Welfare Reform and Work Bill (Ninth sitting)

Debate between Shailesh Vara and Naz Shah

Thursday 15th October 2015 Public Bill Committees

[Mr Vara]

This group of amendments deals with some important elements of the rent-setting process. Amendment 144 provides flexibility to registered providers to set reductions in rent of more than the required 1%.

Amendment 169 provides that the rent reductions must be applied on a pro rata basis if the tenant’s tenancy comes to an end part way through a relevant year. The same principle applies if the rent reduction provisions cease to apply to a tenant part way through a year because an exception under clause 20 or an exemption under clause 21 no longer applies. The amendment therefore makes it clear for registered providers that, in the circumstances specified, the rent reduction should apply on a pro rata basis.

Amendment 171 is an essential amendment that clarifies a number of important points. Proposed new subsection (3) provides that the amount payable by the tenant in the preceding 12 months is to be treated as having been the greater of: the amount that would have been payable if the rent at 8 July 2015 had applied during those 12 months; or, if the Secretary of State consents to the use of a different permitted review day, the amount of rent that would have been payable if the rent on the permitted review day had applied during those 12 months. We expect to use the flexibility to grant providers whose normal rent review date is after 8 July permission to use an alternative date as the reference date when calculating reductions, providing there is no evidence that the provider in question has manipulated his rent review date or implemented rent rises after 8 July 2015 in order to avoid the effects of the rent reduction.

Proposed new subsection (3A) clarifies that the Secretary of State’s consent for an alternative permitted review date may be for a particular case or for a description of cases. It is likely that the Secretary of State will issue a general consent covering typical cases. Proposed new subsection (3B) clarifies that, if a tenant was a tenant on 8 July 2015 and continues as a tenant of the same social housing until the beginning of the first relevant year, they will be treated, for the purpose of clause 19(1), as if they had been a tenant for the 12 months preceding the first relevant year—whether or not that is in fact the case—in order to establish the baseline of the rent on which the reductions will then apply.

[Naz Shah (Bradford West) (Lab)]

It is great pleasure to serve under your chairmanship, Mr Owen. Will the Minister highlight whether service charges are subject to the 1% cut and explain the process for introducing rent reductions for tenants when rents changes are not usually announced until April?

[Mr Vara]

I am not sure whether that question is entirely relevant to what I am saying.

Welfare Reform and Work Bill (Tenth sitting)

Debate between Shailesh Vara and Naz Shah

Thursday 15th October 2015 Public Bill Committees

[Naz Shah]

rose—

[Mr Vara]

A lot of questions were asked, and I would like to have the opportunity to address the issue of additional funds. I will give way to the hon. Lady in due course.

We need to recognise the £2.4 billion in surplus funds that housing associations have and the £2.2 billion that the 165 local authorities have in their housing revenue accounts. We should also remember the Government’s £10 billion debt guarantee scheme to support the delivery of new rental homes, and we are encouraging the supply of new homes with a £1 billion build to rent fund.

[Naz Shah]

Will the Minister give way?

[Mr Vara]

I will not for the moment.

The Government remain committed to the delivery of 275,000 homes over the course of this Parliament. I remind Opposition Members that we have a track record of delivery—in the past five years we delivered more affordable homes than the Labour party did in 13 years of Government.

--- Later in debate ---

[Mr Vara]

In England, only 75,000 homes were started between June 2008 and June 2009, the lowest level of building since the 1920s. So Government Members will take no lectures from Opposition Members when it comes to house building. They need to reflect on a whole host of other things—

[Naz Shah]

Will the Minister give way?

[Mr Vara]

I will give way to the hon. Lady.

--- Later in debate ---

[Naz Shah]

Will the Minister qualify his 2014 figure of £2.4 billion? Was that before the bedroom tax hit, when the housing associations lost that money, or afterwards?

[Mr Vara]

I thought I had made it clear that the £2.4 billion was in the 2014 financial year. The £2.2 billion for local authorities was in the last financial year.