Welfare Reform Bill

Lord Freud Excerpts

Wednesday 29th February 2012 Lords Chamber

Moved by

[Lord Freud]

That this House do not insist on its Amendments 3B and 26B to which the Commons have disagreed.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, I am sure that all noble Lords will agree that we have debated this measure comprehensively over the passage of the Bill through this House. Perhaps, though, your Lordships will allow me to take some of our time this evening to explain again why we believe that this change is necessary.

We have been open about the fact that this measure is essential to curb housing benefit expenditure. Left unchecked, expenditure on housing benefit would reach £26 billion by 2014-15. That is unsustainable and unjustifiable, not least because of the current economic climate. As I have said before during our earlier debates on this subject, we do not think that it is reasonable to expect the taxpayer to fund the cost of somewhere approaching 1 million spare bedrooms. At £500 million a year the cost is substantial, and there is no realistic possibility of finding that money elsewhere.

Some in this House, and indeed in the other place, have suggested that we should perhaps abandon this measure altogether as it will not deliver savings if substantial numbers of tenants move into the private sector. I assure noble Lords that if that really were the case, we would not be implementing this change. It is important to look at the bigger picture. If there were movement into the private rented sector, that would free up accommodation in the social rented sector, enabling it to be let to others who may otherwise have been renting privately. Alternatively, it could be offered to people who are currently placed in often expensive temporary accommodation. So, while I can understand how some may conclude that this measure would result in an increase in housing benefit expenditure, I firmly believe that it will achieve precisely the opposite as the effects ripple outward.

During this final stage of the Bill’s passage, the noble Lord, Lord Best, has offered amendments to protect some social sector tenants, all of which would reduce the expected savings from this measure. I pay tribute to him for the manner in which he has pursued his amendments and the wealth of knowledge that he brings to bear on this issue. I do not doubt for one moment that these were anything other than well intentioned but the Government have been unable to accept them. Aside from the financial implications, there is an important issue of fairness. We have talked about that a lot in the context of these changes but we must make sure that we recognise the need to be fair to tenants living in the private sector in receipt of housing benefit.

On the face of it, what has been suggested through earlier amendments is an approach that protects claimants in social housing but not those in the private sector. I do not believe that there is a clear rationale to pay claimants in the social sector to keep a spare bedroom but not those renting from a private landlord. The Government’s clear view is that we do not fund spare bedrooms in the social sector or the private sector. The cost to the taxpayer would be excessive and totally unjustifiable.

Although we have had to take a tough decision to press ahead with these changes, that does not mean we will not protect people in vulnerable situations. As noble Lords know, we are adding £30 million a year of extra help to the discretionary housing payments fund from 2013-14 for disabled people living in significantly adapted accommodation and for foster carers. Local authorities will of course still be able to consider discretionary housing payments for other groups. I realise that the noble Lord, Lord Best, and others would prefer the certainty of specific exemptions for these groups. We understand the arguments for that but do not believe that a blanket exemption is the most effective or affordable approach. Any exemptions would also add complexity to the system, which we want to avoid.

We also have special rules to provide protection for groups such as the recently bereaved, so that they do not see an immediate reduction in their housing benefit. I know that the noble Baroness, Lady Hollis, who I do not see in her place tonight, is concerned about the impact of these changes on those who need care. Therefore, I reassure her once more that we will allow an extra bedroom for those requiring overnight care from a non-resident carer, in the same way as we do for claimants in the private sector.

We have more than a year before these changes are due to come in and we recognise how important it is to prepare for them. It is essential that all those affected by this measure, whether directly or indirectly, understand how the change will affect them so that they can take action well before April 2013. Therefore, we will use this lead-in time as effectively as possible to support local authorities, customers, landlords and others to plan for these changes. I beg to move.

Motion A1 (as an amendment to Motion A)

Moved by

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, we support the Motion proposed by the noble Lord, Lord Best, and I, like others, thank him for the persistence, diligence, precision and passion with which he has pursued this subject from the start of our proceedings. I very much agree with the noble Lord, Lord Kirkwood, who said that this is no way to go about tackling issues of underoccupation; a much broader, more sophisticated approach is needed. It is a pity that we are stuck at this stage with, basically, having to live with what is in the Bill, subject to the review.

We have been told again that the amendment that we sent to the other place is an infringement of its financial privilege. It disdainfully clings to that financial privilege, which it could waive, without regard to the consequences for hundreds of thousands of households who will bear the financial burden of these cuts, in the same dismissive way that the Prime Minister today announced that the Bill would complete its parliamentary passage before noble Lords had even convened to consider it further. They brush aside our amendment, with its protection for families, notwithstanding that for some there are no smaller properties for them to move to; regardless of the fact that, for some, their disability involves them in additional costs which will be more difficult for them to meet and given their housing benefit reductions; and ignoring that many do not have a route to work to mitigate loss of benefit. The noble Lord, Lord Best, was absolutely right not to water down the amendment further and try to pick and choose which of those categories of individual is more deserving of escaping this iniquitous provision than the others.

Throughout the various stages of the Bill, we have sought to press on the Government the innate unfairness of the provisions concerning underoccupation. As we have heard, the arguments advanced have variously included the following. There is the appropriateness of adopting the CLG definition of underoccupation—a measure which provides sensible flexibility for households as family arrangements wax and wane, health conditions change, and young children grow older. There is the acceptance that only if there is suitable alternative smaller accommodation should families be expected to move, notwithstanding that that may be totally disruptive to their lives, and that meeting a housing benefit shortfall by getting a job or working more hours should not be insisted on where claimants are simply not able to work.

The losses in housing benefit a week, whether of £12, £13 or £14, cannot be borne without driving more households closer to or into poverty. Most are not sitting on substantial savings to cushion the loss of benefit; if they were, they would be ineligible for housing benefit in the first place. Moving to the private sector is likely to lead to increases in housing benefit costs for the Government rather than reductions. Taking in lodgers to contribute to the housing benefit shortfall will simply not be possible or desirable in many family circumstances. It is a false economy to force disabled people to move from a property which has been substantially adapted. To make it more difficult for those involved in foster caring makes no sense on many levels.

Your Lordships have supported those arguments, but they have been rejected by the Government in Committee, at Report and, now, at ping-pong. The only acknowledgement of the havoc, despair and poverty they will create is a £30 million annual top-up to discretionary housing benefit. Even that, as we heard from the noble Lord, Lord Best, is funded by an increase in the housing benefit reductions for all.

The Government know full well that these clauses will not solve the problem of underoccupation of social housing. They cynically do not want to solve it, otherwise their intended savings will simply not materialise. The offer they make is to move further afield, away from your community, support network, friends and jobs—not a sensible proposition, as we heard from my noble friend Lady Lister—to take a lodger, to use your savings or to earn more money. That is essentially a bogus offer, because most will simply not be able to take it up.

If we cannot persuade the Government, the least we can do is to have arrangements which will confront them with the consequences of what they implement. That is why we support the Motion tabled by the noble Lord, Lord Best, which requires an independent review of the consequences of Clauses 11 and 68. Of course, it will not be just that review which explains what is going on. Local authorities, councillors, MPs, and voluntary and community organisations—and, indeed, the courts—will get the blast from this in little over a year from now, as the cuts begin to bite.

We do not deny the need to tackle the deficit, nor that that means some hard choices, but it is genuinely difficult to understand why this contribution is sought in this way to this extent from this group of people. The alleged cost of our previous amendment, £100 million, is, when we think about it, just 20 per cent of one company’s tax avoidance schemes.

However, that is what both partners in government have chosen to do, and we have not been able to persuade them otherwise. We hope that an independent review will reinforce the points that we have made and still persuade the Government to a different view. If the review concludes otherwise, we can have no complaint.

This is not the end of the matter; it remains work in progress; but this debate marks the conclusion of our deliberations on the Bill, a Bill that we have been able to improve in some respects, but which, in too many ways, imposes unacceptable burdens on the most vulnerable. They are entitled to better from their Government.

[Lord Freud]

My Lords, let me start with two points. The first is that we plan to move ahead with these changes. The second is that I pick up the point made by my noble friend Lord Kirkwood. I heard very clearly what he said about housing strategy. On this measure, of the 3.3 million tenants living in the social rented sector and receiving housing benefit, only about one in five is expected to be affected by this change. Some will move to more suitably sized accommodation and will get support to do so. However, if social sector tenants choose to stay where they are and meet the shortfall through employment, we will offer them help in doing that. As noble Lords know, this measure applies only to working-age people. The substantial investment that we are making in the work programme and in universal credit will ensure that people are supported to find work and that work really will pay.