Housing Benefit (Amendment) Regulations 2010

Lord McKenzie of Luton Excerpts

Monday 24th January 2011 Lords Chamber

[Baroness Dean of Thornton-le-Fylde]

My Lords, this has been quite a long discussion but I would say that its impact on our communities is as important as what we have been discussing in this House over the past two weeks.

Of all the government cuts, the ones in this area are probably the cruellest. They affect people’s homes, where they live and how they live, and how communities operate. Indeed, if a decision in this House were based on merit, the Motions of my noble friend Lord Knight would carry the day in this Chamber. The Minister may have the comfort of getting votes from those around him but I cannot convince myself that all members of the coalition—I am looking particularly at the Liberal Democrat Benches—are sitting comfortably while supporting this policy. That is based on the many debates that we have had in this House in the nearly 20 years in which I have been a Member.

I can picture a House that did not have a coalition but would be faced with support from the Lib Dem Members. It is also telling that the Minister, who I know will put up a brave fight for his Government’s policy, must be feeling very isolated. Not one member of the coalition has stood up in this debate in support of the Government’s policy. I think that speaks volumes about the many Members on the Benches opposite.

I will support, and I hope the Minister will support, the Motion in the name of the noble Lord, Lord Best, who has enormous experience and knowledge of the housing sector and communities. In this rather lengthy debate, we have not covered other areas of the impact of this policy. Naturally, the House has as a priority the impact on single parents and other people in our community who have the narrowest shoulders with which to bear the implications. However, I suggest that this has enormous economic implications, too. We have a shortage of housing in this country; the impact of this policy will be that, in three or four years’ time, that shortage will have increased and will be extremely costly to rectify.

It also means, without being too emotional about it, the increasing ghettoisation in our cities, London most of all. How will our businesses be able easily to get labour when many people in their community have had to move outside of the city because they could not afford the rents inside? So this is a very far-reaching policy; it is not about simply taking an average of £9 out of someone’s weekly income. It has a much more far-reaching impact than that.

I hope that the Minister will accept the Motion of the noble Lord, Lord Best—second best though it may be, and I think it is. The wording is quite specific, and I know the department will carry out a review annually: that is its responsibility. But the Motion of the noble Lord, Lord Best, covers quite specific areas: children, homelessness and the resources that local authorities can allocate to this important area.

If a citizen does not have a home, he does not have anything. Therefore, I hope the Minister will accept the Motion in the name of the noble Lord, Lord Best, and that this House, operating at its best, as it usually does, will monitor the policy very closely and debate it as often as is necessary, until we rectify some of the cruelty we now face.

[Lord McKenzie of Luton]

I support the two Motions moved by my noble friend Lord Knight of Weymouth and that moved by the noble Lord, Lord Best. The noble Lord, Lord Best, anticipates a significant statement from the Minister, and I look forward to that as well. If it were to signify the withdrawal of these orders at the twelfth hour, the Minister would become an even greater national treasure than that described by the noble Lord, Lord Kirkwood, but I do not hold my breath.

My noble friend was right to signify that he was not going to press his Motions. In many ways, it would be good to test the view of the House to see if we could stop these orders in their tracks, but I think it has helped the tenor of our debate, as the noble Lord, Lord Kirkwood, has said. Of course, if we did defeat the orders, we would have to carve out, perhaps through the welfare reform Bill, those two parts of the order that we do support, as my noble friend has said: the provisions relating to carers and an additional room being allowed, and the removal of the £15 excess. We sought to do this before the election, and some noble Lords may recall that one party represented here was quite opposed to that. I think it is right now to remove that excess.

Others have explored the thrust of these orders. The most damaging are the setting of the local housing allowance at the 30th percentile of rents in each broad rental market area and the introduction of absolute caps relating to the number of bedrooms in a property. The noble Lord, Lord Kirkwood, asked whether the Minister could say what proportion of the rental market is in fact available to housing benefit claimants. I understand that the 30th percentile would mean, at least on day one, that 30 per cent of rents would potentially be affordable. It does not mean that 30 per cent would be available, and once we move to uprating by CPI, not even that first proposition would hold true.

Who bears the cost of the benefit savings is at the heart of the debate we are having. Will it fall wholly or mainly on landlords or on tenants who are, by definition, the poor? In considering these matters, we need to be mindful that they are just part of a package of measures aimed at cutting the cost of housing benefit. Still to come are increases in non-dependant deductions, the uprating of LHAs by CPI rather than by actual movements of rents, the docking of 10 per cent for those on JSA for more than 12 months and the extension of the single room rate for individuals up to the age of 35.

The need to tackle the budget deficit is acknowledged, which is why we accept and, indeed, initiated the withdrawal of the £15 excess, but the speed and depth of the cuts proposed is not something we support, as my noble friend has explained. The distribution of the cuts, which the IFS analyses will mean that by 2013-14 there will be an increase in absolute poverty by 300,000 children and 200,000 working-age parents, largely driven by the housing benefit cuts, is simply not acceptable. The DWP issued an impact assessment in November, together with an equality impact assessment. My noble friend Lady Sherlock spoke with some passion about this. The DWP suggests that it cannot assess the behavioural effects of the housing benefit proposals, although it provided an assessment on the assumption that housing choices on rent levels would be unaffected. As we have heard, it estimated that households would lose £12 a week on average, but declared itself unable to estimate the number of households that may move. In contrast, Shelter estimated that 68,000 to 134,000 would move nationally, and the GLA estimated that some 9,000 households may need to move in London.

In the context of our debates, £12 is sometimes not seen as a meaningful figure, but the right reverend Prelate the Bishop of Hereford brought us down to earth on that, as did my noble friend Lady Sherlock who said that it is better to talk in terms of a pair of shoes or enough food on the table. Excluding the removal of the £15 a week excess, the impact assessment still shows that 68 per cent of LHA claimant households will lose on average £10 a week and that losses for those in five-bedroom accommodation will average £74 a week.

Another consequence the impact assessment acknowledges but does not quantify is the prospect of increased homelessness. It also acknowledges that local authorities have a duty to find school places for children moving into their area and that that can lead to increased costs and that children who experience disruption in their schooling may do less well than would otherwise be the case. It recognises that there may be additional burdens on local authorities when families move into an area requiring a care-and-support package, and for disabled people, as we have heard, the DWP states that the LHA proposals could reduce options to help independence and lead to the loss of informal carers and support networks. They are retrograde provisions indeed, as explained by my noble friend Lady Wilkins. For individuals in work, an enforced move could extend their commute to their place of work.

There is a list of probable consequences, but there is no fundamental assessment of or research into the extent to which these circumstances will arise or into how people’s lives will be affected. There is just a cruel acceptance of the traumas that these proposals will visit on poor families and the damage they will inflict on them, their families and their communities. All of this has to be considered in the context of 48 per cent of people on LHA already facing shortfalls between their benefit and their rent. It is inevitable that people having to move, homelessness increasing and debt rising will become a reality. The Government assert that these matters will be mitigated principally by downward pressure on private sector rents, by transitional relief, by households choosing more appropriate accommodation, and by additional funding for discretionary payments.