Housing Benefit

Phil Wilson Excerpts

Tuesday 9th November 2010 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

I want to broaden the debate, because for me it is about not just housing benefit but housing in general. In particular, I want to talk about the problems that we have with private landlords. It seems to me that the Government are more than prepared to attack the tenants, whereas we need to look at the escapades and state of some of the private landlords we have to deal with—not just in the cities, but in ex-colliery villages in County Durham, such as those that I represent.

There seem to be three basic problems. We need to look at housing benefit and the LHA and to reform them, but we also need to look at the rented sector and at housing supply in general. There are three pillars to the problem, as I see it. If we do not control and manage the private landlord aspect, it will suck the community spirit out of some of our villages and communities up and down the country. I have had problems in places such as Chilton, Ferryhill and Trimdon Station, where the police have been involved. I have had to address large meetings and the problems have basically been to do with the behaviour of some private landlords and, indeed, the tenants too.

We should consider not only the reform of housing benefit but the depth of the problems in some of our communities. For example, we did a survey in some of the communities that I have just mentioned of just under 1,100 houses, 38% of which were in the hands of private landlords. More than half of those private landlords did not even live in the county and quite a few—a significant number—lived outside it. What kind of relationship with and understanding of the local community will they have if they do not even know where some of the properties they own are? That is something that the Government need to address.

The Labour Government started to address it with a selective licensing scheme sanctioned by the Secretary of State. I have two or three in my constituency and they are starting to happen around the country, too. Local authorities can implement these schemes and they go some way towards imposing rules and regulations on private landlords and on the behaviour of tenants. The only problem is that although we have the legislation, if the Government are interested in that aspect of housing they should give it some funding so that we can have stable communities where there are private landlords and a lot of people on housing benefit live.

Another thing that we wanted to introduce was a national register for private landlords. That was one of the things that I discussed with the then Secretary of State, my right hon. Friend the Member for Wentworth and Dearne (John Healey), before the election. However, the Government have said that they will not introduce it. I understand that they think that it is over-bureaucratic, but local residents who have to put up with some of the behaviour of the private landlords and their tenants do not believe that it is too bureaucratic. If there is a will, there is a way, and we will have to consider that in future.

I do not agree with those who think that if housing benefit and the LHA are reformed in the way that the Government propose, rents will automatically come down. The British Property Federation briefing that I have received states:

“Currently in areas across the country from Harrogate to Trafford to Brighton and most of the South West, for every LHA claimant searching for a two bedroom property to rent there are between five and ten individuals who are in work doing likewise. LHA”—

and housing benefit—

“claimants will be left behind as landlords naturally seek individuals who are looking for property to rent and are in work.”

That is what will happen. People on housing benefit and LHA will be priced out of some of their local communities because the first port of call for the private landlord is those people who have a secure income—people who are actually in work. As the federation has said, five to 10 people in work are chasing every let, compared with two or three people on housing benefit. That is one of the main reasons why rents will not automatically come down. A major survey by the Cambridge centre for housing and planning research has found:

“A majority of 500 landlords surveyed for the study believes the changes will increase arrears, and a large proportion of those who currently let to LHA claimants intends to reduce the number of such tenancies they offer.”

Those are some of the issues that we need to address. We should not focus on housing benefit and tenants and think that these people are just sitting watching the television all day long. Perhaps some of them are, but a lot of them are not. Some are pensioners, some are out of work because they have been forced out of work, and some are among the five people chasing every job vacancy. The Government must confront these issues. It is about not just sorting out the tenants, but sorting out the rest of the market, too.

Let me end on one point. I have with me a copy of a written answer from the Treasury. At the moment, about 100,000 tenants in the private sector are paying rents to private landlords—about 44,000 of them—who have not paid tax on that rental income. More than 50% of those landlords are receiving income from housing benefit claimants. The Government need to look into that. It is a case not just of tenants claiming benefit, but of many people in the private sector who rent out properties who are not playing the game. We need to look at both sides, not just one.

[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 ---

[Bob Blackman]

I will repeat the mantra that my hon. Friends have repeated, which is that 13% are in work and the rest are on JSA. The LHA has distorted the market even more, as my hon. Friends have said, by making it more beneficial in certain instances for people to be on housing benefit and pocket the difference. What nonsense! Rent levels have been distorted in many parts of the country.

The Opposition are claiming that the modest reforms being introduced will mean people being thrown out of their houses and suddenly being cleansed out of all proportion, but what will happen is exactly what is happening in the borough of which my constituency is a part. Its housing director has said that 3,040 families will be affected by the change, and the borough will seek to ensure that the rents fall and adjust to the levels of housing benefit that are applicable—although that still distorts the housing market. Some 3,000 properties out of more than 100,000 in the borough will be affected, so this involves a small percentage of people.

When I challenged the housing director to tell me what he would do about the families who might, sadly, lose their houses as a result of this change, the figure came down from 3,040 to 80. I have great sympathy for the 80 families who could be in that position, so I then challenged the housing director to tell me what he would do about it. My authority will do what every local authority in this country should do, which is challenge the landlords to reduce their rents so that those people are not made homeless.

[Phil Wilson]

How can the hon. Gentleman expect private landlords to reduce their rents when for every one person on LHA wanting a property, five to 10 people in work are looking for the same property? Who are private landlords going to go for? They are going to go for the person in work.

[Bob Blackman]

I thank the hon. Gentleman for his intervention, which leads on to the other key issue in this debate: the supply of housing in this country. That point is not really being answered by the Opposition. The Labour party had every opportunity to build houses over the past 13 years, but it failed to do so. At the same time, it failed to take account of the fact that this country’s population is increasing, so the need for housing increases all the time. We have a market for housing and housing benefit distorts it directly, which is why it is a bad benefit in desperate need of reform. One of the reforms that must take place is a change to the way in which housing benefit is withdrawn from people as they get work. At the moment that is a direct disincentive for people at a certain level to work, because they lose benefit pound for pound. Why should someone work if that is the position?