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Lord Northbourne: As always, we come back to the problem that we have not seen the guidance. As usual, we are being asked to sign a blank cheque. I do not

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know what to say. I accept the noble Lord's assurance, but so much may or may not be stated in the guidance which will make a great difference as to whether matters that we have been discussing will or will not be accomplished. I can only accept the noble Lord's assurance and hope to see the guidance, or to have an opportunity to comment on the draft when it arises.

Lord Mackay of Ardbrecknish: Perhaps I can assist the noble Lord at least to a small extent. I recall reading out at least one paragraph and pointing out that there were a number of paragraphs in the current guidance on the subject of children. Perhaps I may suggest that the noble Lord casts his eye over the current guidance. It was written just as the Children Act was coming in and will, therefore, need to be considerably updated in that regard. He will see the basis on which we are likely to continue our work on guidance.

Baroness Fisher of Rednal: Before the noble Lord sits down perhaps I may intervene with a few words. I said that good practice is being operated by the city council in Birmingham with the housing department, social services and St. Basil's. I simply seek assurance that such practice will still be allowed under the provisions of the Bill.

Lord Northbourne: Continuing my dissertation, I return to the point that some local authorities are doing brilliantly. It is the dogs, those that are not making it, which are the problem. I shall take the amendment away and think about it. My reason for wanting to insert the provisions of Amendment No. 268A was precisely to force those local authorities that are not doing their job to jolly well get off their backsides and do it and to find the money to do it somehow. If we do not force them to do it, central government seem powerless to influence them and get results. However, I shall take careful note of the noble Lord's remarks. I beg leave, for the time being, to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 268B not moved.]

Baroness Hollis of Heigham moved Amendment No. 268BA:

Page 107, line 7, at end insert--
("( ) Accommodation is not suitable unless it is at a rent which the applicant can afford, either from his own resources or with the benefit of such public assistance as is likely to be available to him.").

The noble Baroness said: This amendment, standing also in the name of the noble Baroness, Lady Hamwee, seeks to establish on the face of the Bill, and not merely by the blank cheque of guidance--in which the Minister just asked the Committee to place such trust--that accommodation is not regarded as suitable for a homeless person for the purposes of this legislation if the person cannot afford the rent. In other words, part of the definition of accommodation being "suitable" is that it is affordable. Otherwise, it is not suitable.

The Government propose that local authorities will use the private rented sector extensively for homeless families while they are waiting their time on the housing register for permanent social housing. The trouble is, private rented housing is ill-suited to the needs of many

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homeless families. It is often of poor quality and may add, as the noble Baroness, Lady Hamwee, said, to problems of poor health or disability. The worst problems of disrepair are to be found in the private rented sector. Energy and insulation costs are likely to be high, and fuel debts are likely to mount. Equally, private rented housing can often be quite small and unsuitable for larger families. It is also insecure. A shorthold tenancy lasts for only six months; therefore a family placed in the private rented sector can have no confidence that it will be there in a few months' time.

We know from all the research that the DoE itself has commissioned from Peter Kemp and others at the University of York that private landlords do not like letting to homeless families, families on housing benefit or families with children. They will let to them only if they cannot let to the people to whom they wish to let; namely, childless couples in work. Therefore, such families will very often end up with accommodation that the private landlord can rent to no one else.

Above all, private rented housing, as we know, is expensive. The average local authority rent for a two-bedroomed flat in 1993 was £39. The same accommodation in the private rented sector was £72 a week, or 85 per cent. higher. In London, it ran to over £100 a week, more than twice as much.

When we discussed this matter earlier, the Minister agreed that the insecurity, unsuitability and cost of private rented housing were among the major causes of homelessness. Something like one-fifth of all homeless families are homeless because they have been evicted from the private rented sector. The usual reasons for their eviction are that they cannot afford to pay the rent or the housing benefit does not arrive on time. Yet under the Bill homeless families will be sent back into the self-same rented sector from which they were made homeless in the first place. Unless the accommodation is more suitable this time round, the homeless will again be evicted and will again become roofless--endlessly churned, endlessly the revolving door.

If we are to avoid that churning, as I am sure the Minister wishes to do, it is essential that homeless families are placed in a private rented property that is suitable. As the noble Baroness, Lady Hamwee, said, it must be in decent physical repair. But it must also be accessible, as argued earlier by the noble Lord, Lord Swinfen; and it must also be affordable.

Yet even before the changes in housing benefit regulations this year, housing benefit for homeless families--80 per cent. of homeless families are on housing benefit--only covered the full rent in something like 60 per cent. of the tenancies. In the rest, if they wanted to stay in the private rented sector, families had to top slice their income support, which should have gone on food or clothing, to pay for rent. The housing benefit changes which the Government introduced in January have made that situation much worse.

Let me give just one example from the CAB in Cheshire. A homeless couple with a child had their house repossessed and were in temporary rented accommodation. The rent was £84 a week. Housing benefit until January covered £72 a week and they had

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to find £12 of that out of their income support. Following the Government's capping of housing benefit in January, housing benefit fell to £55 a week--to meet a rent of £84. The difference of nearly £30 a week had to come out of a total income from income support of just £80 a week, leaving a family of three with just £50 a week on which to live. They could not; they did not; and they became homeless. I repeat, 80 per cent. of homeless families are on housing benefit and are likely to face that situation.

What happens if they cannot pay the extra rent out of income support, which was never intended for rent but for food and clothing? Perhaps the Minister can tell us. Have they made themselves intentionally homeless? If so, where do they go? If they are unintentionally homeless what do they do next? Do they go to yet another private rented flat and face the risk that they cannot afford to pay the rent?

The Minister in another place on 26th March accepted that it was a problem. We expect the Minister to say nothing less tonight. In the other place, the Minister said that the Government would use regulations to ensure that accommodation that the applicant cannot afford, taking into account any housing benefit to which he is entitled, is not to be regarded as suitable. The Awva judgment of July 1995, already quoted tonight by the noble Earl, Lord Russell, also confirmed that whether the occupant could afford the rent was "a material factor".

I fear that the Minister will say that this will be left to regulations; it will be left to a code of guidance. Given that these clauses of the Bill hinge on the word "suitable" any definition of suitability must be on the face of the Bill and, pivotally for those going into private rented sector accommodation, "suitable" must mean affordable. Then local authorities will know where they stand in the discharge of their duties. They simply cannot hand over a list of addresses and ask the tenants to take pot luck on where they wish to go. It is a protection to tenants; it is a protection to the Government, given that the courts most recently have not exactly supported the Government in relying on regulations to discharge what should have been done in primary legislation.

To avoid a fate that I am sure the Minister will wish to avoid, I hope that we can encourage him to support these amendments tonight. I beg to move.

10.15 p.m.

Lord Mackay of Ardbrecknish: This amendment seeks to specify on the face of the Bill that accommodation is not suitable unless it is at a rent which the applicant can afford. We have already considered the issue of affordability in dealing with Amendment No. 264AB from the noble Baroness, Lady Hollis, and I agreed that there was probably little difference between us on this point. The difference we have is that we do not agree on the means of achieving the desired result; that is, whether the issue should be addressed on the face of the Bill. As I made clear, we are taking an order-making power under Clause 183, and we firmly believe that the place to address affordability is in an order made under that clause.

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During discussion of Amendment No. 264AB, the noble Baroness referred to the supply and availability of accommodation and the difficulties which people may have in securing the right accommodation for themselves. The Committee will be aware that local authorities are making considerable progress towards developing housing supply strategies which use the resources of the private sector, housing associations and other agencies. Indeed, I referred to that at greater length earlier this evening. It is no longer the case that people have to rely on the authority to provide the accommodation.

The noble Baroness suggested that one-fifth of homeless households were evicted from the private rented sector. The suggestion appeared to be that that had something to do with rent. Indeed, one-fifth of households were evicted from the private rented sector, but 80 per cent. became homeless for reasons other than rent arrears; for instance, breakdown of relationships, sharing and so forth. That means that only 20 per cent. are in rent arrears. A small calculation will show that it is not one-fifth of the homeless that are evicted from the private rented sector who are in rent arrears; it is only 2 per cent. who are evicted for rent arrears. The magnitude of the problem is not as great as the noble Baroness implied.

My right honourable friend the Minister for Housing said that affordability was an example of the sort of issue which we were considering using the order-making power to make clear. That is exactly the position I maintained in the previous amendment and I maintain it again now. A suggestion made by the noble Baroness was that benefit cuts would affect homelessness. I cannot agree with her. A person who cannot afford the rent on housing benefit--that is, at an average reference rent-- will not be intentionally homeless. Accommodation at or above the reference rent will not be suitable. There is now case law in that regard and the question we must ask ourselves is whether we need to reinforce it by regulation.

The issue of affordability therefore is one which is raised irrespective of who provides the accommodation. Homelessness and every other factor must take affordability into account. As I said, we are reflecting on the adequacy of case law on that point and in the light of that will consider precisely how to use the order-making power under Clause 183.

We are clear that if we need to specify further what constitutes affordability, the right place to do that is in an order rather than on the face of the Bill. The great advantage of an order-making power is that one can change it fairly easily if circumstances change. In relation to these matters, circumstances could easily change. Coming back for primary powers does not happen often and, therefore, it is best that matters as detailed as this should be left to regulation. I am not sure that the noble Baroness will agree with me on that, but I suspect that she will not be surprised at the view I have taken. I am sure that she appreciates

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that we are very much aware of the problem she raises. However, we believe that it is best solved by another route.

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