Housing Benefit

Paul Uppal Excerpts

Tuesday 9th November 2010 Commons Chamber

[Paul Uppal (Wolverhampton South West) (Con)]

I speak in this debate as somebody who has had experience in the commercial and residential property markets for more than 22 years.

I was heartened to hear the comments of my hon. Friend the Member for South Thanet (Laura Sandys). She highlighted the 12% return on some investments and the fact that that seems to attract a certain type of landlord. The hon. Member for Sedgefield (Phil Wilson) alluded to that as well. It is almost an open secret in the property business that that aspect needs reform. If truth be told, it seems to attract those who are not the best landlords.

The shadow Secretary of State, the right hon. Member for Paisley and Renfrewshire South (Mr Alexander), quoted Liz Peace, and the hon. Member for Sedgefield quoted the British Property Federation. Both quoted selectively. The context in which Liz Peace made that comment was much broader. She was making the point that many landlords do not receive housing benefit directly, so they prefer tenants who are working. Her comment was quoted selectively. As a member of the all-party group on urban renewal and regeneration, it is part of my remit to read such quotes comprehensively.

[Phil Wilson]

Those affected by the cuts will find it increasingly difficult to find a place to live. I quoted most of the paragraph. In the private sector there are good landlords and bad landlords. The problem is that many of them are amateur landlords who have one or two properties. That sector needs to be regulated, and a national register would be extremely helpful.

[Paul Uppal]

Brevity is always required of us, so I shall press on.

Throughout the debate, I have been saddened by one feature of it. All of us on both sides use partisan language. Let us be honest and acknowledge that some of us use politically partisan language, but the language used about the issue under discussion has been inflammatory and poorly judged. I refer specifically to the term “cleansing”. My family experienced partition in India in 1947. My father was eight years old when he saw people forcibly removed—Hindus, Sikhs and Muslims. My maternal grandfather had to protect his neighbours from a mob of Sikhs and Hindus who wanted to burn out his Muslim neighbours. It is particularly difficult for them to accept the sort of language that has been used in the debate.

As a new Member I say these words not through any pomposity or grand-standing, but because our words resonate widely outside the House. The advice that we received at the very beginning to use temperate language was impressed upon us by wiser heads than ours.

--- Later in debate ---

[Chris Heaton-Harris (Daventry) (Con)]

rose—

[Paul Uppal]

I was going to respond to the hon. Member for Dumfries and Galloway (Mr Brown), but I am happy to give way to my hon. Friend the Member for Daventry (Chris Heaton-Harris).

[Chris Heaton-Harris]

I thank my hon. Friend. Perhaps I can add another quote from a Labour Front Bencher:

“This would lead to social cleansing on an unprecedented scale, with poorer people shipped out in large numbers”.

Does that bring anything whatever to the debate?

[Paul Uppal]

We could trade quotes, but the issue was eloquently covered earlier by my right hon. Friend the Secretary of State, who made a passionate and pertinent point about the inflammatory language that has been used.

Government estimates show that spending on housing benefit has risen from £14 billion 10 years ago to £21 billion at present. These figures self-evidently make the case for reforming the system and I, for one, believe that reform is long overdue. The central point of the proposed reforms is that people who receive benefits should have the same choices regarding housing as people who do not get benefits. To be balanced in these reforms, the Government have announced more support for the additional discretionary housing payment to help the most vulnerable cases, particularly where there are unusual difficulties.

In a nutshell, if we are prepared to pay, as we are, £20,000 in housing benefit, is it not reasonable to assume that we can meet the vast majority of housing requests? But with a massive deficit, tough choices have to be made. We need to push ahead with the changes to ensure that hard-working individuals and families will no longer have to subsidise people living in properties that they themselves could not afford.

Figures will undoubtedly be bandied across the Chamber today, and I have no desire to rerun arguments that have been put forward already, but it is always important to put things in perspective. The maximum rent following the cap will be £400 a week, which is equivalent to £20,000 a year. As the Secretary of State said, based on what people spend on average on housing, this would require an income of more than £80,000 a year. The current maximum local housing allowance rate is £104,000 a year, which would require an income of well over £250,000 a year to fund. Can that be right? Indeed, it could be argued that extreme LHA payments act as a barrier to mobility, trapping people in unemployment and benefit dependency. It is also grossly unfair to expect hard-working low-income taxpayers to fund these rates.

Recently a constituent of mine wrote to me about his experiences as a landlord. The tenant received housing benefit directly after the landlord had been advised that he could be paid directly only if the tenant was in arrears by two months. I say this to show that there are always two sides to the argument—the tenant’s perspective and the landlord’s perspective. I quote my constituent:

“Currently tenants are assessed for housing benefit and the amount paid is dependent on the tenant’s personal circumstances and size of house . . . However if the housing benefit awarded is over the amount of rent agreed on the assured shorthold tenancy, the tenant is allowed to keep the difference.”

If the tenant benefits under the existing assured shorthold tenancy agreement, the landlord would have to make up the difference in the rent agreed.

My constituent continued:

“If the tenant is not happy that the rent is being paid directly to the landlord then the tenant has the right to move to a new property and the whole process starts again.

My tenant advised the housing benefit department that she had left my property; they subsequently stopped paying the rent. In fact she stayed at the house for three weeks without paying a penny. When I advised the council that she was still residing at the property and provided them with evidence of this, they said they had to take her word for it”.

Although I welcome the broad measures in the housing benefit reforms initiated by the Government, I believe that significant savings could be achieved if the local housing allowance were paid direct to landlords instead of to tenants. That would remove a significant disincentive for landlords to provide accommodation to LHA claimants. Research by the British Property Federation has shown that as a consequence, 60% of the landlords surveyed do not offer tenancies to those receiving LHA, mainly for fear of rent arrears. At the very least, claimants ought to have the right to choose how their housing benefit is paid, and be able to choose that their payments should go directly to the landlord.

I reiterate that I wholly support the Government’s measures, not only because they mark a move away from dependency towards independence, but because under the Labour Government housing benefit was allowed to spiral out of control. However, it would be wise to revisit the issue of direct payment to landlords to prevent public money from being wasted, and to encourage landlords to continue to let property to those receiving housing benefit. All of us would agree that the welfare system should provide an effective safety net, but it should not pay workless families far more than most working families earn. As has been said, the 2010 Labour party manifesto stated:

“Our goal is to make responsibility the cornerstone of our welfare state.”

I wonder whether the shadow Secretary of State still stands by those words.

I appreciate the acknowledgement in today’s Opposition motion that

“housing benefit is in need of reform”,

but they mean “at a slower pace”, which in essence seems to apply to almost all the debates that we have. Government Members have decided to address the problems that face our country, and, although Opposition Members now talk of reform, under their stewardship housing benefit increased by more than 50% in one decade.

This debate is not just about reform; it is essentially about responsibility—and Government Members have taken on that responsibility for the good of the country and its financial future.