Housing Costs (Reformed Welfare System)

Debate between John Hemming and Mark Spencer

Tuesday 3rd March 2015 Commons Chamber

[John Hemming]

I thank the hon. Lady for that intervention, but my reading of all the documents, including those memoirs, is different from hers. It was not about an incentive to move, which I do not think anyone would criticise. I think that his proposals were very similar to those that have been adopted by this Government, as seen in the written parliamentary questions.

[Mr Mark Spencer (Sherwood) (Con)]

I am grateful to the hon. Gentleman, who is being generous in giving way. Does he also recognise that it is wrong to distinguish between individuals on the basis of who their landlords are? Whether their landlord happens to be in the private sector or the public sector should make no difference to the level of support they get.

[John Hemming]

The hon. Gentleman makes a valid point. The scheme for working out how much space people need and paying them for it was introduced in the private sector many years ago. The Opposition will make the valid point that they did not make it retrospective, but the Government then say that if we want to deal with overcrowding and the like, this is one of the difficulties. Speaking personally, I would rather not do any of these things, but we do not have the finances for that. If we had chosen to take the Greek approach and said, “Can’t pay, won’t pay”, and then run out of money, we would not have had to do a lot of these things, but sadly we have to try to bring the books into balance over time.

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[Mr Spencer]

I am not familiar with Birmingham, Yardley, but I wonder whether the fact that the lists were so long is a symptom of the legacy of the previous Government’s inability to build single-bedroom accommodation for the hon. Gentleman’s constituents to move into.

[John Hemming]

The hon. Gentleman makes a valid point. Social landlords have had a relatively simplistic approach to designing property to suit the demands of the market. That creates a difficulty, in as much as one should recognise that there are real difficulties in the financial costs of living alone, including paying rent. The hon. Member for Aberdeen South said that the changes to universal credit mean that people have to keep money aside for rent in a social housing property in the same way as they have had to in a private rented property, the logic being that it makes for a seamless move into work and therefore they are not frightened about getting a job.

In my constituency, I have worked with 6 Towns credit union, which is based in West Bromwich, to extend its service to Yardley, as it has done. It allows someone to be a preferred creditor. Basically, the housing element of universal credit or housing benefit is put to one side and made available for the landlord, be that a social housing landlord or a private landlord. It is important to do that, because we need to make sure that people do not end up in a mess. The idea is that budgeting is done through the bank account rather than the housing benefits system. That creates a situation in which people do not find themselves in great difficulty with budgeting as soon as they get into a monthly paid job.

There have been proposals to cash limit housing benefit by giving it all to the local authorities. I think that the Institute for Public Policy Research proposed something along those lines. That would lead to a situation where potentially many more tenants in social housing would have to pay towards the rent for their accommodation. I would be concerned about that, because it would put them in a situation that they could do little about. I favour the current process, which supports people with the housing costs they need to pay so that they can cope on a day-to-day basis.

This is a difficult area, and the Government have done many things that I would have preferred them not to do, one of which is the change to housing benefit, which it would have been nice to do gradually. However, we have to bring the books into balance, because if we do not, the interest rates on sovereign debt will go up and the amount of interest that we would then have to pay means that the cuts or tax rises that are necessary would become a lot greater than would have otherwise been the case.