Housing Benefit

Steve Webb Excerpts

Tuesday 13th July 2010 Westminster Hall

[The Minister of State, Department for Work and Pensions (Steve Webb)]

This is the first time that I have had the pleasure to serve under your chairmanship, Mr Streeter. I congratulate the hon. Member for Hackney South and Shoreditch (Meg Hillier) on raising this important issue and on giving a number of hon. Members, particularly but not exclusively from the London area, the chance to air their views, which they have done effectively.

I have been advised not to run through a whole history of housing benefit because we do not have enough time. However, I will set out some of the thinking behind the reforms. The housing benefit bill has been rising inexorably: in the past five years, we have seen a 50% real rise in the bill when the numbers have gone up by less than 20%. With £1 billion added each year, it does not take long before we are talking about serious money. The question is this: do we stand by and watch that or do we allow our constituents, who are on low wages and paying tax out of their low wages, to have a voice in this debate? A number of hon. Members said that the taxpayers’ perspective relates not just to the well-off but to low earners as well. As the hon. Member for Brighton, Pavilion (Caroline Lucas) said, if we consider the whole tax burden, the tax impact on low earners is quite substantial.

What we cannot do is to continue to pay out blank cheques to private landlords—this is a blank cheque not to tenants but to private landlords. Rents have been going up and the state has been a passive observer. The housing market has demanded cash from us and we have simply handed it over. Then it has demanded more and we have handed it over again.

[Margaret Hodge]

Will the hon. Gentleman give way?

[Steve Webb]

Not at the moment. I will take some interventions, but first I want to set the scene.

If we do not have a blank cheque, what do we do? What is a legitimate way to say that someone who takes a low-paid job typically chooses a rent around the 30th percentile? That number has not been plucked from the sky. If someone takes a low-paid job, they do not have an unlimited choice about where they live. They cannot live in as big a house as they would like. They are constrained in where they live. Why should our constituents who take a low-paid job with all the associated uncertainties and who have to restrict their housing choice be in a worse position than those—I do not use the words “scroungers” or “apartheid”, which have come from the Opposition Benches—who are, for example, unemployed? There is an issue about social justice.

[Meg Hillier]

The Minister is confusing things. In my constituency, people do not have a choice. To afford anything, they need the housing benefit top-up. That is because rent levels and the demand for property are high. If landlords do not rent to people on benefit, there will be plenty of people in the private sector who do not need benefit who will take those homes.

[Steve Webb]

Clearly, there is a differential impact in different parts of London; I do not dispute that for a second. Taking London as a whole, just a little under a third of properties will be available within the caps. Obviously, the figure will vary from area to area, and there are particular issues that affect central inner London.

[Mr Mark Field]

Will the Minister briefly give way?

[Steve Webb]

I will carry on just for now, because I want to respond to as much of the debate as I can.

The question is, how can we appropriately look at this matter? Some of the figures that have been quoted for losers assume that nothing changes and that people will go on living exactly where they are living and making the same choices, but the whole point of the reform is to have an influence on the housing market, and to try to do something about escalating rents.

[Frank Dobson]

Will the hon. Gentleman give way?

[Steve Webb]

I will not. I want to respond to the debate in the short time that is available to me. If we allow rents to go on rising as they are doing, how can we expect people to find the work that will enable them to pay those exorbitant rents? There are not the jobs that will enable people to afford to pay those rents. If we can do something about the rents that landlords charge, more people will find it worth working. At the moment, people get no return for work.

[Several hon. Members]

rose—

[Steve Webb]

No, I will not give way. I said that I wanted to respond to the debate. [Interruption.] I am trying to respond. If I give way, I will not have time to do that.

The issue of the discretionary housing benefit was raised. We are tripling the budget; it is £20 million now and it will be £60 million in a couple of years’ time. If we spread that thinly across the country, it will not go far, which is why, when we are allocating discretionary housing benefit we will have particular regard for the places in the country and the local housing markets where the changes will have the most impact. I am sure that the constituents of many hon. Members here today will see a bigger share of the money because of the points that have been raised. That is part of the answer to the question that was raised about transitional measures. Local authorities will consider on a case-by-case basis individuals who have been severely affected by our measures and for whom moving would be most disruptive, and, in those extreme cases, provide assistance.

The hon. Member for Hackney South and Shoreditch asked about timing. It is important that I place it on the record that I need to make some corrections. Nothing happens this autumn; nothing will change until next April. We have to put regulations through the Social Security Advisory Committee, so there will be a process of consultation on the regulations. The regulations will be laid before Parliament in October or November. There will then be a further six months before anything changes. As she rightly said, those are the changes that will go through secondary legislation. Some of the longer-term changes will require primary legislation, so there will be a further process of scrutiny and consultation.

I want to address some of the specific issues raised. The hon. Lady raised the issue of the rent levels relevant to the cap in her constituency. I understand that the broad rental market for inner east London is significant. I have looked at the figures for one-bed, two-bed, three-bed and four-bed properties at the 30th percentile in her constituency, and they are all at or below the cap. I am happy to supply her with the figures.

We have had many contributions to the debate. The extraordinary word “apartheid” was used and we heard about vast numbers of people criss-crossing London. There has been an awful lot of overstatement about the actual impact of the changes, particularly given that three out of 10 private rented properties will still be available after the change within the cap.

The issue of pensioners was raised. There was some suggestion that elderly people would be particularly adversely affected. I hope that the Chamber will recall that the local housing allowance that we have been talking about today, which is used in the private rented sector, applies only to 80,000 pensioners the length and breadth of Britain. [Interruption.] There was some implication that millions of pensioners would be affected by our measures. We are talking about only a tiny number of pensioners across Britain, and many of them live in regulated tenancies, which will be protected in any case.

[Margaret Hodge]

Will the hon. Gentleman give way?

[Steve Webb]

No, I will not. Hon. Members have asked about the impact assessment, statistics and parliamentary questions. The impact assessment will be published on 23 July. There was some suggestion that that had something to do with the timing of this debate. We do not control the timing of these debates.

[Helen Goodman]

But the Government control the timing of publication.

[Steve Webb]

We are publishing on 23 July to give us time to prepare the detailed statistics that the House wants to see. We know the aggregate impact, but the House wants some fine detail. I can tell the Chamber that the impact assessment will include the impact on groups at a national level, broad rental market areas, bedroom category, the availability of accommodation by broad rental market area, the households affected by caps by local authority and by Government office region, the households affected by moving to the 30th percentile and the distribution of local housing allowance and housing benefit award by case load and by housing benefit award intervals. Rather than drip-feed incomplete information, we want to give the Chamber comprehensive detailed information before the House rises for the summer recess.

One thing that is usually said in such debates is that people on housing benefit will not be able to find anywhere to rent. We have all come across anecdotal examples of that. Occasionally, landlords will not rent to people on housing benefit. [Interruption.] I hate to bring the facts to bear in this debate, but since November 2008 the number of private sector tenants on housing benefit has not fallen. It has risen by 400,000. If private landlords are not willing to rent to people on housing benefit, how come there are 400,000 more of them doing it?

[Ms Buck]

I refer back to my first question, which the Minister has not had time to answer. The majority of increase, according to the Department for Communities and Local Government, is in households that are placed in private rented accommodation by local authorities. That is why they have been able to access it, and they will no longer be able to access it in whole swathes of the country including London.

[Steve Webb]

As the hon. Lady knows—she is exceptionally knowledgeable about such matters—what is important is how the market responds to these changed incentives. If everything carries on as it is now, the reforms will have failed. We want an impact on the rental market so that we can end the situation in which people have huge rents paid for by the taxpayer that they cannot afford from the jobs they get.

[Mr Gary Streeter (in the Chair)]

Order. Our time for this debate has gone. We now move on to the less controversial subject of the construction of nuclear power stations. [Laughter.] Will Members leaving Westminster Hall please do so quietly?