Welfare Reform Bill

Karen Buck Excerpts

Wednesday 1st February 2012 Commons Chamber

[Chris Grayling]

There might be an element of that—it is difficult to escape that conclusion. The Opposition proposal would have more credence had it not been made at the 59th minute of the 11th hour. We should not take them seriously when they make such ill-thought out, last-minute proposals.

The Government are clear that average earnings are the right way to determine the level of the cap. We do not need the Opposition’s proposed independent body—another quango, I hasten to say—to tell us otherwise. The cap needs to be a single, national one for the policy to make sense. The Government will lay before the House a report on the policy’s impact evaluation after a year of operation.

[Ms Karen Buck (Westminster North) (Lab)]

rose—

[Chris Grayling]

I will give way one more time as the hon. Lady was on the Committee.

[Ms Buck]

The Minister knows that the Committee extensively discussed the impact of housing costs and their interaction with the cap. If a household loses income through the benefits system through no fault of its own, can it claim legitimately to a local authority to be statutorily homeless, in line with existing homelessness legislation?

[Chris Grayling]

I am sorry, but I simply do not buy the homelessness argument that Labour Members keep making. We are talking about a cap equivalent to a salary of £35,000 a year. Labour Members were vociferous 12 months ago when the housing benefit cap was introduced, but we have not seen the consequences of which they warned in the terms they used. I simply do not accept that somebody receiving the equivalent of £35,000 a year should be categorised as homeless and unable to find anywhere to live.

Much was said in the other place on the importance of child benefit. Let me make it clear that the introduction of a benefit cap will not result in a single household losing its entitlement to child benefit, which will continue—rightly—to be paid to the current recipient. That important principle will not change.

We are, however, changing another important principle: households on out-of-work benefits should not in future expect to receive unlimited financial support from the state. Like other welfare benefits, child benefit is funded by taxpayers. We therefore believe that it is right for its value to be taken into account along with other state benefits when applying the cap.

--- Later in debate ---

[Mr Byrne]

I will come to the localisation of the benefit system, which, as the hon. Gentleman will know, we have had for 70 years in this country, when I set out how I believe our proposal can work in practice.

[Ms Buck]

Will my right hon. Friend help those Government Members to understand one simple fact: that housing support and council tax benefit are in-work benefits, and that—thanks to those benefits and the tax credits policy—it is virtually impossible for any household of comparable size and comparable housing costs to be worse off in work than on benefits? The whole system is constructed to avoid precisely that scenario. Will he also help those Government Members to understand that the impact of the cap hits not only Knightsbridge and Mayfair—the Government want to run the policy by anecdote—but outer London boroughs and suburbs, such as Enfield, Barnet and Brent, as well as Birmingham? Where will those households find somewhere that they can be priced into?

[Mr Byrne]

My hon. Friend did an extraordinary job of deconstructing the Bill as it went through Committee, and she is an acknowledged expert on this subject. Her point is absolutely right. The Minister was not able to confirm that somebody on £35,000 could receive, for example, housing benefit. I am reliably informed that that is, in fact, the case. Because the Government have not thought this measure through, we are now confronted with the extraordinary spectacle of a cap that appears to cost more than it saves. As was pointed out by the hon. Member for Shipley (Philip Davies), who is not in his place now, in some parts of the country that will not send the signal that people are better off in work than on benefits. Only the Government could have introduced a proposal that is, frankly, that much of a dog’s breakfast.

Let us take the cost side first. In this debate, we are in the happy position of not simply having to rely on costing an assertion made by Opposition Members. We are very grateful that we have got the analysis that was presented by our good friend, the Secretary of State for Communities and Local Government. In a blunt warning—not to just anybody, but to the Prime Minister’s Office—the principal private secretary in the Department for Communities and Local Government said:

“we think it is likely that the policy as it stands will generate a net cost”,

and that was before the Government burnt all the money that they have sent up in smoke just this afternoon.

A cursory glance at some of the scenarios that we will see in, for example, the constituency of the hon. Member for Cities of London and Westminster (Mark Field) confirms exactly what is going on.

--- Later in debate ---

[Mrs McGuire]

I will certainly not give way at the moment.

My hon. Friend the Member for Westminster North asked Ministers at the Department for Communities and Local Government what constituted under-occupancy, and they said that it was two spare bedrooms, whereas the Department for Work and Pensions has a far more restrictive interpretation.

[Ms Buck]

We know from the Government’s own impact assessment that under-occupation is a problem particularly, but not exclusively, in the north of England, and that overcrowding is a problem particularly, but not exclusively, in the south. Local authorities have legal duties to their tenants, and if somebody from Salford is seeking to downsize, local authorities in Doncaster or Hull are not permitted to take them because of residency qualifications. Will my right hon. Friend help me to understand something that the Government have completely failed to explain? How will tenants be able to move from one local authority to another?

[Mrs McGuire]

Frankly, I do not think the Government know how. The DCLG and local authorities certainly do not know.