Welfare Reform and Work Bill (Tenth sitting)

Jess Phillips Excerpts

Thursday 15th October 2015 Public Bill Committees

[Mr Vara]

I thank the hon. Gentleman for that contribution. I am mindful of the fact that he was a council leader before entering Parliament, and he brings added value to the Committee, and indeed the House, as a result. I will address the issue he has referred to and the argument that there will be a reduction in housing, so if he will please bear with me for a while longer, I will tell him why I believe that these measures will not have the impact that Opposition Members seem to think they will.

The Government have taken the decision to reduce rent increases within the social sector, which is good news for tenants. Just as I did on Tuesday, I pay tribute to the right hon. Member for East Ham (Stephen Timms), who acknowledged on Second Reading that the 1% reduction was a good thing and that he supported it. He is a distinguished Member of Parliament, and I am sorry that the Opposition Front Bench team has been deprived of the benefits he brought to it. He is a former Chief Secretary to the Treasury and a former Department for Work and Pensions Minister, and commands respect on both sides of the House. Given his ministerial experience, he knows the real position, and he said that he felt the 1% reduction was necessary. To be fair to him, he said he had concerns about the housing stock; I will address those concerns shortly, as I said to the hon. Member for Bootle. However, he recognised that the 1% reduction is necessary.

Rents paid by social housing tenants in England will reduce by 1% a year for four years from 2016. That means that by 2020 they will be paying roughly £12 per week less than they would have had to pay under the current policy of increases at a rate of the consumer prices index plus 1%. The policy will also help taxpayers, who are subsidising rents through the rising housing benefit bill. It is interesting that we have heard a lot of comments regarding housing associations, but no one seems to be acknowledging the financial benefit of £12 a week to the people living in those houses.

[Jess Phillips (Birmingham, Yardley) (Lab)]

To return to the Minister’s point about the benefit to the taxpayer, people living in lots of different types of supported accommodation, in social housing or in housing association housing are also in work and are taxpayers. I wonder how many times we will have to repeat that point to the Minister. They are not two distinct groups. Everybody pays tax, so will he please stop making out that one group of people is paying for another?

[Mr Vara]

The hon. Lady speaks of one group. The only conversations we hear are about the people she refers to; she does not talk about the people who are paying through their taxes for social housing but do not live in it. She speaks of a distinction she would rather I did not make—she would rather that we all spoke of just one group. She needs to recognise that there is another group. Perhaps she might reflect on those people occasionally.

[Jess Phillips]

Is the Minister telling me that the taxes of people who do not live in social housing are put in one pot and the taxes of people who do are put into another, and that those pots pay for different things? Am I confused, or is that money mixed?

[The Chair]

Order. This is a debate, and I am sure that the Minister will deal with the questions that have been raised.

--- Later in debate ---

[Debbie Abrahams]

Absolutely. My hon. Friend makes a powerful point. Those housing providers provide housing and support to a very vulnerable group, including people with mental health conditions. The measure will affect their opportunity and ability to live independently and well.

The impact on accommodation for homeless people with support needs demonstrates how damaging the change would be for supported housing as a whole. Over 90% of residential homelessness services rely on housing benefit as a key funding stream. One homeless organisation in the north-east of England has modelled the impact of the change on the 300 beds of supported accommodation that it provides, which accommodate 1,400 disadvantaged people a year. The impact of the 1% rent reduction, assuming that other costs increase by 2% or 3% a year, is that 50% of its accommodation projects will be financially unviable in 2016-17. It is absolutely imminent. That is key. The pace of the clause’s implementation means that we will be facing problems in the next few months and I hope the Minister responds appropriately. It gets worse, I am afraid: the organisation has mentioned 100% financial unviability by 2017-18. What will happen to that vulnerable group of people?

A second organisation, St Mungo’s Broadway, provides accommodation support to 3,800 people each year across London and the south-east of England. I have visited the project here and in the midlands. St Mungo’s estimates that the 1% annual rent reduction requirement will result in it losing £1.25 million in rental income by year 4—between £250,000 and £300,000 each year. Taking into account the rental income that the organisation anticipates over that period, the overall impact on its finances over the four-year period is a loss of £4 million. That loss of income will force some projects to close, resulting in the loss of accommodation for homeless and disadvantaged people.

Mr Owen, I expect that you have experienced an increase in rough sleeping in your constituency. I was shocked recently, in the last month or so, when I arrived back in Manchester from Parliament late one night. Every 50 metres there was somebody sleeping rough. The fact that the measures will affect organisations such as St Mungo’s is serious. I have mentioned the groups of people supported by those housing providers. The providers have estimated who will be affected in percentage terms. They expect that people with learning disabilities and physical health problems, people who have slept rough and people with a history of offending, and people with alcohol, drug and mental health problems who have been accessing their services for support needs, will be affected.

As has been mentioned, the measures will have an enormous impact on services working with other disadvantaged people. A large national provider of supported housing has estimated that the change will lead to the loss of 104 schemes, removing 1,969 support spaces for clients, including 228 spaces for people experiencing domestic violence. A small specialist learning disability provider will have its operating margins reduced to 0.2% and will be forced to cancel all proposed development of learning difficulty schemes. A large national organisation will be forced to reduce planned development of extra care by 400 units, including units specifically to help people home from hospital. Such organisations reduce the pressures that our beleaguered NHS is experiencing—the measures will have a direct impact on the NHS.

There is a precedent. The principle of treating supported housing separately from other social housing for welfare reform purposes was recognised in the previous Government’s proactive decision to keep housing costs for specified accommodation out of universal credit and the benefit cap calculations.

[Jess Phillips]

Does my hon. Friend want to pay credit to Ministers for removing specified accommodation during the previous Government? It most certainly meant that, at the refuge where I worked at the time, we could maintain operations exactly as they were, and in fact develop some others. The Minister spoke earlier about listening. Perhaps we should pay credit to the Government for listening on that occasion.