Social Security

Debate between Stephen Timms and Kate Green

Monday 10th February 2020 Commons Chamber

[Stephen Timms]

I am very concerned. My hon. Friend is absolutely right. I think that the Government are making sure that the situation is not going to get worse, or at least not much worse, but they are certainly in no way putting right the damage that has been done over the last few years—indeed, over the past 10 years.

[Kate Green]

Does my right hon. Friend agree that there is a cruel lack of logic in the household benefit cap because it is a blunt instrument that takes no account of different family structures and different forms of need in different households?

[Stephen Timms]

My hon. Friend is quite right. We were given a rationale when the cap was introduced—it was an extremely blunt one, but it was a rationale—but the benefit was reduced arbitrarily after that.

I have several questions for the Minister. Does he recognise that the freeze has made life much harder for those who depend on benefits, and that they are due a better offer than simply maintaining the current diminished level of income in line with inflation in the years ahead? Does he recognise the force of the case made by the Select Committee under its previous Chair and by Citizens Advice, which is of course drawing in part on its observations from the work it does for the Department, running the help to claim service for universal credit? Does he recognise that benefits need to catch up on ground lost over the past 10 years?

I have one specific technical question. The definition of RPI is to be revised. The Treasury is going to consult on the future definition, which will replace the current definition in a few years’ time. Is it the Government’s intention to make the new RPI the default uprating amount for each year, rather than the CPI figure that is being used this year? I would be grateful if the Minister said a little about the Government’s intentions in that regard.

As has been mentioned already in this debate, there is one part of the system where inflation uprating makes no sense at all, and that is local housing allowance—determining how much housing support claimants in the private rented sector in each locality can receive. Local housing allowance was introduced in 2008 to limit the amount of housing benefit that could be paid. It was set initially at the 50th percentile of rents in a locality, so the effect was to cap housing support at the median rent locally. In 2011, it was then reduced to the 30th percentile, so housing support would cover only the cheapest 30% of accommodation in the area. Since 2016, local housing allowance has been frozen completely in cash terms, while rents have increase by leaps and bounds. That is why, as the shadow Minister, the hon. Member for Glasgow South West (Chris Stephens) and others have pointed out, Shelter and others have drawn attention to the fact that there is now hardly anywhere in the country where people can rent accommodation for the amount set by the local housing allowance. The shortfall therefore has to be made up from people’s other income, and if that is benefit income that has been has been frozen since 2015-16, so people have to pay their increasing rent by somehow reducing what they spend on everything else.

What does that mean in practice? Well, it is a very big part of the reason why so many people are sleeping rough in London this winter. I can remember—I imagine that many of us can—when nobody slept in Westminster tube station overnight. We have all seen the large numbers who seem at times to be camping out there at the moment. That is the consequence, to quite a large extent, of the extraordinary unwillingness to allow the local housing allowance to reflect what is actually going on in housing costs in London.

Last summer, I hosted a visit to my constituency by members of the Archbishop of Canterbury’s Commission on Housing. We called on one of my constituents who lived with his wife and child in a single small, squalid room above a shop on East Ham High Street. Both those parents work in the NHS part-time, but this room was all they could afford. Their four-year-old son was running around when we visited—a very lively youngster. His mother had given birth to a younger sister, but she had died. It was clear that the housing conditions in that room had contributed in no small part to her death.

That is the impact of the grinding down of housing support since 2010. Surely we can do better than that. In its report last July, the Select Committee recommended

“that the Department unfreeze Local Housing Allowance as planned in 2020/21, and restore rates to at least the 30th percentile of local market rates. Thereafter, the Department should commit to uprating Local Housing Allowance in line with rental prices.”

I want to urge that view from the all-party Select Committee on the Minister this evening.