Housing Benefit

Richard Graham Excerpts

Tuesday 9th November 2010 Commons Chamber

[Mr Betts]

I thank the hon. Gentleman for that helpful intervention. I am not sure how putting 1.6 million people in the dole queue is part of a grand strategy to get people back to work. At some point, somebody will add those bits of the grand strategy up and explain how they connect together.

On the lack of joined-up thinking, we have been taking evidence in the Select Committee on Communities and Local Government about the impact of the Government’s policy of abolishing the regional spatial strategies. Some people have told us that that is a good thing to do, others have been more critical of the inherent aim of Government policy, and some have said that eventually we will get policies in the localism Bill that explain the Government’s long-term strategy. However, almost every witness has said that in the meantime there is a complete vacuum in housing planning policy. The National Housing Federation has commissioned detailed research and it has been estimated that 160,000 planning permissions that would have been given under the previous planning regime have not now been given. That means that fewer houses will be built when eventually the housing market returns.

[Richard Graham (Gloucester) (Con)]

The hon. Gentleman mentioned joined-up thinking. Does he feel it is fair that so many families who are not working and who are not disabled receive more in benefits than families who are working and are on the average national salary or less? What would he say to my constituents about the joined-up thinking of the past 13 years that allowed that situation to continue unchanged for so long?

[Mr Betts]

As Labour Members have clearly said, those on the Government Benches are involved in a complete misthinking about the fact that not everyone on housing benefit is unemployed; many people on housing benefit are on low wages and they will be affected by these changes too. There is a real issue to address about disincentives to work and tapers in the housing benefit system. I would appreciate those tapers being flatter than they have been or are now, but we all have to recognise that if the steepness of housing benefit tapers, or of any other benefit tapers, is reduced, the cost is increased. That is a problem and I look forward to seeing how the Secretary of State will solve it when he introduces his universal credit.

I have alluded to the impact that these changes will have in Sheffield. It is not the cap that affects cities such as Sheffield; it is the 30th percentile change that affects us. That is the fundamental problem and it will cost the average family on housing benefit in Yorkshire and Humber about £7 a week. The total cost of the change for the average family in Sheffield will be more than £30 a month, and it will lead to dispersal. There are considerable differences in the rates that apply in different parts of Sheffield, and not only the unemployed, but those on low wages who are renting in the private sector will be dispersed from richer parts of the city, in the constituency of Sheffield, Hallam, to other parts of the city. I did not use the word “cleanse” or “clear”, because “disperse” is an accurate and proper word to use when describing what will happen. The city will become more segregated and more divided. The situation will get worse, because local housing allowances are linked to the consumer prices index but rents rise at a higher rate. Therefore, over time, people will be dispersed from progressively more parts of the city. That is what the impact will be on cities such as Sheffield—that is the reality.

At the same time, housing departments, such as Sheffield city council’s, will face pressure because unemployment will create more housing problems and more homelessness. The budgets of these departments will have been cut, yet they will have to deal with advising or re-housing people in desperate circumstances. What we have not had a clear answer to is whether people who have to move home because they cannot pay their rent as housing benefit no longer covers it will be considered intentionally homeless. That is a fundamental point, so can we have an answer on it please? Can we also have an answer on whether the Government really are going to change the homeless legislation as Lord Freud indicated in order to see their way out of this problem without local authorities having to have the responsibility of housing people? Those are fundamental issues.

Why is it necessary to punish the couple in their 50s who lose their jobs, whose family have left home and who are living in a three-bedroom council house? Why is their home at risk because they have lost their jobs and housing benefit will not cover their rent as they are deemed to be under-occupying? This is simply not fair. It is a vicious and nasty policy that is aimed at hard-working people who happen to be unemployed and who then need to be re-housed too. These benefit reductions are not part of any grand policy on welfare reform and they are certainly not part of any clear housing strategy. They are part of an unfair agenda driven by the Chancellor, who has simply cut the incomes of some of the poorest people in our communities.

--- Later in debate ---

[Laura Sandys]

My hon. Friend mentioned £21,000, but the average wage in the south-east is £17,000. The inflationary impact of housing benefit on those families has been huge.

My second point is that these rates have not seen an improvement in the housing stock. Some landlords are interested in the rental value rather than the capital appreciation because that gives them such a high return on their investment. Investing in the properties and in the fabric of them is therefore not a priority.

The third issue is the extreme concentration of housing benefit claimants in pockets in my constituency. That problem was brought up by my hon. Friends the Members for North East Hertfordshire (Mr Heald) and for Cardiff Central (Jenny Willott). We create micro-economies that attract a significant amount of housing benefit because property prices are so low and the return from housing benefit is proportionally high.

The current situation has fundamentally distorted housing in my area. The average wage in Thanet is £17,000 and housing benefits for the unemployed stand at more than £8,000 a year. Most working families cannot compete in that market.

[Richard Graham]

Does my hon. Friend agree that one of the bizarre uses of the word “fair” during the whole debate has been the assumption that it is somehow unfair to people who are not working for them not to have better housing than those who are working? The whole point of this reform is to enable a level playing field in which people can live in the houses that they can afford from their work.