Housing Benefit

Sheila Gilmore Excerpts

Wednesday 13th October 2010 Westminster Hall

[Bob Russell]

The right hon. Gentleman is correct about the inheritance of the new Labour Government, but that makes their concentration on one aspect of housing just as bad. I am not saying anything new; these are points that, as Hansard will confirm, I put to the then Prime Ministers Blair and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), as well as to Prescott when he was in charge of council housing—or rather non-council housing.

In the years of plenty when the economy was thriving, new Labour should have emulated what Clement Attlee did in 1945 after six years of war: introduced a house building programme to house the poorest people in the land. It did not do that. The poorest people were among those the party turned its back on, which is why it lost 5 million votes at the last general election.

[Sheila Gilmore (Edinburgh East) (Lab)]

I agree that we should have built more houses—I have always said that—but is the solution to this problem to introduce changes to housing benefit that will affect current tenants and will not result in any more houses being built? The savings generated by the cuts will not be ploughed back into building housing, which might have made such cuts more tolerable, so how can these changes be justified on the basis that not enough houses have been built?

[Bob Russell]

If the hon. Lady had been paying attention, she would have noticed that I opened my remarks by saying that I am not speaking in defence of the coalition Government’s proposals—anything but. I am just setting the scene by pointing out that the problems are inherited. I do not agree with how the matter is being dealt with, but Her Majesty’s official Opposition should not come here today and pretend that they are the saviours of the social housing market, given that the record shows that they built only—let me repeat the figures—6,470 council houses in 13 years, in contrast with the previous Conservative Government, who built 507,200 in their first 13 years.

Let me now say that I do not agree with the proposals on housing benefit. I know that the Minister will be aware of them, but I draw his attention to the gospels of Matthew, Mark and Luke—particularly Matthew chapter 19, verses 13 to 15, Mark chapter 10, verses 14 to 15, and Luke chapter 18, verses 15 to 17, which includes the phrase “suffer little children.” I do not want this coalition Government to make children suffer, but that is what will happen as a result of the proposals on housing benefit. I wish to put it on the record that I have already initiated one debate on child poverty in this Chamber since the general election. Another record for the previous Labour Government is that they left 3.9 million children living below the official poverty line. What an appalling legacy. I do not want that figure to increase; I want it to be eliminated.

I am grateful to the Local Government Group, particularly Mr Ben Kind—the public affairs and campaigns manager—for sending me a briefing in advance of today’s debate. That document states:

“The housing benefit measures announced in the June 2010 budget, including capping local housing allowance rates, paid to tenants in the private sector, and setting them based on the 30^th percentile of local rents, are likely to increase homelessness costs, since they will diminish the willingness of private rented sector landlords to let to housing benefit customers. This will have hugely variable and disproportionate effects on different parts of the country.”

On the local housing allowance, the briefing points out:

“Councils will continue to have a duty to house those who are homeless and this will be a challenge to council homelessness budgets. Although the precise extra cost is still hard to estimate, temporary accommodation costs seem certain to be higher.”

I know that from my own constituency of Colchester. It is a relatively prosperous town in a relatively prosperous part of the country, but there are pockets of deprivation. The simple fact is that housing a homeless family is far more expensive for the public purse than putting them in a proper, decent house.

I refer colleagues to the full debate that I had on child poverty, in relation to which I was contacted by the Child Poverty Action Group. In that debate, I pointed out that it is no good for any Government, either this Government or the previous Government, to come up with wondrous schemes and policies for the betterment of people if the basic pieces of the jigsaw—the framework and the corners—are not in place. Such a basic building block is a house. If children do not have decent housing, the rest of the Government’s proposals are almost meaningless.

Social housing is already extremely scarce—I have mentioned the failures of the previous Labour Government—and an increase in the number of people who are priced out of privately rented housing will place additional demands on housing stock. Meanwhile, the increase in the non-dependant deduction could have a negative effect on family and community stability to the extent that young adults feel that they have to move out of the family home. That could have the adverse effect of encouraging the concealment of the presence of and incomes of some family members, which will add to the level of fraud and error in the system.

I do not wish to defend the relatively small number of people in society who abuse the system. Unfortunately, the Daily Express and the Daily Mail think that everybody on housing benefit is abusing the system. The minority who do are destroying the case for genuine people who are not defrauding the system, but who are depicted as scroungers. Of course, we need to tackle that problem, but we must not alter the whole system to deal with just a few scroungers.

--- Later in debate ---

[Sheila Gilmore (Edinburgh East) (Lab)]

It is important to realise that issues to do with housing benefit do not just apply in London. I acknowledge that problems in London are great—far greater than in many other places—but the suggested housing benefit reforms will affect other parts of the country in ways that are similar, if not quite so grotesque.

In Edinburgh we will not be affected by the proposed cap. The local housing allowance is already beneath that cap. However, the decision to restrict the LHA to the 30th percentile will affect us, as will the decision to up-rate not according to what the market is doing, but according to the consumer prices index. The proposals will have an effect on the kinds of homes that people can find.

As it is, many people in Edinburgh who are receiving housing benefit or local housing allowance already meet a shortfall on their rent. Housing benefit is not just for people who are out of work, as some of the propaganda would suggest. Many people work and are able to stay in their homes only because housing benefit is available to them, even if it tapers off. Many people are already paying an excess out of their limited incomes because they have not been able to find anywhere else within the LHA. The number of people in that situation will rise. That is a substantial financial difficulty. Some of my constituents are paying £10 or £15 a week out of a limited income just to top up their rent payments. That problem will become greater.

I live in a city with a large private rented sector. It is not as large as in Islington, but 20% of all households are in the private rented sector, which in Scottish terms is high. At the moment, around 18% of private rented sector properties are occupied by people who receive some housing benefit. There is ample scope for landlords, if they no longer wish to have tenants on housing benefit because of the lower local housing allowance, to find other tenants. There is a huge shortage of properties in the city and plenty of other people to fill them without landlords reducing rents. We are a high-cost city and a high-rented city. Students and young people will be able to occupy such properties; perhaps if they are sharing, they will be able to pay the high rents that a household could not meet.

There are other practical issues for people who must move that are not always taken into account. Some of us forget—I had almost forgotten until recently when someone came to see me and told me that she must move—the difficulty of finding a deposit. There are schemes to help people to provide a deposit, but they are limited and those in Edinburgh are very limited. For many people, finding enough money for a deposit to enable them to move is a huge issue. Many of us may believe that it is not that big a deal, but to find £400, £500 or £600 for a deposit, which may be low by London standards, is a lot of money for some people. There are practical issues that make it difficult for people to contemplate moving.

[Glenda Jackson]

The obverse is touched upon by one of the briefings from Citizens Advice. For example, in Brent, if a tenant, because of the changes in housing benefit, finds it impossible to pay their rent and loses their tenancy, they will also lose their deposit because the tenancy agreement is broken before the due date. The landlord wins all round.

[Sheila Gilmore]

That worsens the position.

In Edinburgh, if people with homes in the private rented sector, whether they are in work or not, can no longer afford such homes because they do not receive housing benefit, they will come to the council for help with housing. The council has already entered into lease agreements with landlords for around 1,500 to 1,700 properties to provide accommodation for people who have presented as being homeless. They are outside the local housing authority, and the rent levels are extremely high, which is a serious problem. That was intended to be a temporary expedient, but it has been temporary for five years, and the council has recently entered into another contract because it has little choice. The LHA cap will not apply, but if more people go into such accommodation and the council must take on more private leases to cover the situation, the real bill for housing benefit—we are always being told about the huge total of housing benefit—will be squeezed from one end and will push up at the other end. There will be unintended consequences.

Labour Members recognise that some of the changes and reforms, sometimes well intentioned, have had unintended consequences, and that should be taken into account before the changes go ahead. At the end of the day, the total housing benefit bill may not fall, despite the changes that will badly affect individuals, households and families. It is not good enough to say, “You didn’t do enough about building housing, so we must do this.” If the solution is to build more houses, build more houses. We did that, although they may not all have been council houses, as the Scottish National party said. It came to power saying that it was dreadful that we had not built any council houses, and that it would do so, but the total number built was exactly the same because it gave a little money to councils to build council houses but it took it away from housing associations that were building houses; the global figure did not change.

The answer is not to punish people for the failure of a policy. That is perverse. If there were even a suggestion that some of the money saved would go towards building houses, at least there would be some purpose in the argument, but I do not believe that that will happen. We have had no such assurances. From a perspective much further north than London, I agree with my hon. Friends that the reform is bad and will affect my constituents. I urge the Government, even at this late stage, to reconsider.