Housing Benefit (Wales)

Huw Irranca-Davies Excerpts

Thursday 1st May 2014 Westminster Hall

[Chris Ruane]

rose—

[Huw Irranca-Davies (Ogmore) (Lab)]

rose—

[David T. C. Davies]

I give way first to the hon. Member for Vale of Clwyd (Chris Ruane).

[David T. C. Davies]

Right. Did the hon. Member for Ogmore (Huw Irranca-Davies) want to intervene?

[Huw Irranca-Davies]

Lord Freud kindly appeared recently at a meeting of the all-party parliamentary group on housing. When he was asked by a number of south Wales visitors to the group about the singular impact on Wales of this measure, whatever we call it, his answer was interesting. He said that if there were evidence of what he termed in Latin an “in extensis” impact on a region, he would look at it again. I have heard nothing since. Does the hon. Gentleman agree that if there is a singular and extensive impact across Wales compared with other regions, the measure should be looked at again?

[Sir Roger Gale (in the Chair)]

Order. The hon. Gentleman was invited to intervene, but that was a lengthy intervention. Please keep them short.

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[Huw Irranca-Davies (Ogmore) (Lab)]

It is great to serve under your stewardship this afternoon, Mr Betts. I commend the way that the debate was introduced by the hon. Member for Monmouth (David T. C. Davies), the Chair of the Welsh Affairs Committee, as well as the speeches that have been made and the work that the Committee does. I will add only a few points.

In my constituency, the policy is about as popular as the poll tax was. There is a march today in Bridgend. I would love to be there, but like my hon. Friend the Member for Bridgend (Mrs Moon), I am speaking up in Parliament on behalf of constituents; otherwise we would be there. I have spoken on platforms in Cardiff and elsewhere in direct opposition to the rule. The Minister will have heard repeated, emphatic and passionate accounts of the impact of the policy on individuals. Undoubtedly, many people are being pushed below the UN definition of poverty. The situation in the Bridgend area that my hon. Friend and I represent—the local authority area covers two parliamentary constituencies—is not unrelated to what one report says is a tenfold increase in the number of people seeking debt advice after getting payday loans. Those matters are related.

The present state of affairs is not distant from the fact that the Government’s report on food aid that came out after a year’s delay showed that the reason for the number of people being driven to use food banks is not increased publicity about food banks, as the Prime Minister said at Prime Minister’s questions the other day. There are three factors, and two are directly related to Government policy. One is benefit changes, and the second is delays in benefits. I could give the Minister the third, which is also related to the Government, but I will leave it at those two. Those things are tied in, and are part and parcel of the issue.

My right hon. Friend the Member for Torfaen (Paul Murphy) rightly said that there is a complete failure of understanding about the importance of social housing in parts of Wales—particularly south Wales. That housing is regarded not as a unit of accommodation but as a lifetime home. People have long aspired to be in their home, and not to be in private rented accommodation, which may well be the aspiration in—I do not know—Belgravia or somewhere. They aspire to be in either council accommodation or social housing through a housing association. That is why people have really been angered.

My hon. Friend the Member for Bridgend produced a plethora of data, and they apply to my constituency as well as hers. Within the past few months, Community Housing Cymru has produced an analysis showing that 78% of its members—35 housing association members in Wales provide 156,000 homes to 10% of the Welsh population—have seen a rise in rent arrears. The analysis showed 855 larger properties lying empty and that figure was expected to increase in the next 12 months. It showed that only 3% of tenants downsize, and I can confirm that that is true of my constituency: something like 25 people from about 1,000 properties have downsized. Also, members will deliver more than 1,200 fewer affordable homes, because they will be servicing a £40 million debt as a result of the policy.

We can have a debate about whether the policy is callous and cruel, which I think it is, but we need to debate the fact that it was dumped into areas such as mine overnight, without foresight or planning to enable alternative properties to be provided. The ineptitude of the decision, which means that housing associations will convert and build fewer properties, is causing misery. I ask the Minister to act according to the word and the spirit of what Lord Freud said when he spoke to the all-party group on housing, about evidence of “in extensis” impact on areas. There undoubtedly is one. I can see the Minister smiling. There is an impact—not just on my constituents, but on housing associations in my constituency. Will the Minister accept a delegation of not simply tenants but housing associations and local authorities from south Wales to talk about what “in extensis” means and how we can avoid the impacts being prolonged any further?

[Mr Clive Betts (in the Chair)]

We move on to the Front-Bench spokesmen, who have 10 minutes each.

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[The Minister of State, Department for Work and Pensions (Steve Webb)]

It is a pleasure to serve under your chairmanship, Mr Betts. I join in the congratulations to the Chairman of the Welsh Affairs Committee, the hon. Member for Monmouth (David T. C. Davies). I congratulate him on enabling the Committee to come up with a unanimous report. All of us who believe in the Select Committee system agree that Committees are at their strongest when they can be unanimous. He asked some specific questions for factual information, but in 10 minutes I will be trying to respond to two hours of contributions, so I apologise in advance if I miss one or two points.

I will concentrate on the spare room issue, but one or two hon. Members mentioned direct payment. As the Chairman of the Select Committee said, the philosophy of universal credit is to mirror in out-of-work benefits what happens when people are in work, so that if they make a transition from being out of work to in work, they will not have the sudden shock of having to budget from a wage and pay all of their bills, because they have been used to budgeting from the whole of their income for all of their outgoings. We want to improve that transition from out of work to in work.

The Government accept that direct payment will be difficult or not appropriate for a minority of people—that is not in dispute. Instead of having a system geared around the assumption that most people cannot cope, however, we are twisting that around and saying, “No, actually most people can.” Indeed, we pay housing benefit in the private rented sector direct to tenants, and most people cope. We should not patronise social tenants with the presumption that they cannot cope; we should presume that they can, but then identify the most vulnerable, who will have problems.

[Huw Irranca-Davies]

Will the Minister give way?

[Steve Webb]

No, I will not give way, because I have a whole lot of questions which have already been asked that I want to answer.

In response to the question of whether we simply let eight weeks go by, let two months of arrears accumulate and only then start thinking about doing something, the answer is no, we do not. The alternative payment arrangements of universal credit include an assessment of the likelihood that someone will struggle at the outset; we do not simply wait until eight weeks of arrears have arisen. Eight weeks of arrears may be a trigger in a case where we thought someone could cope, but things did not work. If someone is assessed as likely to struggle right at the beginning, however, we can go straight to direct payment to the landlord, if necessary.

The House wants me to focus my remarks on the spare room issue, which is what I will now do. On a matter of fact and numbers, and because the Chair of the Committee asked me for an update, our estimate in May 2013 of the number of Welsh claimants with a spare room with a reduction was 36,000; our most recent estimate is that that figure had fallen to around 32,000 in November 2013. At this stage, we are not able to identify how far that was due to trading down or taking a job and not needing benefit, and so on. Those figures, however, give an order of magnitude.

The issue of what the thing is called is not simply semantics. Whether it is a reduction in a subsidy or a tax gets to the heart of what the thing is. I want to compare three people: a person who is buying a house; a person who is renting on benefit from a private landlord; and a person who is renting on benefit from a social landlord. Two of those three people pay for the size of the house that they live in; the third does not.

The right hon. Member for Torfaen (Paul Murphy) said, “Hang on, we are introducing this new divide between people who rent and people who buy,” but in actual fact we are treating people in those different tenancies in a parallel manner. If people are thinking of buying a house in Wales and want an extra bedroom, they can have an extra bedroom and pay for it. If people rent from a private landlord, are on benefit and want an extra bedroom, they can have an extra bedroom and pay for it. Until now, however, people who were social tenants in Wales and had an extra bedroom did not pay for it. That is why our measure is the removal of a subsidy; it is not a tax.