Housing Benefit

Guy Opperman Excerpts

Tuesday 9th November 2010 Commons Chamber

[Mr Alexander]

I will answer the hon. Gentleman’s question directly. The former Chancellor of the Exchequer, my right hon. Friend the Member for Edinburgh South West (Mr Darling), introduced an option for dealing with extreme cases in the March budget—excluding a proportion of the highest rents from the calculation of the median. I am sure that given his past employment, the hon. Member for West Suffolk (Matthew Hancock) will be aware of that change. As I have previously stated, I have no objection in principle to a cap, if it is introduced on a staged timetable. I commend to him the speech that I gave at the Institute for Public Policy Research as recently as Friday. However, we have to ask whether a national cap is the most appropriate plan, or whether a regional cap would target the very highest claims in all regions.

[Guy Opperman (Hexham) (Con)]

rose—

[Mr Alexander]

I am keen to make a little progress.

I rather fear and suspect that the focus on the cap in some interventions owes more to Andy Coulson than to the Secretary of State. As I have already made clear, despite the fact that it will yield £65 million, it is only one part of a package of more than £1.8 billion-worth of proposed housing benefit changes resulting from the cumulative impact of the June Budget and the spending review.

Perhaps the Secretary of State will be able to answer some specific questions. Why is it necessary to introduce a cap on rent levels from April next year, and the change in the maximum rate to the 30th percentile in October? Is there not a real risk that some households will be displaced twice within a short period, with all the costs and individual traumas that that would entail?

Let us look at the reality of the matter for a moment. Many households will be making their housing arrangements now without full knowledge of what the proposals will mean. They may be arranging for their children to go to a local school, to sign up for child care support or to buy a season ticket for travel to work. It must be right to give individuals enough notice and clarity about what the first tranche of measures will mean for them to be able to ascertain whether they will be able to avail themselves of the discretionary housing payments that the Government claim will be available.

What estimate has the Department made of the impact of the changes on homelessness? Does the Secretary of State accept the figures provided by London Councils, which expects that 82,000 households will be forced from their homes? What estimate has he made of the cost of the changes to local government? Shelter has said that the costs of introducing all the rushed changes will be as much as £120 million. Does he have an alternative figure that he would like to share with the House?

The Mayor of London’s own director of housing has stated that the introduction of the cap in London alone will lead to a 48% rise in homelessness acceptances, which will mean £78 million being spent in London on temporary accommodation. Yet the Budget Red Book estimates savings of only £65 million a year. Given those figures, why would the Government introduce a policy that could end up costing the taxpayer more than it is intended to save?

I now move from the cap, about which people have been so keen to talk in the newspapers for so many days, to the change to the 30th percentile, which is perhaps more deserving of that level of publicity. Liz Phelps of Citizens Advice UK has remarked that the change

“will potentially affect people across the country. It will mean lower rates…It is very crude, short-term thinking. It will cut the DWP budget but it will explode the homelessness budget. We will see a lot more rent arrears, a lot more debt and acute poverty, and then more homelessness.”