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(b) the desirability of the committee including one or more persons with experience of work among, and the special needs of, disabled persons and of persons appointed by virtue of this paragraph including disabled persons.'. -- [Mr. Ridley.]
Amendment made : No. 14, in page 6, line 4, leave out from exercise' to end of line 7 and insert--
(a) in the case of the Secretary of State, the powers conferred on him by virtue of provisions contained in Chapter I of Part II of this Act or in section 37, 67, or 155 below ; and
(b) in the case of the Director, the powers conferred on him by virtue of provisions mentioned in paragraph (a) above or by virtue of section 40, 42 or 70 below.'.-- [Mr. Ridley.]
Further consideration of the Bill, as amended, adjourned. Bill, as amended (in the Standing Committee), to be further considered this day.
That the draft Rent Officers (Additional Functions) Order 1989, which was laid before this House on 23rd February, be approved. It will be for the convenience of the House also to consider the following motion :
That the draft Rent Officers (Additional Functions) (Scotland) Order 1989, which was laid before this House on 1st March, be approved.
The orders are an essential adjunct to the measures in the Housing Act 1988 and the Housing (Scotland) Act 1988, deregulating private lettings. The measures came into force on 2 January in Scotland and on 15 January in England and Wales. For lettings beginning since the Acts came into force, landlords can charge a market rent. It is clear that in many areas market rents will be considerably higher than fair rents. [Interruption.] It is equally clear that many tenants will be unable to pay the higher rents from their own resources. The Government have, therefore--
Mr. Deputy Speaker (Mr. Harold Walker) : Order. There is noise from sedentary Members and from hon. Members at the Bar of the House. Will hon. Members not taking part in the proceedings please withdraw?
Mr. Trippier : The Government have, therefore, given a clear undertaking that housing benefit will be available to qualifying tenants paying rents up to open market level. Let there be no doubt about our total commitment in that respect. However, a tenant who has all or most of his rent met by housing benefit does not, obviously, have the same incentive to bargain with his landlord to keep the rent to a reasonable level as would be the case if he were paying it from his own pocket. We do not believe that the Exchequer, which provides up to 97 per cent. direct subsidy on housing benefit, should be expected simply to underwrite any rent that the landlord demands. Therefore, it is essential to have an independent check on the rents being paid from the public purse to ensure that those are not significantly above market level--in other words, above the rents being paid by tenants who are not in receipt of benefit.
The task of operating such a check is to be given to rent officers and the purpose of the orders is to lay down how it will be carried out. Besides considering claimants' rents, rent officers will also look at the size of their accommodation. We do not believe that full Exchequer subsidy should generally be available where a claimant is living in unduly large accommodation. Local authorities have long had powers to limit benefit in such circumstances.
Mr. Clive Soley (Hammersmith) : On that most offensive part of the order, will the Minister tell us the size of his property, how many people live in it and how much subsidy he has from the public purse? Mr. Trippier : Before the hon. Gentleman draws the attention of the House to that, he may care to consider the precise lettings policy of his local authority. It fits very neatly into what is proposed in the order. The hon. Gentleman knows full well that I am not in receipt of housing benefit. Therefore, it would be fairer to debate
Column 1039--I shall try to develop this theme--the precise housing allocation policy of his local authority. It is so akin to what we are proposing in the orders that the hon. Gentleman might regret his intervention. Given the prospect of higher rents in the regulated sector, it is desirable to apply a control directly on subsidy. Under the terms of the orders, local authorities will, as from 1 April, refer to the rent officer most cases where a claim for housing benefit is made by a private tenant or licensee with an agreement beginning on or after the date on which deregulation took effect. The only significant exceptions to that requirement will be tenancies with a rent set by a rent assessment committee and, other than in very rare cases, lettings by registered housing associations.
The first requirement on the rent officer will be to consider whether the claimaint's rent is at or below the level of rent prevailing in the open market. If it is, the rent officer will inform the local authority accordingly. However, if the rent is above market level the rent officer will determine what a reasonable market rent will be for the property and notify the local authority of that rent. The rent officer will then assess the claimant's accommodation against the size criteria set out in the orders. If the accommodation exceeds the criteria, the rent officer will determine a market rent for a notional property which does not exceed the size criteria but which otherwise corresponds as closely as practicable to the claimant's actual accommodation.
The rent officer's determinations will in all cases relate not directly to the benefit itself but rather to Exchequer subsidy. Where the rent officer is satisfied that the claimant's rent is no higher than market level and that his accommodation is within the size criteria, the local authority will be able to pay benefit knowing that subsidy will be available on the basis of that rent. Where the rent officer decides that the claimant's rent is above market level or that the property exceeds the size criteria and thus determines a lower rent than the claimant is paying, it will be up to the local authority to decide on which basis benefit is paid.
Authorities will continue to be precluded from restricting benefit in cases where the claimant comes within one of a number of vulnerable groups, basically the old, the disabled and those with children, and it would be unreasonable to expect him or her to move. In such cases direct subsidy will be payable on the benefit awarded on rent above the level determined by the rent officer at a rate of 50 per cent. In other cases no subsidy will be payable above the market rent determined by the rent officer for the premises in which the claimant is living.
Mr. Tony Banks (Newham, North-West) : I am sure that hon. Members know exactly what the order is about, but I am not one of them. Do the size criteria permit a spare bedroom for relatives or friends coming to stay?
Mr. Jeremy Corbyn (Islington, North) : My hon. Friend the Member for Newham, North-West (Mr. Banks) asked, perfectly reasonably, whether the size allocation would allow for a spare room for guests, such as in the case of a single parent with partial custody of a child, who may visit at weekends or on odd occasions. In many instances a
Column 1040spare room is absolutely essential and is not a luxury. We would be reassured if the Minister would make it clear that a spare room is permissible within this order.
Mr. Trippier : Although, as a general rule, we do not believe that the taxpayer should subsidise spare accommodation, we fully accept that some housing benefit claimants may need a spare room. The housing benefit regulations are designed to protect these people. No benefit restrictions can be placed on the elderly, the sick, the disabled or people with children if the local authority is satisfied that cheaper, suitable alternative accommodation is available and the local authority considers it reasonable to expect that person to move.
Mr. Foulkes : I am grateful to the Minister. He used to deal with small businesses ; he seems to be dealing with small houses now. Will the Minister tell me--because I am interested in motivation in my professional capacity--where this plan originated? Did he think it up? Which of his civil servants thought it up? Who suggested it to him? Where did it come from? Who is the architect of this mischievous plan?
Mr. Trippier : The hon. Gentleman knows very well that there is such a thing as the collective responsibility of Ministers, which stretches from the Department of the Environment to the Department of Social Security. We were, of course, unanimous in the decision we arrived at, which is why it is enshrined in this order.
The orders provide for a right of appeal against a rent officer's determination in the form of a facility for a local authority to apply for a case to be determined by an experienced rent officer from outside the registration area in which the case was originally dealt with. The redetermining officer will be required to take advice from one or more-- usually two--other experienced rent officers, one of whom will be from the original area, though not the office which previously handled the case.
This is the system we propose. Its aim is to safeguard the Exchequer against paying for benefit on rents which are unreasonable. It does not represent a back-door form of rent control. It in no way dilutes our commitment that housing benefit will be available up to market rent level ; on the contrary, it offers a guarantee that the housing benefit system will genuinely keep pace with the market and that claimants will have their reasonable needs met.
Mr. Clive Soley (Hammersmith) : This is one of the nastiest bits of legislation from a Government who have specialised in nasty legislation. That is why we are debating it late at night, because the Government are embarrassed about it and would be even more embarrassed if it were reported in the media as it should be. Under the new rules, rent officers will decide what a reasonable market rent is for housing benefit subsidy purposes. The trap is evident straight away, in the concept of a "reasonable market rent". The Government have had difficulty with their concept of a market rent in recent years. Now they have suddenly decided there is such a
Column 1041thing as a "reasonable market rent". I wonder if there is a reasonable price for a packet of tea, a house, or anything else in the market.
Mr. Tim Devlin (Stockton, South) : In the sale of goods legislation, where there is a dispute as to price, there are provisions for the determination of a reasonable price for a packet of tea or any other commodity. The concept of reasonableness is well known throughout English law.
Housing benefit paid above the level determined will not attract full subsidy and local authorities will be under pressure to restrict it. From 1 April, local authorities will refer new private sector claims to the rent officer who, in addition to deciding the reasonable market rent, will have to decide whether the accommodation is too large for the claimant's reasonable needs. That is a step back to the 19th century and will frustrate progress towards reducing overcrowding.
Mr. Trippier : The hon. Gentleman uses a lot of amazing expletives and makes--as he often does--a dramatic presentation, but he tends to forget that the local authority allocation for Hammersmith, to which he has presumably never objected, is one bedroom for a couple, one bedroom for two children of the same sex, one bedroom for two children under six and one bedroom each for children of six and over of opposite sexes. How different is that provision from that of the orders?
Mr. Soley It is very different, because those figures are the minimum that is aimed for. Under successive Governments--not just Labour Governments-- local authorities have risen above them and I am pleased that they have done so.
I am delighted that the Minister intervened when he did. He described my words as colourful, but they are not my words. They are the words of the London Boroughs Association--a Tory-controlled organisation which is supported in its view by another, the Association of District Councils. Both organisations regard this legislation as wicked. They see it as a return to Victorian times--the word "Dickensian" was rightly used. This is an offensive piece of legislation and the Minister knows it.
The orders are unbelievably cruel. They must be considered in relation to the Department of Social Security regulations on housing benefit, which provide that housing benefit subsidy is payable to local authorities only up to the rent level that the rent officer says is reasonable. There are some exceptions to that rule, and the Minister touched on them. There is, for example, the 50 per cent. of housing benefit paid above the rent officer's assessment for claimants over 60, for those incapable of work or for those with dependent children. When a person dies, exemption is granted for a period of 12 months.
Let us imagine two elderly people who have separate bedrooms, perhaps because the man suffers from emphysema--a not uncommon condition. Many people of that age need separate bedrooms for a variety of reasons. If one of the two dies, after a period of just 12 months the surviving partner has the choice of looking around for somewhere smaller or paying extra rent. The only way out
Column 1042of the trap is if the local authority pays the difference, but under the regime that the Government have imposed on local authorities no one believes that they will be able to do that. The Minister cannot pass the buck by talking about collective responsibility. No one with any respect would have introduced an order like this. He is telling elderly people with more than one bedroom that if one of them dies the other will have to get out or pay extra rent.
I will explain the extent of the evil. A son or daughter may be looking after an elderly parent. If the parent dies, the carer has 12 months' grace before having to move to a smaller place or pay additional rent. But if the elderly parent, instead of dying, is admitted to full-time residential care, there is no period of grace--the carer must leave immediately or pay the additional rent. It is significant that a Minister can introduce such an idea and not feel utterly ashamed of himself.
Elderly couples will have to share rooms. Grandparents cannot have a visiting room. My hon. Friends were right to point out earlier that people will not be allowed a spare room unless they pay extra rent. Two children of the same sex under 18 years of age will have to share a room, so a 17- year-old studying for examinations will have to share with a three-year- old. The Government apparently see nothing wrong with that, although they are pushing it through late at night to avoid embarrassment in the media. The size of the room is not even specified--it may be a box room, or one that will take just two bunk beds, with a 17-year-old in the top bed and a three-year-old in the bottom bed. What sort of society or Government does that?
Mr. Soley : A rent officer may say that instead of the rent of £80 per week set by the landlord the reasonable market rent is £60. In those circumstances, unless councils make up the difference-- nobody pretends that they will be able to do so, for the reasons that I have given--the only option for the tenant will be to pay up or move out. That is why the Conservative-controlled Association of District Councils and every local authority and housing body says that this measure will lead to misery and increasing homelessness.
People will become homeless in these situations because, of course, the private rented sector is primarily involved. If an elderly couple have to get out of this sort of situation, they will go down to the local authority, which has to house them at the ratepayers' expense. That is why I say that it is a wicked measure which does anything of this nature.
The measure will also add to harassment. When a landlord wants someone out, he can put up the rent each year by more than the tenants will receive in benefit so that they have to pay the extra or get out. That is why the order is so nasty.
The test of unnecessarily large accommodation will be set as the maximum number of rooms for a particular family size. It is worth looking at the way in which it is set out in the order. It is no use the Minister trying to dodge the issue by referring to local authorities, because he knows that they set minimum standards which they then exceed. Schedule 3 says :
Column 1043"One bedroom shall be allowed for each of the following categories of occupiers
(a) a married couple or an unmarried couple
(b) an adult,
(c) two children of the same sex,
(d) two children who are less than 20 years old,
(e) a child
The number of rooms suitable for living in"
are allowed in the following way :
"if there are less than four occupiers, one".
There will be one additional room to that bedroom. And
"if there are more than three and less than seven occupiers, two". In any other cases, three rooms are allowed. That really is sick. The order is all about preventing excessive demands on the benefit system by claimants whose choice of accommodation is unreasonable, in the Government's view, or where the house or flat is in an unnecessarily expensive area. In other words, if tenants pick a house or flat in an upmarket area, they can expect to pay the rent or get out. That will create ghettoes.
I asked the Minister in an intervention how many rooms he had, and how many family members shared those rooms. I am sure that he has a spare room for visitors. What is more, if he bought his house and got mortgage income tax relief, he has had a big fat subsidy from the public purse. The Minister says that he does not believe that taxpayers should subsidise spare bedrooms, but they are subsidising his. They are subsidising the Secretary of State for the Environment, the Prime Minister, and every Conservative Member--and probably Labour Members too. We do that for those who own and buy property, but when it comes down to those who rent in the private market we suddenly say, "No visitors for you--and you are not allowed to sleep in separate rooms or have separate rooms for your children unless you pay the price and fork out the extra money yourself." Where is all the talk about choice from the Tory party now?
Mr. Foulkes : My hon. Friend did not mention the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, West (Lord James Douglas -Hamilton), who is to reply to the debate. Will my hon. Friend be fair to the Minister and admit that the taxpayer is subsidising only one of his houses?
In another place, Lord Caithness said on the Housing Bill : "I put it to the Committee in this way. Where one has a international market such as that which exists in central London, is it right that the state should, for instance, fully subsidise the housing benefit of someone living in a penthouse flat in Mayfair? That is the kind of criteria that we are looking for."--[ Official Report, House of Lords, 11 October 1988 ; Vol. 500, c. 742.] That may or may not be right, but if it is right for those whose rent is being subsidised, it is also right for those who are buying and being subsidised for buying. We either subsidise housing costs, or we do not. We should not decide that those who rent are second-class citizens who do not deserve the support of the state. I have not touched much on housing associations, but they are relevant in certain circumstances. The Minister should give some thought to the clarification that the housing associations require on some of these issues. They are worried about suitable alternative accommodation being available.
Mr. Trippier : I am trying to follow the hon. Gentleman carefully. Is he saying that it is Labour party policy to scrap mortgage interest relief-- [Interruption.] It is not a stupid point. Anyone listening to the debate would draw that inference from what the hon. Gentleman has said so far.
Mr. Soley : No, it is not an insult. Plenty of people who are educationally subnormal are quite nice people. I will introduce the hon. Gentleman to some one day--indeed, he may not have to go all that far to meet them.
The Minister is trying to wriggle out of the problem. He knows that what we are talking about, and what I have been talking about for a long time, is a subsidy system which is fair within and between the rented and purchase sectors. We must move towards that in such a way as not to throw either rent payers-- [Interruption.] The Minister should listen for a moment and stop throwing his head back. He must understand that whether people rent or buy they should not be thrown into economic distress by the absurd actions of a Government who have shoved up interest rates to such an extent that the average person paying the average mortgage in England or Wales was paying £81 per month more in January 1989 than in January 1988--
Mr. Trippier rose--
Mr. Trippier : I am about to tell the hon. Gentleman that he should calm down and stop losing his temper because he is devaluing the currency of what he is trying to communicate to the House. We are anxious to hear from the hon. Gentleman precisely what his and his party's policy would be- - [Interruption.] The hon. Gentleman should put forward a constructive alternative. What is it?
Mr. Soley : I have told the Minister on a number of occasions, and I will tell him again now. It is reform of housing finance so as to make it fairer within and between the rented and purchase sector introduced in such a way as not to throw either rent payers or mortgage payers into economic distress. That is not a problem. There are several ways in which we could do that.
The Minister knows that he is bringing forward this order because his own Secretary of State admitted that the Government were in trouble with housing finance. That is because the market in the south is in such a state that if one allowed housing benefit to rise to meet market rents the cost would approximate to that of mortgate interest tax relief. That is why the Government's housing policy is in such a mess.
We know that selling and buying houses is far more profitable than renting them. That is why the private rented sector is declining and will continue to decline. If the Minister still does not understand that, I ask him to understand it now, because it is the whole point of the order.
No one can possibly justify what is being done in this order. It is literally cruel. When Conservative-controlled
Column 1045associations say that it is Dickensian-- they all say that what is being done is cruel and is causing homelessness, anxiety and stress--how can the Minister go ahead and do it without any sense of compassion whatever?
Mr. Andrew Welsh (Angus, East) : I wish the Minister would defend what is proposed, but he would be defending the indefensible. It is ridiculous that at half past midnight we are discussing a matter that affects so many people, many of them among the most vulnerable in the low- income groups. It is ridiculous that we should be dealing with this order at this late--or early--hour, two days before the beginning of the Easter recess.
The draft Rent Officers (Additional Functions) (Scotland) Order stems from the Housing Act 1988, and it certainly confirms that I was right in voting against that legislation. This instrument gives rent officers power in terms of size of dwelling, rent level and services provided, but it also raises some important and worrying considerations to which I hope the Minister will address himself. Better still, the Scottish housing Minister should deal with those matters before this debate ends.
The draft order confirms the new role of the rent officer in determining, for housing benefit purposes, "reasonable" rents in respect of premises let under assured tenancies. I note, and wish to draw to the Minister's attention, the view of the Scottish Council for the Single Homeless that the proposals concerning size criteria and occupation levels are simply contrary to declared Government policy. As recently as 3 March the Scottish housing Minister was promoting a more flexible use of housing stock and commending housing providers who were managing stock imaginatively. But the Department of Social Security regulations appear to undermine that policy completely, at least for people on benefit--often those in the greatest housing need.
I remind the Minister that approximately 80 per cent. of Scotland's housing stock is three-apartment or larger, and that about 50 per cent. of the people on waiting lists are single persons. Many housing agencies where there is a surplus of large dwellings offer three-apartment, or even four- apartment, houses to single people. The problem is that DSS regulations would make this impossible in the case of people dependent on housing benefit. In this connection the Minister should address himself to several specific problems. It is clear that the purpose of this order is to introduce constraints into the existing rent calculation criteria. Will the Minister make their meaning clear? Will he explain how, for example, the rent officer will decide what is a "reasonable" rent? Can he deny the rumours that, where a single person occupies a three-apartment house, the rent officers will have power to identify a reasonable rent for that house and then simply allow only two thirds of that amount to be paid in housing benefit as one room is unoccupied? If a couple and their teenage son occupy a three-apartment house, and if the son leaves home, will the rent officer refuse the remaining couple full housing benefit? These matters are very important to people on very low incomes whose lives depend on such decisions. What will happen in the case of someone who, it is decided,
Column 1046is intentionally homeless? If a person were to accept a tenancy, and if the rent officer were subsequently to decide that the property was too big, or that the rent was unreasonably high, could the tenant be deemed to be intentionally homeless were he to be evicted owing to contractual arrears arising because housing benefit simply did not meet the full rent--a situation that the tenant might have been totally unable to anticipate? People are quite entitled to know the specific details of the Minister's response.
Where people sharing a flat have joint and several liability for the rent, what will happen if one of them leaves the flat? Will the remaining people be entitled to housing benefit for the increased share of the rent, or will they have to meet the cost from their own pockets?
These points have been raised by the Scottish Council for the Single Homeless, and they should be on record and should be answered by the Minister. The answers may be crucial to the survival of many projects aimed at housing young single people. If tenants have to meet the cost themselves, the further development of such projects may be hampered. My local authority is anxious to do something to meet the major problem of housing the homeless, specifically the young single homeless. The order will not help ; indeed, it will hinder progress. It is not clear what criteria will be used by rent officers to assess housing benefit levels for residents in old-fashioned hostels. Surely it must be recognised that residents require more than a cubicle in which to live. Allowances must be made for the cost of proper staffing and service charges. As the hon. Member for Hammersmith (Mr. Soley) said, the criteria as stated would mean that a 17-year-old student living at home might have to share with a younger sibling. Is that what the Government expect? In Glasgow it is the norm for students to live at home while at university or college.
The Government are setting housing norms which will take housing provision and standards back in time instead of making progress by raising standards and conditions. If the Government implement the order, they will have a great deal to answer for. [Interruption.] An independent Scotland would probably have done better than the Government are doing.
Why is there not a system of outside independent appeal? Under the order appeals will be in-house. Why is there not provision for an independent system of arbitration?
I have raised some specific questions, which are justified. I hope that they will be answered by the Minister because the order will affect many people on low incomes. Families will be affected. I would like to see the Government raising standards, but the order confirms my suspicions and my opposition to the Housing Act 1988. If this is the best the Government can do, it is not good enough. I hope that the House will oppose the orders for many of the reasons so adequately stated by the hon. Member for Hammersmith. I will be happy to join him in outright opposition to these inadequate orders. 12.47 am
[Interruption.] I listened carefully, and in silence as usual, to the arguments from Opposition Members. It
Column 1047is a sign of their bankruptcy that they start their normal barracking when somebody gets up to defend a reasonable measure. As I was saying, I did not intend to speak. I wanted to listen carefully to the points being made. As I listened to all the points that the hon. Member for Hammersmith (Mr. Soley) was making and the fire with which he spoke, it became clear that there was much less in what he was saying than the passion he was using to put it forward. Anybody looking at the housing scene must recognise that there has to be a limit to the amount of subsidy on housing benefit, both in terms of cost because of the area-- [Interruption.] It is a Library briefing note ; even Opposition Members are allowed to read those. There has to be a limit to the amount of money that can be used from the public purse for housing benefit to subsidise the cost of accommodation.
The speech of the hon. Member for Hammersmith on behalf of the Labour party was precisely the style of speech, with the same approach to rented housing, that has dogged the party for many years.
Mr. Jimmy Hood (Clydesdale) : I am interested to hear the hon. Gentleman's points. I am impressed by his gall in defending the measure. Will the hon. Gentleman pick up a copy of Hansard tomorrow and take it to his surgeries and show it to his constituents who are in rented accommodation and who are complaining about the effects of the measure? If he did, they would say to him, "How did you have the gall to stand up in the House and support such a measure?"
Mr. Hughes : What I shall tell my constituents is that last year's Housing Bill and the one going through at present will provide increased private rented accommodation and housing association rented accommodation, and I was part of what the Government did to improve housing conditions in the capital in the long term.
I want to refer to the gall of the Labour Front Bench. Their approach has been the same as the one that has done disservice to the people of London for so long. The hon. Member for Hammersmith was saying, "It does not matter what size your accommodation is, we will provide the housing benefit." What he was laying out as a scenario of Labour policy was, "We will provide any amount of benefit to anyone living in rented accommodation." Anyone who has canvassed in the east end of London knows that that is the same falsehood that the Labour party has been using for generations to con people in the east end of London into voting for it.
The reality is that that sort of housing policy has never been the truth. It is that sort of policy that has led to some of the worst conditions in the east end of London. It is shameful that we are hearing that that will be the Labour policy for at least the next generation. There will not in fact be a housing policy that deals realistically with the accommodation that could be made available.
Mr. William O'Brien (Normanton) : Can I take it from what the hon. Gentleman is saying that the policy being presented by the Tories is based on a London situation that will affect Scotland and the rest of the country? That appears to be the theme that the hon. Gentleman is developing.