Local Housing Allowance and Homelessness

Debate between Karen Buck and Alex Cunningham

Wednesday 24th July 2019 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship this morning, Mr Bailey. I congratulate my hon. Friend the Member for Ealing, Southall (Mr Sharma) on securing this important and timely debate and on spelling out the reality for so many of our people. I also congratulate him on the 12th anniversary of his election to Parliament yesterday, which we were pleased to celebrate last evening.

As my hon. Friend said, we know that rough sleeping in London has hit a record high with an 18% rise on last year, but it is not limited to London. Since 2010, when the Conservative-Lib Dem coalition Government came to power, rough sleeping has more than doubled across England, and there is no one reason for that. There are ways that it could have been prevented, but successive Governments since 2010 seem to have been content to allow the numbers to escalate. Even when they have admitted that there is an issue, the Government have failed to act. Two Prime Ministers have seen the numbers grow on their watch. I wonder what the new one, due to be installed later today, will make of such a terrible legacy and what he will do to sort it out.

Our Governments and Prime Ministers have been too preoccupied with Brexit and internal warring, meaning that people across this country have been let down and forced on to the streets because they simply have no other option. It is not that the Government do not know what is happening to people who are being made homeless. Ministers are quite happy to turn up and spout at events like the recent one hosted by Crisis, but we know that for all their rhetoric and plans, rough sleeping has dropped by less than 2% in the past year. If it is to be eradicated, at that rate it will take 50 years to sort it out, so I am left with no other conclusion than to ask whether they simply do not care enough to act.

Let us look at what the Conservatives have done—the decimation of social housing up and down the country over recent years, a failure to build the social housing needed, and the erosion of the welfare state. Such failures have been major factors in generating a worrying rise in homelessness, and it is across the piece. The hon. Member for Strangford (Jim Shannon) is always in his place speaking up for the people of Northern Ireland. He made it very clear that the crisis here in the UK is reflected in Northern Ireland, too, and it is families that suffer as a result.

There is ultimately one root cause that must be tackled if we are serious about ending homelessness. We need to increase the availability and affordability of housing. Stable and secure homes will give people the best chance of moving on from homelessness, or preventing it altogether. Unfortunately, we are in a position where having housing for every person is seen as an ambitious goal when it should be the standard and the bare minimum. The Government have moved the goalposts of what is seen as reasonable and turned adequate housing for all into the unachievable.

We know that many people live on low incomes. A person could work 40 hours a week on the minimum wage and not be able to afford the cost of renting privately in some places in this country, especially if they have children. We should not have a race to the bottom where only those with higher incomes can afford adequate housing. Those on lower incomes deserve secure, decent living conditions with affordable rents, but that is not the situation in Westminster North, as my hon. Friend the Member for Westminster North (Ms Buck) said. Not a single home is available for low-income families and we have the lamentable situation where former council homes are now out of reach of the poorest people because of rents of as much as £500 a week.

On the need for social housing, the hon. Member for South West Bedfordshire (Andrew Selous) spoke of the need to build more homes more quickly. He talked about energy-efficient and bill-free homes, and he is entirely correct about that—no doubt about that—but the Government have built fewer than 7,000 new homes provided at social rent in England in 2017-2018, when what we need is 90,000 each year for the next 15 years just to tackle the backlog of housing need. People are being forced to turn to private rented housing. Although some positive moves have been made regarding tenant fees, affordability is still a major problem, even if people can find a property in the first place.

My hon. Friend the Member for Stroud (Dr Drew) spoke of private landlords refusing to take people on benefits. What does the Minister have to say about that? Is he surprised that private landlords are not always accommodating and understanding when their tenants are late with their rent payments? The reality is that families are being evicted because they cannot keep up with rent payments, and they enter undesirable living arrangements—sleeping on the floors of other family members, at best, and sleeping in cars and on the streets. We have heard other examples as well. Often it means that families are split up, leading to more pain and suffering.

Research from Crisis—we have heard much about its research—and the Chartered Institute of Housing has shown that cuts to local housing allowance rates mean that in 92% of areas in Great Britain, single people and couples or small families who need local housing allowance to pay their rent will struggle to find somewhere to live that they can actually afford. Until social housing can meet demand, people on low incomes must be able to find secure and stable housing in the private rented sector. Shelter has said that targeted affordability funding is not alleviating the problem. The top-up grant for areas most affected by the freeze in local housing allowance—just a 3% increase—has not worked.

[Ms Buck]

Will my hon. Friend join me in congratulating London Councils, which has been doing some excellent research? It found that, even over the period of targeted affordability funding, single rooms had declined in affordability by more than 10% since 2015.

[Alex Cunningham]

Yes, and what is happening in response? Very little. So much more needs to be done. The housing allowance is not allocated or based on how many areas are in need, just distributed to areas in a ranked order until there is no more money. In Shelter’s words, the affordability funding is

“not even close to plugging the gap.”

My hon. Friend the Member for Ealing, Southall proved that the housing crisis is very real with a series of case studies of real people and families in crisis. They are not just numbers in a table of statistics. My right hon. Friend the Member for Birmingham, Hodge Hill (Liam Byrne) told us that we need to remember the names of some of the people who never found a home, and spoke of the memorial to Miguel in his constituency. He also spoke of children in his area who are taking their GCSEs while accommodated in the local Travelodge. I understand why he is asking the new Prime Minister to take action on that systematic failure.

I hope that the Minister remains in post, and can do something. As I mentioned, we will get a new Prime Minister today, and there will be a lot of shuffling around, but whether the Minister remains or provides a handover to his successor, I urge him to work to restore local housing allowance rates back to the 30th percentile of the market, as others have called for. We need to address homelessness with immediate effect, and provide a lifeline to people on a low income. We simply cannot afford not to.

I know that it can be easy to sit in opposition and criticise those making the decisions, but Labour has made some bold pledges that we will deliver when we win a general election. We will define affordable housing as linked to local income, and scrap the Conservatives’ so-called affordable rent home price, at up to 80% of market rates. We will stop the sell-off of 50,000 social rented homes a year by suspending the right to buy—I am pleased that the Scottish Government have done that already—ending all conversions to affordable rent, and scrapping the Government’s plans to force councils to sell their best homes.

We will back councils and housing associations with new funding, powers and flexibilities to build at scale. While we work to provide 8,000 homes for rough sleepers, we will provide local authorities with £100 million to deal with winter pressures and ensure that no one sleeps rough. We will also tackle the scandal of empty homes, many of which need upgrading to be habitable, and many more of which investors simply buy and leave empty, believing that the value will go up and they will make a financial killing.

The crisis is leaving families homeless because of the Government’s failure to act. Successive Conservative, and Lib Dem coalition, Governments have failed on housing and failed to end homelessness—no wonder people have no confidence in their housing policies. There is no doubt in my mind that it is time to act on house building and, in the meantime, on the local housing allowance, before even more families are shown the door and thrown out on to the streets.

Amendment of the Law

Debate between Karen Buck and Alex Cunningham

Thursday 20th March 2014 Commons Chamber

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

This is a budget that does little or, in many cases, nothing for the millions in the lowest income groups in this country. Unsurprisingly, the chief executive of the Joseph Rowntree Foundation has said:

“This is a Budget for the people who already have, not the people who need to benefit most from the return to growth.”

It is a lost opportunity to help the 13 million people on low incomes, who are unlikely to see any benefit from these measures. That assessment fits in with the analysis of the Institute for Fiscal Studies, which shows that more than 300,000 children will be pushed back into absolute poverty over the course of this Government and that, on present trends, 900,000 children will be returned to relative poverty by 2020. That will undo everything that the last Labour Government did to tackle poverty. The Budget sets a cap on overall social security spending while doing little or nothing to tackle the drivers of rising social security spending, especially among working people who are being squeezed by rising housing costs.

I want to talk about two policy areas that lie behind these failures. As we have heard, households have suffered the longest period of falling living standards and squeezed wages since the 1850s. We have had 50 consecutive months of a wage squeeze below inflation. I came into politics because I was driven by concerns about unemployment, and the growth in job numbers is undoubtedly good news, but it would be completely wrong to see the growth that has been achieved in recent months as an unalloyed success story. Among other things, one third of a million families are now working fewer hours than they want, with more people being forced into part-time employment. The latest job figures show 211,000 people entering self-employment, which represents a large proportion of the recent jobs growth. Self-employment is undoubtedly a good thing for many people, but one problem is that it is strongly associated with low pay. Low pay is part of the crisis that is underpinning the fall in living standards.

[Alex Cunningham]

My hon. Friend has quoted one organisation; let me quote another. Gillian Guy of Citizens Advice has said:

“The chancellor talked about making, doing and saving. This budget needs to work for those who are making do and can’t save”.

Are those the people that my hon. Friend is talking about?

[Ms Buck]

I am talking about the 13 million people on very low incomes, many of whom have incomes that are so low that they will not benefit from the change in the income tax threshold, welcome though that is. It will do nothing for the people whose earnings are already below it.

There are 5 million workers on low pay in the UK—one in five of the work force. That is one of the highest proportions in the developed world. The academic consensus shows clearly that the minimum wage, although fiercely and wrongly opposed by the Conservatives, boosted earnings without causing unemployment. It has all but abolished extreme low pay, but in recent years there has been an increasing spike in the number of workers on the minimum wage. The proportion of workers on the minimum wage has grown by nearly 60% in the past five years. Rather than being part of a continuous process of uprating the pay of those on low incomes, it is now becoming the going rate in many sectors. That is one of the causes of falling living standards for millions of people and of increased social security spending.

This is a particular challenge for London. Londoners did not benefit as much from the introduction of the national minimum wage as did people in many other parts of the country, because of the slightly higher wages. The trend towards more workers earning at or just above the level of the minimum wage has exacerbated the crisis in living standards in London.

As well as low pay, another challenge—and another driver of social security spending—is housing costs. It was interesting to see that yesterday’s report from the Office for Budget Responsibility stated:

“The largest driver of the rise in spending on housing benefit has been caseload growth in the private rented sector…The rising proportion of the renting population claiming housing benefit may be related to the weakness of average wage growth…almost all the recent rise in the private-rented sector housing benefit caseload has been accounted for by people in employment.”

The relationship between low pay—and a failure to uprate pay over a number of years—and rising housing costs is driving more and more people, particularly working people, into dependency on housing benefit.

None of us wants to see expenditure on keeping people unemployed or lining the pockets of private landlords by subsidising higher rents. We all want to see a fall in social security spending on these things, but while pay is low, while average living standards are not rising and while rents are rising, we are going to see more costs and expenditure in that area. But there is a solution. The Chancellor promised a rise in the national minimum wage to £7, but we saw a 17p increase. Many employers across the country could pay more than the national minimum wage and they should be encouraged to do so.

We will not see a cut in social security spending unless and until we reverse the calamitous fall in the building of social housing, which is the only safe and secure means of ensuring that low-income people have low housing costs. Combine those two things and we will see a major shift away from the social security spending, which we would like to see fall, into a rise in living standards for millions of people. This Budget has not been able to provide that.