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The Government greatly value the work done by foster carers to look after children. My noble friend Lord German made a point about numbers. There are, as he observed, no precise numbers. I was very impressed by his deductions from various others. I think that, bluntly, our figures are probably in line with his. The Government's position is that up to 5,000 foster carers are also in the benefit system, but, as I say, there are no firm data on this, and we can only speculate.

We greatly value the work of fosterers, and the observations made today make me think very hard about the potential issues here. I will commit to looking very carefully at how this group might be affected and whether more needs to be done.

The next set of amendments are loosely related. Amendments 85 and 86 relate to households waiting for children to return from care. I know that the noble Earl, Lord Listowel, was more relaxed about Amendment 86, which was about former care leavers, so I will concentrate on Amendment 85.

Amendment 48D relates to those where a child of the household is subject to an emergency protection order or interim care order. As in the private rented sector, it is important to avoid the double provision of funding by government, with the needs of the child already being met by the local authority. However, if the arrangement is likely to be short term, this is precisely the type of situation where a discretionary housing payment can be considered by the local authority. As I have already pointed out, an additional £130 million has been made available for that over the spending review period.

Amendments 42 and 82 are intended to exempt from the size criteria those in supported accommodation and sheltered housing. As noble Lords will know, we have just held a consultation on the treatment of supported accommodation within housing benefit, which closed on 9 October, and we are currently considering the responses.

In the consultation, we proposed that the supported housing of registered providers and registered social landlords who are currently classed as exempt should continue to have their rents considered in the same way as mainstream properties. This means that, generally,

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rents will continue to be met in full, although we will look at the level of service charges in this sector. It will remain possible for local authorities to refer individual cases to a rent officer if the rent is considered to be unreasonably high. We envisage that people in this type of accommodation will not be affected by the size criteria.

An exemption for those underoccupying by only one bedroom, as put forward in Amendments 44 and 84, would result in a reduction in the level of envisaged savings by a very substantial amount-an estimated £300 million annually. We do not automatically allow claimants one extra bedroom in the private rented sector. So there is a substantial affordability issue behind those amendments.

Baroness Hollis of Heigham: My Lords, perhaps I may press the Minister on that key point. He has quoted a figure of £500 million for HB savings. The impact analysis that I think most of us were working off gave a figure of £700 million. If that figure is correct-it may have been overtaken by further refinement from the DWP-it would mean that, for less than half the cost of the savings, he would take some 80 per cent of those worst affected out of the equation. That seems to be very good value.

Lord Freud: My Lords, without us rambling through the papers, I think that the figure is £500 million, of which £300 million is a very substantial proportion.

The Deputy Speaker (Lord Haskel): My Lords, a Division has been called in the House. The Committee stands adjourned for 10 minutes.

7.08 pm

Sitting suspended for a Division in the House.

7.19 pm

Lord Freud: My Lords, perhaps I may conclude on the point raised by the noble Baroness, Lady Hollis. The confusion is between the £0.5 billion that we start to save annually in 2013-14 and the £770 million figure that she quoted from the impact assessment. It represents two years of savings on a GB basis, which is appropriately discounted and deflated.

Baroness Hollis of Heigham: My Lords, it is nice of the Minister to give us those figures, but is his £300 million the amount set off against the £500 million, or is it set off against the £770 million?

Lord Freud: No, it is £300 million set against £500 million-so 60 per cent.

I have already talked about the behavioural responses. I move to the point raised by the noble Lord, Lord Rix, about the number of bedrooms, the size of the rooms and box rooms. Again, we discussed that issue briefly in the previous set of amendments when the noble Lord, Lord Foulkes, raised the window tax. It is the social landlord's responsibility to specify the number

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of bedrooms in a property but, as I said, we are looking at this, including the size of the bedrooms, to explore whether it is an issue.

Amendment 35 of the noble Lord, Lord Rix, relates to support for mortgage interest payments and is connected with Schedule 4, concerning the payment of housing costs for pensioners. I understand only too well why noble Lords are seeking reassurance that assistance with eligible mortgage interest costs will continue to be provided for homeowners, including those with long-term disabilities. In fact, I met only yesterday representatives from Mencap to discuss these matters.

Approximately 430 claimants have purchased their properties through the shared ownership scheme known as HOLD-rather less than the 1,000 figure that has more generally been quoted. The Government want disabled people to continue to access suitably adapted homes, whether through a mortgage or housing benefit. The Homes and Communities Agency continues to support the provision of shared-ownership homes where this is a local priority, including shared-ownership homes under HOLD. The agency is holding ongoing discussions with lenders on the provision of mortgages for HOLD. Support for mortgage interest is intended to provide a reasonable level of help for homeowners but has never been intended to cover all of a person's housing liabilities. As noble Lords can see from the draft regulations, help will continue for homeowners. So I see no need to set out in the Bill specific reference to mortgage interest payments. We propose to continue using the same standard mortgage interest rate for all claimants. As to Schedule 4, a housing credit element with broadly the same rules as housing benefit will be introduced into pension credit to ensure that low-income pensioners continue to receive help with their rent.

Regarding the point raised by the noble Lord, Lord Best, on providing incentives for pensioners to move, our approach to this issue will, over the long term, help to ensure that people are in suitably sized accommodation before they become pensioners. Our expectation is that the proportion of pensioners needing to downsize will in future be lower than it is now. As several noble Lords mentioned, the Localism Bill includes measures specifically aimed at helping pensioners to downsize and will help to increase mobility in the social rented sector for this group.

Baroness Hollis of Heigham: Could the Minister at some point, not necessarily today but in due course, set out the stats on the number of pensioners underoccupying and what his projection is of the time it will take for numbers to diminish?

Lord Freud: I would be happy to circulate the information to noble Lords.

On the social sector size criteria measure that we are introducing through Clause 68, we will use the time before its introduction in April 2013, as we are already doing, to explore fully the implications for claimants and landlords. We acknowledge that the impact will not be the same across all regions; we will work with stakeholders to look at those variations as we move towards implementation.

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Let me repeat: I value these debates and hope that they continue on a constructive level as we move forward.

Baroness Wilkins: Could I just return to the issue of disabled people? I am delighted to hear that he is willing to think again about fostering, but I am very disappointed by his reaction in relation to disabled people and feel that he has failed to recognise their situation. He says that the amendments have been drawn too widely. Could I press him on what he would feel was acceptable?

Lord Freud: My Lords, I hope that I am indicating that we are looking very hard at what proposition we can bring forward later on in this process of considering this Bill to deal with that particular set of problems that noble Lords have raised. So I will have something to say later on in the process.

The Earl of Listowel: I am very grateful to the Minister for reassuring the Committee that he will think carefully about the treatment of foster carers. That is welcome. However, I have a strong concern about a number of issues in this area. I have two questions. I wonder if he could drop me a letter on this, if he cannot reply now. Those registered foster carers who may have one, two or possibly even three rooms vacant, who do not have foster children with them at the moment but are waiting for them, and because of that are not getting an allowance and are on benefit, are hit by that-it is a bad situation for them. So reassurance on their position would be good. I am grateful to him for his response with regard to those parents who have their children removed from them. I think he was saying that for a short period it would be acceptable to give those families where the child has been removed an exemption in certain circumstances. I feel very worried about those families, which are very dysfunctional by definition. To have one's children taken away is a very serious situation, and to lose a child and then to have an extra room or two rooms and to be further hit-that does worry me. Reassurance on that point, what happens to them, would be welcome.

Lord Freud: I will repeat the two points. The first point is exactly the issue that we want to deal with and the one that the foster community is worried about-the voids area. That is something that we are aiming to address. My response to the second point was, and remains, that this is where we would expect discretionary housing payments to come into play. It is exactly the complex set of judgments that need to be made, and local authorities are best placed to make them.

Baroness Hollins: I apologise for this, but I think that the Minister said that the same mortgage rates would be applicable as for everybody else. From my understanding, in the example that I gave of Theo, the mortgage rates had changed from the previous preferential rates, leading to a gap in the costs of his housing that he cannot meet.

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Lord Freud: I think that this is the same case where I spent time with the family, so I am reasonably familiar with it. There was never any preferential treatment within HOLD; it used the standard rates. What has happened is to some extent a bit of a breakdown in the financing market in this area, among other breakdowns, after the worst financial crisis that any of us has ever seen.

So we are looking at a dysfunctional mortgage market with huge deposits required. There was never any special provision here: they were using the standard provision. We pulled it down from a little over 6 per cent to, as the noble Lord correctly said, 3.63 per cent and, if we had used the formula pre-crisis, we would have gone down to a rate of 2.08 per cent, which would have left people in an even worse position. To some extent, by moving the way that we do this, we have been more generous than the previous formula, but we have not changed the goalposts in any way. The issue is whether the market revives naturally-I know that it is shut at the moment-or whether, frankly, we need to think again about what is the appropriate level of support and how it should be delivered.

7.30 pm

Baroness Sherlock: May I press the Minister on one more point? I understood that his argument in response to the amendments up to Amendment 83 was that he could not accept such a broad exclusion because it would encompass people who would otherwise have paid the shortfall. That is probably the dead weight argument. I was in the Treasury. Dead weight is much loved as an argument by the Treasury and despised by pretty much everyone outside it. You can see that it makes perfect sense, if you are in the Treasury, to think, "You are already paying this, why on earth would I want to do it?". If you are on the other end of the telescope, it looks rather different.

Does the Minister accept that the fact that a claimant may stay put and pay the difference does not necessarily mean that they can afford to pay it? That point was made by the noble Lord, Lord Kirkwood, and the noble Earl, Lord Listowel. Someone who can see no alternative suitable accommodation may stay put, pay the difference-or at least accept that they must pay the difference and get into debt, with all the consequences that has for the family. Does the Minister accept that point and, if so, how will he address it?

Lord Freud: My Lords, it was interesting that there was a range of responses to our survey. Different people will do different things depending on the circumstances. That is the point. That is the problem with all the broadly defined exemptions that we have discussed today, which we have explored in great detail in the department: none of them works to define eloquently and adequately the people whom we want to protect. We need other ways to do that. I know that people like to attack the Treasury on every conceivable opportunity-

Baroness Sherlock: The Treasury employed me for many years; I would do no such thing.

Lord Freud: It did not sound like that.

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Some people will choose to pay £11 and £12 extra for an extra bedroom perfectly rationally and other people will make other responses; a wide range of response is likely. A lot of people would regard it as a bargain to spend that amount on an extra bedroom. As noble Lords will be aware, spending to get that extra accommodation in the outside world-whether through a mortgage or through renting-would cost a lot more.

Baroness Sherlock: Forgive me, in the interests of levity, I was not being clear enough. The people I am concerned about are not those who could afford it but declined to stay, or those who are staying put and are happy to pay the money. The Minister mentioned statistics earlier about the number of people who would move, downsize or stay put and pay the difference. I am concerned about the rump who remain, which I think is sizeable-perhaps he will remind us of the percentage. I tease him about dead weight only because that argument works only if the Government are willing to accept that the price is borne by those who are not capable of making the difference. I am trying to tease out exactly how big is that price, who is paying it and what price the Minister would regard as acceptable for people who are forced into debt in order to make it work for everyone else.

Lord Freud: My Lords, I said earlier that we are working on the detailed implementation of this. It would be premature to make judgments on that. We need to develop strategies to ensure that those problems do not arise.

Baroness Hollis of Heigham: In that case, can I ask the Minister to amplify his stats for us when he writes to us next? He has talked several times, over the few Committee days we have had, about a £60 million discretionary housing fund, and how it is going up threefold, and so on. I am not keeping a tight list, but I think we have now overspent that by approximately five times. Could he tell us-given that there are some 400 local authorities-even on a per capita basis, how it works out? On average an authority can only help 700 families, out of-for instance, in the Norwich situation-some 20,000-odd families that are in rented accommodation.

I believe that those people affected, who will not readily afford it, are probably more like 7,000 rather than 700. Could the Minister give us the assumptions, or the stats, behind that £60 million figure as to what this would mean in a typical local authority, per 1,000 rented homes, for a period of, say, six months, or what percentage of those families you could typically expect to support? So that, per 1,000, that £60 million would extend to 20 families for six months, or 50 families for six months. Then we can get some idea of how that money connects to all the various issues for which this will, apparently, be the solution.

Lord Freud: Yes. I always prefer to answer rather than write, but I think I will on this occasion go to paper. It may be that the noble Baroness prefers paper.

The Earl of Listowel: My Lords, I was grateful, as I said before, that the Minister is giving this issue of arrears careful consideration. I think it might be helpful

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to the Committee if he could provide some reassurance that by Report we will have considerably more detail on what the plight will be of those who face arrears under the new arrangement. Can he give any assurance on that point?

Lord Freud: By the time we get to this again, I will come back with that answer.

Lord Wigley: My Lords, I speak at the request of my noble friend Lord Rix, who has had to leave the Committee, because we have now been going for well over four hours. I think he anticipated that we would have finished before now, and he has had to go to a 7.30 pm engagement outside the House. He has asked me, as I have my name on the amendment that led this bank of amendments, if I could respond briefly.

In doing so, I will touch on three points. In reverse order, taking up the point made by the noble Baroness, Lady Hollis of Heigham, a moment ago, with regard to the cost implication of the discretionary payments that are to be made by local government, has an assurance been given by the devolved Administrations that they have the resources to be able to do this? We are dealing with a non-devolved subject but are looking to devolved authorities, from a devolved budget, to fund the counterbalancing money that is required. If that answer is not available now, perhaps there will be an opportunity at some later stage to deal with that. It is clearly a matter that will be of concern, not only to the devolved Administrations, but to local authorities in Wales and Scotland.

Lord Freud: I can answer the noble Lord pretty rapidly on that. This is not a devolved area, so the discretionary housing payments are not devolved.

Lord Wigley: Of course-that is the whole point. The housing benefit is not a devolved area, but local government money is, unless there is going to be payment made from Westminster sources-Whitehall sources-to the local authorities in Wales. From the indication I get, payments will be made directly to local authorities, or via the Assembly to local authorities. In which case, fair enough, if enough money is going to be there; but if it has to come from their general pools, then that is from a devolved budget and will cause them problems.

Lord Freud: All I can confirm is that, just as anywhere else in the country, in those Administrations, the money will go by formula to those local authorities, in the same way that it currently does.

Lord Wigley: I accept entirely, of course, that housing benefit is run by the local authorities as a non-devolved portfolio, coming under Whitehall. However, the general funds that they have, unless there is additional funding coming from Whitehall to those local authorities and bypassing the Assembly, it would otherwise come out of the Assembly budget. All I was asking was whether that had been agreed with either the Assembly, or in the case of Wales, the Welsh Local Government Association? The Minister might be able to confirm that.

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Lord Freud: What I can confirm is that the DHPs go directly to the local authorities, not through the local Assemblies.

Lord Wigley: Therefore, will any additional resources for discretionary payments that will be made, in line with the numerous references to discretionary payments that we have heard over the past few days, go directly and be over and above the payments that will otherwise be made.

Lord Freud: My Lords, yes.

Lord Wigley: We can put a marker down on that clear answer, for which I am very grateful.

Secondly, on one of the banks of amendments that dealt with disability and tried to get exclusions for people in certain categories of disability, the Minister, if I recall rightly, said that it would cost far too much, possibly £180 million. If that is the cost of excluding disabled families from the provisions of the Bill, it is, equally, the additional cost being faced by disabled families as a consequence of the Bill. That is an enormous cost. If it is a large sum for the Treasury budget, how much larger a sum must it be for disabled people trying to find it from their own domestic budgets? That is something that I suspect we shall need to come back to for clarification on Report. I hope that will be possible. I do not expect the Minister to respond at this point.

My third point is in regard to Amendment 35 in my name and that of my friend, the noble Lord, Lord Rix, which concerns home ownership among people with long-term disabilities. The Minister mentioned that only 400 people were affected by this. I am sure he is not decrying the importance of the scheme for the 400 people that it has helped; every single one is important in its own right.

Lord Freud: My Lords, may I make that absolutely clear? There are 430 people currently on the HOLD scheme. The bulk of them have an arrangement with a mortgage provider, Kent Reliance, which means that they can continue to pay the required rate of 3.63 per cent. Therefore, only a handful of people on the HOLD scheme are affected by any change.

Lord Wigley: Yes indeed, those 430 may well be safeguarded but there is the question of whether other people, who might in the past have come on to that scheme, will not be able to do so in the future. More importantly, the Minister referred to having had a meeting yesterday with people from Mencap to discuss this. From having a brief word with the noble Lord, Lord Rix, before he left, I understand that the people at Mencap are hoping that the Minister will at some stage, if not today, come back with some provision that will cover the requirements of this important group of people who are being helped by the scheme. I do not know whether they misunderstood that or whether the Minister will look at it again before Report to see what can be done. However, I very much hope that he will take on board the serious points that have been made by the noble Baroness and others, including the noble Lord, Lord Rix, about this important group.

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We have gone well beyond our time. I put it to noble Lords that we ought to consider whether this is the most sensible way of undertaking our responsibilities, when the Committee runs for more than four hours without a break, we have disabled colleagues here and there are disabled people who want to follow our proceedings. I beg leave to withdraw the amendment.

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Amendment 35 withdrawn.

Amendment 36 not moved.

Lord De Mauley: My Lords, this may be a convenient moment for the Committee to adjourn until 2 pm on Thursday, 20 October.

Committee adjourned at 7.44 pm.

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