Welfare Reform Bill

John Leech Excerpts

Wednesday 9th March 2011 Commons Chamber

[Mr John Leech (Manchester, Withington) (LD)]

I am delighted to have the opportunity to contribute to this important debate on the future of the benefits system.

I think that the whole House would agree that the way in which a Government treat the most vulnerable will always be a good measure of whether they can claim to have been fair. When the last Labour Government failed to restore the link between pensions and earnings during their 13 years in power and introduced the infamously derisory 75p pension increase, people rightly saw that as unfair. Similarly, their cut in benefits for single parents—described by one former Labour Member of Parliament for Halifax as “punitive and cruel”—was vindictive and unfair.

If the coalition Government are to be able to make that claim of fairness, we must ensure that we protect the most vulnerable. We have made a good start by restoring the link between pensions and earnings with the triple lock and committing ourselves to raising the personal allowance to take hundreds of thousands of the most poorly paid out of tax altogether. However, changes in the benefits system present a real challenge. If the Bill is not amended during its passage, it will certainly not receive my support.

I want to concentrate on housing benefit and possible changes in disability living allowance. Let me begin with the positives. Ministers in the Department for Work and Pensions have certainly been listening. I have had the opportunity to meet all of them to discuss the proposed changes and am pleased that the plans to restrict housing benefit to 90% of the full award after 12 months for claimants on jobseeker’s allowance have been abandoned. That terrible idea would have resulted in numerous people who were actively seeking work being worse off through no fault of their own. Many people and organisations inside and outside the House have worked hard to ensure that that does not happen, and I am glad that Ministers have recognised that it would have caused real hardship for many vulnerable people.

A great deal of attention has been paid to the proposal to remove the mobility component of disability living allowance from people in residential care. Last month, in an interview in The Guardian, the Minister sought to reassure disabled people in care homes and their families that the Government would not remove their ability to get out and about. I have no doubt that that is the Government’s intention and welcome their commitment to reconsider the proposal. Unfortunately, I do not share the Minister’s optimism that the mobility needs of those in care homes will be met if disability living allowance or its replacement is taken away, and I urge her to abandon any such plans.

The proposal has caused concern to organisations such as the Muscular Dystrophy Campaign, whose petition I submitted to Parliament only last night. The petition stated that the mobility component

“helps to meet the higher costs of accessible public transport”.

It also stated that

“without DLA mobility component, thousands of adults of all ages with severe disabilities who are supported by the state to live in residential care will be unable to retain voluntary employment or simply to visit family and friends”.

I urge the Minister to ensure that that does not happen.

[Ian Paisley]

I agree with much of what the hon. Gentleman has said. Does he believe that linking benefits to the lower consumer prices index rather than the retail prices index is “punitive” and “unfair” to those who have to claim benefit?

[Mr Leech]

I was just coming to that. Yes, I do think it is unfair.

The Bill proposes that from April 2013 the local housing allowance should be uprated in line with the consumer prices index rather than real rent increases. I shall avoid the temptation to reopen the debate about whether RPI or CPI is a better measure to use. I merely point out that the Government do themselves no favours by picking and choosing which measure to use. If CPI is a better measure of inflation, we should not allow train operating companies to increase train fares in line with RPI, but that is a debate for another time. I recognise that the current arrangements do little to keep rents low, but there is a real danger that rents will increase at a much faster rate than CPI. The Government must be prepared to keep a watching brief on increases in rent and to take further action if the changes fail to keep housing benefit in line with rent increases.

I do not think that any Member has raised the issue of under-occupation so far. The decision to restrict housing benefit in social rented homes when tenants are under-occupying properties is ill thought out, and will cause significant hardship to many families who are existing tenants. I recognise that this is designed to bring housing benefit for social-rented property into line with the private-rented sector, but it does not take into consideration local circumstances. In Manchester, for example, under existing rules a family with one child is entitled to queue for a two or three-bedroom property. That is intended to allow for the possible growth of young families and reduce the need for future moves caused by overcrowding. Similarly, in low or no-demand areas where there are a lot of two-bedroom flats, property has been provided to single people or childless couples either to allow children who live elsewhere to visit, or simply to fill the vacancies in hard-to-let properties. As a result, a significant number of families on housing benefit could face a reduction in benefit through no fault of their own. We need to look at this again and recognise that a one-size-fits-all approach will not work. I suggest at the very least applying a gross under-occupation test whereby restrictions to housing benefit could be applied if more than two rooms were unoccupied.

[Mark Lazarowicz]

Another possible circumstance could arise where people who have been in work all their lives and have never had to claim any benefit suddenly find that after 20 or 30 years they have to apply for housing benefit and face the prospect of having to leave the house that they have lived in for decades. Would that not be extremely inhumane as well?

[Mr Leech]

Yes, that is true, and it might lead to people being forced to go into private rented accommodation and not having a protected tenancy.

I want to comment on the proposals to cap benefit at £500 a week for families and £350 for a single person with no children. I recognise that a cap on benefit is justifiable to make work pay, but the cap should exclude housing benefit costs, which can vary dramatically in different parts of the country. Given that the cap on housing benefit for four-bedroom houses will be £400 a week, large families might be expected to survive on as little as £100 per week if total benefit is capped at £500 a week. Under other proposed changes, homeless families will receive only one reasonable offer, which might be of a private rented property that could swallow up the vast majority of their total benefit entitlement. The answer to this problem is to calculate a maximum benefit excluding housing benefit to ensure that families in receipt of benefit have enough to live on, regardless of the cost of housing locally. That is the only way to guarantee that they will have enough to live on.

Finally, although this point is not directly related to the Bill’s contents, I suggest to Ministers that the best way to tackle escalating housing benefit would be to invest properly in affordable social housing and bring more empty homes back into use. That would not only massively boost the construction industry but help reduce rents in the private sector, which is holding tenants to ransom. There would be a short-term cost, but it would give a major boost to the economy and there would be a long-term reduction in housing benefit costs.