Housing Benefit

Kwasi Kwarteng Excerpts

Tuesday 9th November 2010 Commons Chamber

[Bridget Phillipson]

What I will say is that many older tenants will move into different tenancies at different points, and will be affected by the changes that the Government are introducing. Many older people will, at times, vacate social homes and move into the private sector as their needs require, and may be affected by the Government’s changes. The only alarm being caused is coming from the Government Benches. I hope that the Minister will think again about some of these measures.

The Chartered Institute of Housing summed things up best when it stated that the Government’s motive

“appears to be reducing expenditure with little co-ordination or regard for the purpose of the benefit itself.”

This is not a genuine attempt to reform housing benefit and introduce a better system in its place; this is a Treasury-driven hit on the poorest and most vulnerable in our society.

[Kwasi Kwarteng (Spelthorne) (Con)]

I am grateful to the hon. Lady for giving way. The House is unclear about Labour’s position on the cap. Labour Members have accepted that there is a need for public spending restraint, but Government Members want to know whether they think the cap is fair or not.

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[Kwasi Kwarteng]

Will the hon. Lady give way?

[Glenda Jackson]

No.

I was somewhat surprised that the hon. Member for Colchester is not concerned about children this time. As he knows, the greatest damage inflicted on children was when they were stuck in those abominable bed-and-breakfast set-ups. Not infrequently, families were turned out on to the street at 9 o’clock in the morning and not allowed to return until 5 o’clock in the evening.

This, apparently, is the coalition Government’s way of taking people out of poverty. I find it totally incongruous that they should believe that they will take people out of poverty by making them homeless. That, essentially, is what they are going to do.

[Kwasi Kwarteng]

I am much obliged to the hon. Lady for giving way. We have sat through her speech with varying degrees of incredulity. While we admire her histrionic performance, we are still at a loss as to what her position is on the cap. Does she think it is right that in her—[Interruption.] I am fully entitled to ask the hon. Lady a specific question about her view on the cap. There are people in her constituency who are receiving far more than £20,000 a year on housing benefit.

[Glenda Jackson]

If the hon. Gentleman had been here from the beginning of this debate, he would not have been as ill informed as he is ill mannered. There are not people in my constituency claiming housing benefit at that rate, as I have had occasion to say. The majority of housing benefit claimants live in one and two-bedroom properties. We have already said that we would certainly introduce a cap, but not by the method that his Government propose. There should be a regional element.

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[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure to follow the hon. Member for Harrow East (Bob Blackman) and his “Just a Minute” remarks at the end—well done.

This is a Government in a hurry. We can all understand their sense of urgency and their desire to get on with the job. In many ways, that is creditable and commendable. However, the reality is that the plans for reforming housing benefit are ill thought out and ill considered. Only fools rush in—they rush in and make matters worse, and they gamble recklessly with people’s lives and livelihoods. In the Secretary of State’s speech at the beginning of the debate, it was unfortunate that he was unable to give any confidence to people who are worried and concerned about these issues. As my hon. Friend the Member for Manchester Central (Tony Lloyd) said, he did not allay the fears of constituents up and down the country.

As those of us who have sat through the whole debate have heard this afternoon, there has been cross-party consensus in favour of reforming housing benefit. That is clearly embedded in the motion. There is no use anyone’s shaking their head—it is there and it is on the Order Paper.

[Kwasi Kwarteng]

If there is the consensus that the hon. Gentleman talks about, does he have any idea why the previous Government did not address the problem in the 13 years that they were in government?

[Nic Dakin]

The previous Government made changes to housing benefit. As recently as a few months ago, the former Chancellor moved to change how rent entitlements were calculated so that big increases in house prices at the very top of the market no longer skewed spending on housing benefit. Things were in train, but they continue to need to be addressed. We could have a cross-party reform process that engages with all those who have expertise in this area, from Shelter to the National Landlords Association. Instead, there is a danger that the headlong rush into this basket of ill-thought-out proposals will threaten the fabric of our communities.

A key reason that the housing benefit bill has gone up is the lack of affordable housing in certain parts of the country, particularly London and the south-east, which has been exacerbated by the economic downturn, as people lost their jobs or reduced their working hours and needed the support available from housing benefit to prevent them from becoming homeless. The Rugg review of the private rented sector points out a possible way of addressing those issues. Those proposals, combined with real investment in more affordable housing, offer an alternative way forward. Unfortunately, the Government’s cuts to the housing budget and their squeeze on local authorities mean that it is unlikely that much new social housing will be built before 2015 other than that already commissioned by the outgoing Labour Government.

Comments by the Deputy Prime Minister and other Government Members show that they signally fail to understand how housing benefit helps people to stay in work. Only one in eight of all housing benefit claimants are unemployed, as my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) pointed out. If we take just those in receipt of LHA across the country, 26% are in employment and only 19% claim jobseeker’s allowance. The rest include pensioners, carers and disabled people who are unable to work. My hon. Friend the Member for Hampstead and Kilburn (Glenda Jackson) excellently exploded the various myths about housing benefit and housing benefit claimants.

The proposal to use the 30th percentile of local rents, rather than the median, to calculate LHA will have a wide-ranging and negative impact. More than 750,000 people will lose out as a result. They are people on low incomes who, the Government will say, can live on lower incomes. According to Shelter, Crisis, the Chartered Institute of Housing and Citizens Advice, the most brutal of all the housing benefit changes is the proposal to uprate LHA according to the consumer prices index, rather than local rents, as currently happens. If this change goes ahead, it will cause great distress.

Independent research by the university of Cambridge suggests that the cuts will push an additional 84,000 households below £100 per week per couple for all expenses after housing costs. Those households include 54,000 children. I recognise the concerns of the hon. Member for Colchester (Bob Russell) that the proposals may well end up increasing the number of children living in poverty. None of us in the House would want that to happen, I am sure.

The proposal in the universal credit idea to unify benefit tapers and make the system simpler have much merit, but the proposed changes to housing benefit in advance of the introduction of the universal credit will severely undermine the goal within it. Some will be forced to give up employment because they can no longer live within commutable distance. Some will be forced to move away from friends or family who provide child care or support.

The proposal to cut housing benefit by 10% for those on jobseeker’s allowance for more than 12 months seems dreadfully punitive. If the claimant has striven ceaselessly for 12 months to get a job but been unsuccessful, they are penalised for their misfortune. That is the world of Gradgrind and has no place in a modern civilised economy. Shelter, Crisis, the Chartered Institute of Housing, Citizens Advice and Mencap are just some of the range of organisations warning of the dire consequences that might occur if the proposals go ahead unamended. The Archbishop of Canterbury has expressed serious concerns that

“People who are struggling to find work and struggling to find a secure future are . . . driven further into a sort of downward spiral of uncertainty, even despair, when the pressure is on in this way.”

This Government are proud to say that they are listening to people’s concerns and will govern according to the new politics. The proposals represent a challenge to them to listen to those who know what they are talking about, and to those who make things happen on the ground and work with people day in, day out on such issues. The Government should step back from helter-skelter decision making and from a reckless gamble with people’s lives and livelihoods.

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[Kwasi Kwarteng]

rose—

[Yasmin Qureshi]

I promise to allow the hon. Gentleman to intervene in a moment.

On average, the impact of the local housing allowance on my constituency of Bolton South East will be £52 per month for a two-bedroom flat, with an average loss of £39 on properties that have more than two bedrooms. That may not seem like a vast amount of money to some hon. Members here—

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[Caroline Flint]

I am closing this debate on behalf of the Opposition and we want to consider some points that hon. Members have made. We also believe that housing should be looked at in the round, in regard not only to benefit reform but to housing supply.

Let us look at some of the other points that have been raised. We heard from the Government that housing benefit was out of control, but it was not. The housing benefit bill did go up as a result of the economic downturn because, as people lost their jobs or were forced to work reduced hours, they needed more help to prevent them from becoming homeless. In the past two years, there have been 250,000 new cases of people in work claiming local housing allowance. Overall, however, as a proportion of total Government spending on benefits and tax credits, housing benefit has stayed stable at 14% for the past 20 years.

[Kwasi Kwarteng]

Will the right hon. Lady give way?

[Caroline Flint]

No, I am going to make some progress.

We have also heard from the Government that their plans will save money. However, if they do not think their policies through and consider their impact on people, they could end up costing more than they save. The Government say that the cap will save £65 million. Others say that its consequences—uprooting families, forcing them out of their homes and into temporary accommodation—could cost nearly twice that. We have heard that the Government intend to increase the amount for discretionary housing payments, but I seemed to hear them say that they would use that money to pay the people who they say should not be in those homes to stay in them. Instead of using housing benefit for that purpose, they are going to use discretionary housing payments. That is a smokescreen too far.

The Government like to say that these reforms will help people into work, but pricing hundreds of thousands of working people out of whole swaths of the country, often where most of the jobs are, will make it more difficult, not less, for people to find work and keep their jobs.

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[Caroline Flint]

The Secretary of State might say that, but I find it difficult to understand, given the question marks over the impact on rents of the Government’s plans, why they are not doing a more thorough job of getting the evidence to prove that their policies are right. I have heard the Minister for Housing—who is not here tonight; he obviously does not think it worth while—say on a number of occasions that he has evidence to back up his idea that rents will go down, but he has refused to provide that evidence. We have seen no sign of it.

My right hon. Friend the Member for Greenwich and Woolwich and my hon. Friend the Member for Sedgefield made strong points about the rented sector. They said that the Government’s policies on housing benefit reform and their lack of a plan for housing supply would do nothing to tackle the issue of rents. Let us be honest about this: the Government have completely rejected the findings of the Rugg review, which we initiated to tackle some of the problems in the private rented sector.

Much has been said about our record on housing, so let me say something about that. Two million more homes were built, there are now 500,000 more affordable homes and 1 million more homeowners, and 1.5 million homes have been brought up to a decent standard. Homelessness was cut by 75%, and no family spends longer than six weeks in a bed and breakfast. In the face of the global financial crisis, the worst of its kind for 70 years, Labour did not walk by on the other side. We took action and supported families to stay in their homes. We prevented 300,000 families who might otherwise have lost their homes—and who would have lost their homes had the Tories been in power—from doing so. That is the reality. That is our record, and it stands in contrast to the mess the Tories left us.

Many thought that bringing so many homes up to a decent standard in such a short space of time would prove impossible. It did not. However, it did come at the cost of not building as many homes as we would have wanted. I agree with the hon. Member for Colchester and some of my hon. Friends who have referenced that tonight. Let us not forget that the reason why we had to focus on decent homes and bring them up to standard was the desperate situation we inherited from the last Conservative Government in 1997.

[Kwasi Kwarteng]

Will the right hon. Lady give way?

[Caroline Flint]

The Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), who is not in his place, helpfully points out on his website that there were 400,000 fewer homes after the Tories’ 18 years in power. Of the stock that did remain, the last Conservative Government knowingly, wilfully and shamefully allowed so much of it to get into such a state of disrepair that when we came to office in 1997, we faced a maintenance backlog of £19 billion, with 2.3 million homes below a decent standard. Pensioners were unable to heat their homes, and children were made ill because of the damp, mouldy and overcrowded homes they were forced to live in. That is the Tories’ record, and we are not going to let them forget it.

[Kwasi Kwarteng]

Will the right hon. Lady give way?

[Caroline Flint]

Conservative plans today are no better. The Minister for Housing likes to say that his Government will build more affordable homes every year than we built in 13 years. [Hon. Members: “Give way.”] I will give way to the hon. Member for Spelthorne (Kwasi Kwarteng).

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[Kwasi Kwarteng]

I am grateful to the right hon. Lady for giving way. I have asked this question six times in the course of this debate. What is your view on the cap? Would you have one?

[Mr Speaker]

Well, the hon. Gentleman ought to be able to get it right the seventh time. The Chair has no view on the cap.

[Kwasi Kwarteng]

rose—

[Mr Speaker]

The hon. Gentleman has finished. That is the end of it.