Welfare Reform Bill

Lord Morris of Handsworth Excerpts

Tuesday 13th September 2011 Lords Chamber

[Lord Morris of Handsworth]

My Lords, we can all agree that an effective welfare system must be designed to promote the basic well-being of those in need. Rightly, the state demands a quid pro quo—work for those who can and support for those who cannot. However, this arrangement is not as balanced as it might sound because for the balance to be maintained work must always trump welfare, but that demands that there are jobs for people. With unemployment at 8 per cent or more, cutting benefits to make work pay is not a joke for those who are unemployed and struggling to find a job. Of course, there will always be people who try to beat the system. However, to give the impression, as did the Chancellor, that the unemployed see welfare as a lifestyle choice is plainly wrong.

I want to concentrate on the impact of the Bill on the housing sector. I declare an interest as chairman of Midland Heart Housing Association. I start by looking at what is described as “actual rent”. Actual rent is the amount paid by a tenant irrespective of whether they are in the social or private rented sector. The Bill gives powers to the Secretary of State to set the level of housing benefit with no regard to the actual rent being paid. For many housing benefit means the difference between sleeping under a roof and, in some instances, sleeping on the pavement. These new powers for the Secretary of State will have two significant consequences. First, the gap between the benefit paid and the actual rent charged will put at risk security of tenure for many. Those who rely on benefits and cannot afford to fund the shortfall will have their independence and choice further reduced. The reality will be a greater risk of people being forced into poor quality overcrowded homes or being trapped in a cycle of homelessness.

The second downside is that the gap between benefit and actual rent will mean uncertainty for social housing providers who will be left on the horns of a dilemma. What do they do? They have the choice between evicting tenants or funding the shortfall, which in turn will leave less capital to build much needed social housing. That is the dilemma which will be faced by many social housing providers.

The new draconian measure in the Bill—the underoccupation penalties—will mean that the Government can cut housing benefit for social housing tenants who have an unoccupied room. According to the DWP’s impact assessment, this will affect an estimated 670,000 social housing tenants, more than half of whom are disabled. Many disabled tenants live in adapted, specially designed, supported and sheltered housing. Will they be evicted and, if so, where will they go?

Finally, I wish to say a few words about the Social Fund. Much could be said about that fund and other benefits but no doubt our discussions in Committee will be informed by noble Lords’ practical experience. They have the expertise to deal with these issues and ensure that a Bill emerges from Committee which meets the Government’s objectives of cost reduction and supporting those in need. The Social Fund supports families and individuals in crisis when they need financial assistance. However, the Bill abolishes the discretionary Social Fund and replaces it with local provision. This vital safety net for families in severe crisis should be made into a duty on local authorities. If they are to deal with that issue, the provision needs to be secure. There is a view that this fund should be securely ring- fenced to avoid it becoming a Social Fund postcode lottery.

In conclusion, much has been said, and much will be said in Committee, with the aim of improving the Bill. However, I repeat that an effective welfare system must promote the basic well-being of those in need. Sadly, as the Bill stands, it could destroy the safety net for the very people it seeks to protect. The responsibility lies with your Lordships' House to ensure that that does not happen.