Welfare Reform Bill

Simon Hughes Excerpts

Wednesday 1st February 2012 Commons Chamber

[Chris Grayling]

I shall make some progress because we do not have that much time and other hon. Members will want to contribute.

The Government have said that there will and should be some exemptions from the cap, but we believe that work should be the primary way in which households can avoid it. We will therefore exempt households that are entitled to working tax credit. There will be a similar exemption after 2013 for working households on universal credit. Excluding child benefit will only dilute our aim. Being in work—even part-time work—must always pay better than relying on benefits alone.

We have always acknowledged that there will and should be exemptions from the cap among benefit recipients. Those will be households where someone is in receipt of disability living allowance. We will also exempt war widows and widowers. I can announce today that we intend to exempt the small number of households where someone is in receipt of the support component of employment and support allowance but not in receipt of DLA.

We have been clear that we are looking at ways in which to ease the transition for families and to provide assistance in hard cases. That is no different from what we did when we introduced the housing benefit cap a year ago. We used the time before the measure came in to work with those affected; we had flexibilities around the start; and we ensured discretionary funding for local authorities to support hard cases. It is our intention to take the same approach with the Bill.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I support the principle of the cap and appreciate the Government’s efforts to understand the difficulties of those hon. Members who represent high-cost housing areas. The house price in my constituency is roughly double the national average.

Can the Minister confirm what our right hon. Friend the Secretary of State told me in the House on 9 November 2010—that it is “the Government’s policy that” people should not be forced to move

“to a far-off community with which they have no links, and that the intention will always be that”,

if they have to move,

“they should ideally stay in the community or council area where they come from and where they have lived”?—[Official Report, 9 November 2010; Vol. 518, c. 166.]

The Secretary of State gave me that assurance. Will the Minister repeat it?

[Chris Grayling]

My understanding is that those were not the words used by the Secretary of State, but I want to reassure my right hon. Friend.

Let me set out in a little more detail how the transitional measures will work. First, those who are affected by the cap will receive and have access to immediate support from Jobcentre Plus and the Work programme, starting from April this year. We know who the families are. We need them to understand how the cap will work and how it will apply to them, because people in receipt of working tax credit will be exempt from the cap. So we have a 12-month period to work intensively with the families concerned to explain what steps they need to take, to provide support through the Work programme and to look for employment opportunities for them, which will address the issue and move them back into work.

We also always expected that we would provide a grace period—a degree of transition—for people who simply lose their jobs and find that their circumstances have changed dramatically through no fault of their own. We will not penalise those who are in work and doing the right thing. We will put in place a nine-month grace period for those who have been in work for the previous 12 months and lose their job through no fault of their own. We have always intended to make this measure, and I am happy to make that clear to the House today.

In addition, the Secretary of State and the Prime Minister have made it clear that we will provide transitional support to help manage families into more appropriate accommodation—as we did when we introduced the housing benefit cap. So we will follow the same model of additional money for discretionary housing payments that we adopted for the introduction of the housing benefit cap last year. We will ensure that resources are available in the right areas, such as London, where a larger proportion will be affected. We will provide short-term, temporary relief to families who may face a variety of challenges, such as not being able to move immediately for reasons of education or child protection, supporting minimum levels of access to the housing market.

--- Later in debate ---

[Jenny Willott]

I will not give way any more because I want to give other people the chance to speak.

There are no arguments in favour of what Labour has put forward. It is far too vague to even be considered at such a late stage. I think that the Government’s approach is right.

As other hon. Members have said, alongside the targeted support and the grace period, we need to look at the issue of rents and the ridiculously high housing costs in parts of the country. That affects working families who are struggling to keep a roof over their heads, as well as those who are on out-of-work benefits. The Government have been forced into a number of the measures that they are taking because high housing costs have forced up housing benefit and local housing allowance budgets over the past few years. That money is going mainly into the pockets of private landlords. Alongside the transitional support, which will help with high housing costs and help families in the greatest need, I hope that Ministers will work with the Department for Communities and Local Government and local authorities to bring down rents in high-cost areas. That would be a much more effective way to tackle this problem in the long term in particular areas and would save the Government money in the long run.

Finally, I am grateful that Ministers have now made it clear that the Government will review the implementation of the cap after a year. I welcome that. I hope that it will identify any issues or areas where there are problems so that action can be taken.

[Simon Hughes]

My hon. Friend has done a huge amount of work. Before she sits down, may I say that the things that should give London Members the greatest confidence are the letter from the Secretary of State, which confirms that an independent consortium is carrying out a review of the recent local housing allowance changes, and that Ministers have today made it clear that this policy will be reviewed in a way that is public and accountable, and that if it then needs to be re-evaluated, that can be done by Parliament and Government?

[Jenny Willott]

I agree with my right hon. Friend. I give way to the Minister.

--- Later in debate ---

[Maria Miller]

I know that my hon. Friend takes a great deal of interest in that issue, as indeed do many other hon. Members, but I simply put it to him that many people in that situation will choose not to move. They will choose to make other arrangements and, perhaps, to get other people in their household to contribute to the bills. Indeed, I am sure he is right that some people will choose to move, and we are ensuring that there is sufficient time for them to consider their options and, importantly, making sure that support and a significant amount of discretionary housing payments are in place, so that local authorities are able to support people who have difficulty with the change.

[Simon Hughes]

I am grateful for the Minister’s understanding, and, as somebody who represents more people in social housing than probably any other English MP, I know that the Government have absolutely the right policy to ensure that people do not occupy properties that are bigger than they need when the state is paying the rent. But it is not practical to insist that they move when there is nowhere smaller to move to, so Lords amendment 4 is entirely reasonable, because it refers to the situation when

“any such landlord is not able to offer suitable alternative accommodation which would not cause a person to under occupy.”

If a landlord is able to do so, of course the tenants must move, but if the landlord is not, the tenants will not be able to move anywhere appropriate.

[Maria Miller]

I thank my right hon. Friend for that intervention; I understand the feeling with which he delivered it. I say clearly to him that we are saying that there is a great deal of time and considerable support for individuals who find themselves in difficult situations. We need to make sure that as many people as possible are able to remain where they are and that they are given the support to do that.

We have made considerable moves to make sure that the right support is in place, particularly for those with disabilities or foster care responsibilities. But I ask my right hon. Friend to consider how we would deal with what would be an enormous loss to the savings. Our basic problem is that there are 1 million spare bedrooms while about 250,000 families live in overcrowded accommodation. It is important for us to try to balance all those factors.