 House of Commons |
Session 2006 - 07 Publications on the internet Public Bill Committee Debates Welfare Reform Bill |
Welfare Reform Bill |
The Committee consisted of the following Members:John
Benger, Chris Shaw, Committee
Clerks †
attended the Committee Public Bill CommitteeTuesday 28 November 2006(Afternoon)[Mr. Jimmy Hood in the Chair]Welfare Reform BillNew Clause 16Local
Housing Allowance: transitional
arrangements ‘Regulations may
make provision for those in receipt of Housing Benefit to be entitled
to claim Local Housing Allowance from the coming into force of this
Act.’.—[Danny
Alexander.] Brought
up, and read the First
time. Question
proposed,[this day], That the clause be read a Second
time. 4
pm Question
again
proposed. Danny
Alexander (Inverness, Nairn, Badenoch and Strathspey)
(LD): It is a pleasure to be back here this afternoon under
your chairmanship, Mr. Hood. I shall pick up where I left
off in moving new clause 16. Ministers have previously suggested that
they have no plans to make local housing allowance available to
existing housing benefit claimants, but that position will be reviewed
after a two-year period. I have expressed several concerns, not least
the risk that landlords will seek to evict their existing tenants to
let to new tenants at a higher rate, if local housing allowance happens
to be at a higher rate. Local citizens advice bureaux have reported
many cases of landlords increasing their rent to local housing
allowance level. It
seems not impossible, although I am not a fortune teller, that
landlords will respond similarly in the national roll-out and will not
necessarily distinguish, in their rent-setting behaviour, between
tenants whose housing benefit is assessed under the existing rules and
those whose housing benefit is assessed under the local housing
allowance rules. That could leave some tenants at a disadvantage. One
can envisage a situation in which some landlords would be pushing rents
up towards the local housing allowance level, causing shortfalls,
potentially, among the tenants who were in receipt of existing housing
benefits. The new
clause, as I said earlier when probing the Government’s
intentions, would address the problems by allowing existing claimants
to choose whether to transfer on to local housing allowance, or, at any
rate, by giving the Secretary of State powers to make regulations to
allow that to happen. Such an approach would be consistent with another
of the Government’s priorities for the local housing allowance,
which was, after all, to promote choice, in terms of shopping around
with benefits and local housing allowance.
In addition, such an approach could perhaps ease acceptance
among claimants of some of the changes, because it would allow them
greater choice.
The
Minister for Employment and Welfare Reform (Mr. Jim
Murphy): It is a particular delight to welcome you,
Mr. Hood, to the Chair in our third from final sitting of
the Committee, where, as the hon. Member for Bury St. Edmunds said, we
have had particular consensus about important principles. He of course
alluded to the lack of such consensus yesterday in the Chamber.
[Interruption.] That demonstrates again once and for all that there
are
substantial—
The
Chairman: Order. I feel obliged to remind Opposition as
much as Government Members that we expect better order in this
Committee.
Mr.
Murphy: You are right, Mr. Hood, because that
behaviour was worse than anything in the Chamber yesterday.
Nevertheless, the level of disagreement yesterday demonstrates that
there are substantial policy and priority differences between the two
major parties, particularly about poverty and child poverty. The Bill
is an important contribution in that area; I remind hon. Members that
one in six of current incapacity benefit customers has a dependent
child and the Bill would make a substantial impact on the child poverty
measurement. I
acknowledge the comments on new clause 40 made by the hon. Member for
Daventry in the debate on new clause 38. I thank him for giving us
advance notice of his questions and comments in that
way.
Mr.
Tim Boswell (Daventry) (Con): For the avoidance of doubt,
or perhaps to avoid concern on the part of the Committee, I think that
the Minister means clauses 38 and 40—not new clauses. Fertile we
may be on these Benches; disrespectful and even stroppy we may be from
time to time. Nevertheless, our book does not run to creating 38 new
clauses, although, if tempted, we might be inclined to add to their
number.
Mr.
Murphy: As is often the case, the hon. Member for Daventry
is entirely right. Of course, it was clause 38 rather than new clause
38. I was going on to compliment the hon. Gentleman, but I do not know
whether I should do so now. It is a matter of public record that he has
chosen to serve his remaining time in Parliament on the Back Benches,
and we have seen over the years that he has been a free thinker on the
Front Benches as often as one can be. We look forward to his continuing
contributions from the Back Benches. He is someone to whom
compassionate Conservatism came naturally over the years, whereas for
others, it seems that that is not their mother tongue. However, the
hon. Member for Bury St. Edmunds has done very well thus far in
convincing the Committee that it is indeed his second
language. I turn to
the points made by the hon. Member for Inverness, Nairn, Badenoch and
Strathspey. The tone in which he offered his comments suggests that it
was a probing new clause. As he rightly said, we intend to begin by
rolling out local housing allowance only to new claimants and to those
existing claimants who
move house. Although that is different from the approach taken in
pathfinders, there are good reasons for doing it.
The Under-Secretary of State
for Work and Pensions, my hon. Friend the Member for Stirling
(Mrs. McGuire)—I take a temporary foray into her area
of expertise in local housing allowance—has commented before on
the matter. The evaluation reports have made clear the importance of
effective and targeted communication and support. Although some
customers will be able to handle the transition to manage their own
benefits effortlessly, there will, of course, be others who need more
help and support. That is an important lesson learned from the pilot
tests held across the country. At national roll-out, we think that it
will be important to target support where it is most needed, rolling
out new claims only, to allow us and local authorities to concentrate
our resources and efforts on that target group.
On the other hand, extending
the provisions to all—new and existing—claimants from day
one would dilute the available support, and would not enable such a
controlled implementation, which I know that all members of the
Committee would wish to see. As noted during our earlier discussions, a
smooth implementation will in part depend on the success of local
authority IT systems.
As noted in the 15th monthly
operational report, which I am sure the hon. Member for Inverness,
Nairn, Badenoch and Strathspey has in his folder and would be able to
quote from in some detail, a number of local authorities experienced
technical problems in re-assessing awards on the anniversary. Brighton
and Hove was the first big bang authority to do that, and its impact
was underestimated. It was, as one interviewee put it, “almost
like starting again.” That contrasts with those authorities that
phased in the introduction: there, the annual assessment of awards
presented no problems.
In addition, careful
consideration was given to the Green Paper respondents’ views on
the issue. Although some stakeholders were concerned about the
potential administrative complexity, others were keen to see the
gradual implementation that we envisaged in the Bill. For example, the
National Housing Federation supported that approach. The Chartered
Institute of Housing strongly supported the phased approach to
implementation, recognised the importance of doing the groundwork
before roll-out, and appreciated the potential risks posed by such a
large-scale change for 408 separate local authorities.
I hope that I can also
reassure the hon. Gentleman about his fear of landlords’
behaviour about eviction of
customers.
Danny
Alexander: Before the Minister moves on from his point
about learning from the pilot experiences, he has quite rightly talked
about the benefits of the phased approach. However, as I understand it,
the approach now proposed by the Government is different from the
phased approach that took place in the pilots. That approach
transferred people from the old benefit to the new benefit at the time
when their benefit claim was reviewed or
re-assessed, whereas what the Government are talking about in this case
is not transferring people even at that assessment period for a period
of at least two years.
Mr.
Murphy: I want to say a few words, if the hon. Gentleman
will allow me. Six out of the nine pathfinder local authorities chose
the phased approach, so the principle of the phased approach is well
established. Of course, the way in which that phase-in works has been
changed as we look towards national roll-out, but the principle of
phased introduction is well established in two thirds of the pathfinder
local authorities that were involved in the pilots.
As I have already said,
offering such technical detailed advice to our customers has been a
great learning experience and it has empowered them to make the
transfer from housing benefit to local housing allowance. As well as
learning from that experience we are seeking to ensure that the various
resources for advice—including the civil service, local
authority advisers and welfare rights officers—can support
customers in the way that we envisage by means of the phasing that is
set out in the
Bill. The hon. Member
for Inverness, Nairn, Badenoch and Strathspey mentioned a reasonable
concern about landlords—a concern that others may have, too. The
lessons of the pathfinders programme should be considered, however,
because there is no evidence from that programme of such behaviour by
landlords. Despite that, there will be a continuing closely examined
review of local housing allowance during a two-year period, and as the
national roll-out is implemented the concern that he has mentioned will
be a factor in assessing its
effectiveness. We
recognise the hon. Gentleman’s concern that local authorities
will be required for a period to operate two separate, parallel
schemes. As he said, existing housing benefit arrangements will need to
run alongside local housing allowance. He was also concerned about
existing customers being denied access, and about the number of people
who will not be transferred to local housing allowance. Let me share
with him some of our assessments of the likely turnover numbers. The
turnover rate in the private sector is naturally very high, as he is
aware. We estimate that within a three-year period only 20 to 25 per
cent. of customers in the deregulated private rented sector will remain
on housing benefit. The rest will have moved on to local housing
allowance or off housing benefit altogether. That is, three quarters
will be transferred over to local housing allowance or will not be on
the benefit at
all. I
have already alluded to our plans to review the impact of local housing
allowance after the first two years. One of the main aims of that
review will be to consider options for transferring housing benefit
customers in the private sector to local housing allowance if, at that
time, such a step is considered necessary. We therefore believe that
our approach will allow us to extend the benefits of LHA to all, at the
earliest opportunity, while managing the risks inherent in such a
fundamental and wide-ranging change in the benefits system—a
system that is administered by 408 separate local authorities. I hope
that that reassures the hon. Gentleman sufficiently for him to
withdraw the motion.
Danny
Alexander: I am grateful for that response. I am not sure
that the Minister has answered all my concerns in detail, but I hope
that that will be addressed as the Bill goes through another place. In
the meantime, I beg to ask leave to withdraw the motion.
Motion and clause, by
leave,
withdrawn.
New Clause 17Overpayment
of benefits ‘(1) For the
purposes of section 75(1) of the Social Security Administration Act
1992 any amount of housing benefit paid in excess of entitlement may
not be recovered if the overpayment was the fault of the Secretary of
State. (2) For the purposes of
section 76(1) of the Social Security Administration Act 1992 any excess
benefit may not be recovered if the payment of excess benefit was the
fault of the Secretary of State.’.—[Danny
Alexander.] Brought
up, and read the First
time.
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