Private Rented Sector

Debate between Karen Buck and John McDonnell

Wednesday 25th June 2014 Commons Chamber

[John McDonnell]

I congratulate my hon. Friend on achieving that advance. It is difficult in many other areas, where we do not have the co-operation of the local authority. I have started turning up at evictions now, to negotiate with estate agents and others and the bailiffs. As many hon. Members will know, that can be quite confrontational.

I have lived and worked in my constituency and represented it in different forms for nearly 40 years. When I arrived there 40 years ago, if someone wanted a house, they would go to the council and there would be council housing. There was a council housing waiting list, but it was not that long. Most of those council houses were sold off. Ironically, a letter went out from Hillingdon council two weeks ago seeking to lease back the council properties that it sold 20 years ago, to rent those out to people. It is bizarre how the cycle turns.

The other form of housing in my area was owner-occupation. There was little private rented accommodation at the time, but the level of wages was such that mortgages were available. Mortgages were also available through local authorities. The Greater London council had a mortgage scheme with a relatively cheap rate. Now, unfortunately, even though my area has high levels of employment, the pay is such that people cannot afford owner-occupation. The average price of a property in my borough is £318,000, which is way out of the reach of people in my constituency on average pay—between £12,000 and £20,000. They are therefore forced into the private rented sector.

The private rented sector has expanded, but insufficiently. In my constituency, the cost of a family property in the private sector ranges from £1,200 to £1,600, and in some instances up to £2,000, a month. That is simply unaffordable. Even if people overcome the challenge of getting into the private rented sector, they are faced, as we heard earlier, with discrimination against anyone on benefits being able to rent a property. There is ghettoisation going on, organised by the landlords and the agents—“That area or that property isn’t suitable for you because you’re on benefits.”

People go through all the experiences about which I have expressed concern—having to find the money up front, the heavy charges imposed by the agents—and it forces some into penury. I have many constituents who go to payday loan agencies to borrow the money to try to get a roof over their heads.

[Ms Buck]

My hon. Friend is making a characteristically passionate speech. Does he share my concern that at the very time when the impact is being felt, as he describes, we are seeing a collapse in the provision of advice services, particularly for housing? This morning’s statistics on legal aid provision show, for example, that the number of housing cases for which legal aid was provided has fallen from 126,000 to 55,000, so at the time of greatest need, people are finding less advice and assistance available to them.

[John McDonnell]

I was going to come on to that, but let us deal with it now. Tenants are defenceless at present. They may well know their rights, but they are not able to exercise them. Because the law centre in my area is on a contract, it is limited in the work that it can do, and it is swamped. The citizens advice bureau is swamped continuously. There are lines of people on a Tuesday morning queuing up to go to the CAB to book their appointment. In my constituency we have moved to an open door policy so that people can come to the office at any time. All the agencies that I am aware of are swamped.

Tenants cannot get into the system even to challenge what is going on. It is not just about getting access to a property; it is about defending themselves, once they are in that property, against abuse by landlords and threats of eviction. All this has resulted in the use of bed-and-breakfast accommodation in my constituency going up. The figure was 30 in 2012; the latest figures I have from the beginning of 2014 show that there were well over 200 families in bed and breakfast. I thought that on a cross-party basis we had committed ourselves to ensuring that no family would be in bed and breakfast.

The bed-and-breakfast establishments that I have been visiting are squalid. They are appalling. Because families are stuck in bed and breakfast for a long time, children are being brought up in squalid and often unsafe conditions.

Welfare Reform Bill

Debate between Karen Buck and John McDonnell

Wednesday 15th June 2011 Commons Chamber

[John McDonnell]

I understand, and, coming from a local government background—both as a councillor and as a local government officer—I very much support the localist agenda of freeing up local authorities to do as much as they can to reflect the direct wishes of the local electorate. However, we are talking about people in severe poverty, and one of the overall duties of government at every level is to ensure that people in our communities are not put at risk as a result of that poverty. Therefore, there is a danger in the localist agenda, which I support, of allowing a free-for-all. Without establishing national standards and monitoring, we could have a number of local authorities failing to fulfil their responsibilities as we would wish. Although I agree with the hon. Gentleman that the local electorate should hold those authorities to account, we have unfortunately had numerous examples—I speak as an advocate of local government—of that mechanism for keeping local authorities in check not being effective, particularly on the detail of administering such schemes. I am sure that we can all cite examples of that on a cross-party basis, no matter who has been in control.

I am not talking about just my individual concerns. Virtually every organisation dealing with the poor in this country has expressed its concerns about this element of the legislation. My local citizens advice bureau has provided me with numerous examples—which I will not take the House through—of the benefits of both social loans, particularly crisis loans, and community care grants. I would like to take this opportunity to thank Heather Brown, director of the Hillingdon CAB, and all her team for their hard work. They have emphasised the need to explore all the implications locally and nationally before the Government leap into a new system.

Shelter and Crisis, the housing charities, have undertaken their own assessments of the process. Crisis surveyed 250 of its housing advisers. Numerous Members across all parties work closely with Crisis, and we have the greatest of respect for its work. That survey showed that 69% of clients used crisis loans for rent in advance, with 87% using them to help furnish their properties. In its briefing, which many Members will have seen, Crisis quotes one person as saying that unless we have a system that is at least as effective as the social fund, the effect on efforts to get people to move into independent accommodation would be “catastrophic”. Anxieties have been expressed across the board about the fact that we have not yet had that assurance.

I am concerned about the lack of analysis in the Government’s proposals of people’s needs. There is also a lack of detail on how the proposals will work. My worry is that poor and vulnerable people will be put at risk as a result. It therefore behoves us as a House in discussing this Bill, as well as the Government, to come forward rapidly with detailed proposals that have statutory backing, in order to assure our constituents and all those working in the field that we will have a system to provide emergency support to people who are poor and vulnerable, but not one in which local decision making risks diverting those resources away from where they are needed. It is on that basis that I have tabled this amendment for discussion. I hope that, as a result of this debate, we will at least gain a clear understanding of how the Government are going to address these issues—and address them fairly urgently—given that they are causing considerable concern.

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

I congratulate my hon. Friend the Member for Hayes and Harlington (John McDonnell) on the way in which he has introduced this group of amendments. His amendments and those tabled in my name cover much the same ground. Like him, I am deeply concerned that the Government propose to remove the discretionary element of the social fund without giving us a great deal more clarity about how the poorest and most vulnerable will be protected, about the adequacy of the replacement system, about the protection of vulnerable people without a local connection—a matter to which I shall return in a moment—and about the lack of a proper system of review. As my hon. Friend rightly said, the numbers involved are significant, with 640,000 applications for community care grants and 3.6 million applications for crisis loans. We are not talking about a modest amount of money, and those figures represent a great deal of need. He also suggested that they represent only the tip of the iceberg of need. Of course we accept that there cannot be unlimited capacity to meet need, and it is clear that, were more resources to be made available, more need would come out and be met.

I want to pick up on a point that my hon. Friend made in response to an intervention. Despite the numbers of people who apply for and receive loans and grants under the discretionary grant, and the fact that when local government takes on this responsibility it will be accountable, in the spirit of localism, to its electors, we must recognise that the characteristics of people who seek assistance from the social fund do not make them a cohort of people that is likely to influence local politicians on a significant scale. This will tie into comments that I will make in a moment about what we should do with people with no local connection.

All the evidence that I and my hon. Friends have received from our law centres, citizens advice bureaux and other organisations shows that the claimants of discretionary social fund elements are very likely to be highly mobile people in a crisis that frequently severs their connections to the local community. They are not likely to be over-represented among those on the electoral register, or to wield a significant amount of local clout. They would not always need to do that; a good, responsive local authority will map and respond to their needs without it, but the reality is that, in a competition for scarce resources, that will not always be true of all local authorities.

We are completing the stages of the Welfare Reform Bill today, having been asked to make decisions on a number of important elements, which we discussed on Monday and are debating today, without having been given a great deal of substance or detail about how those elements will work. The Government called for evidence on the discretionary element of the social fund in February, but the consultation did not close until we were in the middle of the Bill’s Committee stage. That worries me. Yet again, the Government seem to be pushing ahead with their proposals even though we have not had a proper opportunity to reflect on the breadth of views and opinions of people with experience of and expertise in the subject.

The Minister might care to report to the House on what the responses to the consultation actually said. It would be nice if she assured us that all the responses would be placed in the Library. I think I can guess, however, that their overwhelming tone will be one of deep disquiet, and that they will be urging the Government to think again, which is consistent with the principles outlined by my hon. Friend the Member for Hayes and Harlington. As he said, almost all the organisations with expertise and specialist knowledge in the operation of the social fund have told the Government of their worries. Let us take note of who they are. They include: Age UK; the Association of Directors of Adult Social Services; Barnardo’s; the Child Poverty Action Group; Citizens Advice; Community Links; Crisis; Disability Alliance; Family Action; the Family Fund; the Family Rights Group; Gingerbread; Homeless Link; the National Housing Federation; Oxfam; Platform 51; the Prison Reform Trust; Save the Children; Scope; and St Mungo’s. I am sure that there are others.

Those organisations are the big society in action. In many cases, they provide complementary services to the social fund, and they are expressing their concerns about the Government’s proposals and about their capacity to deliver to the people who will need their services when the changes are introduced. If the Government are serious, as I have always thought they were, about the idea of the big society and about a partnership with voluntary and community organisations, surely the first principle must be to listen to what those organisations are saying. Let us take an example from that list. Oxfam has said:

“The Social Fund provides vital support for people in times of crisis. The government proposes to devolve much of this money to local authorities, but without any statutory duty on them to provide an equivalent system of protection. This runs the risk of driving people to use high-cost lenders, reducing their chances of managing their debts successfully. This is particularly important as Universal Credit constitutes a radical reform, and it is almost certain that its introduction will suffer from teething troubles. These are likely to cause significant need for emergency payments like crisis loans, just as they are abolished. The Social Fund needs to play an important role in protecting people during this transition, which further supports the need for a delay to the change.”

The Committee also heard directly from people who know more about the social fund in all its strengths and weaknesses—we know that there are some weaknesses in the operation of the existing scheme—than anyone else. They included Sir Richard Tilt from the Social Security Advisory Committee, who said:

“Community care grants are the bit I am most concerned about—£141 million. By the time that you have dished that out to 100 plus local authorities, there will not be a great amount of money at local level, and I think, as it is not ring-fenced, it is likely to disappear into other things.”

He also said:

“My view on all this is that we have a UK social security system and that, for the past 25 years, the discretionary social fund has been the ultimate, final safety net for the poorest and most vulnerable…I would argue for a UK safety net underneath it.”––[Official Report, Welfare Reform Public Bill Committee, 24 March 2011; c. 82-3.]

Professor Kempson told the Committee, in respect of the role of local authorities:

“Some will provide a better service than we have now”.

I do not think that that is in doubt. There is excellent practice in local government. Like my hon. Friend the Member for Hayes and Harlington, I also came to the House after serving in local government and I am a great advocate of it. Professor Kempson said:

“Some will provide a better service than we have now; many will provide a worse service; and some, I fear, will provide almost no service.”

She also said:

“As I read it, there will be no ring-fencing, and I cannot even see that there is any proposal as yet to build in any form of accountability by local authorities. That is the very least that is needed.”––[Official Report, Welfare Reform Public Bill Committee, 24 March 2011; c. 82-3.]

We know that the social fund has many flaws and has been subjected to scathing criticism from the Public Accounts Committee, the National Audit Office and others. I completely accept that those criticisms need to be taken seriously. The issue before the House today, however, is whether the Government’s proposal risks making things worse by entirely removing that essential safety net without addressing the genuine concerns of the present system. The Minister made it absolutely clear to the Committee that

“there is no expectation that local authorities will replicate the current scheme.”––[Official Report, Welfare Reform Public Bill Committee, 3 May 2011; c. 731.]

She is nodding at that. She made it clear that, when the discretionary social fund is removed, local authorities will provide a service equivalent to the present one. She said that this was not devolution to local government, but something fundamentally different.

Central to that is the fact that the Government do not expect local authorities to manage loan schemes, as happens now with the crisis loan scheme, and that as loan repayments were topping up the available resource through the current crisis loans, the capacity to provide an equivalent level of service through emergency funding is now severely restricted. The figure I was given was 84%, although the Minister told us in Committee that it was 50%—and I am happy to accept her correction. None the less, the cash sum as an annual figure starting from now that will be devolved to local authorities does not tell us much about the funding that will available for the equivalent level of crisis service once the scheme gets under way because that 50% repayment will very quickly fundamentally erode the value of the service. As we have heard, the likelihood is that it will drive people into the arms of the cowboy and high-interest lenders as well as into debt.

--- Later in debate ---

[Ms Buck]

I will do a deal with the hon. Gentleman. If he supports our amendment, I will accept his point. There is some truth in what he says: there is some excellent practice out there and plenty of innovation in the local government sector, but it is not consistent across the piece. The amendment effectively says, “Do not abolish the discretionary social fund without piloting or without allowing a proper ability for local authorities across the piece to demonstrate that they have the capacity to do what needs to be done”. The hon. Gentleman might well have enough confidence in that, but it cannot be guaranteed. At the moment, there is absolutely no assurance that a consistent level of innovation, expertise and commitment is available in some, let alone most local authorities.

[John McDonnell]

In my constituency we have done just that. A furniture fund has been set up by a voluntary organisation that is partly contracted by different agencies, but it has taken us 10 years to get to that. Now, because of people’s change in circumstances as a result of loss of benefits, we are setting up an arrangement for food parcels, which are being distributed by religious organisations. It is, however, extremely difficult, and it takes a long time to set this sort of thing up. My anxiety is that in the rush to legislate on this matter, none of the preparatory work has been done and there are considerable costs in setting these things up, particularly in the early years.

[Ms Buck]

That is an excellent point. As we have said so many times in debating this Bill, one does not necessarily disagree with some elements in principle—localism and the involvement of local government in shaping the response to local needs, for example—but these local projects take a long time and require investment to set up and they tend to come and go. In north Paddington, one of the most deprived communities in the country, two credit unions were set up over the last 15 years—with regeneration funding in both cases—but they have both collapsed. I do not want some of our most desperate and vulnerable people to be forced into reliance on a set of services that come and go, that might not be available and that might well collapse. I think credit unions are marvellous; I would like to see them flourish in all parts of the country, but they are much more vulnerable than people sometimes allow.

[John McDonnell]

Many of us have been through the same exercise that my hon. Friend described to establish credit unions, so the last thing we need at the moment is anything that destabilises our local credit unions. Loading this sort of responsibility on to them could undermine not only individual credit unions, but the whole sector.

[Ms Buck]

That is absolutely right. We need to carry on growing the local expertise and the local voluntary and community organisations, including credit unions, which need to come up with innovative and practical responses to help deal with our social problems. However, they are not a replacement, but a complement, and they have to be approached with a great deal of care.