Housing Benefit

William Bain Excerpts

Tuesday 9th November 2010 Commons Chamber

[Mr William Bain (Glasgow North East) (Lab)]

It is a pleasure to follow the hon. Member for North East Hertfordshire (Mr Heald) and the other right hon. and hon. Members who have contributed so far.

The Secretary of State likened his welfare reform programme to that of William Beveridge in the 1940s. I welcome his ambition, but I suspect that Beveridge would have major criticisms of the unnecessary hardship that the Government’s housing benefit proposals will cause. It is a matter of great regret that no member of Beveridge’s party has yet risen to their feet to criticise these unjust proposals. Beveridge supported a contribution-based welfare state and the Government doing more to stimulate job creation. That would represent the foundations of genuine welfare reform, and I hope that the Government will reconsider their plans, which will unduly punish those who have the least. They cannot in any shape or form be described as progressive.

There are three key issues of concern to my constituents: the proposals to slash housing benefit payments by 10% for those who find themselves on jobseeker’s allowance for 12 months or more; the restriction of local housing allowance payments to rent for properties in the lowest 30% of rental levels, rather than the median level; and the plans for a crude national cap on housing benefit payments.

The 10% cut hides the inconvenient truth for the Government that affected tenants will have to make up the difference from their jobseeker’s allowance. A single, childless person will therefore experience a drop of almost 30% in their disposable income, as the Scottish Federation of Housing Associations established in its briefing. For the 970 people in Glasgow North East who have been out of work for more than 12 months, the measure could mean a loss of £25 a week in their incomes. Across the UK, the proposals are expected to save £110 million a year from 2013, but at what price to my constituents and to 4.7 million constituents of right hon. and hon. Members throughout the House, who face being pushed into higher levels of poverty?

The SFHA underlined in its briefing that approximately 700,000 people in the social and private rented sectors would be affected by the new rule, losing an average of £9 a week. Overall, 5,445 people in Glasgow who have been on JSA for 12 months or more will lose out—some 22% of all housing benefit recipients in the city. The loss for the 2,750 Glaswegians receiving the allowance for a one-bedroom flat will be £7 a week, for the 2,390 affected people in two-bedroom houses it will be £10 a week, for the 590 recipients in a three-bedroom house it will be £15 a week, and for the 50 families in four-bedroom houses it will be £22 a week.

The Glasgow Housing Association has said that between 11 and 16% of its tenants will be affected by the changes to the rules on presumed under-occupancy of properties. Unable to make ends meet, tenants will suffer higher expenses and the prospect of substantial debts. At worst, they will lag behind on their rent payments and perhaps ultimately face eviction. People will be pushed out of prosperous areas where they have the highest prospects of finding work, and there will be an increase in unemployment and social tensions in areas that are already marginalised and suffer multiple deprivation.

Under the stricter medical tests that the Government have introduced, people will be moved off employment and support allowance, incapacity benefit and severe disablement allowance and on to jobseeker’s allowance. They will be at a greater disadvantage in the labour market, and will they not find it more difficult to find a job within 12 months? If healthy and fit people are unable to find work under the Government’s policies, what chance have the most vulnerable ?

In the June Budget, the Chancellor assured the House that he was aiming to protect the most vulnerable in our society, but the Government’s proposals will hurt the most vulnerable and those who are trying to find work, at a time when their fiscal policies will make that much more difficult with the loss of almost 1 million public sector and associated private sector jobs, as PricewaterhouseCoopers established recently. The truth is, as the Office for Budget Responsibility established in June, there is no guarantee that the economy will be in a state to secure the availability of sufficient jobs by 2013.

Singling out those who can least afford to lose money is neither fair nor progressive. The Government should consider investing in affordable housing rather than slashing the budget by half over the course of this Parliament. That would not only secure savings in the long term, but protect the vulnerable and incentivise work in the coming year.

I support welfare reform that ensures that taking a job will pay and that improves work and training opportunities for those whom previous initiatives have not reached. However, my hon. Friends and I cannot support plans that set out to punish the most vulnerable in our society, who make great efforts to seek work, and who deserve a Government who is on their side and not preparing to abandon them at their time of greatest need. These are the wrong proposals targeting the wrong people. I hope hon. Members across the House will reject them and support the Opposition’s motion in the Division Lobby tonight.