| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
The proposed restriction on Ofcom’s powers may damage the proportionate regulation of the postal market by hindering the collection of robust evidence about the market on which to build the new regulatory regime. The postal services market is going through a period of significant change, and we cannot predict with any certainty how it will be structured in the future. Ofcom’s strategic market reviews will perform a vital function in ensuring that regulation is appropriate, timely and evidence-based. It is essential that the new regime be evidence-based. As Hooper pointed out, no review of the sectors within the postal market has ever been carried out in the way now proposed. With the changes facing the industry today, it is paramount that there is the best possible evidence on which decisions on the regulatory regime should be based. For certain sectors of the postal market to be outside the remit of that review makes no sense. Ofcom and all those with an interest in the market need the strategic review to be as comprehensive as it can be. Excluding certain services, as proposed by the amendment— namely, those within a document exchange, letters weighing 350 grammes or more or costing £1 or more—could significantly restrict the ability of Ofcom fully to understand the postal market and to regulate accordingly.
It is true that this means that some postal operators currently outside the scope of regulation could conceivably be regulated under the new regime. We understand that for some companies this means that they have less certainty about regulation. We recognise those concerns
11 May 2009 : Column 889
It is important that the valid concerns of postal operators are balanced against the importance of Ofcom being able to keep the whole market under review. It would not make sense, therefore, to prejudice or anticipate the reviews that are going to be undertaken by excluding certain things from their purview at this stage. Given the changes that the market is experiencing, this is particularly important. We cannot foresee exactly how the markets will change and evolve. It would not make sense to attempt to try to do so for the purposes of this legislation. It would be quite wrong to take a decision that would prejudice Ofcom’s ability to take necessary but targeted steps to secure the universal service. We just do not have that kind of scientific certainty about the market and how it is changing.
I repeat my earlier assurance that we do not expect Ofcom to extend the scope of regulation to include the services referred to in the noble Lord’s amendment in the foreseeable future, except so far as required by the directive. Ofcom will regulate only where necessary for specific purposes, the most important of which is to secure the provision of the universal postal service. Ofcom already has a legal duty to reduce unnecessary burdens on the areas that it regulates and a duty to promote self-regulation. We expect and anticipate that Ofcom will fulfil that remit. Reducing unnecessary burdens and promoting self-regulation are as important a part of Ofcom’s remit as any other.
To be clear, we are not expecting the active scope of regulation to increase. We expect the new regime instead to be much better targeted. On the back of this assurance and explanation, I invite the noble Lord, Lord Hunt, to withdraw his amendment. I hope that in the light of what I have said he will be prepared to do so.
Lord Hunt of Wirral: My Lords, I am grateful to the Secretary of State for his response, but I hope that when he reads it in Hansard he will see that it has left the position even more confused than it was before. He is the Secretary of State for Business, Enterprise and Regulatory Reform. What we are presented with here is an area which is at the present time unregulated. We are therefore considering whether we should give power to a regulator to regulate this very market in the future. In seeking this extension, the Secretary of State has sought refuge in saying, first, that it is most unlikely to come about and that noble Lords and the other place should not therefore worry about it. Well, we are worried that there will be an extension, and that we will see greater regulation in future.
I had thought that the Minister stood for deregulation. However, we have not heard very much about the deregulatory environment in which we now are and where we are supposed to be reducing the burden on business of regulation. Here we have some viable businesses which are not regulated and which are now, as he has conceded, worried that there is a big question mark over the future. Although I must have time to carefully consider what he has said this evening and I must consult carefully with those who are most affected by this, I think they will be even more worried and that
11 May 2009 : Column 890
7.40 pm
Housing Benefit (Amendment) Regulations 2009
Housing Benefit (Amendment) Regulations 2009
13 Report Merits Committee
Motion to Regret
7.41 pm
Moved By Baroness Thomas of Winchester
To move to resolve that this House regrets that, in drawing up the Housing Benefit (Amendment) Regulations 2009 (SI 2009/614), alternative proposals to deal with the problem of paying Local Housing Allowance for large families put forward by the Social Security Advisory Committee were not properly considered. 13th Report from the Merits Committee
Baroness Thomas of Winchester: My Lords, this Motion is not fatal but it does reflect the frustration that I and others such as Shelter and Citizens Advice feel that the Department for Work and Pensions has not heeded the wise advice of its advisory body, the Social Security Advisory Committee, over the question of how to manage housing benefit for large families. I remind the House that all I am expressing is regret that, in drawing up the Housing Benefit (Amendment) Regulations, alternative proposals to deal with the problem of paying local housing allowance for large families put forward by the SSAC were not properly considered.
The regulations in question introduce a cap on local housing allowance rates at the five-bedroom rate for all new customers and to those moving house, regardless of the size of their families, with effect from last month, and for existing customers who live in properties with more than five bedrooms at the anniversary point of their claim. The one point that the Government have taken on board from the advice is to increase the transitional period from 13 weeks to 26 weeks for existing customers, and for that we are grateful.
Why have the Government decided to take action at all? The SSAC, Shelter and others reckon that it is as a result of sensationalist media coverage of perhaps only two exceptional cases in London where homeless families were rehoused in expensive private accommodation. Citizens Advice thinks that at least part of the problem lay with the way in which local authority staff made decisions regarding the appropriate rent that should be paid for temporary accommodation. However, the Government will certainly not accept that it was only sensational headlines in the tabloid press which have driven this policy, stating in the Explanatory Memorandum that the national rent services in England, Scotland and Wales have reported difficulties in determining LHA rates for larger properties because
11 May 2009 : Column 891
The equality impact assessment takes a different line, stating that one of the benefits of capping will be to help ease the transition into work by keeping rents at a more realistic and affordable level. However, that particular argument is certainly not agreed by Shelter, which says that reducing the choice of properties available to claimants through capping risks endangering the Government’s wider welfare-to-work strategy as claimants are forced to live in lower-cost areas which reduce their access to centres of employment.
While on the subject of the equality impact assessment, I should mention that it has been recognised that these changes will impact disproportionately on some ethnic minority groups and almost certainly on large Catholic families, although it should be pointed out that this particular instrument does not apply to Northern Ireland. However, if the policy were to be implemented in Northern Ireland, it would almost certainly be found to be contrary to equality legislation there. However, coming back to this instrument, does the Minister agree that the new policy does have a disproportionate and adverse affect on BME and certain religious groups, and if so, what is the objective and proportionate justification? Does he further agree that nothing in the parent Act is intended to authorise or require racial or religious discrimination, whether direct or indirect? It seems quite clear to me that the change of policy is arbitrary and discriminatory.
So how many people are likely to be affected by the change? The Government think that less than 1 per cent of householders receiving housing benefit and living in the private rented sector are entitled to benefit for properties with more than five bedrooms. This works out at about 5,000 households or around 50,000 people, the majority of whom will be children. The Government seem to think that because only a very small number of people will be thus affected, this means that the policy is acceptable. However, in those households the impact could be considerable and very undesirable. The impacts that I am talking about concern the possibility of overcrowding, of children living below the poverty line, of disabled people not being able to live with their families, of families being forced into substandard properties or facing large shortfalls in rent. The worst-case scenario is of course that some families could eventually face homelessness, which will mean that the local authority will have to step in to rehouse them.
One of the reasons that I felt impelled to raise this whole issue is that there could be many more families who fall foul of these new housing benefit rules with the steep rise in unemployment. The report of the Social Security Advisory Committee was stark. It says
11 May 2009 : Column 892
Figures published last week show that the Government’s attempt to reduce child poverty has stalled and they are not likely to meet their objective of halving by 2010 the number of youngsters living in households where the income was less than 60 per cent of the national median. It is not as though there are no alternatives to what the Government are doing. The SSAC has suggested various courses of action, as has Shelter. Shelter says that rent officers should omit exceptionally high rents from the list of six or more bedroom properties used to calculate the midpoint which would determine the LHA rate and would prevent distorted rents being used. This is the method used under the local reference rent system before LHA was rolled out in April last year. This is Shelter’s preferred option and it is also the option favoured by Citizens Advice.
Other sensible suggestions have also been put forward. Rent officers, for example, could assess rents on an individual basis; or an upper limit could be placed on the rates for six bedrooms or more in each BRMA based on regional averages; or apply this last policy in London only. Shelter also urges greater joint working between local authorities, private landlords, the DWP and the Rent Service so that potential solutions can be found in sustaining appropriate rent levels.
The Social Security Advisory Committee offered two options. If the customer is able to find a property with six or more bedrooms, a reasonable market rent will be determined by an individual referral to a rent officer. This was rejected as lacking transparency, but it is unclear to the committee why that is the case. The second option was for a percentage increase to be added to the rental amount for properties with more than five bedrooms. A proposed derived rate could be used for calculating rents for larger properties, using existing LHA rates from smaller properties. That would provide visible proof of value for money and would use mid range data free from variations introduced by the luxury end of the market. That approach was suggested by the Convention of Scottish Local Authorities—CoSLA—and is considered by the SSAC to be transparent and credible. The SSAC’s final suggestion is that housing benefit could be capped at the local housing allowance rate for a five-bedroom property, with the addition of the equivalent of the LHA shared room rate for each additional member of the household, who would be entitled to occupy a room.
The Government are obviously determined to go ahead with these regulations, despite all the warnings that they have been given. If they cannot be persuaded to change their mind, I implore them to monitor and assess the impact of the new rules on homelessness and, if necessary, to introduce changes along the lines suggested. In the mean time, I look forward to the contributions from what I was going to call the faithful few in the Chamber—there seem to be a few more than usual here this evening—and to the Minister’s reply.
11 May 2009 : Column 893
Baroness Meacher: My Lords, I shall make a very brief contribution to offer my support to the Motion proposed by the noble Baroness, Lady Thomas, and to raise one or two questions for the Minister.
I am very conscious of the numbers of ethnic minority communities in east London that are likely to be dramatically affected by these regulations. I wonder whether the Minister has legal advice about the potential for judicial review on a possible breach of our own equalities legislation. I was impressed by the idea put forward by Shelter and by the noble Baroness that there are alternative ways in which to deal with this. I take on board the Minister’s intention to reduce the barriers to employment by trying to cap in some way the levels of rent, because there is no doubt that parents of large families find it extremely difficult to get back into work and to feel that there is any point in doing so. Nevertheless, it would be reassuring to feel that the Government could find other ways in which to deal with the problem without such a blunt instrument, which I should have thought could be open to challenge.
Lord Kirkwood of Kirkhope: My Lords, it is a pleasure to follow the noble Baroness, Lady Meacher, and my noble friend Lady Thomas of Winchester. We owe my noble friend a tribute and acknowledgment for raising this important point on a set of regulations, which herald some significant changes. I also pay tribute to the SSAC, whose work informs our debates time after time in a very positive way.
I agree with my noble friend that these regulations have not been properly considered by the Government, and I think that it is safe for the House to vote on the Motion. If it occurred to my noble friend to press the Motion to Division, I would be right behind her in the Division Lobbies. Consideration was given to a consultation that was very extensive and very consensual. That is contained in the committee’s report at Chapter 5. There were 25 very detailed responses, and the score was 24 against and one in favour of the Government proceeding as they have. That is an unusual score, even for the SSAC, and that is something that the House should consider very carefully.
Personally, I am deeply disappointed by these regulations. They are short term and superficial and may be counterproductive. I have not said much as sternly as that since the new Secretary of State, Mr Purnell, took office. This is the first set of regulations under his stewardship of the department which I think are flatly wrong. That is important to recognise.
The argument in the SSAC report about the motive for the policy changes is well founded. The two cases that caused so much controversy in west London some months ago are the provenance of these policy changes, and nothing else. The pathfinder pilots preceding the introduction of the local housing allowance were planned for years and ran for two years in each of the extensive periods throughout the United Kingdom and, to my knowledge—although I stand to be corrected—not one of those pathfinder projects pointed to this as something that needed attention. I cannot believe, if this was the significant problem that it is now argued to be by the Government, that it would not have been picked up in that rigorous process of pathfinding. The
11 May 2009 : Column 894
If I were the Minister and was confronted by these difficult headlines—although I believe nothing that I read in the newspapers any more about social security; they never get it right, if they ever get anything right—I would have brought in the local authorities, the Rent Service people, even the health service and the department, and sat down and worked out exactly what long-term alternatives were available to the housing benefit local authority officers who took these decisions. My noble friend may be right: maybe they took the wrong decisions; maybe the expertise available and the level at which these decisions were taken leading to these reports were not right. If that is true, there are some very obvious lessons to learn from this. Even more fundamental than that, however, is that if we are not careful as a House we will end up with unintended consequences, which will result in family breakdown and households being split, two sets of accommodation having to be provided in some cases and overcrowding, with substandard environmental housing conditions.
As my noble friend Lady Thomas said, these regulations would also result in child poverty. If Lisa Harker has made anything clear in her important contribution to the child poverty debate that has been going on—and positively, it must be said, until the recent past, at the hands of the Government—it is that families predisposed to poverty and hardship contiguously over periods of time are large families with workless households in the ethnic communities. In all three categories, children are subjected to not just low income but hardship and poverty on a longitudinal basis. I do not believe that the department knows how many children will be affected. The figures are 3,000, but they are tentative; this is nothing more firm than survey data. I do not think that that is a safe basis on which this House should allow the department to bring in these regulations if the figures are so flimsy. I do not think that it is safe to make these changes on the basis of survey data.
I have three questions for the Minister. First, we know that there is to be a review of the local housing allowance regulations after a two-year period from the date of their introduction. Can we have an assurance from the Minister that these regulations will form the basis of a special chapter in that review and that a free-standing integral part of the review in two years’ time will be about how this has worked out, how many families it has affected and how many children within those families? After a two-year period, those figures should be nailed down and known. Secondly, we have assurances that the DWP and the Treasury are looking at work incentives as they affect these rents and the local housing allowances in future. I would want to be very careful about work incentives in relation to this client group and these regulations. I would certainly be very nervous about sanctioning people if they were the heads of households of the kinds of family groups that we are talking about here. I would like some assurance that there will be some
11 May 2009 : Column 895
8 pm
Thirdly and finally, the SSAC itself asks, at paragraph 6.9 of its report—this is on page 19 of Command Paper 7571—for “further work” to be done on this area. That is the least that we can do and the least that I would accept if I were, like my noble friend, deciding whether to press this. The paucity of evidence and the scarcity of hard facts and stats on which this policy is based need to be further pursued. Further and better particulars need to be obtained before anybody can have confidence that this is no more than a London problem, which the Government have handled badly with a knee-jerk reaction that might, in the long run, be entirely counterproductive. This House should feel able to resist tabloid pressure from time to time. This is no rational response to the problem that the Government have identified, and this policy should be resisted.
Lord Skelmersdale: My Lords, after the words that we have just heard from all around your Lordships’ House, the Minister cannot be particularly grateful to the noble Baroness, Lady Thomas of Winchester, for raising this issue today—even though I note that these regulations are up for debate and that, if he plays his cards well, there is no likelihood of a vote. I shall not, however, go through the Social Security Advisory Committee’s report blow by blow. However, like the noble Baroness, Lady Meacher, I accept its comment, noted in paragraph 18, that,
although I cannot see that that necessarily means that these regulations make the system neither transparent nor open.
Local housing allowance, which replaced traditional housing benefit, featured in the last Welfare Reform Bill and was supported from these Benches. However, as with so much recent government legislation, the devil was and clearly remains in the detail. The Minister will, doubtless, remember that I wrote to him on behalf of one of my correspondents a few weeks ago, although it was not on an aspect covered by these regulations, which respond to a particular problem: namely, state-aiding the residence of large families. I can tell the noble Lord, Lord Kirkwood, that it elicited the fact that area reviews are already taking place.
The subject of the regulations was, as we have heard, highlighted fairly recently in the press when there were reports of an Afghan family claiming a massive £12,455 per month—met by housing benefit—for a seven-bedroom property in Ealing. The value of the property in question was claimed by the Mail on Sunday to be a massive £1.2 million, as we have heard. Three housing benefit officers supervising the case were apparently sacked, for, as one said, “just doing our job”. A spokesman for Ealing Council even said that it was appropriate to put the family in a seven-bedroom property because of the age of the children. If that is correct, why were the officers sacked? How does that make the situation any better?
11 May 2009 : Column 896
Surely to goodness there are two things wrong with the system. Although I do not know the details of the children’s age and sex, I know that in the private sector, where no housing benefit is paid or claimed, it is not uncommon for children of the same sex to share a bedroom until one or more moves out of the family home. The fact that this is not tolerated in the supported housing sector means that those who get state support are sometimes treated more generously than those who are not—and that is not correct.
| Next Section | Back to Table of Contents | Lords Hansard Home Page |