Housing Benefit

Debate between Kwasi Kwarteng and Nicholas Dakin

Tuesday 9th November 2010 Commons Chamber

[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.