Housing Benefit

Debate between Glenda Jackson and Sheila Gilmore

Wednesday 13th October 2010 Westminster Hall

[Sheila Gilmore (Edinburgh East) (Lab)]

It is important to realise that issues to do with housing benefit do not just apply in London. I acknowledge that problems in London are great—far greater than in many other places—but the suggested housing benefit reforms will affect other parts of the country in ways that are similar, if not quite so grotesque.

In Edinburgh we will not be affected by the proposed cap. The local housing allowance is already beneath that cap. However, the decision to restrict the LHA to the 30th percentile will affect us, as will the decision to up-rate not according to what the market is doing, but according to the consumer prices index. The proposals will have an effect on the kinds of homes that people can find.

As it is, many people in Edinburgh who are receiving housing benefit or local housing allowance already meet a shortfall on their rent. Housing benefit is not just for people who are out of work, as some of the propaganda would suggest. Many people work and are able to stay in their homes only because housing benefit is available to them, even if it tapers off. Many people are already paying an excess out of their limited incomes because they have not been able to find anywhere else within the LHA. The number of people in that situation will rise. That is a substantial financial difficulty. Some of my constituents are paying £10 or £15 a week out of a limited income just to top up their rent payments. That problem will become greater.

I live in a city with a large private rented sector. It is not as large as in Islington, but 20% of all households are in the private rented sector, which in Scottish terms is high. At the moment, around 18% of private rented sector properties are occupied by people who receive some housing benefit. There is ample scope for landlords, if they no longer wish to have tenants on housing benefit because of the lower local housing allowance, to find other tenants. There is a huge shortage of properties in the city and plenty of other people to fill them without landlords reducing rents. We are a high-cost city and a high-rented city. Students and young people will be able to occupy such properties; perhaps if they are sharing, they will be able to pay the high rents that a household could not meet.

There are other practical issues for people who must move that are not always taken into account. Some of us forget—I had almost forgotten until recently when someone came to see me and told me that she must move—the difficulty of finding a deposit. There are schemes to help people to provide a deposit, but they are limited and those in Edinburgh are very limited. For many people, finding enough money for a deposit to enable them to move is a huge issue. Many of us may believe that it is not that big a deal, but to find £400, £500 or £600 for a deposit, which may be low by London standards, is a lot of money for some people. There are practical issues that make it difficult for people to contemplate moving.

[Glenda Jackson]

The obverse is touched upon by one of the briefings from Citizens Advice. For example, in Brent, if a tenant, because of the changes in housing benefit, finds it impossible to pay their rent and loses their tenancy, they will also lose their deposit because the tenancy agreement is broken before the due date. The landlord wins all round.

[Sheila Gilmore]

That worsens the position.

In Edinburgh, if people with homes in the private rented sector, whether they are in work or not, can no longer afford such homes because they do not receive housing benefit, they will come to the council for help with housing. The council has already entered into lease agreements with landlords for around 1,500 to 1,700 properties to provide accommodation for people who have presented as being homeless. They are outside the local housing authority, and the rent levels are extremely high, which is a serious problem. That was intended to be a temporary expedient, but it has been temporary for five years, and the council has recently entered into another contract because it has little choice. The LHA cap will not apply, but if more people go into such accommodation and the council must take on more private leases to cover the situation, the real bill for housing benefit—we are always being told about the huge total of housing benefit—will be squeezed from one end and will push up at the other end. There will be unintended consequences.

Labour Members recognise that some of the changes and reforms, sometimes well intentioned, have had unintended consequences, and that should be taken into account before the changes go ahead. At the end of the day, the total housing benefit bill may not fall, despite the changes that will badly affect individuals, households and families. It is not good enough to say, “You didn’t do enough about building housing, so we must do this.” If the solution is to build more houses, build more houses. We did that, although they may not all have been council houses, as the Scottish National party said. It came to power saying that it was dreadful that we had not built any council houses, and that it would do so, but the total number built was exactly the same because it gave a little money to councils to build council houses but it took it away from housing associations that were building houses; the global figure did not change.

The answer is not to punish people for the failure of a policy. That is perverse. If there were even a suggestion that some of the money saved would go towards building houses, at least there would be some purpose in the argument, but I do not believe that that will happen. We have had no such assurances. From a perspective much further north than London, I agree with my hon. Friends that the reform is bad and will affect my constituents. I urge the Government, even at this late stage, to reconsider.