Housing Benefit

Jackie Doyle-Price Excerpts

Tuesday 9th November 2010 Commons Chamber

[Jackie Doyle-Price (Thurrock) (Con)]

I am grateful for the opportunity to speak in this important debate. Many Government Members have said that at the heart of this debate about housing benefit is fairness—fairness for those on average incomes who face higher tax bills because of the size of our welfare budget. I remind the House that when £1 in every £3 spent by the Government is spent on welfare, the need for reform is acute and unavoidable. The need to control housing benefit is an important component of that.

The way in which housing benefit operates causes a major distortion in the way in which our housing market operates generally. As any A-level economics student will tell you, subsidies lead to higher prices, and the result is that as taxpayers we all subsidise the rents that even above-average earners would not be able to afford.

[Neil Carmichael]

In my constituency one of the biggest problems is that people cannot access houses. It is one of the biggest distortions of which we should be aware, and it is grossly unfair. My hon. Friend makes a good point, because we have to free up the situation so that people who really need a house have access to a house.

[Jackie Doyle-Price]

My hon. Friend makes a good point. It is easy for Opposition Members to say, “It’s all about those evil Tory reforms to housing benefit,” but the housing market is much more complicated than that. It involves a lack of supply and, under the failed regulatory system, the over-provision of credit by our banks. All of us together have a big job to do in tackling it, but I am glad that we have seen fit to grasp the nettle and do exactly that.

[Mr Lammy]

On that point about grasping the nettle, will the hon. Lady and the leader of her local council join me and the leader of mine in making provision to house in her constituency some of the overcrowded tenants in Tottenham?

[Jackie Doyle-Price]

Tottenham is not in my constituency, I am afraid.

[Mr Lammy]

“Not in my back yard.”

[Jackie Doyle-Price]

Let me address some of the specifics. We are talking about putting a cap of £250 a week on the proposed maximum for a one-bedroom flat. That would amount to £12,000 a year to be spent on rent. I am afraid that not many people who are working can afford to spend £12,000 on rent.

[Sheila Gilmore (Edinburgh East) (Lab)]

In the event that the problem is as the hon. Lady describes it, can she explain to my constituents why they are having their housing benefit reduced when the cap has no relevance whatsoever to people in Edinburgh because all the rents are well below it? Despite that, they will have their LHA reduced to the 30th percentile. Others, who are not necessarily in the private rented sector, will have non-dependants deductions from their housing benefit increased substantially, which is a serious problem for many low-income households. Why is that justifiable to solve the problem of high rents in London? Why not deal with London on its own?

[Jackie Doyle-Price]

It is justifiable because this country simply cannot afford the level of welfare benefits that we are paying out. It is all very well to say that this is all about London, but it is not; it is about the fact that people who are working hard are having to pay higher taxes to pay the bills that Labour left for us to sort out.

We have a system of housing support that is no longer fit for purpose. Housing benefit should act as a safety net to support people who need it—I think we would all agree with that—but it should not provide a subsidy for people to live beyond their means, by which I mean beyond the scope of what they could potentially earn. For those who are jobless, it is clear that this level of subsidy encourages benefits claimants to become trapped in dependency. If we are really going to reform benefits so that work is rewarded rather than penalised, we have to build in incentives that do not encourage people just to sit back and collect their benefits.

[Mr Umunna]

The hon. Lady talked about fairness, and she has mentioned the jobless. What does she think of the proposal to reduce housing benefit by 10% for JSA claimants who have been out of work for more than 12 months and have been doing absolutely everything they can to get work? I come across many people in that position in my constituency, and this measure is unduly punitive, in my view. What does she think?

[Jackie Doyle-Price]

The hon. Gentleman will be aware that the Government are increasing the discretionary allowances that can be used to tackle exactly that problem. My concern is for the people in part-time work who find that increasing their hours is punitive, because their housing benefits will be clawed back.

This measure is not an attack on the vulnerable, nor is it based on an assumption that all benefits claimants are workshy. It is my firm belief that most people do not want to be reliant on state benefits—that they want the pride and self-respect that come with providing for themselves and for their families. However, we have allowed a benefits system to emerge that sucks the self-reliance out of them by preventing work from paying. It is all too easy for self-respecting people to find themselves trapped in worklessness because the amount of support they get from the taxpayer exceeds what they could expect to earn. If we are going to get our economy back on track, that has to change.

Members in all parts of the House will have received many representations on this issue and its impact on vulnerable people. The National Housing Federation claims that those who rely on housing benefit to cover part of their housing costs will be forced to move away from higher-rent areas, and may as a result have to commute and have difficulty finding family care. Well, that is the day-to-day reality for many of my constituents. I consider it unfair that my constituents are having to pay higher taxes for people to live in places where they would like to live but cannot afford to.

[Ms Louise Bagshawe (Corby) (Con)]

My hon. Friend is talking plain common sense. Does she agree that there is a total lack of reality on the Labour Benches, because a YouGov poll in July on the Government’s changes to housing benefit found that 68% of the public supported them, including 57% of Labour voters?

[Jackie Doyle-Price]

I would say that Labour Members are in denial about how we are going to tackle the issues that will get the economy moving again. Many of my constituents say, when I go knocking on their doors, “Good for you—it’s about time people did this,” because they are heartily sick of having to keep putting their hands in their pockets.

[Dr Whiteford]

On the DWP’s own figures, nearly 27% of the people who currently receive housing benefit are pensioners. How are those people, who are mostly on a fixed income that has been squeezed hard during the financial crisis, supposed to be able to pick up the tab for welfare reform? That makes no sense, and it puts unbearable pressure on household incomes that are already very pressured.

[Jackie Doyle-Price]

I think that the hon. Lady needs to see that issue against our broader package of welfare reform. When we introduce the welfare credit reforms, that will be tackled. The Government have recognised that such fundamental reforms will generate difficult cases, and to that end they have increased the money available for discretionary payments. I wholeheartedly endorse that.

Let me reiterate what has been said about the impact that these changes will have on landlords. Removing subsidies means that landlords will change their behaviour. They are charging rents that they know the market will bear, and if we reduce the amount of support available they will have to stay in the market by reducing their rents, or get out of it. As the hon. Member for Sedgefield (Phil Wilson) and my hon. Friend the Member for Wolverhampton South West (Paul Uppal) said, those are exactly the kind of people we want to leave this marketplace.

I shall finish where I started, with the concept of fairness. Government Members want a fair deal for the taxpayer. We also want a welfare system that acts as a safety net and rewards work. Doing nothing, and allowing the current system to continue, would not be treating taxpayers or benefit claimants fairly.