Universal Credit: Private Rented Sector

Debate between Gregory Campbell and Stephen Lloyd

Tuesday 9th January 2018 Westminster Hall

[Stephen Lloyd]

I appreciate the intervention. Not only do I wholly agree, but the decisions are completely irrational. One thing that I am finding out from the Residential Landlords Association and others is that there is not adequate communication between the DWP, local authorities and landlords, so even though, in theory, it seems from the changes in the Budget that there is the beginning of an understanding from the Government that default payments will be necessary to prevent a complete car crash, there is still a long way to go towards understanding that they have made the system so complicated that things will still be very hard for residential landlords. What does that mean? It means that they will pull out in droves.

Currently, 1.2 million people are on housing benefit or LHA in the private rented sector. There is a housing crisis in this country. This is not the debate to discuss that, but we have a housing crisis; we all know that from our constituency surgeries. The Government could convert that 1.2 million to 2.4 million; it could double the number of tenants moving into the private rented sector, because the capacity is there. However, that will happen only if the Government make it easy—very straightforward—for private landlords to take on someone who is on universal credit and give them a roof over their head, and if there is that automatic default payment that is, as it says on the tin, automatic.

If I am a landlord and I take someone, or am willing to take someone, on universal credit, and give them a flat or a house, a roof over their head, the automatic situation—by mutual agreement with the tenant, I accept that that is important—would be for his or her payment on universal credit automatically to go straight into my account, the landlord’s. I was in business for years before I went into politics, and I can absolutely guarantee that despite the challenges with some tenants on universal credit, in the eyes of landlords, ultimately, a business is a business, and if a landlord is getting their payment directly into their business bank account every month—or every two weeks, as I would like, but that is another issue—then, as a business, they will look favourably on that particular group. That is something that I really urge the Minister to consider.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Gentleman on securing this debate. On the issue of the automaticity, as he might term it, of the payments going to the landlord, does he agree that in parts of the United Kingdom, such as Northern Ireland, where we have negotiated that, it has not led to an increase in rent arrears? There are other problems, but rent arrears are not a big one. We have also negotiated the twice-per-month payment, which helps both landlords and tenants to know that the rent is being paid and the tenant to know that he or she is not going into arrears.

[Stephen Lloyd]

I thank the hon. Gentleman for that intervention; I was going to come to that point in a moment, but I will come to it straightaway. In Northern Ireland—I think five or six years ago, way before we reached the crisis that we have had over the past couple of years—the politicians negotiated default direct payments to landlords. They also negotiated that the payment should be every two weeks. I am reliably informed by colleagues from Northern Ireland that at the time the DWP—again it was under the then Secretary of State, the right hon. Member for Chingford and Woodford Green, if my memory serves me—did not want to budge and insisted that that would collapse the entire thing. However, as Government Members have discovered, when my friends in the Democratic Unionist party dig their heels in, they dig their heels in. I pay tribute to them on this one, because the DUP, and I think the Social Democratic and Labour party as well, said, “No, we are not budging. It must be a default payment.” Do you know what? It was. It worked. It is the same computer system, folks. The previous Secretary of State—the one who has just gone—kept saying, “It is much more complicated, you can’t just change it.” Do they use a different computer in Northern Ireland? I do not think so, because as we all know, they are part of the United Kingdom.

The other thing that the Stormont Government negotiated was payments every two weeks. The percentage of rent arrears in Northern Ireland for people on universal credit is almost zero. In England, as we all know from our constituency surgeries, we have section 21s in the private sector going through the roof, or private landlords coming into our offices and saying, “That’s it, we are pulling out of universal credit. We’re not going to touch it.” Meanwhile the local authorities, housing associations and councils, which are under horrendous stresses and strains at the moment, are asking where all these additional people are going to go.