Welfare Reform Bill

Lord Wigley Excerpts

Monday 10th October 2011 Grand Committee

[Lord Wigley]

My Lords, I support this amendment very warmly indeed, and put to the Minister circumstances that arose frequently in the area that I used to represent in the other place and that still arise in rural areas, not only in Wales but also in areas such as the Lake District and Cornwall, where it is very difficult for young people to buy a first home. Indeed, it is so difficult that unless a parent is in a position to make some contribution towards a deposit, it is next to impossible to buy a first home. The question that goes through my mind is: if a parent has money allocated for this purpose, is he or she going to pass it to their offspring to buy a house, knowing that if it stands in their offspring’s name in a bank it may prevent that person from getting benefits?

In areas such as those to which I have referred, the major industry is often tourism, which is highly seasonal. This means that people are moving in and out of work frequently. If one takes the combination of ultra-high property values, which have often arisen because of the pressure of second homes, the relatively low income levels that obtain within the economy, and the seasonal nature of the employment available, particularly for young people looking for their first job—and one wants to encourage them to take every job opportunity there is—one surely has to make sure that the rules and regulations do not militate against them getting their foot on the first rung of the ladder in order to be the owner of their home. I put it to the Minister that somehow or other that has to be safeguarded within the system.

[Baroness Sherlock]

I would like to make one brief point about the sums of money that are increasingly needed to save for a house. It was reported in the Guardian on 17 September this year that the average deposit has gone up tenfold in the last 20 years, from £6,793 in 1990 to over £65,000 now. The same article went on to quote a banker from First Direct, which I presume must know these things, who said:

“The average deposit … has actually risen more than twice as fast as house prices and almost four times as fast as income”.

Could the Minister therefore think for a moment about whether the inflation in the savings limit properly takes account of the specific house-related inflation, and within that the specific deposit-related inflation, that we are seeing?