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I have alluded to the impact that these changes will have in Sheffield. It is not the cap that affects cities such as Sheffield; it is the 30th percentile change that affects us. That is the fundamental problem and it will cost the average family on housing benefit in Yorkshire and Humber about £7 a week. The total cost of the change for the average family in Sheffield will be more than £30 a month, and it will lead to dispersal. There are considerable differences in the rates that apply in different parts of Sheffield, and not only the unemployed, but those on low wages who are renting in the private sector will be dispersed from richer parts of the city, in the constituency of Sheffield, Hallam, to other parts of the city. I did not use the word "cleanse" or "clear", because "disperse" is an accurate and proper word to use when describing what will happen. The city will become more segregated and more divided. The situation will get worse, because local housing allowances are linked to the consumer prices index but rents rise at a higher rate. Therefore, over time, people will be dispersed from
progressively more parts of the city. That is what the impact will be on cities such as Sheffield-that is the reality.
At the same time, housing departments, such as Sheffield city council's, will face pressure because unemployment will create more housing problems and more homelessness. The budgets of these departments will have been cut, yet they will have to deal with advising or re-housing people in desperate circumstances. What we have not had a clear answer to is whether people who have to move home because they cannot pay their rent as housing benefit no longer covers it will be considered intentionally homeless. That is a fundamental point, so can we have an answer on it please? Can we also have an answer on whether the Government really are going to change the homeless legislation as Lord Freud indicated in order to see their way out of this problem without local authorities having to have the responsibility of housing people? Those are fundamental issues.
Why is it necessary to punish the couple in their 50s who lose their jobs, whose family have left home and who are living in a three-bedroom council house? Why is their home at risk because they have lost their jobs and housing benefit will not cover their rent as they are deemed to be under-occupying? This is simply not fair. It is a vicious and nasty policy that is aimed at hard-working people who happen to be unemployed and who then need to be re-housed too. These benefit reductions are not part of any grand policy on welfare reform and they are certainly not part of any clear housing strategy. They are part of an unfair agenda driven by the Chancellor, who has simply cut the incomes of some of the poorest people in our communities.
Laura Sandys (South Thanet) (Con): I thank the hon. Member for Sheffield South East (Mr Betts) for his speech, despite disagreeing with many of the things he said, not least the last one. This is an interesting debate because we are considering housing benefit change, but in many ways it has to be regarded as part of a much wider welfare reform programme. As such, we can ensure that some of the observations of Labour Members will be addressed by the universal credit benefits, the Work programme and many other ways in which the Government will make work reward and pay, by ensuring that we put the right value on, and give the right level of reward to, those who work.
It has taken a lot of political courage to address housing benefit. It has not been done early enough, but the coalition can now deal with what has become a ludicrous and highly inflationary system. Like my hon. Friend the Member for Hastings and Rye (Amber Rudd), I represent one of the poorest areas in the country-it has the second highest number of low-paid workers. These people earn less than £7 an hour and often hold down more than one job at a time; they work in the care sector, in our hospitals and in the low-paid retail sector. Before and during the election, my campaign with them focused on asking how we could show how greatly we valued them. I promised to do something about this issue and said that my Government would try to help those people who hold down one or two jobs, who put food on the table and who ensure that they pay their rent.
Dr Eilidh Whiteford (Banff and Buchan) (SNP): Does the hon. Lady acknowledge that the majority of housing benefit recipients are people in work, pensioners and disabled people, and that less than one in five of the recipients are unemployed?
Laura Sandys: First, it is 13% of people who work who receive housing benefits. It is good to see on the Front Bench the Minister who is responsible for disability, because in addition many provisions are made for people with disability. We need to protect those who are vulnerable, and they will be protected. It is crucial that we ensure that equity and justice are at the heart of the housing benefit structure.
Housing benefit is one of the key problems in Thanet. In an area of real deprivation, the rate of housing benefit has dramatically distorted the market, disadvantaging those on low wages while not delivering an improvement in the housing stock for those on housing benefit. I wish to highlight three blights that my constituency faces as a result of the level of housing benefit. As I said, it is unfair on the low paid, who do not claim housing benefit. The double whammy of inequity is compounded by the inflationary impact on the overall housing market.
Guto Bebb (Aberconwy) (Con): I, too, represent a seaside constituency, so I know that my hon. Friend's point is strong and fair. The average wage in my constituency is £21,800. People earning that will be paying about £4,500 in taxes, yet they often find themselves priced out of the local market by people who move into the area from other parts of the world.
My second point is that these rates have not seen an improvement in the housing stock. Some landlords are interested in the rental value rather than the capital appreciation because that gives them such a high return on their investment. Investing in the properties and in the fabric of them is therefore not a priority.
The third issue is the extreme concentration of housing benefit claimants in pockets in my constituency. That problem was brought up by my hon. Friends the Members for North East Hertfordshire (Mr Heald) and for Cardiff Central (Jenny Willott). We create micro-economies that attract a significant amount of housing benefit because property prices are so low and the return from housing benefit is proportionally high.
The current situation has fundamentally distorted housing in my area. The average wage in Thanet is £17,000 and housing benefits for the unemployed stand at more than £8,000 a year. Most working families cannot compete in that market.
Richard Graham: Does my hon. Friend agree that one of the bizarre uses of the word "fair" during the whole debate has been the assumption that it is somehow unfair to people who are not working for them not to have better housing than those who are working? The whole point of this reform is to enable a level playing field in which people can live in the houses that they can afford from their work.
As I said, concentration is also an issue. Two wards in Thanet have 83% privately rented accommodation and 20% of all the benefits claimants in my district, but only make up 2% of the population of Thanet district. Some 30% of the activity of all our housing benefits department is taken up by those two wards. Why? The housing benefit has increased by more than 50% over the past 10 years. Some landlords are making a return on their investment of more than 12% through housing benefits whereas similar properties in Westminster would generate only 4 to 5%. These pockets are hugely attractive to landlords, particularly in coastal towns, and that can be very inflationary.
In certain areas across the country, these micro-economies have significantly lower house prices than areas within their broad market rental area. I urge the Government to consider the possibility of allowing local authorities to create sub-districts to ensure that they can exercise the localism that is at the heart of our agenda and the discretion to assess where low market values are creating a magnet for housing benefit claimants. However, that has to do with broader issues of welfare reform. I am sure that throughout the universal approach that the DWP is taking, we will be able to reverse the current situation.
Our system is broken. Those who want to work know that work does not pay. Those who work get less than those who claim and those who do not work often receive the most. I commend these measures and believe that many in my constituency and those areas that have lower income workers will welcome the reforms.
Phil Wilson (Sedgefield) (Lab): I want to broaden the debate, because for me it is about not just housing benefit but housing in general. In particular, I want to talk about the problems that we have with private landlords. It seems to me that the Government are more than prepared to attack the tenants, whereas we need to look at the escapades and state of some of the private landlords we have to deal with-not just in the cities, but in ex-colliery villages in County Durham, such as those that I represent.
There seem to be three basic problems. We need to look at housing benefit and the LHA and to reform them, but we also need to look at the rented sector and at housing supply in general. There are three pillars to the problem, as I see it. If we do not control and manage the private landlord aspect, it will suck the community spirit out of some of our villages and communities up and down the country. I have had problems in places such as Chilton, Ferryhill and Trimdon Station, where the police have been involved. I have had to address large meetings and the problems have basically been to do with the behaviour of some private landlords and, indeed, the tenants too.
We should consider not only the reform of housing benefit but the depth of the problems in some of our communities. For example, we did a survey in some of the communities that I have just mentioned of just under 1,100 houses, 38% of which were in the hands of private landlords. More than half of those private landlords did not even live in the county and quite a few-a significant number-lived outside it. What kind of
relationship with and understanding of the local community will they have if they do not even know where some of the properties they own are? That is something that the Government need to address.
The Labour Government started to address it with a selective licensing scheme sanctioned by the Secretary of State. I have two or three in my constituency and they are starting to happen around the country, too. Local authorities can implement these schemes and they go some way towards imposing rules and regulations on private landlords and on the behaviour of tenants. The only problem is that although we have the legislation, if the Government are interested in that aspect of housing they should give it some funding so that we can have stable communities where there are private landlords and a lot of people on housing benefit live.
Another thing that we wanted to introduce was a national register for private landlords. That was one of the things that I discussed with the then Secretary of State, my right hon. Friend the Member for Wentworth and Dearne (John Healey), before the election. However, the Government have said that they will not introduce it. I understand that they think that it is over-bureaucratic, but local residents who have to put up with some of the behaviour of the private landlords and their tenants do not believe that it is too bureaucratic. If there is a will, there is a way, and we will have to consider that in future.
I do not agree with those who think that if housing benefit and the LHA are reformed in the way that the Government propose, rents will automatically come down. The British Property Federation briefing that I have received states:
"Currently in areas across the country from Harrogate to Trafford to Brighton and most of the South West, for every LHA claimant searching for a two bedroom property to rent there are between five and ten individuals who are in work doing likewise. LHA"-
"claimants will be left behind as landlords naturally seek individuals who are looking for property to rent and are in work."
That is what will happen. People on housing benefit and LHA will be priced out of some of their local communities because the first port of call for the private landlord is those people who have a secure income-people who are actually in work. As the federation has said, five to 10 people in work are chasing every let, compared with two or three people on housing benefit. That is one of the main reasons why rents will not automatically come down. A major survey by the Cambridge centre for housing and planning research has found:
"A majority of 500 landlords surveyed for the study believes the changes will increase arrears, and a large proportion of those who currently let to LHA claimants intends to reduce the number of such tenancies they offer."
Those are some of the issues that we need to address. We should not focus on housing benefit and tenants and think that these people are just sitting watching the television all day long. Perhaps some of them are, but a lot of them are not. Some are pensioners, some are out of work because they have been forced out of work, and some are among the five people chasing every job vacancy. The Government must confront these issues. It is about not just sorting out the tenants, but sorting out the rest of the market, too.
Let me end on one point. I have with me a copy of a written answer from the Treasury. At the moment, about 100,000 tenants in the private sector are paying rents to private landlords-about 44,000 of them-who have not paid tax on that rental income. More than 50% of those landlords are receiving income from housing benefit claimants. The Government need to look into that. It is a case not just of tenants claiming benefit, but of many people in the private sector who rent out properties who are not playing the game. We need to look at both sides, not just one.
I was heartened to hear the comments of my hon. Friend the Member for South Thanet (Laura Sandys). She highlighted the 12% return on some investments and the fact that that seems to attract a certain type of landlord. The hon. Member for Sedgefield (Phil Wilson) alluded to that as well. It is almost an open secret in the property business that that aspect needs reform. If truth be told, it seems to attract those who are not the best landlords.
The shadow Secretary of State, the right hon. Member for Paisley and Renfrewshire South (Mr Alexander), quoted Liz Peace, and the hon. Member for Sedgefield quoted the British Property Federation. Both quoted selectively. The context in which Liz Peace made that comment was much broader. She was making the point that many landlords do not receive housing benefit directly, so they prefer tenants who are working. Her comment was quoted selectively. As a member of the all-party group on urban renewal and regeneration, it is part of my remit to read such quotes comprehensively.
Phil Wilson: Those affected by the cuts will find it increasingly difficult to find a place to live. I quoted most of the paragraph. In the private sector there are good landlords and bad landlords. The problem is that many of them are amateur landlords who have one or two properties. That sector needs to be regulated, and a national register would be extremely helpful.
Throughout the debate, I have been saddened by one feature of it. All of us on both sides use partisan language. Let us be honest and acknowledge that some of us use politically partisan language, but the language used about the issue under discussion has been inflammatory and poorly judged. I refer specifically to the term "cleansing". My family experienced partition in India in 1947. My father was eight years old when he saw people forcibly removed-Hindus, Sikhs and Muslims. My maternal grandfather had to protect his neighbours from a mob of Sikhs and Hindus who wanted to burn out his Muslim neighbours. It is particularly difficult for them to accept the sort of language that has been used in the debate.
As a new Member I say these words not through any pomposity or grand-standing, but because our words resonate widely outside the House. The advice that we received at the very beginning to use temperate language was impressed upon us by wiser heads than ours.
"A mark of any society is how it cares for the vulnerable. It is not possible for any society to guarantee equality of outcomes for all; it is however possible to achieve equality of opportunities."
That is a quote from the convener of the Church and Society Council of the Church of Scotland. Can the hon. Gentleman explain to me and to the House how people being forced from their homes because of the rent levels and the actions of his coalition Government will produce equality for anyone?
"This would lead to social cleansing on an unprecedented scale, with poorer people shipped out in large numbers".
Paul Uppal: We could trade quotes, but the issue was eloquently covered earlier by my right hon. Friend the Secretary of State, who made a passionate and pertinent point about the inflammatory language that has been used.
Government estimates show that spending on housing benefit has risen from £14 billion 10 years ago to £21 billion at present. These figures self-evidently make the case for reforming the system and I, for one, believe that reform is long overdue. The central point of the proposed reforms is that people who receive benefits should have the same choices regarding housing as people who do not get benefits. To be balanced in these reforms, the Government have announced more support for the additional discretionary housing payment to help the most vulnerable cases, particularly where there are unusual difficulties.
In a nutshell, if we are prepared to pay, as we are, £20,000 in housing benefit, is it not reasonable to assume that we can meet the vast majority of housing requests? But with a massive deficit, tough choices have to be made. We need to push ahead with the changes to ensure that hard-working individuals and families will no longer have to subsidise people living in properties that they themselves could not afford.
Figures will undoubtedly be bandied across the Chamber today, and I have no desire to rerun arguments that have been put forward already, but it is always important to put things in perspective. The maximum rent following the cap will be £400 a week, which is equivalent to £20,000 a year. As the Secretary of State said, based on what people spend on average on housing, this would require an income of more than £80,000 a year. The current maximum local housing allowance rate is £104,000 a year, which would require an income of well over £250,000 a year to fund. Can that be right? Indeed, it could be argued that extreme LHA payments act as a barrier to mobility, trapping people in unemployment and benefit dependency. It is also grossly unfair to expect hard-working low-income taxpayers to fund these rates.
Recently a constituent of mine wrote to me about his experiences as a landlord. The tenant received housing benefit directly after the landlord had been advised that he could be paid directly only if the tenant was in arrears by two months. I say this to show that there are always two sides to the argument-the tenant's perspective and the landlord's perspective. I quote my constituent:
"Currently tenants are assessed for housing benefit and the amount paid is dependent on the tenant's personal circumstances and size of house . . . However if the housing benefit awarded is over the amount of rent agreed on the assured shorthold tenancy, the tenant is allowed to keep the difference."
"If the tenant is not happy that the rent is being paid directly to the landlord then the tenant has the right to move to a new property and the whole process starts again.
My tenant advised the housing benefit department that she had left my property; they subsequently stopped paying the rent. In fact she stayed at the house for three weeks without paying a penny. When I advised the council that she was still residing at the property and provided them with evidence of this, they said they had to take her word for it".
Although I welcome the broad measures in the housing benefit reforms initiated by the Government, I believe that significant savings could be achieved if the local housing allowance were paid direct to landlords instead of to tenants. That would remove a significant disincentive for landlords to provide accommodation to LHA claimants. Research by the British Property Federation has shown that as a consequence, 60% of the landlords surveyed do not offer tenancies to those receiving LHA, mainly for fear of rent arrears. At the very least, claimants ought to have the right to choose how their housing benefit is paid, and be able to choose that their payments should go directly to the landlord.
I reiterate that I wholly support the Government's measures, not only because they mark a move away from dependency towards independence, but because under the Labour Government housing benefit was allowed to spiral out of control. However, it would be wise to revisit the issue of direct payment to landlords to prevent public money from being wasted, and to encourage landlords to continue to let property to those receiving housing benefit. All of us would agree that the welfare system should provide an effective safety net, but it should not pay workless families far more than most working families earn. As has been said, the 2010 Labour party manifesto stated:
"Our goal is to make responsibility the cornerstone of our welfare state."
"housing benefit is in need of reform",
but they mean "at a slower pace", which in essence seems to apply to almost all the debates that we have. Government Members have decided to address the problems that face our country, and, although Opposition Members now talk of reform, under their stewardship housing benefit increased by more than 50% in one decade.
Frank Dobson (Holborn and St Pancras) (Lab): I make no apologies for saying that as a Member of Parliament, before that as the leader of Camden council, before that as an individual councillor for Holborn ward, and before that as a human being, I suppose, campaigning locally, I have always been obsessed with trying to ensure that the beleaguered ordinary residents of the area be allowed to stay there. However, that does not mean that I believe that spending £20 billion on housing benefit is a sensible use of public funds. Not a penny of that £20 billion goes on building flats or homes, it is just used to subsidise rents that ordinary people cannot afford, and I remind Government Members from both parties that 100 years ago, Winston Churchill rightly said that rent is a preliminary tax on all economic activity. That was true 100 years ago, and it is true now.
When I say ordinary people, I mean nurses, street cleaners, bus drivers, shop assistants, people who clean the hospital, ambulance drivers, kitchen staff, waiters who serve Government Members, butchers, bakers, plumbers, electricians and builders. Those are the ordinary people who I want to be able to stay in my constituency, in decent housing and at rents that they can afford. That is not the case at the moment, and the Government now propose not just to cap housing benefit, but to slash the funding to build decent homes and flats that people can afford.
The Government are cutting housing investment. In Camden, certainly, private rents are very high, and in the south of my constituency they are very, very high. However, the ordinary people living there did not set those extortionate rents; grasping landlords did, and then they gave some of it to fund the Tory party's election campaigns, election in, election out- [ Interruption. ] It is no good Conservative Members jeering; they know that the landlords help to fund their party.
Those profiteering landlords have set the rents, yet the Government claim that if they cap housing benefit the landlords will cut the rents. In my area, nine out of 10 private lettings are nothing to do with housing benefit, so if there is to be a reduction in housing benefit for one flat in 10, it is clearly not going to have an impact on the rest of the sector. There is unlikely to be very much impact at all.
Let us look at the cap. All hon. Members who live outside London rightly receive an allowance for a one-bedroom flat so that they can live in London. The going rate, according to the Independent Parliamentary Standards Authority, is £340 for a one-bedroom flat. According to this generous Government, the going rate for a three-bedroom flat if one is on housing benefit is also £340.
Well, if it is the going rate for a one-bedroom flat, it cannot be the going rate for a three-bedroom flat, and that just shows how unfair the system is.
All the talk about the unemployed getting housing benefit is significantly misleading, because at least one third of the people on housing benefit in my constituency are in work. They struggle to make ends meet, they send their children to local schools, and they frequently rely on support, both financial and practical, from family and friends. Many were homeless, but then the Liberal Democrat-Tory coalition council in Camden urged them to rent in the private sector. They were told that that would be okay. It did not matter what the rents were, because housing benefit would cope with them-or, as the current Leader of the House of Commons said some years ago, housing benefit would "take the strain". All those people were told that housing benefit would take the strain, but the Lib Dem-Tory coalition Government are now going to take away the money that would have helped them, and I believe that that is wrong.
Many people from my constituency will be pushed out to outer London where they do not want to be, and among neighbours who do not want them to be there, which does not seem a very good formula for establishing decent communities in outer London. It is also worth bearing in mind that some of those areas already have higher mortgage and landlord repossessions than inner London.
The situation will affect not just people in work, but those out of work. Three such cases were brought to my advice surgery last weekend, all by well-spoken middle-class people who had hit a bad patch. One had lost a well-paid job, another was suffering from a serious illness, and another was experiencing a family breakdown. They all faced being pushed out of their homes, because the housing benefit that helps out middle-class people going through a bad patch is to be taken away from them just to suit the Treasury. Money will be taken away from those in the greatest difficulty.
We have heard of the highland clearances. There are no highlands in my constituency, but what we face is the lowland clearances-a combination of grasping landlords and a malignant Government, as existed at the time of the highland clearances. We do not want those in London, and I hope that we never will have them.
Jackie Doyle-Price (Thurrock) (Con): I am grateful for the opportunity to speak in this important debate. Many Government Members have said that at the heart of this debate about housing benefit is fairness-fairness for those on average incomes who face higher tax bills because of the size of our welfare budget. I remind the House that when £1 in every £3 spent by the Government is spent on welfare, the need for reform is acute and unavoidable. The need to control housing benefit is an important component of that.
The way in which housing benefit operates causes a major distortion in the way in which our housing market operates generally. As any A-level economics student will tell you, subsidies lead to higher prices, and the result is that as taxpayers we all subsidise the rents that even above-average earners would not be able to afford.
Neil Carmichael: In my constituency one of the biggest problems is that people cannot access houses. It is one of the biggest distortions of which we should be aware, and it is grossly unfair. My hon. Friend makes a good point, because we have to free up the situation so that people who really need a house have access to a house.
Jackie Doyle-Price: My hon. Friend makes a good point. It is easy for Opposition Members to say, "It's all about those evil Tory reforms to housing benefit," but the housing market is much more complicated than that. It involves a lack of supply and, under the failed regulatory system, the over-provision of credit by our banks. All of us together have a big job to do in tackling it, but I am glad that we have seen fit to grasp the nettle and do exactly that.
Mr Lammy: On that point about grasping the nettle, will the hon. Lady and the leader of her local council join me and the leader of mine in making provision to house in her constituency some of the overcrowded tenants in Tottenham?
Jackie Doyle-Price: Let me address some of the specifics. We are talking about putting a cap of £250 a week on the proposed maximum for a one-bedroom flat. That would amount to £12,000 a year to be spent on rent. I am afraid that not many people who are working can afford to spend £12,000 on rent.
Sheila Gilmore (Edinburgh East) (Lab): In the event that the problem is as the hon. Lady describes it, can she explain to my constituents why they are having their housing benefit reduced when the cap has no relevance whatsoever to people in Edinburgh because all the rents are well below it? Despite that, they will have their LHA reduced to the 30th percentile. Others, who are not necessarily in the private rented sector, will have non-dependants deductions from their housing benefit increased substantially, which is a serious problem for many low-income households. Why is that justifiable to solve the problem of high rents in London? Why not deal with London on its own?
Jackie Doyle-Price: It is justifiable because this country simply cannot afford the level of welfare benefits that we are paying out. It is all very well to say that this is all about London, but it is not; it is about the fact that people who are working hard are having to pay higher taxes to pay the bills that Labour left for us to sort out.
We have a system of housing support that is no longer fit for purpose. Housing benefit should act as a safety net to support people who need it-I think we would all agree with that-but it should not provide a subsidy for people to live beyond their means, by which I mean beyond the scope of what they could potentially earn. For those who are jobless, it is clear that this level of subsidy encourages benefits claimants to become trapped in dependency. If we are really going to reform benefits so that work is rewarded rather than penalised, we have to build in incentives that do not encourage people just to sit back and collect their benefits.
Mr Umunna: The hon. Lady talked about fairness, and she has mentioned the jobless. What does she think of the proposal to reduce housing benefit by 10% for JSA claimants who have been out of work for more than 12 months and have been doing absolutely everything they can to get work? I come across many people in that position in my constituency, and this measure is unduly punitive, in my view. What does she think?
Jackie Doyle-Price: The hon. Gentleman will be aware that the Government are increasing the discretionary allowances that can be used to tackle exactly that problem. My concern is for the people in part-time work who find that increasing their hours is punitive, because their housing benefits will be clawed back.
This measure is not an attack on the vulnerable, nor is it based on an assumption that all benefits claimants are workshy. It is my firm belief that most people do not want to be reliant on state benefits-that they want the pride and self-respect that come with providing for themselves and for their families. However, we have allowed a benefits system to emerge that sucks the self-reliance out of them by preventing work from paying. It is all too easy for self-respecting people to find themselves trapped in worklessness because the amount of support they get from the taxpayer exceeds what they could expect to earn. If we are going to get our economy back on track, that has to change.
Members in all parts of the House will have received many representations on this issue and its impact on vulnerable people. The National Housing Federation claims that those who rely on housing benefit to cover part of their housing costs will be forced to move away from higher-rent areas, and may as a result have to commute and have difficulty finding family care. Well, that is the day-to-day reality for many of my constituents. I consider it unfair that my constituents are having to pay higher taxes for people to live in places where they would like to live but cannot afford to.
Ms Louise Bagshawe (Corby) (Con): My hon. Friend is talking plain common sense. Does she agree that there is a total lack of reality on the Labour Benches, because a YouGov poll in July on the Government's changes to housing benefit found that 68% of the public supported them, including 57% of Labour voters?
Jackie Doyle-Price: I would say that Labour Members are in denial about how we are going to tackle the issues that will get the economy moving again. Many of my constituents say, when I go knocking on their doors, "Good for you-it's about time people did this," because they are heartily sick of having to keep putting their hands in their pockets.
Dr Whiteford: On the DWP's own figures, nearly 27% of the people who currently receive housing benefit are pensioners. How are those people, who are mostly on a fixed income that has been squeezed hard during the financial crisis, supposed to be able to pick up the tab for welfare reform? That makes no sense, and it puts unbearable pressure on household incomes that are already very pressured.
I think that the hon. Lady needs to see that issue against our broader package of welfare reform. When we introduce the welfare credit reforms,
that will be tackled. The Government have recognised that such fundamental reforms will generate difficult cases, and to that end they have increased the money available for discretionary payments. I wholeheartedly endorse that.
Let me reiterate what has been said about the impact that these changes will have on landlords. Removing subsidies means that landlords will change their behaviour. They are charging rents that they know the market will bear, and if we reduce the amount of support available they will have to stay in the market by reducing their rents, or get out of it. As the hon. Member for Sedgefield (Phil Wilson) and my hon. Friend the Member for Wolverhampton South West (Paul Uppal) said, those are exactly the kind of people we want to leave this marketplace.
I shall finish where I started, with the concept of fairness. Government Members want a fair deal for the taxpayer. We also want a welfare system that acts as a safety net and rewards work. Doing nothing, and allowing the current system to continue, would not be treating taxpayers or benefit claimants fairly.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): I have to disappoint not only the hon. Member for Thurrock (Jackie Doyle-Price) but one or two others on the Government Benches who called for us to be passive and calm. To be perfectly frank, my constituents would be extremely disappointed, and rightly so, if I were anything other than angry as this debate proceeds. The plain and simple fact is that this debate is about cuts to the most vulnerable-and it is not new. We saw it in the '80s, and in earlier days when the Conservatives had control. This time, we are telling them that enough is enough.
In my constituency, the response to people who talk about fairness is that this has nothing to do with being fair-that it is unbelievably unfair and unjust. There was an air of unreality in the speeches by Government Members, including, I am sorry to say, the Liberal Democrats. I hope to have time to deal with that in a moment or two. In my constituency, as against what we have been hearing, 7,965 households are in receipt of housing benefit, and probably more than 2,000 will lose £9 a week, with many losing more if they are in the private sector. What is beyond doubt is that the overwhelming majority will lose out: how can that be fair?
Neil Carmichael: There is one big unfairness, and that is the level of debt that you have left us to deal with. You are talking about cuts, but we are giving people opportunities as well, and that is what fundamentally underpins the changes to housing benefit. What do you say about that?
The hon. Member for Colchester (Bob Russell) rightly reminded us of the role of Lord Beveridge in dealing with these matters, followed, as he said, by Clement Attlee, who built the welfare state-and whose record on housing was outstanding-and who did so after the war, having dealt with one of the biggest deficits in history. So when it comes to deficits, do not blame it on my people-the people with whom I have grown up.
People have been complaining about the media. I am sick and tired of the media expression "workshy". We have already been told by the TUC-I prefer its figures to the ones that we have heard from Conservative Members-that only one in eight people who make applications are unemployed. We are not talking about the workshy; we are talking about the work-starved.
Yasmin Qureshi (Bolton South East) (Lab): Like you, I am sick and tired of the Tories blaming the need to make cuts on the ordinary working person, when we know that it was the bankers who caused the crisis. What do you think-
Mr Clarke: I repeat that we are dealing with people, including those with disabilities. They are going to be dragged along for tests, sometimes lasting 10 minutes, and then be told that their payments will be cut off. That happened in my constituency in the 1980s, when person after person told me about such experiences.
The Government tell us that there are hard choices, but there are no harder choices than those that have to be made by people living in high-rise flats who cannot afford electricity or gas given the increased energy charges that we are experiencing. They have to choose whether to eat or have heating, and whether to have any leisure activities at all or to stay at home. On top of that, something that is at the very heart of their income is to be attacked-housing subsidies, as they have been called. Nobody said anything about subsidies given to the bankers.
Ms Bagshawe: The right hon. Gentleman must be massively disappointed that an overwhelming 57% of Labour voters agree with the Government's changes to housing benefit. How does he explain that to his supporters?
Mr Clarke: I am speaking for my constituents, and I have not found a single person in my constituency who supports what the coalition proposes. We will go into the voting Lobby at the end of the debate, and afterwards my constituents will look at how we voted. In particular, they will look at how the Liberal Democrats voted, because they know that the Liberals are propping up a Government in whom they simply do not believe, particularly in this field. Nor do my constituents. No wonder the Liberal Democrat Benches are practically empty, although I pay due respect to the two Liberal Members who have stayed.
"Ministers want us to believe that housing benefit is going to what they would call work-shy scroungers, yet in reality only one
claimant in eight is unemployed. The rest are mainly low-income working households, pensioners or the disabled."
"We are concerned to hear those who are reliant on housing benefit being described as making a 'lifestyle choice'. Nearly half of those on LHA already face a shortfall between their benefit and their rent of an average of £23 per week, meaning tough choices between rent, food, heating or falling into a vicious spiral of debt."
I could go on. My local associations, such as the citizens advice bureau and disability organisations, agree. We had an excellent meeting in one of the Committee Rooms of the House of Lords just a few weeks ago, with representatives of organisations of and for disabled people. Lord Rix made an outstanding speech, and the overwhelming view was that those people were representing those who are already disadvantaged and not fully recognised by society, and who are being asked to bear the brunt of what the coalition Government are imposing on them. How can that be fair?
How can it be fair to say that we have an economic problem, so we will ask the poor to pay for it? Are all the people who criticise the coalition-Shelter, landlords who have made it clear that they will not reduce their rents, the TUC, the Archbishop of Canterbury, the Church of Scotland and so on-wrong, and coalition Members right? I believe not.
The result of tonight's Division will be extremely important. We have a choice about priorities and our commitment to people. It is a choice between what is decent, right and reasonable and what I believe is the arrogance of intellect and the exploitation of power.
Jenny Willott: On a point of order, Mr Deputy Speaker. I should just like to correct the record. Earlier in the debate, the hon. Member for Eltham (Clive Efford) quoted my website, suggesting that I had criticised the current Government for hitting the poorest hardest. I am sure it was a simple oversight, but in fact the quote that he referred to was from 2009 and referred to my criticisms of the previous Labour Administration.
I heard so much that I disagreed with from the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke) that I do not quite know where to start. I should probably take the opportunity to point out to Opposition Members, as I always do, that last year, of the £700 billion that the Government spent in total, only £40 billion went on propping up the banks, which is 6%. They can hardly go around blaming the bankers for the £170 billion deficit that they left us.
I wish to take head-on the accusation made by the right hon. Member for Coatbridge, Chryston and Bellshill that this is all about the cuts. Of course, a lot of the changes that we are making to housing benefit, and others matters that we are debating at the moment, are a result of having to make public spending reductions. It is broadly agreed by Members of all parties that we need to reduce public expenditure to pay off the deficit and start paying off the £1.4 trillion debt.
Mr Burley: I can tell the right hon. Gentleman that housing benefit expenditure ballooned from £11 billion in 1999 to £20 billion 10 years later, and is forecast to reach £25 billion by 2015. The Prime Minister would agree with me that the country simply can no longer afford that. We cannot go on like this, spending £25 billion a year on housing benefit.
I wish to leave for a moment the necessity argument and the fact that we have to make these changes. Even if we were in the boom years, they would be necessary purely on the grounds of fairness. They are all about fairness, but the problem with the word "fairness" in political debate is that beauty is in the eye of the beholder. There is no single agreed definition of what is fair. Everybody in the House defines it in their own way. For Opposition Members-I respect them for it-it is about redistribution of income. It is about taxing the rich more and throwing more money at the poor. For us, it might be about fairer taxes or rewarding hard work and playing by the rules. Fairness is about being able to keep more of what one earns.
What I wish to add to the debate is what we believe is fair when it comes to housing benefit. I will start with a few basic questions of principle. Is it fair that hard-working individuals and families in this country should subsidise people living in properties that they have no realistic chance of ever affording to live in? Is it fair that when the average salary in this country is £22,000 a year, some people, as we have heard, can claim more than £100,000 a year just for their rent? Is it fair that even under the proposed cap of £20,000 a year, a person would still need to earn about £80,000 just to have that disposable income for their rent? Is it fair that the cap is being set so high? If the average salary in this country is £22,000, the cap should actually be about £7,000 a year.
Sheila Gilmore: If the real aim is to reduce the housing benefit bill, will the hon. Gentleman explain why his Government propose to change the way in which houses, for both councils and housing associations, are built? The tenants will be paying for the cost of building houses and rents will rise to 80% of market rents, which will put up the housing benefit bill. If that is the hon. Gentleman's key objective, how does that help us to reduce the housing benefit bill?
The hon. Lady should have listened to what I said. Our point is that it is not just about reducing the housing benefit bill, but the issue of fairness. We need to go back to the first principles in this debate and decide what is a fair amount for the working majority to pay towards those who do not, cannot or
will not work. What is fair? The average annual earnings in my constituency is £25,279 a year.
Michael Ellis (Northampton North) (Con): On the subject of fairness, is it not right that Opposition Members persistently forget one of the first principles of fairness, which is the juxtaposition between low-paid hard-working families and those on housing benefit? Housing benefit claimants should not be better off than those who are hard-working and low paid. Is that not a principle of fairness?
Mr Burley: That is precisely my point. People in Cannock Chase who earn £25,279 a year would frankly love to have £20,000 to spend on housing from an equivalent annual salary of £80,000, because that is what it equates to. That is dreamland for them. They have never earned £80,000 a year, so why should they be paying out of their hard-earned taxes for some people to have the equivalent of a salary of a quarter of a million pounds so that they can live in parts of London that have some of the most expensive postcodes on Earth.
Sheila Gilmore: If the problem is about households with very high rents, why not tackle that problem? Perhaps we could build more affordable houses in London. Why not solve the problem in a phased way? Housing benefit changes will be made all over the country and 30% of housing benefit recipients in my city are at work. Why are they being punished because there is a problem? Why not just solve the problem? The hon. Gentleman has spoken very eloquently on it.
Mr Burley: I agree with the hon. Lady on the need for a regional cap. Funnily enough, some of the work that the Independent Parliamentary Standards Authority has done on regional caps for MPs should be considered. In my constituency, the IPSA cap to claim is £700 a month. That is what IPSA thinks is a reasonable rent for an MP and his family to claim to live in Cannock Chase. Yet under the housing benefit rules, a person can claim £1,600 a month, which is more than double what IPSA thinks is fair for an MP. How is that fair?
The charity Shelter, which has been guilty of some terrible scaremongering, has claimed that up to 80,000 people will be made homeless by the plans. It falls to it to redefine its ludicrous definition of homelessness, which includes two teenage children living in the same bedroom. That is hardly the definition of homelessness that most people in this country would understand. For most, homelessness is about someone not having a roof over their head. Even according to Shelter's own briefing, the average loss in my constituency will be £30 a month-£7.50 a week. The total number of claimants in Cannock Chase is 10,278. Therefore, one eighth of my constituency-it is a very poor working-class constituency that used to have 52 coal mines-will have to adjust their weekly outgoings by less than a tenner. Is that really a reason to speak of weeping children, social cleansing, Highland clearances, or, worst of all, as Polly Toynbee said, a "final solution" for the poor? She somehow compared capping housing benefit to £20,000
a year to the extermination of 6 million Jews. The left has engaged in disgusting language and it should be thoroughly ashamed.
If anything, these reforms do not go far enough for me. Let me finish by saying that as a country we must start to live within our means. We need to even up the benefit that a person gets from working with the benefit that a person gets from the Government. Yes, the changes are about saving money, but they are also about fairness. It is simply not fair that people on low incomes in my constituency, in which the average income is 25 grand a year, should pay their taxes to subsidise those who want to live in some of the richest postcodes in this country, where a person would need a salary of £250,000 to afford them. That is not fair and neither is the Opposition's motion.
Roberta Blackman-Woods (City of Durham) (Lab): Let me begin by commenting on how the coalition parties seek to frame this debate, which was exemplified in the speech by the hon. Member for Cannock Chase (Mr Burley). They are trying to suggest that housing benefit claimants are workless, wasteful and feckless. They are using the most extreme examples of housing benefit claims to try to suggest to the public at large that that is the norm. They are trying to dress up cuts to benefits for some of the most disadvantaged people in this country as fair. If the hon. Member for Hastings and Rye (Amber Rudd) were still in the Chamber, I would say to her that the only sensationalising of this issue that is going on is in the right-wing press. The press is trying to lead the whole country to believe that everybody on housing benefit is getting £26,000 a year. That is absolutely scandalous and outrageous. I cannot believe that the Secretary of State, who has a social policy background, is presiding over such changes. Shelter suggests that the change to the JSA will mean that many claimant households will be shifted from around or below the 60% median income, which is the poverty line, into severe poverty. That will force an additional 84,000 households to live on less than £100 a week. Those are the sums that will apply to most people on housing benefit, which includes 54,000 children. We need to have a more balanced debate on the issue and to have some of the real facts talked about in this Chamber.
The hon. Member for Colchester (Bob Russell) made an interesting contribution. I accept that when we were in government, we did not build enough social houses. In my constituency, the Liberal Democrat council never implemented a housing policy that ensured that all developments contained 30% social housing. Such a measure was not implemented year on year, which is why we have such a shortfall in social housing. Tory and Liberal Democrat councils all over the country stopped, through the planning process, delivering houses. I am talking about not just social houses, but houses right across the whole spectrum. That is why we have a real problem with supply, and those councils should take responsibility for the situation.
Let me go on to explode some of the myths that have been put around about housing benefit claimants. Let us take the first myth that all claimants are workshy. Only one in eight of all housing benefit claimants is unemployed. Taking just those in receipt of local housing allowances across the country, 26% are in employment
and only 19% claim jobseeker's allowance. The rest include pensioners, carers, disabled people and others unable to work. In the north-east, 18% of people in receipt of local housing allowance are in employment, and that includes a number of people in my constituency.
A lot of people in receipt of housing benefit have very complex needs. I have an example from my local housing authority. A 21-year-old woman secured a tenancy through working with a family intervention worker, who helped her to move on from an overcrowded and difficult family situation. She has multiple social issues, so subsequently, in addition to her weekly rent, she had a tenancy sustainment officer working with her. Also due to her circumstances, she had no furniture and had to access a furnished tenancy. With the changes to long-term jobseeker's allowance after 12 months, she will lose 10% of her housing benefit entitlement. With the additional services, that means £10.75 a week. Her JSA is only £51.85, which means that her income will drop by 20%, leaving her with just £21 to buy food and clothes, to pay for transport, and to get to job interviews and so on. That is the sort of change we are talking about, and that is the type of person who will affected.
I want to address issues applying specifically to my constituency. The risk analysis by the Department for Work and Pensions states that 99% of LHA claimants will, on average, lose £12 a week. With regional variations in the economy, some areas will bear disproportionate impacts, and Durham has been identified as one of those areas. It will take a bigger hit than many other authorities, which is made much worse by the fact that constituencies such as mine have artificially inflated private sector rents because of students. With the reduction in the amount a person can claim from the median to the 30th percentile, most people will be priced out of private renting in Durham. There are always a lot of students willing to come in and take their place, so this will not lead to a reduction in rent levels. Poorer families will be pushed out of areas such as my city centre and will have to move to outer areas, where they will find it much more difficult to access work opportunities. I ask the Minister therefore to think again about the proposals, and certainly to stop trying to suggest that this is part of the fairness agenda. It can be described only as an unfairness agenda.
Mark Pawsey (Rugby) (Con): Any organisation facing an item of expenditure that has increased by 80% over 10 years would consider it a matter for attention, so it is entirely appropriate that the Government have been looking at housing benefit, given that expenditure there has increased from £11 billion in 1999 to £20 billion in 2009, and it is predicted that, without the reforms the Government are bringing forward, that figure would rise to £25 billion in 2014. As the Minister reminded us earlier, that is £1,500 per working family. Labour did nothing about the situation during 13 years in government, despite the anxieties of the right hon. Member for Holborn and St Pancras (Frank Dobson), although it was recognised by Labour in its 2010 Budget and is accepted in this motion. The question, therefore, is not whether we should act, but how we should act.
The situation today arose from the freeing up of the private rented sector by the Conservative Government in the 1980s. People were freed from the state as the only provider of affordable housing, and new, assured short-hold tenancies massively increased the private rented stock-a stock of property that was barely in existence up until that point. That measure gave greater choice to tenants and increased mobility, but it became clear that if people's circumstances changed, or they were unable to remain in their homes, a new form of support would be needed. However, that support has got out of control. In addition, the system has introduced unforeseen consequences, because the payment of housing benefit has caused rents to rise higher than they would otherwise have done. There are 3.3 million rented properties in the UK, and 1.2 million tenants receive this benefit. That is more than one third of the total, and has a massive effect in the market for rented properties.
Sheila Gilmore: Is the hon. Gentleman not aware that according to two recent research reports-the Rugg report in England, and another conducted in Scotland for the Scottish Government-the proportion of those in the private rented sector on housing benefit was less than 20%. In Scotland, it was 17%. That report was published last year-not a long time ago. Of that 17%, only 8% were on full housing benefit, 6% had half paid, and 3% had less than half paid. Those are the actual figures from research. It is important that we have this published research, and that Government Members are aware of it.
Mark Pawsey: I am referring to the UK as a whole, and I will go on to show how the current system has driven rents up. When councils make their rates available, landlords use them as a benchmark for the rents they charge, knowing that a proportion of tenants will be able to pay and will not contest the level. The recipients of housing benefit are happy to accept whatever a landlord asks for, because they know that the state will pay. That contrasts with the position of private tenants, paying rent out of their earned income, who will be keen to negotiate the best rent they can. These higher rents might be good for landlords, but that does nothing to help people who are not in work to find work. In fact, the reverse can apply, because it can discourage claimants from taking low-paid employment or from working longer hours, because if they do so, their benefit entitlement might be lost, and the mobility introduced by the sector might be reduced.
It is worthwhile remembering-sometimes the Labour party seems to forget-that the benefits paid to recipients come out of the taxes paid by hard-working families. A number of my hon. Friends have drawn attention to that. Often, they are the kind of people who look with envy at the kind of housing enjoyed by some recipients of housing benefit. The new system will make things fairer.
We have heard a great deal today about the effect on people living in London, and some Government Members could be excused for thinking that this is a London-only issue. In my constituency, however, a terraced house costs £550 per month to rent, so some of the sums spoken about, such as the family cap of £26,000-more than many people in my constituency earn in a year-are out of this world to the average resident in my constituency. They fail to understand why such sums should be made available.
Concern has also been expressed about the effect of the new rules on availability of properties for people in receipt of housing benefits. I believe that landlords will have to become more realistic in the rents they accept. They will have to accept a lower return than they enjoy now. My hon. Friend the Member for South Thanet (Laura Sandys) spoke about landlords enjoying a return of 12%. There is no reason residential landlords should receive a disproportionately higher rate of return at the expense of the state. In order to improve returns, those who are committed to this sector for the long term and who continue to acquire properties in the future will not be willing to pay capital prices at the level they have done previously. That will exert downward pressure on the price of housing, making housing more generally more affordable, and, as a side effect, benefiting many people struggling to make a start on the housing ladder.
Increasing the supply of housing more broadly will be another important factor as the coalition deals with the Labour party's failure to build enough homes. Last year, fewer homes were completed than in any time for a generation, and today's housing reforms need not be seen in isolation when it comes to providing support for those in need of housing.
Mark Pawsey: I thank my hon. Friend for that intervention. I spoke about a generation, but it is clearly two or three generations. Either way, we need to deliver more houses, as I think has been recognised by the Labour party, and the changes that the Government are introducing in the localism Bill will enable more houses to be built. It is that additional supply that will bring down prices for both rental and sale, giving occupiers a better deal. Progressive authorities, such as my local authority in Rugby, recognise the benefits of housing growth both for their local economies, by introducing new consumers into the area, and for the community as a whole, through the new homes bonus, which will enable the local authority to retain more council tax to develop new infrastructure.
I will draw my remarks to a conclusion because I know that other Members wish to speak. In my view, the housing benefit reform that the coalition is introducing is a necessary step in controlling the cost of the system of housing support to taxpayers, a saving that will yield £1.6 billion a year. In addition to that saving, the system being introduced will bring long-term benefits in the operation of the housing market.
Alex Cunningham (Stockton North) (Lab): As a new member of the Select Committee on Work and Pensions, I have a keen interest in this topic. The Committee is undertaking an inquiry into the impact of the changes to housing benefit. We had an insightful evidence session the other day with the Minister for Welfare Reform. Conclusions will follow soon.
It is worth repeating that the statistics show that 4.7 million people receive housing benefit in the UK, two million of whom are pensioners, 500,000 are on jobseeker's allowance and 700,000 work in low-paid
jobs. The housing benefit total is clearly a huge sum, and I, too, am in favour of reforming housing benefit if the changes are fair and well thought through. We all agree that the deficit must be cut somehow, even if we do not agree about the pace at which the cuts should happen. However, the coalition is seeking to push through the changes to housing benefit on the basis of quick fixes and cheap headlines. I reject the approach of targeting and punishing people-that is what it is: punishing people-who cannot find work. Someone who is trying their best to get a job should not have 10% of the money that they need to pay their rent taken from them, thereby only adding to their miserable situation, imposing even greater stress, both financial and emotional, and doing nothing to improve their job prospects. Indeed, quite the contrary: doing so reduces their meagre resources still further, cutting the funds available to them to apply for jobs and attend interviews.
Dr Whiteford: Does the hon. Gentleman agree that those cuts will affect local authorities, which will have a statutory duty to pick up the pieces when people are evicted from their homes or forced on to the streets?
The cut to housing benefit is not the only disincentive to work. Those 700,000 people claiming housing benefit who are in low-paid work will incur greater travel costs to get to work if they are forced to move further from their places of employment. Indeed, they might not even be able to afford to do so, thereby losing their jobs. For those who are already working for the minimum wage or close to it, the change could make the difference between balancing the books each week and being unable to pay the bills and put food on the table. Certain sections of the media would have us believe that the vast majority of people who have been unemployed for 12 months or more are lazy layabouts who do not want to work-not so: in reality, very few people have that attitude. Most people who are unemployed want to work and provide for their families. The Government's crude measure, however, will target all those people, regardless of their attitude.
Despite reductions in the number of people unemployed in recent years, in the Stockton borough there are still nine people unemployed for every job available. With 500,000 public sector and 500,000 private sector jobs set to go as a result of the coalition's cuts, things will only get worse on Teesside. People should not be punished because of a lack of jobs. A few weeks ago, Connaught, a major building company, went into administration, and it was followed by another this week, Rok. Both were big employers in my area, and I doubt whether either will provide the private sector jobs that the Government seem to think will be magicked out of thin air. If people had those jobs, they would not have to access housing benefit.
As a result of the changes, people who claim housing benefit will lose £9 a week on average, or £468 a year, which is a lot of money to a lot of people. It is a big drop in income for people struggling to make ends meet. Much of the focus has been on the impact of the changes on London and the south-east, and understandably
so, given the high cost of housing in those areas. However, Shelter estimates that some 45,000 people in the north-east will also be affected by cuts to housing benefit. In Stockton-on-Tees, the local authority has told me that from April 2011, 30 families will lose out by £36 a week on average, thanks to the removal of the five-bedroom local housing allowance rate. From April 2012, 400 claimants will be hit by the extension of the shared room rate, which in future will apply to people up to the age of 35. Another 1,800 households will also lose out in hard-cash terms. Clearly the impact of the changes will be felt by people across the country, and not just in London and the south-east.
We must also look at the associated costs of the changes for local authorities. The wider impact of the changes on families and communities will be significant, particularly in areas expected to see an influx of people who have been forced to move out of areas in which they can no longer afford to live. For example, some schools may see an influx of pupils, as families are forced to move to areas where accommodation is cheaper. I worry that uprooting families in that way will cause chaos and might end up costing more than it saves.
Others Members have talked about the shortage of affordable homes. A key reason for the increase in the housing benefit bill in recent years is the lack of affordable housing. I am passionate about the need to build more homes and ensure that young people in particular can get on the property ladder. According to the Council of Mortgage Lenders, more than eight out of 10 first-time buyers get on the housing ladder only because they receive cash from the bank of mum and dad. First-time buyers today typically require a deposit of 21%, compared with 10% three years ago. The problem will surely only get worse for those young people due to start university in 2012, who will graduate with huge debts, of £30,000-plus, making it even more difficult for them to save for a deposit for a house.
Thirty-five years ago, 85% of the housing budget went on bricks and mortar, building new homes. Today, more than 85% of the housing budget goes on helping people with their housing costs, because the lack of affordable housing has driven up rents and house prices so much. Under the previous Labour Government, many new homes were built, including 500,000 more affordable homes, but that was not enough. In addition, the right to buy gave millions the chance to own their own homes, but it meant that the nation's social housing stock dwindled. Surely the long-term solution to the problem is to invest in our housing stock, to ensure that rents and house prices are sustainable, and that ordinary, hard-working people can afford housing without assistance from the state.
Since the coalition came to power, I am told that local councils have ditched plans for new homes at a rate of 1,300 every day. That is not the direction that we as a nation should be travelling in. I will be interested to hear just what the Government plan to do to reverse that decline and help us build the affordable homes that will help negate the need for such vast sums of public money in the benefits system.
Nick de Bois (Enfield North) (Con):
As an outer-London MP with the 13th highest proportion of LHA claimants, I very much welcome the opportunity to contribute to
this debate, in preparation for which I met representatives from Shelter and other interested parties. I had looked forward to this debate, but I must say that as the afternoon has grown longer and I have grown a little wearier, I have been disappointed that, apart from some notable contributions, we seem to have heard a lot of cant, hyperbole and soundbites from many Opposition Members, which has done little to improve the quality of the debate.
I have sat here for so long that I started looking for some fresh ideas, and at one point the hon. Member for Sheffield South East (Mr Betts) said that there was no strategy. Well, strategy there is, and strategy is the point that has been missed by Opposition Members, because it is a mistake to look at housing reform in isolation. That is a mistake that we have seen all afternoon. To do so is to miss the point of what the Government are trying to do. This Government's strategy is to try to lift people out of poverty, taking them from dependency to independence-something that the Opposition have neither embraced nor understood, but even at this late hour I hope that they might just reflect on it. They are missing the point of what the Government are doing, but by understanding my constituency they will see what we can do for our constituents.
Enfield North has 7% unemployment, higher than average youth unemployment, and pockets of poverty, mainly in the eastern area. Those are issues that I want to conquer, and that requires reform. Doing nothing is not an option, but constructive suggestions have been notably lacking from the Opposition. Of course the decisions are difficult- [ Interruption. ] I welcomed the conversion of the hon. Member for Dudley North (Ian Austin) to the cap for London, which was seriously missing from everything that the Opposition had said previously. Of course the changes are difficult, but that does not mean that they are wrong. They will drive out poverty by the most reliable means of helping people and contributing to getting them back into paid employment.
The Secretary of State is sensitive to many of the demands. He was quick to point out the discretionary funds that are available and to which due acknowledgment has not been given today. Is it right to have a system-
Nick de Bois: I will not give way until I have made some progress. I am sure the hon. Lady will understand that I have been here for many hours, and I am not sure whether there is anything new coming from the Opposition Benches.
Is it right to sustain a scheme that works against employment? No. What do I say to the employer who came to my surgery only last week and told me that people are queuing up for jobs, but they want to work for only a limited number of hours for fear of losing their house? How absurd is that? Whatever the Labour party's good intentions when it was in government, its reforms produced a grotesque situation. What do I say to the people who come to my office and want to work, but are caught in the poverty trap- [ Interruption. ] I am sorry that hon. Members do not want to listen, but week after week in my constituency I see the evidence of a failed policy on my doorstep, and it is absolutely right to represent my constituents' interests not only where
there has been failure, but where there is an opportunity for success. That is what this Government are trying to do, and rightly so.
What will the changes mean? We are talking about the LHA, not social housing. Rents are high. There has been a 25% increase over seven years in the LHA sector compared with 15% in the private sector. It was interesting when an Opposition Member-forgive me, I cannot remember his constituency-said that the 40% share of the LHA market that the Government are driving is not influencing rents. It is utter nonsense to think that such a massive contribution can have no impact on the level of rents. Opposition Members may deceive themselves if they wish, but I assure them that in the real world that is definitely the case.
A four-bedroom house will allow almost £20,000 of LHA, which is equivalent to a substantial amount of gross income. We talk about fairness, but it must work both ways. Hon. Members should come with me down the Hertford road in my constituency to meet those who are working hard to pay their rent and trying to look after their family on a low income. They should try to understand the frustration of living next door to people who may be living in a bigger house, subsidised by the state. We must bear that in mind when making judgments. We are all in this together, and we must reform and change.
The Labour Government believed that the answer to defeating poverty was to use targets and money-some £20 billion of our money in housing benefit. They rationalised that that was how to fix the problem, but it failed. It did not help; it hindered. Instead of releasing those in poverty and suffering inequality, it imprisoned many in a spiral of unwelcome state dependency. The time has come to change. Our proposals are part of a holistic, joined-up programme.
Nick de Bois: The hon. Lady should change the end of the telescope she is looking down. She should look at what she can do to encourage employment and encourage people back to work, and start to take people out of real poverty. That is the contribution that she could make, and I hope that I can welcome her to such a conversion later this evening.
Our proposals are part of a holistic, joined-up programme to reform the Labour party's policy of surrender to dependency to a future of independence free from poverty. I understand that hon. Members do not want to hear that, but they have heard and perhaps they will learn.
I want to pick up on some comments made by the hon. Member for Wolverhampton South West (Paul Uppal) and my hon. Friend the Member for City of Durham (Roberta Blackman-Woods). They referred to the tenor of the national debate on this issue, which I have found deeply worrying, and how our newspapers in particular show unemployed people being divided from employed people, benefit recipients being divided from those who are not claiming benefits.
We saw that division of rich and poor at the weekend with the headlines in some newspapers reflecting announcements from the Department for Work and Pensions. The Mail on Sunday said "New IDS blitz on the workshy"; the News of the World said "Work gangs for shirkers"; and The Sunday Telegraph said "Workshy will have to take unpaid jobs".
Today, we read that the Department has released figures showing that every family will have to pay more than £1,500 a year in taxes to fund the housing benefit system. As ever, it seems that a particular section of society has become a target. Has the Treasury released figures to show how much each family in this country loses as a result of tax evasion and avoidance by wealthy individuals and companies? It is extremely important that we do not allow the tactic of divide and rule to succeed.
This is particularly pertinent to my community. The constituency that I represent is diverse not only ethnically but in regard to the socio-economic demographic of the people who live there. I spoke to one of my constituents about these issues last weekend. He and his wife live in one of the more leafy parts of Clapham common, an area known as Abbeville village, and he works for a private equity company. He is undoubtedly in the top 1% of earners. I asked him what he thought about the Government's changes to the housing benefits regime. Given that they will not have a direct impact on him, I was surprised to find that he had strong views about them, and that he was horrified at their likely impact on his community. One of the reasons that he likes living in my constituency is the diverse nature of the streets and the different parts of the area. He said that he did not want to live in a street where all the people were like him. He liked the fact that there were different people living there.
I mention this because it is important to understand that these changes will be an issue not only for people claiming housing benefit but for the community as a whole. Given the impact that the changes will have on my constituents, I do not feel that I am whipping up hysteria or unduly disturbing my community. I am simply looking at the facts. There are 5,470 households in Lambeth that will face huge cuts in housing benefit next year. For example, 1,520 households in two-bed properties in Lambeth will see the contribution to their rent reduced by an average of £25 a week. That is £1,300 a year, and those people simply cannot afford it. The
changes will undoubtedly cause an increase in poverty in my constituency. Shelter is predicting that they will affect many of the claimants who live just above the poverty line, and they will undoubtedly lead to deep anxiety and stress among people who are already struggling to get by.
Bob Russell: Does the hon. Gentleman agree that an unintended consequence of the measures will be that, if people have to spend more of their income on rent, they will have less to spend in local shops and on local services?
I have outlined some of the effects on my community that we are able to discern, but there will be others that it is difficult to quantify at the moment. We are going to be faced with people moving from inner London to our part of Lambeth, seeking private rented accommodation.
Pete Wishart (Perth and North Perthshire) (SNP): We know that this is what the Tories do: they attack the poor and the vulnerable. But what about Labour? I could not make out from what the right hon. Member for Paisley and Renfrewshire South (Mr Alexander) said whether Labour was for or against the cap. Does the hon. Gentleman know?
Mr Umunna: If the hon. Gentleman reads the motion, he will see no denial of the need for some degree of housing benefit reform. No doubt my right hon. Friend the Member for Don Valley (Caroline Flint) will give further details in her speech, in addition to the many details that my right hon. Friend the Member for Paisley and Renfrewshire South gave the House earlier.
I was talking about the effects of the measures that we are not yet able to discern. We have 22,000 people on social housing waiting lists in Lambeth, but we have no idea of the number who will seek social private rented housing in our area as a result of the changes. I mention that figure to demonstrate that we are already under huge pressure.
There has been a lot of talk about introducing these measures to reduce the benefits bill, but we are told that rents will inevitably fall as well. London Councils, a cross-party organisation, has carried out a survey of landlords in London. I make no apology for talking about London, by the way; it is my area, and it is where my constituency is based. The survey found that 60% of landlords letting properties to housing benefit tenants in London said that they would not reduce their rents, even by a small amount, to accommodate the changes, and Shelter has found that 43% of such landlords will simply scale back their operations in this sector.
I want to finish by mentioning a matter that I have already raised with the Chancellor of the Exchequer-the proposal to reduce by 10% the housing benefit of jobseeker's allowance recipients who have been receiving JSA for more than 12 months. I challenged the Chancellor about this at a Treasury Committee hearing in July and asked him to provide me with evidence that that measure would produce increased work incentives, given that he said that that was why he was introducing it. Funnily enough, he quoted the Institute for Fiscal Studies back at me. It is funny how the coalition Government choose
to ignore the IFS when it tells them things they do not want to hear, only to quote it back at me when they find it helpful.
"welfare benefits can have substantial effects on the work behaviour of unskilled and even for men with high school education".
Be that as it may, I do not see how there can be an incentive for people to work when there are no jobs for them to go into. In the past few weeks, information from the Chartered Institute of Personnel and Development has shown that 1.6 million people are going to be out of work as a result of the measures being introduced by the Government. We already know that there are five people chasing every vacancy in the economy, and research shows that that figure is not going to fall.
Will the Minister tell us why the Government are seeking to punish people who are doing everything they can to find work? I have asked this question in the Chamber before, but I have not received a reply. There are many people in my constituency who have been on JSA for more than a year-the number generally hovers between 700 and 800-and who are struggling to find work. Why are the Government punishing them when they are already down on their luck? We must resist the divisions that the headlines are seeking to create in our communities. This is an issue for everyone, whether they are on housing benefit or not, and I plead with the Government to reconsider the measure on JSA recipients. As I have said, they are already down on their luck. Why kick them when they are down?
Andrew Bingham (High Peak) (Con): I am a firm believer-I always have been-that people should be rewarded for hard work. I am also a firm believer that we need housing and other benefits, but that they should be there as safety nets. The willingness of the Labour Government to pay more than £100,000 a year to someone on benefits is not, to me, a safety net. It has to be said that £100,000 is an enormous amount of money, which is sufficient to fund a lifestyle beyond the budget of many hard-working families in my constituency of High Peak. [Interruption.] I am sorry, but that has to be wrong; it cannot be right.
Labour Members claim that this is fair. Do they think it fair that, under current arrangements, someone paying rent below the local housing allowance level will be able to receive the local housing allowance and keep the change? People can make a profit on housing benefit. Does that seem fair? Is that fair to someone working hard to pay their way? Labour Members look askance, but it is true.
Glenda Jackson: In my constituency, private landlords are increasingly reluctant to accept tenants who can pay only through housing benefit. For an increasing number of people, there is a shortfall between what the local rent office deems a property to be worth and what the landlord actually charges. Not one single claimant of housing benefit in my constituency-and they number thousands-has money to take home from the local housing allowance. In many instances, they have to make up the shortfall themselves.
Andrew Bingham: That may be the case in the hon. Lady's constituency, but there are examples where people are keeping the money as change. I will pay slight tribute to Labour Members, as they were going to stop that in April next year. Fair do's there. However, that needs to be compared with what the hon. Member for Manchester Central (Tony Lloyd) said, as he spoke about taking money away. I gather that £15 of weekly excess was taken away last year. How do they square that one?
The £20,000 to £21,000 cap on housing benefit is fair. Some people have claimed that that amount is too much, but I think it is about right. I also think that setting the local housing allowance at the 30th percentile point is fair. It means that people on housing benefit can afford three out of 10 rental properties.
From experience, however, I would like to sound a small note of caution about broad market rental areas. The determination and review of BMRAs must be done with great care. The Rent Service looked at the BMRA in my constituency. Glossop was covered as well, but because of the determination and conditions, there was a detrimental impact on some residents in my constituency. This issue was raised by my hon. Friends the Members for Cardiff Central (Jenny Willott) and for North East Hertfordshire (Mr Heald), and it is a slight concern of mine. One thing that came out of the Rent Service review was the Heffernan case, which went to the House of Lords-some Members may be aware of it, some not. It caused a long delay-hence my note of caution.
The increase in the discretionary housing allowance has not been much mentioned. It is increasing by £10 million next year, £40 million a year from 2012 to 2015, and £60 million a year from 2013-14. This is a huge amount. The DHA was used to deal with the difficulties of the BMRA in High Peak a couple of years ago.
The reform of housing benefit is long overdue. At present, we spend more on it than on the Army and Navy combined. It is right to offer people support when they need it, and it is right that the extra money is available through the discretionary housing allowance.
Andrew Bingham: I will not give way, as I have nearly finished and many others are waiting to speak. [Interruption.] I can talk as long as anyone wants, but I am conscious that some Members have been in their places a long time and are waiting to speak.
Caroline Flint: The hon. Gentleman welcomes the announcement of a rise in the amount provided for the discretionary housing allowance. How would he feel if those payments were paid to the landlords of the very occupiers of homes that the coalition Government have demonised by letting them stay in houses that cost so much money? What does he feel about that?
Andrew Bridgen: Does my hon. Friend believe that the increase in the housing benefit budget from £14 billion to £20 billion in the past five years is a sign of the success or the failure of the last Government's policies?
Glenda Jackson (Hampstead and Kilburn) (Lab): I was interested by what the hon. Member for High Peak (Andrew Bingham) said. I think that it had something to do with hard-working families and the impact of the present housing benefit system on people who wish to work hard. I was reminded of the first Thatcherite regime, when the hon. Gentleman's party deemed a living wage to be 75p an hour. I also remember that during our term in government, his party voted against every single move to take people out of poverty, including the national minimum wage.
The most interesting thing to emerge from today's debate is the fact that Government Members have swallowed hook, line and sinker the myths that were originally used in the proselytising of their Prime Minister, who stood on the Floor of the House and castigated housing benefit for paying people £1,000 and £2,000 a week. He attempted to present that as the median for people claiming the benefit, and I was so intrigued that I tabled a question on the issue. There are, in fact, no claimants receiving £2,000 a week, and there are precisely 90 families, in London exclusively, whose housing benefit pays them rent of £1,000 a week, because those are extremely large families.
The myth with which the Government have been successful in their proselytising is that most people on housing benefit live in four-bedroom properties. Nothing could be further from the truth. Most people on housing benefit live in shared accommodation or in one or two-bedroom properties. In my constituency, the amounts that those claimants will lose range from £21 a week for those in shared rooms to £246 a week for those who are fortunate enough to live in four-bedroom properties.
Fiona O'Donnell (East Lothian) (Lab): The 10 families in my constituency who live in five-bedroom properties do so not because they have dressing rooms or extra en suites, but because of the nature of families nowadays. A mother and a father may bring in children from previous relationships. Government Members do not seem to be able to grasp that.
That is a salient point, which can be replicated in my constituency. I know of a family with two children who are severely disabled and in wheelchairs,
and two who are not so severely disabled. There are also a mother, a father and a grandmother, and they are all attempting to live in a four-bedroom property.
The other myth that has been propounded by Government Members today is that these changes are essentially fair. I distinctly remember the Prime Minister and the Deputy Prime Minister-who has proved himself to be the Maréchal Pétain of his generation-saying that the changes were not only fair, but made at a time when the Government were having to make extremely difficult choices to protect the most vulnerable members of our society. Throughout the afternoon, it has been clear that Government Members do not regard pensioners as vulnerable. Nor, apparently, do they regard them as being taxpayers. They do not regard people with disabilities as being vulnerable, and they do not regard people on low pay as actually working.
What I say about my constituency and my city of London is not scaremongering. We have been here before. As I said, some of us remember the Thatcherite regime, when people were forced out of their homes and some were sleeping on the streets because they could not afford to find anywhere to live. The bills for bed-and-breakfast accommodation were astronomical. I am sure that Government Members are smiling at that memory, because that, essentially, is what they wish to do.
Anas Sarwar: I thank my hon. Friend for giving way, and I promise not to annoy her again. I just want to highlight the fact that Government Members are finding much of this funny. They like to portray this issue as being about workshy or unemployed people taking benefit from hard-working taxpayers across the country. Is it not true that only one in eight people who receive housing benefit are unemployed? Government Members should take this debate more seriously.
Government Members also discount the briefings that we have all received, from organisations such as Shelter, Crisis, the Chartered Institute of Housing, Citizens Advice and the National Housing Federation, about the real danger and damage that these ill-thought-out plans are going to inflict on some of the most vulnerable people in our society.
We have been here before. We have seen all this before. An earlier submission by Crisis pointed out that it will cost £60 a day for a room in a bed and breakfast. Let us look back to the earlier history of bed and breakfasts. The hon. Member for Colchester (Bob Russell) referred to the history of 1945; I was somewhat surprised that he did not take us back to the much more recent history of what happened to people in this country under the first Thatcherite regime. The hon. Gentleman was concerned about children then-
I was somewhat surprised that the hon. Member for Colchester is not concerned about children this time. As he knows, the greatest damage inflicted on children was when they were stuck in those abominable bed-and-breakfast set-ups. Not infrequently, families were turned out on to the street at 9 o'clock in the morning and not allowed to return until 5 o'clock in the evening.
This, apparently, is the coalition Government's way of taking people out of poverty. I find it totally incongruous that they should believe that they will take people out of poverty by making them homeless. That, essentially, is what they are going to do.
Kwasi Kwarteng: I am much obliged to the hon. Lady for giving way. We have sat through her speech with varying degrees of incredulity. While we admire her histrionic performance, we are still at a loss as to what her position is on the cap. Does she think it is right that in her- [Interruption.] I am fully entitled to ask the hon. Lady a specific question about her view on the cap. There are people in her constituency who are receiving far more than £20,000 a year on housing benefit.
Glenda Jackson: If the hon. Gentleman had been here from the beginning of this debate, he would not have been as ill informed as he is ill mannered. There are not people in my constituency claiming housing benefit at that rate, as I have had occasion to say. The majority of housing benefit claimants live in one and two-bedroom properties. We have already said that we would certainly introduce a cap, but not by the method that his Government propose. There should be a regional element.
Glenda Jackson: From a sedentary position, the Minister is waving his hands in disbelief. This afternoon he was leaping to the Dispatch Box asking questions about what my party would have done if we had been in government. He knows, and I know, that if my party had been in government and his party had still been in opposition, and we had introduced the policies that he is supporting now, he would have fought them tooth and nail.
The Minister has absolutely no cover any more. As I have had occasion to say before in the House, his party has become the "30 pieces of silver" party, and nowhere is that more marked than in what it is proposing to do to some of the most vulnerable people in all our constituencies. I say to Government Members that the problem is not exclusively London's; this will affect the whole country. When the second tranche of the Government's approach to social housing comes in-the increase of rents to at least 80% and the removal of secure tenancies-the impact will run and run.
Michael Ellis: Are not hard-working people on low incomes also vulnerable, and do they not also need to be treated fairly by our society, as opposed to those on whom so many of the hon. Lady's Opposition colleagues focus-people on housing benefit who are receiving more from the taxpayer than many of the working poor could dream of paying for themselves?
Glenda Jackson: I am intrigued to know how the hon. Gentleman thinks it will benefit low-paid hard-working families who are not claiming housing benefit if we make low-paid hard-working families who are on housing benefit both unemployed and homeless. They will then have to move from where they are currently living-and, I hasten to add, where they provide services that the hon. Gentleman and his hon. Friends would never dream of providing for themselves. We are all dependent on those services, and on the people who provide them. I know the hon. Gentleman and his colleagues do not like it, but when that happens in the centre of London we are going to see-
Bob Blackman (Harrow East) (Con): Thank you, Mr Deputy Speaker, and I think I am right in also wishing you a happy birthday for tomorrow. I also wish to say that it is a privilege and an honour to follow the hon. Member for Hampstead and Kilburn (Glenda Jackson).
We cannot divorce housing benefit from the plethora of other benefits that have been allowed to build up over the last 13 years: jobseeker's allowance, employment and support allowance, income support, and also council tax benefit, child tax credit and working tax credit. Contributory benefits and universal benefits will all play a part in resolving this country's benefits problem.
These benefits are a bureaucratic nightmare. They are mainly paper based, and enormous amounts of evidence are required to justify their application. As a consequence, many individuals who claim benefits have to go to Jobcentre Plus, the pensions authority, the disability and carers service, their local authority and Her Majesty's Revenue and Customs. If they are on jobseeker's allowance they may have to swap between that and incapacity benefit, claiming the money from the same agency yet having to claim again. Clearly therefore, what we have inherited will be a nightmare to resolve. Housing benefits impinge on all those other benefits, and I have said before that housing benefit is a very bad benefit, because it is so complicated to administer.
Let us look at what has happened over the last 10 years. I will not repeat the figures for the increase in the total budget, but we should note that it costs £1 billion to administer that budget. For most local authorities in the country it is the biggest single item of expenditure going through their books. We are using it as a form of housing subsidy. That is right and justified, but the extent to which the costs have built up and been allowed to spiral is completely wrong. The one thing I agree with the Opposition about is the need to reform housing benefit, yet for 13 years they ran this country but did not reform it. Instead they made it worse. Now we have inherited that situation and we, as the new Government, must deal with it.
What must we do to reform it? First, we must look at the costs involved in housing benefits. As we have said, this is the first stage in simplifying the country's benefit system, making it more effective, reasonable and transparent, and changing it into a system that encourages people to go to work. In my constituency people frequently
say to me, "I can't get a house for love nor money." The advice given to them by the local authority is, "We can't provide you with a council house, but what we can do is this: you go into private sector rental accommodation, and housing benefit will pay for it." If people in that situation follow that advice but then have the temerity to get a job, they lose housing benefit pound for pound, which is, of course, an immediate disincentive to getting a job. What we have to do is make sure that any reform of the whole housing benefit regime transforms it so that work always pays.
Ms Buck: I am asking this for about the fourth time this evening. Does the hon. Gentleman concede that half of all local housing allowance claimants of working age in private rented accommodation are either in work or connected to the labour market through jobseeker's allowance?
Bob Blackman: I will repeat the mantra that my hon. Friends have repeated, which is that 13% are in work and the rest are on JSA. The LHA has distorted the market even more, as my hon. Friends have said, by making it more beneficial in certain instances for people to be on housing benefit and pocket the difference. What nonsense! Rent levels have been distorted in many parts of the country.
The Opposition are claiming that the modest reforms being introduced will mean people being thrown out of their houses and suddenly being cleansed out of all proportion, but what will happen is exactly what is happening in the borough of which my constituency is a part. Its housing director has said that 3,040 families will be affected by the change, and the borough will seek to ensure that the rents fall and adjust to the levels of housing benefit that are applicable-although that still distorts the housing market. Some 3,000 properties out of more than 100,000 in the borough will be affected, so this involves a small percentage of people.
When I challenged the housing director to tell me what he would do about the families who might, sadly, lose their houses as a result of this change, the figure came down from 3,040 to 80. I have great sympathy for the 80 families who could be in that position, so I then challenged the housing director to tell me what he would do about it. My authority will do what every local authority in this country should do, which is challenge the landlords to reduce their rents so that those people are not made homeless.
Phil Wilson: How can the hon. Gentleman expect private landlords to reduce their rents when for every one person on LHA wanting a property, five to 10 people in work are looking for the same property? Who are private landlords going to go for? They are going to go for the person in work.
I thank the hon. Gentleman for his intervention, which leads on to the other key issue in this debate: the supply of housing in this country. That point is not really being answered by the Opposition. The Labour party had every opportunity to build houses over the past 13 years, but it failed to do so. At the same time, it failed to take account of the fact that this country's population is increasing, so the need for housing increases all the time. We have a market for housing and
housing benefit distorts it directly, which is why it is a bad benefit in desperate need of reform. One of the reforms that must take place is a change to the way in which housing benefit is withdrawn from people as they get work. At the moment that is a direct disincentive for people at a certain level to work, because they lose benefit pound for pound. Why should someone work if that is the position?
Fiona O'Donnell: Does the hon. Gentleman not realise that what this means for housing associations, on which we are going to rely to build homes, is that their cash flow will be interrupted, they will have debts and there will be an adverse impact on their ability to borrow to build those homes?
Bob Blackman: I thank the hon. Lady for her intervention. The housing associations throughout this country seek changes of tenure, changes of regime and an encouragement to develop the housing that this country desperately needs in every local authority area. I trust that that is what will happen. The coalition Government have set out their stall: we will build 150,000 new homes during the life of this Government. We agree that that is not enough, and we would like to see more. What we want to see is young people getting a foot on the housing ladder, moving out of rented accommodation and purchasing their own property. What has to change is that the applicable lending regimes of the banks, building societies and suchlike must enable people to get on the property ladder.
Rosie Cooper (West Lancashire) (Lab): Will the hon. Gentleman comment on my local authority, West Lancashire borough council? It wanted to build a new civic centre, and in so doing said that it would build affordable houses and in the process knock down four good homes. While he is speaking about that-
This is a Government in a hurry. We can all understand their sense of urgency and their desire to get on with the job. In many ways, that is creditable and commendable. However, the reality is that the plans for reforming housing benefit are ill thought out and ill considered. Only fools rush in-they rush in and make matters worse, and they gamble recklessly with people's lives and livelihoods. In the Secretary of State's speech at the beginning of the debate, it was unfortunate that he was unable to give any confidence to people who are worried and concerned about these issues. As my hon. Friend the Member for Manchester Central (Tony Lloyd) said, he did not allay the fears of constituents up and down the country.
As those of us who have sat through the whole debate have heard this afternoon, there has been cross-party consensus in favour of reforming housing benefit. That
is clearly embedded in the motion. There is no use anyone's shaking their head-it is there and it is on the Order Paper.
Kwasi Kwarteng: If there is the consensus that the hon. Gentleman talks about, does he have any idea why the previous Government did not address the problem in the 13 years that they were in government?
Nic Dakin: The previous Government made changes to housing benefit. As recently as a few months ago, the former Chancellor moved to change how rent entitlements were calculated so that big increases in house prices at the very top of the market no longer skewed spending on housing benefit. Things were in train, but they continue to need to be addressed. We could have a cross-party reform process that engages with all those who have expertise in this area, from Shelter to the National Landlords Association. Instead, there is a danger that the headlong rush into this basket of ill-thought-out proposals will threaten the fabric of our communities.
A key reason that the housing benefit bill has gone up is the lack of affordable housing in certain parts of the country, particularly London and the south-east, which has been exacerbated by the economic downturn, as people lost their jobs or reduced their working hours and needed the support available from housing benefit to prevent them from becoming homeless. The Rugg review of the private rented sector points out a possible way of addressing those issues. Those proposals, combined with real investment in more affordable housing, offer an alternative way forward. Unfortunately, the Government's cuts to the housing budget and their squeeze on local authorities mean that it is unlikely that much new social housing will be built before 2015 other than that already commissioned by the outgoing Labour Government.
Comments by the Deputy Prime Minister and other Government Members show that they signally fail to understand how housing benefit helps people to stay in work. Only one in eight of all housing benefit claimants are unemployed, as my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) pointed out. If we take just those in receipt of LHA across the country, 26% are in employment and only 19% claim jobseeker's allowance. The rest include pensioners, carers and disabled people who are unable to work. My hon. Friend the Member for Hampstead and Kilburn (Glenda Jackson) excellently exploded the various myths about housing benefit and housing benefit claimants.
The proposal to use the 30th percentile of local rents, rather than the median, to calculate LHA will have a wide-ranging and negative impact. More than 750,000 people will lose out as a result. They are people on low incomes who, the Government will say, can live on lower incomes. According to Shelter, Crisis, the Chartered Institute of Housing and Citizens Advice, the most brutal of all the housing benefit changes is the proposal to uprate LHA according to the consumer prices index, rather than local rents, as currently happens. If this change goes ahead, it will cause great distress.
Independent research by the university of Cambridge suggests that the cuts will push an additional 84,000 households below £100 per week per couple for all expenses after housing costs. Those households include 54,000 children. I recognise the concerns of the hon.
Member for Colchester (Bob Russell) that the proposals may well end up increasing the number of children living in poverty. None of us in the House would want that to happen, I am sure.
The proposal in the universal credit idea to unify benefit tapers and make the system simpler have much merit, but the proposed changes to housing benefit in advance of the introduction of the universal credit will severely undermine the goal within it. Some will be forced to give up employment because they can no longer live within commutable distance. Some will be forced to move away from friends or family who provide child care or support.
The proposal to cut housing benefit by 10% for those on jobseeker's allowance for more than 12 months seems dreadfully punitive. If the claimant has striven ceaselessly for 12 months to get a job but been unsuccessful, they are penalised for their misfortune. That is the world of Gradgrind and has no place in a modern civilised economy. Shelter, Crisis, the Chartered Institute of Housing, Citizens Advice and Mencap are just some of the range of organisations warning of the dire consequences that might occur if the proposals go ahead unamended. The Archbishop of Canterbury has expressed serious concerns that
"People who are struggling to find work and struggling to find a secure future are . . . driven further into a sort of downward spiral of uncertainty, even despair, when the pressure is on in this way."
This Government are proud to say that they are listening to people's concerns and will govern according to the new politics. The proposals represent a challenge to them to listen to those who know what they are talking about, and to those who make things happen on the ground and work with people day in, day out on such issues. The Government should step back from helter-skelter decision making and from a reckless gamble with people's lives and livelihoods.
I come from rural Somerset, where house prices are high. There has been a great rise in house prices over the past 10 years, but people still have low incomes. The average income is £18,500 and many of the workers are part-time workers, with many jobs which they tack together, and seasonal workers.
I have three questions. First, once the existing housing is rented out, will the Government give housing associations the flexibility to build brand-new homes and let them out at the traditional social rents, or will all the new homes have to be charged at 80% of the market rent, which is high? The problem for tenants in my constituency is that they have very little capacity to save money towards their own housing, as such a large proportion of their income goes on housing costs.
The next two points are similar to those raised by the hon. Member for Hampstead and Kilburn (Glenda Jackson). Can the Minister clarify the situation for tenants who have mental health issues? There are two gentlemen in my constituency who use private rented
accommodation. Because of their age-they are in their early 30s-they may be asked to move into shared accommodation. Will they be able to access that discretionary housing allowance? Those payments would ensure that they were able to remain in their existing housing, rather than having to move out for a year, two years or three years and into shared accommodation, such as a flat. I want to ensure that they are protected in some way against the disruption of a move, particularly when that might be extremely detrimental to their mental health.
My third point is about the alarming and increasing practice in one district council area of my constituency, where homes that have a dining room are classified as having an extra bedroom. Therefore, a three-bedroom house with a dining room becomes a four-bedroom house, a four-bedroom house becomes a five, a five-bedroom becomes a six, and so on. As a result, families, who are the only ones able to obtain such housing, end up with no living space. People normally retreat to their bedroom if that is the only space that they have in the house, but such a loss of family space is extremely detrimental. That of course has a subsequent impact on the private rented market, because the example that the local authority sets becomes custom and practice throughout the housing sector in my area.
John McDonnell (Hayes and Harlington) (Lab): This debate has been enlightening in many respects thanks to Members on both sides of the House. I shall not be repetitious; I shall just concentrate on putting on the record the plight of my constituents and the implications of the policy for them. It will at least give me some peace of mind that someone has spoken up for them.
Like every other Member, I have a weekly advice surgery-about twice a week at the moment. We have an open-door policy at the office, and we are swamped with casework, as many Members are. Half my casework is housing-related, and my surgery is the most distressing part of my week, as I am sure the surgery is for many Members are. It is heart-rending.
Families, who come with their children, are living in appalling housing conditions: overcrowded, sleeping three or four to a room and often, as the hon. Member for Wells (Tessa Munt) said, using their living rooms and other parts of the accommodation as bedrooms. They live in unsanitary conditions, lacking heat and hot water, and often their premises are damp. They live a nomadic life in my constituency, with 12 to 18-month accommodation licences, and their children move from school to school, disrupting their education.
We have not seen a housing crisis on this scale since the second world war. In the borough, I have 1,500 to 2,000 families and more who are homeless at any point in time. The reason for that has been mentioned-the hon. Member for Colchester (Bob Russell) referred to it-and it is that the bulk of our council housing stock has been sold off. Little council housing has been built in 30 years, under both Governments, and the buy-to-let landlords have moved in to provide the accommodation. They fail in many instances to maintain the properties, and we also have Rachmanite landlords who abuse their tenants. They are profiteering from the housing shortage with high rents and, of course, through housing benefit,
but I find it ironic that in this debate Members on one side of the House seem to be blaming the tenants and housing benefit for high rents, not the landlords themselves, who charge those high rents and exploit the benefits system.
Many families in my area already struggle to pay the rent, and many already make up the gap between benefits and rents. They receive some discretionary payments from the council, but they are few and far between, and the families get into debt and fall back on loan sharks. As a result, they often fall into rent arrears, get evicted and then become classified as intentionally homeless. We can see how people can get caught in a cycle of deprivation.
The new proposals will exacerbate the nightmare that many of my constituents already face. Some 3,000 families will lose out on anything between £6 and £27 a week. The London Councils survey, which has been quoted extensively, demonstrates that a large number of landlords have stated that they will evict families if the gap in rent is more than £20. Many families in my constituency will be evicted, and they are already rushed through eviction as it is. That means that there will be an increase in homelessness in my area and it will be extremely difficult to find accommodation. I already have families moving out of the area on different schemes who find it very difficult to find work elsewhere and then desperately seek to come back to be close to their family members.
The results of these proposals-I want to put this on record for my constituents-will be an increase in poverty, immense stress, and immense distress for many people, particularly at a time when unemployment is rising in my constituency, as it is across the country. I do not believe that cuts in benefits are the answer, or that people are incentivised to find work by poverty or by homelessness-in fact, it pushes them back into further depths of despair.
There is an alternative proposal for which many in this House have argued for a number of years. First, it is about building council homes again, and getting back to investing on a scale that meets the needs of our population. That means an element of redistribution of wealth and ensuring that people pay their taxes, particularly the corporations, so we must tackle tax avoidance and evasion. I believe that we need an emergency programme of house building to tackle the homelessness that we now have, particularly in London and the south-east.
Secondly, there should be rent controls. If benefits are high because rents are high, there is a simple solution that applies in many parts of Europe, where people have controlled the rents and thereby stopped the exploitation by landlords.
Thirdly, in areas such as mine we need a more radical solution to the level of homelessness. We should allow councils compulsorily to purchase empty properties so that we can put families into them. I find it a disgrace that a house will stand empty for a long period. Some 300,000 properties are empty for more than six months, while people are on the streets or living in housing deprivation. We have a housing crisis on our hands, and we need an emergency programme to tackle it.
I certainly do not believe that cuts in benefits will go any way towards tackling this problem-in fact, that approach will cause more homelessness, put more people
into deprivation, and cause immense human suffering in our society. That is why I support the motion, and why I will do everything I possibly can in this House, in demonstrations, and in direct action on the streets to oppose these housing benefit proposals.
Yasmin Qureshi (Bolton South East) (Lab): Thank you, Mr Deputy Speaker, for giving me the opportunity to speak in this debate. I want to support my party's motion on the housing benefit cuts. We have heard contributions from many Members. I concur with everything that Opposition Members said, and there have been notable exceptions among Government Members. I will not try to repeat everything that has been said, but I would like to flag up three issues that have arisen regarding the Government's reasons for wishing to introduce these housing benefit cuts.
First, there is the fallacy that the cuts need to be made because of the deficit. Yes, everybody agrees that cuts need to be made in different areas of Government activity and public services to balance the books. However, it is always said that because a Labour Government were in power, we somehow caused the deficit and the financial crisis, when everyone knows that that is not true. Up until 2008, the Government parties supported the public expenditure projects that we brought about in the past 13 years, such as the beautiful hospitals, the schools, and all the building work that had been carried out to improve the country's infrastructure. Most of the money was spent on that. We created jobs and regenerated the economy. In 1997, when we came into government, we inherited a complete mess, with unemployment and interest rates at record levels, so let us not have any lectures from the Conservatives about financial mismanagement.
Secondly, it has been said that Labour was in power for 13 years and did not do enough about housing. I accept that my party could have done a bit more on building new houses. However, we tried to help vulnerable people by bringing 1.5 million social homes up to a decent standard. Those were homes that were substandard when the Conservatives were in power. We fitted 700,000 new kitchens, 525,000 new bathrooms and more than 1 million new central heating systems. Yes, it cost billions, and I remember the then Opposition begrudging it, but it made life better for the people who had lived in substandard houses. At the same time, it regenerated the economy and provided jobs. We will not take any lectures from Conservative Members who tell us that we did not do enough.
Mrs Mary Glindon (North Tyneside) (Lab): Does my hon. Friend think it is a disgrace that the Conservative mayor of North Tyneside, when she was leader of the council, wrote to the then Housing Minister to oppose £104 million being given to North Tyneside for homes for older people? When she came to power, she also resisted money for building 800 council houses in the area. How can we trust the Tories on council housing?
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