Housing Benefit

Kate Green Excerpts

Thursday 10th March 2011 Westminster Hall

[Dame Anne Begg]

That is why it is important that the research is carried out. In his evidence to the Committee, the Minister, the noble Lord Freud, said:

“They would say that, wouldn’t they?”

It is not until the proposal is market-tested that we will know whether what we are talking about will be the case.

[Kate Green (Stretford and Urmston) (Lab)]

Does my hon. Friend agree that we can already market-test to some degree? In my borough of Trafford, for example, we already know that two-bedroom properties in the private rented sector are heavily oversubscribed. The market is unlikely to reduce rents when it can readily let to people who are not in receipt of local housing allowance.

[Dame Anne Begg]

Indeed, and there is the same situation in my constituency, where there is a housing shortage. Even people who work in the oil industry—a fluid population that comes temporarily to work in the offshore sector—have great difficulty in finding housing. There are jobs in certain areas and people flock to them, but those people often cannot take up the employment, because they cannot find accommodation. Those people are in the private rented sector and can afford fairly high rents, and their situation probably has more to do with rent inflation in Aberdeen than with anything that has happened as a result of local housing allowance. The Government have sometimes given the existence of the local housing allowance as a reason for rent inflation in the private rented sector, but in certain areas it has nothing to do with the allowance, simply because there are not enough LHA claimants to have that kind of market effect.

One aspect of the housing benefit reforms that we congratulated the Government on is the fact that disabled people who need a non-familial person to stay overnight will be able to claim housing benefit to cover the extra room required for that carer, which is, in itself, a good measure. It was a recommendation made by the Select Committee in the previous Parliament, and I have to say that the then Labour Government did not agree to implement it. However—there is often an “however” in all this—as a Committee we realised that even if the person looking after a disabled person is a relative who does not need space in the house, there might, for example, be a need for more space for wheelchairs, or an extra room for dialysis machinery. Disabled people need large houses, for which they would not qualify on the basis of their family size, for all sorts of reasons.

I was disappointed by the Government’s response on that issue:

“Housing Benefit is not designed to meet every individual circumstance and it would be complex to introduce different rules for the situations such as those described by the Committee”.

That is poor, because council tax benefit and the tax itself can take account of people who need extra room. If someone can prove that they are in a bigger house than they would otherwise occupy because they need extra room for a wheelchair, the local authority places the house in a lower council tax band. That is quite simple and straightforward, and it is not particularly difficult. I am disappointed that the Government have not recognised that such extra space might be imperative for disabled people. It is doubly imperative that the Government recognise that, because the proposals also introduce an under-occupancy rule, of which disabled people could fall foul simply because they occupy a house that is bigger than the one that they would need on the basis of the number of people in their family.

The Government also completely miss the point of the Committee’s recommendations regarding the possibility that someone with a disability who has had their house adapted has to move because they do not qualify for a house of that size, or because the house is too expensive. Their house, whether in the private rented or social rented sector, will no longer be covered by housing benefit. The Government’s response is, “Well, we’ve got the nine-month transitional protection,” or “There might be something in the discretionary housing payment that can be used.” The Government’s response suggests that disabled people will be able to move just like everyone else. Well, the answer is, “No they will not.” It is incredibly difficult, as it is, to get accommodation; it is almost impossible to get accommodation that is already adapted; and it is very difficult to get accommodation that can easily be adapted. For someone who has already spent a lot of money—out of their own pocket or through facilities grants—not only on making their home accessible, but on adapting the bathroom and kitchen and doing all the other things that need to be done, the Government are saying that it will somehow be okay, because if housing benefit is changed such people will be able to move and replicate those facilities somewhere else, but only in a smaller house or a cheaper area. That is not possible, and a lot of disabled people will be distressed by what I see as complacency by the Government.

I know that the Government say that all that will be covered by the discretionary housing payment. In fact, their response to our report seems to say that the payment will be a panacea. I came across mentions of the payment so often that I counted them, and it appears 20 times in a relatively short document. The discretionary housing payment will be the solution 20 times—it is mentioned three times on page 11 alone. So, £190 million is going to go an awfully long way and do an awful lot, and I am fairly sure that the Minister himself recognises that it is not elastic and will not cover all that the response says that it will.

[Kate Green]

I, too, noted the many references to the discretionary housing payment as the solution to the hardship and risk of homelessness identified in our report. Does my hon. Friend agree that it is not only about whether that payment can possibly be adequate, which looks unlikely, but about the fact that it is discretionary? That introduces further uncertainty for families and households about the stability of their home.

[Dame Anne Begg]

That is the problem. As well as the discretionary element, council tax benefit will be devolved to local authorities, although only 90% of it, and that as well will be discretionary to the local authority. The discretionary element must cover not only older people but disabled people, young people, large families and multi-generational families, perhaps from ethnic minorities, yet it will be up to the local authority to decide who receives it. I suspect that most local authorities will have a pecking order of groups that they think are worthy of support, leaving the groups that they do not think are worthy of support at the bottom of the heap.

--- Later in debate ---

[Dame Anne Begg]

As we are speaking, perhaps the hon. Gentleman could read the report, where he will discover that the Select Committee recognised that housing benefit needed to be changed, and that the costs of housing benefit should be under control and affordable. There is no dissent from that. In terms of the Government’s response, the Government agree with the Committee, even within the ambit of the importance of getting the right amount of money to the right person to ensure that those who are on housing benefit are not experiencing a luxurious lifestyle, though I have to say they are not. That is where much of the problem in the debate came: the often overblown claims in some of the tabloid papers. One must remember that local housing allowance was set at broad rental market area level. Although the overall cap is £400, in a lot of areas it was already not possible to get that level of housing benefit or local housing allowance anyway.

[Kate Green]

If the hon. Member for Woking (Jonathan Lord) has now had the opportunity to consider the Government’s response, I wonder whether he was as struck as I was by the recognition that, after the introduction of local housing allowance, it was found that most low-income working households do pay a rent slightly lower than the local housing allowance rate for the property they occupy. It was only slightly lower—that rent was usually 90% or more of the local housing allowance rate. The differential between those who were in work and those not, in terms of rent paid, was relatively low. The make-up of the two groups often accounted for quite a lot of that difference. Those who were in work and having to pay rent were often young professionals, for whom occupying rented property would be a transitional step through to property ownership.

[Dame Anne Begg]

Very often, partly because of the publicity and the tabloid headlines, the assumption is that people on housing benefit are always out of work, when that is certainly not the case. In fact, in London it is particularly important that if low-paid people are to get work and to have work incentives, housing benefit must be set at the right level. The danger is that the gap between what they can get in housing benefit and what they can afford is too great; they end up not being able to get accommodation in the area in which they are working, which is even more important.