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Orders of the Day
Housing Benefit
4.8 pm
Mr. Keith Bradley (Manchester, Withington): I beg to move,
- That the Housing Benefit (General) Amendment Regulations 1996 (S.I., 1996, No. 965), dated 28th March 1996, a copy of which was laid before this House on 2nd April, be revoked.
The proposals will severely affect all new and change of address claims made on or after 7 October 1996, and existing claims assessed under arrangements since2 January 1996, from the first benefit review date on or after 7 October 1996. The single room rent will become the maximum limit for housing benefit payable to a young single person. It will be determined by rent officers as the average cost of shared accommodation in the local area. Local authorities will have the discretion to pay rents above the single room rent in cases of "exceptional hardship", but the subsidy available will be subject to an overall cash limit determined by central Government.
Some groups of people will be exempt from the proposed restrictions. Following the consultation exercise after the original draft regulations were laid, two further groups of people have been included in the exempt list--first, some care leavers, but not including care leavers in Scotland, and in any case only young people subject to care orders, and even then only until their 22nd birthdays; secondly, all young people living in housing association properties.
The second key component of the regulations is the changes in payment arrangements for housing benefit for all new claims from 7 October 1996. Those changes will mean, first, the shifting from payment of benefit in advance to payment in arrears; secondly, that direct payments to landlords will be paid four-weekly or monthly; thirdly, that local authorities will have discretion to make first payments of benefit payable directly to the landlord. We believe that all those changes will add considerably to the problems faced by young people seeking rented accommodation.
Let us consider the two sets of proposals before us. First, there is the ceiling for single people under 25 years of age. The proposals in the regulations to restrict benefit rights have to be seen against the background of the severe restrictions on housing benefit entitlement in the private rented sector that have already been in effect from January 1996.
Those draconian measures include a mandatory limit on benefit levels based on a comparison with average rents for the type of accommodation and known as the
local reference rents; a removal of the previously existing protection from benefit restrictions for vulnerable groups such as the disabled, the elderly and families with children; and a very narrow cash-limited discretionary power for local authorities to pay higher levels of benefit in cases of exceptional hardship.
The result is that many people making claims since January 1996 have found that their housing benefit entitlement falls far short of the rents they have to pay. There is already evidence that that is causing severe hardship and leading to many people losing their homes.
The further restrictions on housing benefits for single people under 25 must be seen and judged against the background of the changes that have already been introduced.
How do the Government attempt to justify these further changes? From their statements, they seem to be making several arguments. First, they claim that the number of young people living independently has grown over the past 15 years and is projected to continue to grow. Secondly, they claim that young people who live independently expect to live in accommodation at the cheaper end of the market--usually in bed-sits, or in rooms in shared accommodation. Thirdly, they claim that most young people have comparatively low incomes, and that housing benefit should not assist young people to meet rents for larger accommodation, as that would act as a disincentive to find work and to come off benefit. Fourthly, they seem to argue that housing benefit should not act as an incentive for young people to leave the parental home.
I think that it is worth considering each of those contentions. First, absolutely no evidence has been presented to support the Government's contention that most young people living independently are not in self-contained accommodation, or that young people on housing benefit are any more or less likely to take on unnecessarily large or expensive accommodation. Although the Government estimate that 144,000 out of the 177,000 young people on housing benefit in the private sector will suffer benefit cuts from these measures, no evidence has been presented to support the view that those young people are occupying overly large accommodation. I should be grateful if the Minister will today present the House with the evidence on which that contention is based.
Secondly, the Government's case that young people have lower incomes is certainly true in respect of those who are claiming benefit. Since the introduction of income support in 1988, single people under the age of 25 have been paid at a lower rate of income support--amounting to a shortfall of about £10 a week--with a correspondingly lower level of housing benefit for those not on income support. So there is already a financial imperative for single people under 25 to occupy accommodation at the cheaper end of the market.
Under these proposals, many young people will suffer the double disadvantage of a cut in their housing benefit, leaving potentially large rent payments to be made up out of an already reduced income support level. As the Government's Social Security Advisory Committee commented in its report on the draft regulations, that situation could lead to young people being
Thirdly, the Government's concern that housing benefit should not act as an encouragement to young people to leave home, and that it should not enable them to take accommodation that their contemporaries not on benefit would not be able to afford, is of central importance in these changes. Again, however, no evidence has been presented to support either of those concerns. The regulations seem to be based on the view, first, that young people under 25 ought to live with their parents, and, secondly, that such young people should not live in self-contained accommodation.
In response to those views, the Social Security Advisory Committee commented:
The Social Security Advisory Committee also concluded:
The Government have said that they are concerned about incentives to take work, but the restrictions are likely to act as a strong disincentive for young people, especially those on benefit since January 1996 and so protected from these changes, to change their circumstances by taking work or moving to find work, for fear of not being able to afford the rent if they subsequently have to claim benefit again.
Surely the Government should be encouraging young people to take jobs and look for job opportunities rather than establishing in the proposals a further barrier in the benefit system to their moving to seek the work they so desperately need. Will the Minister explain why the proposals have been set up so as to provide a further barrier to job opportunities?
Imposing a new ceiling on housing benefit for young people is likely to force them into poorer accommodation, always assuming that the supply of shared accommodation increases to make it available. Once again, the Social Security Advisory Committee commented on that contention:
In addition, the proposals seem to fly in the face of the tremendous efforts across the country by local authorities--I pay tribute to my own in Manchester in this respect--which have vigorously tackled the wide range of problems associated with houses in multiple occupation. Authorities have been working with landlords and often forcing them to convert accommodation into single units, thus providing a decent supply of affordable, safe and sound accommodation for single people.
The policy tries to reverse that trend, a view supported by the National Association of Estate Agents, which, in its response to the draft regulations, said:
"harassed by landlords because of rent arrears, leading to possible eviction and homelessness."
The Social Security Advisory Committee also registered its concern at the lack of any evidence about the living situation of young people to back up these cuts, and about
the perceived use by young people of housing benefit to pay for unnecessarily expensive accommodation. The Government have not cited any such evidence, and I again call on the Minister to put before the House today the evidence on which that contention is based.
"young adults have the same general preference for independent living and self-contained accommodation as the rest of the population."
The Government have clearly encouraged that for owner-occupiers, 850,000 of whom are now young people under 25.
"We consider that the proposal is unlikely to have any significant impact on persuading young people to remain with their parents. If it does succeed to any extent it will make people less mobile . . . Many have legitimate reasons for leaving the parental home, while many do not have the choice to return to one."
We support those conclusions, and we further believe that the restrictions on benefit levels are likely to make it harder for young people who need or choose to live independently to find affordable accommodation, and to act as a disincentive for those who do not have accommodation to risk moving for work or for other reasons.
"There appears to be no firm foundation for the Department's assessment that the market for private rented accommodation is sufficiently flexible to respond positively to the new ceiling by providing more, inexpensive, shared accommodation."
Again, we share that view. We share the concern that the response of landlords is likely to be to withdraw from providing accommodation for young people.
"It is also, in the opinion of a number of our members, going to create an impossible position as the availability of shared accommodation is on the decline as many landlords have over the past few years been busy converting these type of HMOs into self-contained units. As such, these units will command higher rentals and, therefore, any assessment based on bedsit accommodation with shared facilities made by rent officers will make it nigh impossible for the under 25s to rent this type of accommodation if it is not there to be had."
Surely the Government should recognise the problem and seek to ensure a supply of affordable and safe accommodation for young people.
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