Welfare Reform Bill

Debate between Lord German and Lord Stoneham of Droxford

Wednesday 14th December 2011 Lords Chamber

[Lord Stoneham of Droxford]

My Lords, I declare an interest as chair of First Wessex Housing Association and Housing 21. I am pleased to speak in this debate initiated by the noble Lord, Lord Best. I think everyone in the House today understands the extreme pressure of the need to reduce the housing benefit budget and to tackle the issue of underoccupancy at a time of housing shortages. We should not forget that underoccupancy of social housing is nearly matched by 50 per cent overoccupancy.

In Committee, the Minister set an objective for the changes he was proposing. He said:

“Housing benefit … will become more balanced in a way that will restore fairness, encourage better use of our existing social housing stock and encourage more people into employment”.—[Official Report, 18/11/11; col. GC 71.]

The problem is that the market for social housing is not flexible; it is quite rigid. It is a fight to get a home and, in severe shortages, requirements and needs are not easily matched. We wish we had a situation where people could have a better choice, but it is simply not possible. What we have available in any locality is way short of need, and often what is available cannot specifically match need. On the issue of underoccupancy, we know that there will be something like 180,000 under retirement age who want to move but that the annual available housing for them is about one-third of this.

Housing requirements change through life. In a rigid market where people cannot easily match their requirements to supply, some flexibility is required. Otherwise, allocations will be even more difficult. The Minister’s objective—balance to restore fairness—will not be fair if an individual wants to move home and cannot. The person will have to find extra income and, in the current economic climate, as my noble friend Lord Kirkwood, said, it will be extremely dubious whether they will be able to find the significant extra income they need. Let us not forget that in this situation—my noble friend also referred to this—underoccupation is greater in the north, and so there is a regional dimension. Thirty pounds a week is a lot of money for people least able to afford it, and 150,000 households will have to find nearly twice that.

The Minister also said that one of the objectives is to provide balance to make better use of our existing stock, but the reality is that the existing rigidities will be distorted by this change. Available new housing stock will now have to be used to move people. The people who probably need the most encouragement to move are those who are retired—who are underoccupying—and we will not now have the facility to move them. They are the people whose household costs need to be reduced. Indeed, we improve the housing benefit bill by moving them. As the housing stock is re-let, we will be required under the Government’s housing benefit reforms to let some of these houses at affordable rents. So for those people who take on that stock, we will probably be paying out a higher proportion in housing benefit.

The Minister gave us, in his Committee speech, figures from the future network. Under the claimants benefit research, he said that of the 670,000, 25 per cent want to move; 50 per cent will not move; 29 per cent are looking for increased work and income—which is going to be difficult; 15 per cent say that they will take in a lodger, and 35 per cent are said to be likely to go into arrears. Those are pretty dramatic figures. He also said that over the next couple of years we will look at putting strategies in place to make sure that this does not happen. The problem is we only have 15 months in which to do this, not a couple of years, as the measure comes in in April 2013. That is madness.

We have already heard this referred to as a room tax. In fact, in Committee, somebody referred to the window tax. It was not in the time of Queen Anne, as the Minister mentioned; it was William and Mary—1696. I looked it up; two shillings per window. That is interesting; £11.20 in real money—it is not much different. I am assured also by the research that the phrase “daylight robbery” did not originate from that time. We can imagine, however, the political campaign—and the slogans—should this room tax come in on a single day. I do not fancy the Chancellor—I hope my colleagues will remember this—standing up in March 2013 to give his Budget speech when in April 2013 this change will be coming in. I bet you he will have to move politically at that time, even if he does not move now.

We have to expect that 25 per cent of people will move. How is this to be organised in 15 months? There are not enough houses being built to do this. Housing associations do not even know how many and who will be affected. There is a lack of information. What are the strategies? What must the Government do in this situation? What do they need to say today?

The first proposal is that of the noble Lord, Lord Best: allow an extra room for flexibility. It is probably the best proposal, but—as we will be told—this will take £300 million of the £500 million savings. It is not actually a great deal of money. I just ask the House to think what the Chancellor will be thinking in March 2013. It is not clear that the £300 million in savings will come through. I expect that a lot of children and other relatives will suddenly emerge in these houses. Re-lets, as I have already mentioned, would lead to higher housing benefit claims. There are also the costs of moving, plus the costs of discretionary housing grants, and so on. Retired people who we want to move into smaller accommodation—saving housing benefit and saving their household costs—will not be able to move.

The second proposal is to extend the transition so it coincides at a minimum with the anniversary of tenancies; that ideally, as the Minister has already said, we should spread this change over a couple of years so that people can adjust. If you are trying to take from the poorest people these sums of money, they need time to adjust. So do the housing associations and the housing providers. They need time to adjust to allow a better transition, to allow the adjustments in housing stock. We cannot expect everybody to simply change on day one in 15 months’ time.

The third option is to extend discretionary housing grants. We hear this on each occasion, but we are not sure how that is going to be administered.

I urge the Government to move on this issue, for sensible housing requirements, for fairness and for assuring that the poorest and the least resourced will not assume a significant burden at a very difficult time. Above all, the providers also need time and flexibility to adjust the housing supply to the new demands and the new needs.

[Lord German]

My Lords, I have two groups of people to whom I want to refer. My noble friend Lady Thomas referred to them in Committee, and I referred to one of them. What does the Minister anticipate doing for foster carers? We have already been told that we have a shortage of foster caring in this country, and foster carers need to keep a bedroom to be able to host and look after children in foster care. It is very important indeed—and I think that the Minister acknowledged this in his response in Committee—that something needs to be done to accommodate the needs of that group of people.

The second group of people are those who have had adaptations to their properties. Those adaptations probably cost the public purse quite substantial sums of money, so it does not make sense, for example, to require people to move from one property that has a stair lift to another where a stair lift has to be put in place. Can my noble friend tell us what he anticipates doing for both those groups?