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House of Commons

Monday 11 May 2009

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Work and Pensions

The Secretary of State was asked—

Local Housing Allowance

2. Mrs. Linda Riordan (Halifax) (Lab/Co-op): What proportion of claimants in each local authority were classified as vulnerable for the purposes of paying local housing allowance in the past 12 months. [273484]

The Parliamentary Under-Secretary of State for Work and Pensions (Kitty Ussher): The information is not available for the past 12 months. However, evidence from the nine local housing allowance pathfinder evaluations indicated that payments of local housing allowance were made to landlords in 12 per cent. of cases where local authorities assessed the claimant as vulnerable.

Mrs. Riordan: There is a great deal of difference in the way that local authorities handle policies on vulnerability and rent arrears in their housing allocation. Many vulnerable people are left homeless and landlords are left with rent arrears. What mechanisms are there for making sure that local authorities apply their policies properly and are there any plans to change those mechanisms?

Kitty Ussher: My hon. Friend raises an extremely important point. The guidance to local authorities on how to implement the regulations, and in particular the safeguards for vulnerable claimants, has been set out clearly. Indeed, we have provided comprehensive training and guidance material to local authorities. Like my hon. Friend, I too have been concerned that some local authorities are implementing the regulations differently from other local authorities, so we shall be reissuing the guidance. I want to make it entirely clear, and on the record, that local authorities by no means have to wait for eight weeks before reinstating direct payments to landlords. They can set their own policies in that regard and make direct payments much sooner if they think there is a likelihood that the rent will not be paid by vulnerable claimants.

Steve Webb (Northavon) (LD): The Minister will know that the effectiveness of the local housing allowance scheme depends on the definition of “local”. If the
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local housing market is defined over a very large area, there will be parts where the rent is too high for anybody on benefit—no-go areas—and ghettoised areas where people on benefit have to live. Will the Minister commit to an early review of the definitions of local housing market areas to see whether that is happening and, if so, to redraw the local housing markets?

Kitty Ussher: The hon. Gentleman needs to check his facts. In fact, 25 per cent. of the broad rental market areas are being reviewed this year; 14 of those reviews will be published quite soon and a further 18 in the next few months, and 25 per cent. a year will be looked at. I have asked the Rent Service to prioritise areas where there was less local consensus and encourage them to involve all local authorities and interested groups, including Members, to make sure that consensus can be reached, precisely to solve the issues that the hon. Gentleman raised. However, I should also like to make it clear that local authorities have at their discretion a pot of money to ameliorate some of the effects case by case. In the vast majority of circumstances when Members have raised cases with me, the local authority has agreed the new boundaries, so the onus is on the local authority to ameliorate any unforeseen circumstances that follow.

Mr. Jim Devine (Livingston) (Lab): Will my hon. Friend review housing benefit? Many of my constituents are trapped on benefit; they have been offered jobs but are afraid to take them because as a consequence they would lose their housing benefit, and then obviously their home. Will my hon. Friend look at that?

Kitty Ussher: My hon. Friend is right to raise that point. It is precisely why shortly—in the next few months or so—we shall be starting a public consultation on what has so far been an internal review of housing benefit, designed to make sure that work incentives are at the core of the way we implement the benefit system.

David Howarth (Cambridge) (LD): May I press the Minister on the timing of the reviews she mentioned in answer to my hon. Friend the Member for Northavon (Steve Webb)? In Cambridge, there are 800 claimants whose housing benefit is being reduced because the area was drawn far too wide. A review has been under way since last year. The Minister mentioned local authorities. Cambridge city council has made its submission, backed by Shelter. How much longer do those tenants have to wait for their review to be completed?

Kitty Ussher: I mentioned in response to the earlier question that 14 reviews were being fast-tracked. Cambridge is one of those and I expect to have recommendations about what should change, if anything, in the next few weeks. Any changes will, we hope, be implemented from 1 July.

Andrew Selous (South-West Bedfordshire) (Con): It is now clear from reports across the country that not only tenants but charities helping the homeless are being very poorly served by the local housing allowance, so will the Minister agree to urgent reform of that allowance, which, frankly, is failing the very people whom it was designed to help?

Kitty Ussher: We always said that we would review the local housing allowance after two years, but the evidence so far does not bear out the hon. Gentleman’s
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points. In the pathfinder evaluations, it was shown that 96 per cent. of customers had a bank, building society or Post Office account, and a quarter of those had been opened in order for those customers to pay their rent. We are talking about an important policy, giving more choice to tenants. It is an important part of our plans for financial inclusion. We will, of course, listen to all interested parties, but we do not currently have the evidence that the hon. Gentleman needs to make his point.

Mr. Andrew Love (Edmonton) (Lab/Co-op): There have been reports in the newspapers that the expenditure on local housing allowance has been greater than was forecast, and that as a result the Government are considering whether those whose local housing allowance is more than the rent that they pay and who therefore benefit will lose that benefit. Can my hon. Friend report on that?

Kitty Ussher: My hon. Friend is right that the local housing allowance has proved quite generous. That is not a bad thing, particularly in the current economic circumstances, but it is right in looking across the whole of Government expenditure that people should not be able to claim in excess of what they pay for their rent. Once the economic circumstances improve, the issue is to be looked at again, and he is right to make that point. Every single person will have their rent paid if it is at or below the LHA level.

Incapacity Benefit Claimants

3. Philip Davies (Shipley) (Con): What plans he has to assist long-term incapacity benefit claimants to move into employment. [273485]

The Secretary of State for Work and Pensions (James Purnell): We are increasing the help available to incapacity benefit claimants, all of whom have access to back-to-work support through pathways to work. We are also taking forward the Gregg review vision that everyone should be expected to take active steps towards work in return for their benefits, except for those in the support group, who are most disabled. In the first instance, we will trial that approach for existing claimants through the invest to save funding model. We will also reassess everyone on incapacity benefit to make sure that they are on the right benefit.

Philip Davies: Does the Secretary of State not agree that the best way to get people from incapacity benefit into work is to make it as easy and least burdensome as possible for employers to take on new people? Would not that be the best approach to take, rather than ridiculous politically correct initiatives such as the Equality Bill, which the British Chambers of Commerce says will discourage job creation in this country?

James Purnell: It is very important for us to provide people with help to get back into work, and to improve the incentives for getting back into work. That is why we are re-testing everybody on incapacity benefit to make sure that they are on the right benefit. That is why we have tightened the gateway to make sure that only the right people get on to the benefit, and that is why we will require everybody for whom it is appropriate to have back-to-work support. The one thing that we will not do is abolish the minimum wage, to which I think
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the hon. Gentleman is referring. He is the promoter of a Bill on the issue, which will come before the House on Friday. I hope that everyone, including Conservative Front Benchers, will oppose it, and make it clear that that is not the way that we should go.

Jeff Ennis (Barnsley, East and Mexborough) (Lab): In response to what my right hon. Friend just said, before the national minimum wage came in, 17 per cent. of my constituents were on wage rates of £2 per hour or less; some were on 99p per hour. We need to push more worklessness projects that give people who are on incapacity benefit opportunities to move gradually from benefit into work. As my right hon. Friend will know, such an approach has been championed by the worklessness tsar, the leader of Barnsley metropolitan borough council, Steve Houghton, who is doing some great things in that respect.

James Purnell: My hon. Friend is absolutely right, and we strongly welcome the Houghton review. He recommended that we invest money in helping local authorities to prevent the kind of worklessness that occurred in the past, and I am glad to say that that is exactly what we are doing.

Sir Nicholas Winterton (Macclesfield) (Con): Will not the Secretary of State deal with part of the question that my hon. Friend the Member for Shipley (Philip Davies) put? Should we not seek to minimise the cost to employers of employing people? That is, should we not provide them with an incentive, particularly at this time, to employ people? Unemployment is rising dramatically. We want more people in work, even if they are from among those on incapacity benefit. Does he not think that the Government should give more thought to assisting employers and providing them with incentives to employ people?

James Purnell: Of course we should minimise regulation, but I do not think that there is a contradiction between supporting equality and helping more people into work whatever their background, and getting people into work. Knowing his views, I do not think that the hon. Gentleman does either. It is important to point out that the hon. Member for Shipley was talking about abolishing the minimum wage, showing that such views still obtain in some parts of the Conservative party today. [ Interruption. ] It is a Bill that comes before the House on Friday, and the hon. Gentleman is promoting it. It is important that people know about it.

Mr. David Clelland (Tyne Bridge) (Lab): My right hon. Friend will know that it is not only those people who suffer from incapacity but those who care for them who find it difficult to move back into work, not least because if they earn one penny more than £95 a week they lose their entire £55 carer’s allowance. When will my right hon. Friend remove that disincentive to work?

James Purnell: My hon. Friend makes an important point, and we are improving our help for carers to get back into work. Carer’s allowance is clearly supposed to be a replacement income for people who cannot work, and therefore it has never had that structure in the past. However, we said in the carer’s strategy review that we would keep on looking at the issue, and we will do so.

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Mr. Mark Harper (Forest of Dean) (Con): The Secretary of State referred to existing incapacity benefit claimants and the importance of getting them into work, and he will know that nearly 1.2 million incapacity benefit claimants are over the age of 50. Under his Government’s proposals, those people will be offered only one work-focused interview to help them get back into work, and that is clearly not going to be adequate. Significant numbers have been out of work for more than five years—

The Minister for Pensions and the Ageing Society (Ms Rosie Winterton): The minimum wage?

Mr. Harper: The right hon. Lady says, “The minimum wage”. No Opposition Member has mentioned the minimum wage, so why do we not just stick to the questions and the answers? Will the Secretary of State explain how one work-focused interview for those 1 million people over 50 will help them get back into work?

James Purnell: It is not surprising that the Opposition Front-Bench team do not want people to be reminded of their record on poverty wages. On the hon. Gentleman’s— [ Interruption. ] If he will just calm down for one second, he will hear that, on his question, he is wrong about the facts: people can volunteer for far more than that which he described. We are the first Government to require people to take part in work-focused activity, and that contrasts with the previous recession, when 1 million people went on to incapacity benefit. They were encouraged, sometimes forced, to go on to it by the Opposition, and they were trapped there, because they were offered no help to get back into work or back to health. It is a record that, frankly, he should be extremely embarrassed about, and I am therefore surprised that he wants to contrast his Government’s record with ours.

Local Housing Allowance

4. Willie Rennie (Dunfermline and West Fife) (LD): What assessment he has made of the effectiveness of the operation of local housing allowance. [273486]

6. Andrew Stunell (Hazel Grove) (LD): What assessment he has made of the effectiveness of the operation of local housing allowance. [273488]

The Parliamentary Under-Secretary of State for Work and Pensions (Kitty Ussher): Local housing allowance is a simpler, fairer and more transparent system of help with rent for people on benefits or low wages. It is designed to promote personal responsibility over payment of rent and to ensure that people do not face disincentives to move back into work.

We are, as I said in an answer to a previous question, closely monitoring how the scheme works in practice and have committed to completing a full review over a two-year period from the commencement of the scheme’s roll-out in April 2008.

Willie Rennie: The Minister will have seen reports that about half of all landlords are considering getting out of the housing benefit market because they have lost complete confidence in the system, mainly through tenants who are unable to pay their rent on time. The
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situation has a significant impact on the finances of landlords’ businesses, and it could, in turn, have a significant impact on homelessness. What is the Minister prepared to do—further to the flexibility that she discussed earlier—to ensure that that drastic measure is not taken?

Kitty Ussher: There are quite a lot of things going on in the housing market at the moment, and we do not have the evidence that those changes mean that landlords are withdrawing from the market. In fact, overall, there has been a slight increase in the number of rented properties in the market throughout the country. As I said, we are ensuring that local authorities completely understand that they have the flexibility to reinstate direct payments if they think that the tenant is vulnerable; the authority does not have to wait eight weeks to do so; and we will complete a full review at the two-year anniversary of the scheme. The review will include proper research and data collection, rather than simply the rumours that the hon. Gentleman is clearly trying to promulgate.

Andrew Stunell: Does the Minister recall the time when her hon. Friend the Member for Sunderland, South (Mr. Mullin) was Minister and housing benefit local areas were expanded? Hazel Grove, a constituency with high property and rental values, was linked with inner Manchester, leading to “economic cleansing” of poor tenants in my constituency. Will she undertake to ensure that, in the review, Stockport will be restored as a separate local housing allowance areas, allowing the poorest in my community to remain in that community when they need to do so?

Kitty Ussher: I will not, because I will take the advice of the Rent Service. However, as I said in response to a previous question, we will be reviewing 25 per cent. of broad rental market areas each year. I advise the hon. Gentleman to engage fully with the Rent Service in England, to make his points clearly.

Rosie Cooper (West Lancashire) (Lab): Does my hon. Friend agree that it is important for there to be a wide range of organisations involved in the provision of training and support, developing skills and experiences for people with disabilities? I commend the Brighter Future Workshop and Midstream, two organisations in my local area that do a grand job with people of varying ranges of disability. I invite my hon. Friend to visit any time she can.

Kitty Ussher: I completely agree with my hon. Friend, and I would be delighted to visit.

Jobseeker’s Allowance

5. Mr. Andrew Robathan (Blaby) (Con): What his most recent estimate is of the (a) number of claimants of and (b) percentage of the work force claiming jobseeker’s allowance in (i) Blaby constituency and (ii) the UK. [273487]

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