17:09 - Division on Amendment 12 - Ayes: 258 / Noes: 190 - Amendment 12 agreed.
Lord German
My Lords, I have two groups of people to whom I want to refer. My noble friend Lady Thomas referred to them in Committee, and I referred to one of them. What does the Minister anticipate doing for foster carers? We have already been told that we have a shortage of foster caring in this country, and foster carers need to keep a bedroom to be able to host and look after children in foster care. It is very important indeed—and I think that the Minister acknowledged this in his response in Committee—that something needs to be done to accommodate the needs of that group of people.
The second group of people are those who have had adaptations to their properties. Those adaptations probably cost the public purse quite substantial sums of money, so it does not make sense, for example, to require people to move from one property that has a stair lift to another where a stair lift has to be put in place. Can my noble friend tell us what he anticipates doing for both those groups?
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I need to thank noble Lords to start with for a thoughtful and insightful debate.
The introduction of size criteria into the social rented sector from April 2013 is essential to reduce housing benefit expenditure, which without reform would reach £25 billion in cash terms by 2014-15. With savings from this measure estimated to be around £500 million per annum, it will play a key role in our efforts to control housing benefit expenditure and to tackle the budget deficit. In these difficult economic times, we cannot avoid having to make these choices. I assure noble Lords that these decisions have not been taken lightly.
In case there is any doubt, let me remind noble Lords that the size criteria measure will affect only working-age housing benefit claimants living in the social rented sector who are underoccupying their accommodation. For a family of four, with two adults and a teenage boy and girl, we are proposing that they will be entitled to housing benefit for a three-bedroom property with a living room, kitchen, bathroom and possibly even other rooms, such as an extra bathroom and study. This is the same as we allow for people living in the private rented sector. Those in a property that has more bedrooms than the size criteria allow will receive a percentage reduction in their eligible rent, meaning, on average, a shortfall of around £14 per week.
It is only fair that everyone plays their part, but we will, of course, ensure that we maintain safeguards for those in the most vulnerable circumstances. However, even with the reforms that we have started making to housing benefit, we are still expecting to spend nearly £23 billion on housing benefit this year. By the end of the spending review, we expect to achieve £2 billion in annual savings from the package of housing benefit reform. That is £2 billion off the £25 billion that I referred to. The Government believe that it is right that those living in oversized properties in the social rented sector contribute to those savings. Claimants in this sector make up over two-thirds of all housing benefit claimants, although most of the £2 billion in annual savings will still come from claimants living in private rented accommodation.
In England, approximately 420,000 households in the social rented sector underoccupy their accommodation by two bedrooms or more, while over a quarter of million households are overcrowded. What is more, 1.8 million households are currently on the housing waiting list in England. Over 700,000 of these households belong to reasonable preference groups, which means that they are treated as having a higher priority on the waiting list. This includes the homeless, people living in insanitary or overcrowded housing, and those needing to move because of a medical condition.
This measure is necessary to control spending. It is necessary because spending was allowed to spiral out of control under the previous Government, but we also believe that it will encourage greater mobility among households living in the social rented sector. It will help local authorities and other social housing providers to make the best use of their existing housing stock. It runs alongside and in support of measures introduced as part of the Localism Act, such as increased flexibility for local authorities to manage their housing waiting lists and the development of the national home swap scheme.
We have discussed this measure in detail and I have listened to and thought at length about the important issues that have been raised. We have various amendments to get through, but it might be helpful if I first set out what conclusions the Government have arrived at and what we intend to do. Noble Lords will understand that there is limited scope for manoeuvre within such a tight fiscal context, but I am pleased to announce today an additional £30 million that we will add to the discretionary housing payment budget from 2013-14, in support of the introduction of the size criteria into the social rented sector from April 2013. We believe that the amount made available is reasonable, based on what we know about the numbers likely to be affected by the measure. We think that £30 million could assist around 40,000 cases. It could help even more if local authorities choose to use DHPs to make up some, but not all, of a claimant's shortfall.
My noble friend Lord German asked what that funding is for. It is specifically aimed at two groups. The first group is disabled people who live in significantly adapted accommodation, and the funding is to enable them to remain in their existing homes. I hope that goes some way to satisfying the noble Lord, Lord Wigley, as well on that matter. The second group, which a number of noble Lords mentioned, is that of foster carers. We have carefully assessed the number of foster carers who will need to keep an extra room for when they are in between fostering, and we have an amount for them. I hope that goes some way to satisfying my noble friends Lord German and Lord Kirkwood on that matter, and indeed the right reverend Prelate the Bishop of Ripon and Leeds, who I hope feels that there is some room at the inn for this very vulnerable and important group.
The case for providing some mitigation for these two groups is clear, but we have decided that the way to do it is through the discretionary housing payment route rather than through specific amendments. We need rules in the benefit system that do not increase administrative complexity. We need to be able to make and deliver effective legislation not just within housing benefit but within universal credit. Such exemptions might, for example, include those who would otherwise have met the shortfall themselves, and might miss others who would have had a stronger case for additional support. I am convinced that a more localised, discretionary approach is the best way forward. It means that the limited resources that we have can be efficiently targeted at those who need them most. Of course we would like to do more, but there is simply no more money available.
Discretionary housing payments can be paid only where there is a linked claim to housing or council tax benefit. This is in effect, therefore, ring-fenced funding, although we cannot tell local authorities precisely who they should spend it on or how much they should spend. That is for local authorities to decide. However, we provide further guidance for local authorities through the DHP good practice guide. We have an illustrative draft of that, which I can share with noble Lords this evening, and we look forward to refining that with the input both of noble Lords and key stakeholders.
Lord McKenzie of Luton
Would the Minister clarify whether that £30 million is a one-off figure or an annual figure, and from when does it commence?
Lord Freud
I am pleased to clarify that that is an annual figure that starts in the year 2013-14, when the actual provision comes in.
Next, I would like to clarify the rates of reduction to be applied under this measure. In setting the percentage reduction rates, we have considered the sorts of rent differentials seen in the social rented sector alongside the question of affordability for the taxpayer. We intend to set the percentage reduction rates at 14 per cent for underoccupiers with one additional bedroom, and 25 per cent for underoccupiers with two or more additional bedrooms.
We think that the average cost to affected claimants, in terms of reduced housing benefit entitlement, will be around £14 a week in 2013-14. The majority of claimants affected—just over three-quarters of the total—are underoccupying their accommodation by just one bedroom. For this group, the average reduction will be around £12 a week. For those underoccupying by two or more bedrooms, the average reduction will be around £22 a week.
I would like to assure noble Lords that discussions within the coalition Government in designing this measure were thorough and productive, and these will continue through implementation. My officials are working closely with the Department for Communities and Local Government, the Department for Education, and the devolved Administrations.
It is worth picking up the issue, which my noble friends Lord German and Lord Stoneham raised, of whether we can make the transition easier. It is technically possible to stagger implementation arrangements, based on the anniversary of the claimant’s tenancy, but this move is not cost-neutral, and the planned savings will be reduced, albeit modestly.
I must be clear that, principally, I am more concerned about the ability to deliver the proposal because it might be very difficult to police and monitor. I am concerned that some landlords will offer new tenancy agreements to existing tenants, so that implementation of this change is delayed, and then the costs would spiral very substantially.
We are, however, determined to make maximum use of the time available between now and the measure coming into force to help prepare local authorities and social landlords for the changes, which in turn will benefit those who are affected. I am sorry if I rather loosely used the term “two years”, on which my noble friend picked me up.
Amendments 14 and 49, from the noble Lord, Lord Best, would exempt claimants from the measure where they underoccupy by just one bedroom. Amendment 12 would appear to tie Amendment 14 in with the housing costs calculation for universal credit.
There is a tension here between the bedroom standard, which is a widely used standard which views underoccupation as having two or more extra bedrooms, and the local housing allowance size criteria, which we propose to use for housing benefit purposes and which we already use for the private rented sector.
Our size criteria take a more generous view on the age at which someone is entitled to their own bedroom. Since the deregulation of rents in 1989, we have been using 16 as the adult threshold in size criteria for housing benefit purposes. The bedroom standard, on the other hand, sets the threshold at 21. Against these stricter criteria, however, the English Housing Survey and other similar surveys then consider the household to be underoccupying their accommodation only if they have more than one additional bedroom above the bedroom standard, a point the noble Lord, Lord Best, made. The size criteria that we propose to introduce into the social sector consider any number of spare bedrooms to be underoccupation. Neither approach is right or wrong. In some cases, the bedroom standard plus one will be more generous than the local housing allowance size criteria, in some they will work out the same and in a few cases the LHA size criteria would actually prove to be more generous.
On the point made by the noble Baroness, Lady Hollis, about the person who needs an overnight carer, I need to make it clear to the House that where someone needs an overnight carer we allow an additional bedroom for that non-resident carer, and we have done so from June this year.
Baroness Hollis of Heigham
My Lords, I said that she would “occasionally” need—in other words, the assumption is that she would not normally need an overnight carer but occasionally might. The Minister has not covered that.
Lord Freud
I suspect that we can look at the difference between “occasional” and “regular” in detail outside the House. Maybe we can exchange letters on the matter.
In Grand Committee, the noble Lord, Lord Best, spoke of the experience of owner-occupiers, explaining that 83.9 per cent would fail against our definition of underoccupation. I put it on record, however, that a similar proportion of working-age owner-occupiers, 86.7 per cent, are in work. We are not suggesting that households in the social rented sector should live differently. We all share the aspiration for a home in which our children can thrive, concentrate on their homework or leave to study or find work, but still have the option of returning home sometimes. To realise that, though, must the taxpayer be expected to pay in full for those extra rooms just because those people live in the social housing sector? The Government believe that it is reasonable to ask for a contribution toward the rent where there is, by definition, some degree of underoccupation. It is not a change to the allocation rules; it is a measure for housing benefit purposes only.
The research from the Housing Futures Network explores how those claimants affected by the measure might respond. As well as the 29 per cent who were likely to try to find work or increase their earnings, around 15 per cent thought that they would take in a lodger or ask another family member to move in. Another sizable group, perhaps 20 per cent to 25 per cent, thought that they were likely to seek help to pay the rent from someone within or outside the household—someone they know. Around 25 per cent thought that they were likely to downsize. There were also those, as some noble Lords have pointed out, who feared that they were likely to get into arrears; that figure was around 35 per cent. We will do our utmost between now and the measure coming into force to minimise that risk. This is what we are looking at as part of our work with the implementation group.
That said, we cannot ignore the financial position. I emphasised at the beginning of my response that the introduction of size criteria is fundamentally about savings. Without the inclusion of those who underoccupy by one bedroom, we would not achieve the £500 million savings expected from 2013.
The noble Lord, Lord Best, challenges our savings estimate. As I have set out in the evidence, though, a majority of people will pay the additional amount for the larger property. The cost of renting in the private rented sector may generally be higher but those who choose to move out of the cheaper social housing into private housing because they are underoccupying will by definition free up accommodation in social housing that can be offered to those on the housing waiting list or those living in expensive temporary accommodation. That argument from the noble Lord simply does not stand. If we excluded one-bedroom underoccupiers, we would lose around £300 million of the estimated savings. The fiscal case driving this measure forward must not be underestimated.
Lord McKenzie of Luton
My Lords, we have Amendment 14ZA in this group, which concerns foster carers seeking exemption from the underoccupancy penalties. We know—indeed, we heard a short while ago—that the Government are sympathetic. When we discussed this in Committee, the Minister told us that it was not possible both to disregard foster allowances as income and to include foster children in the assessment of housing need. However, the National Housing Federation has suggested that discussions between fostering organisations and DWP officials have not shed any light on why the trade-off would be inevitable and has suggested that it could be sorted out by legislation.
As we heard earlier, the Minister’s solution to supporting foster carers was the use of discretionary housing payments and the additional funds that have been made available, and it would be churlish not to welcome that. However, it is hard to see how this can adequately address the problem, given the many other calls on these payments that are likely to be made. Of course, these payments are discretionary, so there would be no certainty for those looking to foster a child that their housing benefit would be covered. It is suggested that the Minister cannot possibly see the inclusion of foster carers within the underoccupancy penalties as a cost-saving measure. As the LGA has put it, if these penalties apply, foster carers could be forced to give up this role at a time when there is a national shortage of 10,000 foster families across the UK. I urge the Minister to give due consideration to this matter, but in doing so I welcome the announcement that he made earlier.
My noble friend Lady Turner introduced amendments that covered three issues. The first was about adaptations to properties, which has been fully covered. My noble friend Lady Wilkins made the important point that this is not just about the physical adaptations to properties but about the support that people need in their community.
My noble friend also referred to someone in the work-related activity group being exempt unless there was suitable employment within easy access of alternative accommodation. We need to know that someone in the WRAG would not necessarily need to be in employment but to be working closer to the labour market. Nevertheless, my noble friend makes a valid point.
My noble friend’s third point was about claimants agreeing to any proposed relocation to alternative accommodation. In the debate on the last group of amendments, we debated a little the issue of suitable alternative accommodation for people, what “suitable” might mean and the complexity that might come with that. To the extent that it features in these arrangements, the opportunity for the claimant to be able to agree to what is reasonable is a fairly fundamental point as well, so I support my noble friend’s contention.
Lord Freud
My Lords, Amendment 13—and Amendment 48, which is a repeat of Amendment 13 but relates to Clause 68—tabled by the noble Baroness, Lady Turner, seeks to make a number of changes. I spoke earlier about how I propose to address the noble Baroness’s valid concerns about those living in adapted accommodation, and I hope that that has satisfied that particular position. On the related point raised by my noble friend Lady Thomas, the disabled facilities grants are quite separate from this; they are administered by local authorities to meet those costs. It is a separate pot, if you like, run by local authorities and not by the DWP.
Amendment 13 would create a new Section (3A). Proposed new paragraph (b) deals with the availability of work in an area and seeks to exempt claimants from the underoccupation measure by their not being relocated to an area where there is no suitable employment, or from a reduction if there is no suitable employment near their current home. We are not in the business of dictating to people where they can or cannot live and we have no intention of doing so. We expect that most people will choose to stay where they are and meet the shortfall. This was supported in the research from the housing futures network, which we have already discussed.
Let me put into perspective the numbers of people who are looking to increase their hours of work. We are talking about between two and four hours per week at the national minimum wage to meet these shortfalls. The amendment links an exemption to the availability of suitable employment, which would be hugely complicated to administer. We would need to define suitable employment and easy access, and in our view those are decisions for the tenants themselves to make, just as those people who live in the private rented sector or who are buying their own properties make such decisions. The labour market is constantly evolving. From a practical point of view, the exemption would be unworkable.
Proposed new paragraph (b), which would be inserted by Amendment 13, would appear to ensure that claimants are not forced to downsize against their will. The amendment would achieve that, but in practice it would go even further. It would enable claimants to block relocations by their landlord regardless of the circumstances. It is unusual for a social landlord to relocate a tenant without their consent, but they can do so in some circumstances, such as where they plan to redevelop the area. We do not intend to interfere in the relationship between landlord and tenant, and nothing in our legislation would force a tenant to move against their will.
On the size criteria measure, we are not seeking to force people to move, but we are asking people to consider the affordability of their accommodation where it is larger than they require, and I beg the noble Baroness, Lady Turner, to withdraw her amendment.
On Amendment 14ZA, which was tabled by the noble Lord, Lord McKenzie, I have set out our intention to increase the DHP budget with the specific aim of helping foster carers as well as disabled people in adapted accommodation. We very much value the work done by foster carers who care for and welcome children into their homes. That is why the benefit system already treats them more favourably by not taking those children, and, as a result, any fostering allowances, into account in their assessment. However, we recognise that there might be circumstances in which a reduction in the housing element of their benefit might act as a disincentive to fostering, and in such circumstances a local authority will have additional funds to award a DHP.
I should make the point here that local authorities will have a direct interest in applying those discretionary funds because they will make a saving by keeping the fostering market open. This is not one of the areas where one worries about discretionary funds being used in other ways; this is an incentive for the local authority. Just to reinforce that natural incentive, we are going to make sure that children’s services within local authorities will be made aware of the availability of DHPs and will input locally on their priorities. I know there are many concerns in this area, but I really think that we have closed the circle.
This amendment seems to go further and would not allow any deduction to the housing element, thereby prohibiting deductions for other income or non-dependant deductions. It also does not cover foster carers who are between placements and who therefore have no income from fostering allowances. The flexibility of DHPs will allow for such circumstances, if it is felt necessary.
The noble Baroness, Lady Wilkins, raised a point on the JCHR. We have just received that report and will be considering it very closely.
I consider that we are meeting the needs of this group through the increase to DHPs, and I therefore beg the noble Lord, Lord McKenzie, not to move his amendment.
Baroness Turner of Camden
I thank the Minister for that response. He seems to have made a number of concessions in response to me. He outlined some of the practicalities, which I understand. I intended the amendment to acknowledge that this is a very complex and difficult area. I was seeking to give a certain amount of guidance to the Government about the way in which it should be handled; otherwise a number of people are going to be very badly hurt, and there could be a few human tragedies on the way, which one would not like to have. I accept that the Minister has made a number of concessions this afternoon. This is a very complex area, so I would like to have the opportunity to study it again. It is unlikely that I will come back with this at Third Reading because we have been over the ground fairly comprehensively. In the mean time, I thank the Minister for the concessions that he has made and beg leave to withdraw the amendment.
Amendment 13 withdrawn.
Amendment 14
Lord McKenzie of Luton
My Lords, the amendment deals with mortgage interest relief. When we raised this issue in Committee, the Minister told us that it was actively under review. We have now had a chance to see the results of that review with the publication this month of a call for evidence on support with mortgage interest and we have some concerns about what it contains.
The main proposals outlined include placing a charge on the property of any long-term claimant of mortgage interest support, which, with an additional sum for interest and an administration fee, would be recouped on the sale of that property; paying the support directly to the claimant rather than to the lender as at present; introducing a zero-earnings rule for eligibility for mortgage interest support to prevent in-work claimants on universal credit from qualifying; and extending the current two-year restriction for JSA claimants on claiming support for mortgage interest to those previously entitled to some transitional protection.
The Government’s stated rationale for the changes is, once again, to encourage claimants into work. The document states:
“A core aim of Universal Credit is that working age claimants have strong incentives to take up work in order to maintain their choice of housing tenure”.
However, the proposals to place a charge on the property of MIS recipients at present apply only to those who are not expected to move back into work—those who, in the words of the call for evidence,
“need long-term help with their mortgages because they are disabled or have retired with outstanding mortgage liabilities”,
and whom, the document states, it is not fair for the taxpayer to support indefinitely. Perhaps the Minister in his response could outline the key rationale for these changes. Are they intended to ensure that anyone who wants to remain in their home must move into work? Or are they intended primarily as a cost-saving measure? What are the expected savings from the scheme to put a charge on the property, and how do these compare to the potential added expenditure on housing benefit if people decide that they would rather not pay this charge and move into the private rented sector?
On direct payments to lenders, we have had significant representations from landlords who are worried about the impact of direct payments to tenants of housing benefit—we discussed this in Committee on a number of occasions and will discuss it again shortly. The Council of Mortgage lenders seems similarly concerned about these proposals, with its director, Paul Smee, stating that,
“the principle of paying the benefit to claimants rather than lenders is dangerous in terms of potentially reducing its effectiveness in meeting its intended purpose”.
Could the Minister let us know what discussions he has so far had with lenders about these proposals?
The Minister will doubtless say that the proposals in this document are out for consultation—that is, they are just that: proposals—and that he will consider views on them. Perhaps he could therefore let us know the expected timetable for any changes to support with mortgage interest payments. It would be particularly useful to know when he intends to make decisions about eligibility for this support under universal credit, as the level of support provided will make a significant difference to whether work pays for home owners.
We look forward to further detail on these measures, but it would be extremely helpful if the Minister could take a moment to outline the principles behind them and the expected timescale for their introduction. I beg to move.
Lord Freud
My Lords, I thank the noble Lord for this opportunity to debate the way in which we will provide help with mortgage costs alongside, or as part of, universal credit. As I have said previously, housing support is critical to the success of universal credit. It will recognise that people need support across a range of different tenure types whether they live in the private rented sector or the social sector, or whether they are owner-occupiers.
Noble Lords will have seen the illustrative regulations on the universal credit housing element which set out our broad approach to support for housing costs. The regulations will indeed make provision for help towards mortgage interest payments.
I also mentioned in Committee that we would be consulting on possible future reforms of the support for mortgage interest rules. As the noble Lord pointed out, we published not a consultation but a call for evidence on 6 December which contained a number of ideas on simplifying the help provided towards mortgage interest payments for working age and pensioner home owners. One of the reasons that it is a call for evidence and not a consultation is that there are much less backing data in terms of impact assessments around a call for evidence than a consultation. Therefore the noble Lord will forgive me if I do not supply the answers to some of the questions he asked me. That is the difference in the process.
We intend to provide support for owner-occupiers, as the call for evidence makes clear, whether this sits inside or outside of universal credit and pension credit. The call for evidence seeks views to help inform the appropriate way forward in determining how financial support towards mortgage interest costs should be changed in both the shorter term and longer term. We are looking at a different model to deal with the longer-term costs of supporting home owners. Essentially, we are looking for a way in which we can keep people in their homes when it is long term, but not at an exorbitant, open-ended cost to the taxpayer. That is the point of exploring these issues: we want to make sure that it delivers fairness to taxpayers.
For support for mortgage interest, we intend to have a rule that provides that help with mortgage costs will stop once a claimant starts work, as is broadly the case now. We believe that the position of claimants with mortgages is different from that of tenants. Owner-occupier claimants have been in work—clearly lenders would not advance money for house purchase unless the borrower could service that debt through income from work. If owner-occupiers are to be able to service their mortgage debt in the future, then they need to return to full-time work and our proposals, or our evidence call, reflect this reality.
The call for evidence runs for 12 weeks until 27 February 2012 and we will of course consider carefully the responses, whether from the CML or anyone else—noble Lords are welcome to add their views, at which I shall look with great interest—and, based on those responses, we will then develop our detailed policy proposals. I can assure the House that we are continuing to provide help with mortgage interest costs. With that assurance, I hope the noble Lord will withdraw the amendment.
Lord McKenzie of Luton
I am grateful to the Minister for that reply. I certainly do not intend to press the amendment. As he explained, this is very much work in progress. Can he say a little more about the reactions to date—particularly from the Council of Mortgage Lenders—in respect of the direct payment issue.
Lord Freud
To be absolutely honest, I have talked to the CML about this matter but I have not had a direct conversation with it since we issued the call for evidence. One of the reasons we had that as one of the questions is specifically to get a considered view from it as to how that might work.
There are a number of issues. At the moment, we pay a fixed rate for everyone based on the average mortgage. The Council of Mortgage Lenders has said in the past that it prefers the actual amounts. So there are a lot of issues. It is administratively complex. I know I am telling the noble Lord things he already knows because he was in situ while some of this was being developed. There is a nest of complicated issues. We are trying to flesh this out in the next few months.
Lord McKenzie of Luton
I am grateful for that further clarification and beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I shall be brief, because it is very rarely possible to add to something that my noble friend has said in moving an amendment. However, I will try in two respects.
Amendment 15 deals with a relevant change in circumstances. How would that feed through into changes of circumstances that may impact on transitional relief for universal credit? Would a change in rent level support be a change of circumstance that would have to be taken into account?
As for non-dependant deductions, under existing arrangements there are a range of circumstances whereby people who might be treated as non-dependants are not and where some non-dependants do not generate a deduction under the provisions. For example, in respect of the latter, no deduction is made in respect of any non-dependant who is staying with someone but whose normal home is elsewhere, who is receiving a training allowance in connection with youth training under specific provisions or is a full-time student during his or her period of study or is in hospital for more than 52 weeks. There are those sorts of exemptions. Is it planned that those will be carried forward into the new world of universal credit?
Lord Freud
My Lords, local housing allowance rates are set each year at the anniversary date of the claim. In many cases, they coincide with claimants’ annual rent increases, but as the noble Baroness, Lady Hollis, will recall, during the LHA pathfinder some landlords increased rents mid-year to take advantage of increasing LHA rates. That is why we will operate a common uprating date of 1 April.
I would like to consider this matter further. I do not believe that it is appropriate to provide regulations in the Bill, and we will have an opportunity to debate the regulations in this area. However, I can assure the noble Baroness that we will consider the implications of a common uprating date for this group of claimants as part of the continuing work on the treatment of change of circumstances in universal credit. I am not able to get to a conclusion on what we define as a change of circumstances. Again, it is an interconnected group of things. On the basis that I am working on it, I hope that the noble Baroness will agree to withdraw the amendment.
The next area is on non-dependants. We debated a similar amendment in Committee, and I remember blushing with pride when the noble Baroness said that I made an intelligent response. It is a rare accolade that I get from some members of the opposite Benches, but not all.
Lord Brooke of Sutton Mandeville
The noble Baroness was even more generous. She actually described it as a “very intelligent response”.
Lord Freud
I thought that I would be self-deprecating and leave the “very” out.
The noble Baroness asked me to keep the House briefed on the thinking here and return at Report. The best that I can do now is to say that we have not changed our views. There is a lot of active work, and I know that the noble Baroness, Lady Meacher, also took a great deal of interest in this issue. The universal credit will recognise the general principle that adults who live in the household of people getting help with their housing costs should expect to make a contribution towards those costs. Not to do so would, in effect, mean that taxpayers would subsidise non-dependants through the benefits system. I think that that is common ground around the House.
It is also common ground that a reformed welfare system must make work in comparison to dependency benefits pay and be seen to be paid, and the current treatment of non-dependants can work against employment incentives for both the claimant and non-dependant. As I said, there are various factors that we have to juggle between decisions on non-dependants—the “touch wood” factor, taking in a lodger, and so on. These factors mean that the issue of non-dependants is complex.
I accept that the amendment is a probing one, but it would not work. However, we are considering it in detail, and it is an important area. It really goes to the heart of the simplicity agenda that we have, and I hope that as we flesh out the detail noble Lords will have something to which the expression “very intelligent” remains applicable. On that basis, I ask the noble Baroness to withdraw her amendment.
Baroness Hollis of Heigham
I am happy to withdraw my amendment. I absolutely understand that this is a work in progress, but we now have the draft regulations, which we did not have in Committee, which is why we are trying to probe to see where this goes. The problem could be that, were it not for the earlier amendment being passed, a couple in a two-bedroom place with an adult son could be regarded as underoccupied if the adult son was not counted as eligible for the room, whereupon their housing benefit would be cut—but, because he was in the House, he would be expected to cover not just their housing benefit but the cut as well. It is that Catch-22 situation that I am seeking to avoid.
It is not straightforward, and I understand that. I am grateful for the Minister’s response. I look forward to an appropriate, acceptable and welcome solution to these dilemmas. I beg leave to withdraw the amendment.
Lord Freud
Noble Lords will be aware that we propose to limit increasing the local housing allowance in line with the CPI index from April 2013. The aim here is to ensure that we continue to exert downward pressure on rents while looking at rent levels in local markets. The limit will apply only in areas where local market rent increases, at the 30th percentile, exceed the annual rate of CPI inflation. We have said that we are committed to making savings from this measure up to 2014-15. If it then becomes apparent that local allowance rates and rents are out of step, they can be reconsidered.
To prepare for this change, the Minister for Pensions set out in the uprating Statement the arrangements for fixing rates. The first uprating will be in April 2013. We have taken this step to ensure that CPI rating can commence from April 2013, but that nobody will see their ongoing award fall at that point as a result of LHA rates being uprated. As the annual rates will be set well in advance, we will be able to provide clarity and certainty to claimants and landlords. We will continue to monitor the path of market rents until 2015 and the Secretary of State will be able to review the LHA rate, or uprate it by some other method, should the need arise.
As the noble Baroness, Lady Meacher, pointed out, the future is uncertain. Clearly, you can draw any scenario you like; the point is that we need to watch it and we will watch it very closely. In particular, we may need to increase LHA rates if growth in rents and the CPI are so out of sync that there is a critical lack of affordable housing. To pick up on the noble Baroness’s other point on extrapolating out to 2013, clearly we all recognise that over any kind of longer-term run rents tends to move with average earnings, not with average prices. Any extrapolation out that long will have a big gap, but we are not talking about that here. We are talking about a measure which is locked in for that two-year period at a time of great difficulty when we are trying to bear down on prices. Therefore, I do not think it is relevant for me to hypothesise about employment levels. That is not what is happening here.
On the point about data and monitoring and what Parliament can expect from us, we will provide to Parliament on an annual basis from late 2012 the relevant CPI data and the data on the 30th percentile of market rents. In addition, noble Lords should be aware that the Valuation Office Agency currently makes available quarterly data on market rents by local authority.
I should point to the major piece of independent external research that is already underway to evaluate the impact of the reforms to housing benefit announced at the June Budget and the spending review. Indeed, I need to thank the noble Lord, Lord Best, for the way that he shaped that research effort. The research will be comprehensive and will be presented to both Houses and the public alongside a ministerial Statement. The department is currently considering how this research could be extended—subject, of course, to funding—to allow it to look at the impacts of changes to local housing allowance uprating over a longer period.
I hope that I have reassured noble Lords that we are committed to monitoring and evaluating this change really thoroughly. On that basis, I urge the noble Baroness to withdraw her amendment.
Baroness Hollis of Heigham
I am grateful to the noble Baroness, Lady Meacher, for her support and her additional probing and questions. I am more than satisfied with the Minister’s reply, apart from one word. I wonder whether I could invite him to change that one word. He said that if the two tests, rent levels and CPI, are out of step, then they “can be reconsidered”. I want “will be reconsidered”. I invite the Minister to strengthen his position on that point. Everything else was lovely.
Lord Freud
On the basis that the noble Baroness is going to be incredibly helpful to me in all the consequent amendments in the Bill, I will change the word from “can” to “will”.
Baroness Hollis of Heigham
I am very grateful and with great pleasure withdraw the amendment, knowing that our policy intent and the Government’s policy intent will now be met. Thank you.
Baroness Hayter of Kentish Town
My Lords, as my noble friend Lady Hollis made clear, this amendment addresses the cases of those who, not having been housing benefit claimants, become in need of this, perhaps through the loss of a job, a change in domestic circumstances, illness or some other unanticipated event. It is aimed at the potential impact on vulnerable young adults: single people between 25 and 35, who rent in the private sector and from January will only be eligible for the single room rate, losing about £40 a week. Crisis—which we all know, particularly at Christmas, of course—an organisation that knows a thing or two about homelessness, believes that most of the 50,000 or more people affected are likely to lose their homes.
The amendment does not say that these people would be excused the shared room rate up to the age of 35, but it gives them a window of a year in which to find a new home or a job, to get well, or in some way to change their circumstances so that they are no longer dependent on housing benefit. It would extend the current 13-week breathing space to 52.
This is not just a matter of the individuals concerned sorting out their lives but of allowing the market to respond to these new rules. Research by the University of York on the impact of extending the shared-room accommodation rate found that there is insufficient shared accommodation available at the moment. Indeed, this would risk making such accommodation even harder to find for those aged under 25 as the supply of relevant accommodation takes time to build up. Furthermore, the York study found that sharing can sometimes be difficult or even dangerous, as we have already heard, and can have a serious negative impact on the health and well-being of vulnerable people.
As we have already heard, there are exemptions to the shared accommodation policy, including those for severely disabled people, care leavers aged under 22, people who have spent more than three months in a homelessness hostel and received resettlement support and those aged over 25 who are considered a risk to others. It does not include those who might themselves be at risk. In Committee the Minister reminded us of the other exemptions, such as those for certain ex-offenders who pose a risk to the public and certain former residents of specialist homeless hostels, which might include those leaving a refuge following domestic violence.
However, we also heard in Committee of a number of situations in which shared accommodation not covered by those exemptions would pose a real problem for people. My noble friend Lady Sherlock raised the question of single pregnant women, who may find such circumstances particularly difficult. The noble Baroness, Lady Campbell of Surbiton, raised the issue of those with obsessive compulsive disorder, who may also find the prospect particularly difficult. My noble friend Lord McAvoy, who is not in his position at the moment and is, in his own words, not a social liberal, talked about the situation of those with a mental illness and how they might gradually be forced out of successively worse forms of shared accommodation.
Many of the people caught by this proposed new ruling will be fathers of young children soon after a split, when it is particularly crucial for their relationship with the children to be maintained. If it is not kept close in that first year of separation it is very hard to re-establish it later. That relationship depends not just on shared hamburgers in McDonald’s but on cooking, eating and even washing up together. For this, a place of one’s own, where young children can feel at home—not a house shared with strangers—will be crucial. The amendment relates to that first 12 months, within which we hope finances, jobs or better accommodation can be sorted out. If it is not sorted out in that 12 months, at least it will be much less threatening for those children visiting their now non-resident parent to get used to a different way of living.
The amendment does not reverse the intention of the policy, which the Minister told us was to ensure that claimants make similar choices to those not on benefits. The flaw in his argument is that the circumstances of many of those on benefits are not the same as those who can support themselves. The benefits system is designed exactly to protect people when their circumstances change. The amendment provides a little extra support of this kind. It would give people sufficient time either to address the circumstances—whether job loss, illness or a change in family arrangements—that meant they had to claim benefit, or, at a later time, to find the shared accommodation that best meets their needs. It is a thoughtful amendment, which the Opposition are happy to support.
Lord Freud
My Lords, Amendment 19 from the noble Baronesses, Lady Hollis and Lady Meacher, deals with a subject that we have debated at considerable length—the shared accommodation rate. In case there is any doubt, let me be clear: the shared accommodation rate is what we pay people to share accommodation, not to share rooms, as some people think. We do not expect people to share one room or a bedroom, but to share accommodation.
Baroness Hollis of Heigham
My Lords, I do not think anyone disputes that, but at the bottom end of the market it will be a room in a shared house, which means sharing a kitchen and bathroom, as we have discussed.
Lord Freud
My Lords, it is rather interesting to look at the actual rates. If you take two people, each with their own shared accommodation rate of housing benefit, that covers or exceeds the two-bedroom rate in 60 per cent of localities. We are not talking about a dramatic cut in much of the country. Indeed, if three or four people choose to share a house, taking their own shared accommodation rates, the amount of money that they get would cover the rate for three or four-bedroom properties in 90 per cent of localities. We are not talking about a hugely draconian cut in that context.
If we look at the amendment itself, it is not altogether obvious what rate of housing costs the noble Baronesses are proposing should be paid during the 52-week period of exemption. Since the amendment applies to new claims only, perhaps it seeks to ensure that new claimants have their full contractual rent met for the first 52 weeks, rather than being paid the local housing allowance. If it is the latter, we covered those points in Committee. We debated whether the current 13-week exemption from rent restrictions for claimants who could afford their rent when they first took on that commitment should be extended to 52 weeks.
I need to make clear that rent can be met in full for up to 13 weeks for those who could afford their rent when they first took on the tenancy and have not been in receipt of housing benefit in the past year. This means that those claimants who experience a short spell of unemployment are not forced to move, and it gives others time to consider their housing options. Around 40 per cent of JSA claimants aged between 25 and 49 have been claiming for less than three months, and around 60 per cent for less than six months. For completeness, I should add that there is a 12-month protection for people who have recently been bereaved.
As I said at the time, most claims for housing benefit are for short periods. The 13-week exemption protects a person’s ability to pay their rent during that time. Half of jobseeker’s allowance claimants aged between 18 and 24 have been claiming for less than 13 weeks and less than 5 per cent have been claiming for more than 52 weeks. We already know that more than a third of those who claim housing benefit choose shared accommodation. These are people who could be in either separate-bedroom accommodation or shared accommodation and choose the shared accommodation rate. Of the people who are not on HB, 40 per cent of 25 to 34 year-olds share. I am excluding students from this. This is not a form of housing that is unusual or imposed on people; it is an absolutely normal form of housing.
I accept that there is real concern about the impact of the shared accommodation rate and particularly about the availability of accommodation. I said in Committee that the market will not remain static and that I believe it will respond in time to the increased demand for this type of accommodation. The feedback that I had from officials following their recent meeting with a Methodist housing association suggests that this is already happening. The association is already converting some of its property into shared accommodation. I am also reassured by meetings that I have had with stakeholders that a number of support organisations are helping to match tenants to shared accommodation.
Lord Best
I support the amendment. We already have up and running, thanks to the good work of the Minister, a really first-class piece of research looking at the impact of the housing benefit changes on families, poverty and a whole range of issues. I strongly congratulate him on taking that suggestion seriously and bringing forward a significant piece of research. It engaged a consortium of the top people at Oxford University, Sheffield Hallam University, Ipsos MORI polling and the IFS. I wondered whether that team might have its work somewhat extended to embrace the research suggested by the noble Baroness. It would not involve quite as much work because it would examine the 150,000 or so households that will now be affected by the underoccupancy arrangements. There is much important research to take place.
Lord Freud
My Lords, I acknowledge and commend the contributions of the noble Baroness and the noble Lord to the debate on policy. Both of them, particularly the noble Lord, Lord Best, played an important role setting up the independent research that the department has already commissioned around the local housing allowance. More recently, as noble Lords are aware, we have announced research looking at direct payments in the social rented sector. However, I must complain bitterly at the improvement to the negotiating position of the consortium that the noble Lord mentioned. When we carry out research, we always have open competition and no one is favoured. We choose the best researchers.
I place real value on independent research. We need robust evaluation on the impact of welfare reform on housing provision. I know that we are taking some steps in housing benefit reform where we need to monitor the risks. I know that there are risks, and we have all discussed them. That is why proper research, considered properly and taken very seriously, is right at the heart of the protections that we are looking at in this area.
I fully support the intention behind this powerful amendment. I want to go on record as saying that. I can tell noble Lords that the department is currently in the process of planning its research programme for 2012-13 onwards, subject, I have to add, to available funding—and I hope that noble Lords do not take that away from me in other ways. I intend to cover the size criteria and underoccupancy in housing benefit. We are considering separately how to evaluate universal credit. Noble Lords will be aware of the constant-piloting clause that we approved in Committee, which provides for a radically new way of looking at this important benefits system.
All research commissioned by the department is published. I am sure that noble Lords will accept that it is not necessary to provide for this research in the Bill. I know that this is a probing amendment and we will look to providing this research at the right time. With those reassurances, I hope that the amendment can be withdrawn.
Baroness Hayter of Kentish Town
My Lords, dinner beckons. Nevertheless, there are seven good reasons for accepting this amendment.
First, it is cost free. The facility to pay rent directly to landlords is there for certain beneficiaries, so it would simply be a case of using this for others.
Secondly, it helps to give financial responsibility and decision-making to claimants, as it would allow them to choose to have the rent paid in this way.
Thirdly, it is what the rest of us do with our mortgages or rent: it goes straight out of our bank accounts, normally the day after payday—in my case, usually the same day—so that we cannot get our hands on it in the mean time. The difference is, of course, that many of these claimants do not have bank accounts, or a joint bank account if they are a couple, and therefore do not have the ability to make such arrangements for direct payments. Furthermore, if they have a basic bank account, such accounts cannot go into the red, and so if there is not money to pay the rent, it simply will not be paid, even with a direct debit mandate, leading to the build-up of arrears.
Fourthly, this amendment is strongly supported, as has been said, by housing associations and by local authorities. Both know that arrears will build up more quickly without this amendment. For housing associations, the interest on borrowing will increase as their assured-rent income will decrease. To give the example of one housing association, 85 per cent of Riverside tenants choose to have their rent paid directly, as many of its tenants do not have bank accounts, and many more fear the bank charges if they go overdrawn. This is an important way for low-income households to manage their finances. If this existing facility is withdrawn, pilot studies show that, as has already been mentioned, rent arrears are likely to rise sharply, putting tenancies at risk. In addition, funders have indicated that they are likely to regard lending to housing associations as higher risk and thus to increase the cost of funding. In the long term, it will mean that social housing providers will simply be able to do less. Income streams to local authorities will similarly be threatened if direct payments, which exist now without any problems, are ended. CoSLA, the association for local authorities in Scotland, estimates that this will cost about £50 million a year in Scotland alone.
Fifthly, many vulnerable families will be at risk. To quote again from CoSLA:
“COSLA is deeply concerned that Housing Benefit paid direct to claimants without sufficient safeguards will result in an increase of rent arrears and evictions, sending households spiralling into debt and facing homelessness”.
We know the families for which the risk of not paying the rent directly will be the greatest: those with debts, where the pressure to pay these off—whether to the gasman or to the loan shark—will be pressing; those with a family member with a drink, drug or gambling habit, where temptation to use the rent money will be high; and those with immediate demands, as the noble Lord, Lord Cormack, has said, for money to feed their children and yet who want to ensure that the roof over those children’s heads, albeit not today’s problem, is equally vital, so want to have that rent assured. While we know some vulnerable groups will have their rent paid directly, we can see no reason to wait until borderline cases get into problems, struggle and get into rent arrears, before we allow them to have the rent paid directly. Why risk that for no good reason?
Sixthly, it will make sure that we do not dissuade private landlords from coming into this sector.
Seventhly, the strongest argument: the noble Lord, Lord Best, who chairs the Local Government Association and has forgotten more about housing associations than most of us will ever learn, tells us it is the right thing to do. We concur.
Lord Freud
My Lords, my intention is to reassure the noble Lord, Lord Best, so that he withdraws his amendment. I start by trying to convince the noble Baroness, Lady Howe, and my noble friend Lord Cormack of the reason why we are doing this. It is not an arbitrary thing. We are not doing it because we want to annoy housing associations or local authorities. We are doing it for a very simple reason. If you are a tenant in social housing whose housing benefit goes straight through to the landlord and you take a job, all your arrangements for paying for your housing have to change. It is a major change in your arrangements and a real block on you taking the job. It is a major thing for you to organise, and you have to learn, when you take that first job and your housing benefit goes down within universal credit—because that is the change—that the money no longer goes through automatically to the landlord.
We have to break that link. It has to be the same arrangement whether you are working or not working. We deliberately excluded pension-age people from this because we are not expecting them to work. We do not need to worry about the people who find it difficult to work. It is working-age people who we want to go into work.
Baroness Meacher
I listen to the Minister’s passion—“We have to do this, we have to do this”—and I find myself thinking that that would be fine if we were in normal circumstances and the benefits were not changing but were pretty much going on as they always have, and people were not going to be facing major drops in their benefit levels or having to adjust to having to move because of all sorts of rules about underoccupancy or because of the tying of benefits to the consumer prices index and so on. There are so many ways in which people on benefits are going to be losing—that is the context—and this is not the time to be determined to bring all these people into line with people in work. Can we not wait until things are stable and then maybe introduce the rather nice idea of bringing these two groups together?
Lord Freud
The answer to that is very simple: the universal credit will, each year, inject an extra £4 billion into the pockets of the poorest people. That is what the universal credit does. It will start coming in in 2013-17, when hopefully the laws of the business cycle will still be working and we can expect an upturn at some stage. As we move into that situation, the concern will be what happens to the universal credit. This measure is for universal credit. It does not stand outside it.
Baroness Meacher
I apologise for interrupting again, but £4 billion is surely a tiny amount relative to the losses in projected benefits. This huge budget would normally go up very extensively each year, would it not? I do not have all the numbers in my head, but £4 billion in a tiny fraction of the actual real losses in benefit that people are going to face.
Lord Freud
Absolutely not; £4 billion is a very substantial figure. Over the course of this SR, we are looking at a loss of £18 billion spread over the four-year period. The noble Baroness can do the sums. The most important thing about universal credit is that the money goes into the pockets of the lowest two quintiles very efficiently. I contend that the noble Baroness’s argument is not a real argument.
Baroness Hayter of Kentish Town
My Lords, if I understand the Minister correctly, he is saying that this is all part of getting people off benefits and into work, which we absolutely support. However, this will also cover those people who are never going to work—those in the support group—as well as people with young children who are not in work for some time. Therefore, we are not talking only about people who are on the cusp; even those people will lose the right to have their rent paid directly.
Lord Freud
No, my Lords. We have made it absolutely clear that we expect those who are vulnerable to continue to have payments made directly to the landlord. Indeed, in the private rented sector, where this process has already been in place and has worked rather well, 80 per cent of people pay their landlord directly, and 20 per cent are regarded as vulnerable and have a payment made directly to the landlord. That is how it works there. At the moment in the social rented sector, 95 per cent have direct payments and 5 per cent pay the landlord themselves. Therefore, there is a real disparity there.
I want to provide some reassurance for noble Lords who think that this is a draconian measure. I need to explain to the noble Baroness, Lady Howe, and the noble Lord, Lord Cormack, that we are doing this for a real reason. It is not arbitrary; it is intended to make sure that there are no artificial barriers for people who would stay in the comfort zone of not working. We need to make it easier for them to make that transition, and that is one thing that we are doing. This will empower people and allow them to manage their finances.
I shall now come to the reassurance factors, which I hope will have noble Lords nodding happily on the Benches. I am determined that, while we introduce this system, the housing sector will remain financially stable. I talk regularly to banks and to rating agencies in particular about what we need to do to make that happen. I am absolutely convinced that we can have our welfare cake—the transformative cake—and financial stability for the housing sector. I shall do nothing that undermines the security of the housing sector in this area. I absolutely understand that this country needs more housing, and it would be madness for us to undermine that ambition.
I completely understand the two imperatives here. We are working closely with local authorities and housing associations in running half a dozen demonstration projects, which are designed to find out exactly how to make direct support payments for housing costs so that they work with universal credit. I have been incredibly pleased that the industry has shown real enthusiasm for taking part in these demonstration projects, with no fewer than 70 different groups looking to join in. During the selection process, we have been delighted at how much choice we have had, and we are finding out what is going to work to get the two things that we need. These demonstration projects will allow us to identify those who are likely to struggle financially. The projects are testing not whether we should introduce direct payments but how to support landlords and tenants ahead of the scheme being introduced. The important part is to get the safeguards operating properly. We need to see when people are not able to handle the system and switch payments to the landlords, and then find out how to recoup the money over the period when landlords do not have it so that their security of income is locked into the system. That is what we are trying to find out here.
The noble Lord, Lord Best, mentioned the London & Quadrant research, and we are aiming to apply that to the demonstration projects. It shows the importance of communications. Clearly, we want to improve the outcome and throw out the doubling of arrears.
Baroness Drake
I speak as someone who is rather preoccupied with financial inclusion. The Minister is describing a process, but if there is a product—a bank account—that works for low-income or unemployed people and the account is in debt, how does one know that the bank will pay the direct debit? Can he be confident that it will pay if there is a deficit in that account?
Lord Freud
That is exactly what we need to ensure and that is exactly what we are discussing with the banking groups. Specific banking support is exactly the issue that we need to get right.
Lord Cormack
My noble friend is trying to be helpful and I appreciate that very much. Is he saying that this amount of money that is earmarked for paying the rent will be used for paying the rent and for nothing else, and that, unless he is assured that he has the product that will deliver that, he will not move in this direction?
Lord Freud
I am saying that we are working really hard with the banks and the banking community to make sure that we have an escrow arrangement of that nature, and we are doing this at several levels. We can have a general agreement, which I shall discuss with the banks as a whole, to provide a generalised protection. However, I am quite interested in getting particular banking products that will provide a simple bank account and elaborating on what could be a new level of support for some of the poorest people in our community. We have a one-off chance with universal credit to ramp up support for the poorer people in our community, and we are putting a lot of energy into achieving that. I have talked about this before. It is one of the hidden gains that we can get out of the introduction of this new system. Rather than people living on drips of money from here and there, we can really start to help them, supporting them in managing their finances and getting true independence. This is a core part of what we are going to be doing with universal credit, and part of that relates to housing. Housing will be a major part of people’s total income stream. We are not doing this for fun or to annoy anyone; this is absolutely part of what we are trying to do with universal credit.
I need to deal with one other point—the issue of safeguards raised by the noble Baroness, Lady Lister. We are concerned about the safety and welfare of claimants and, where we have a concern, we need to put direct payments in place. There are vulnerable groups who are not able to manage the potential freedoms, and for them we will make sure that we go on with existing arrangements for direct payments.
We have commissioned a consortium led by Professor Paul Hickman—I am sorry, but this is a bit of an announcement late at night—from the Centre for Regional Economic and Social Research at Sheffield Hallam University to evaluate the effects of direct payments to claimants in the six demonstration project areas, which I shall announce soon. The other key team members are Dr Kesia Reeve, Peter Kemp of the Oxford Institute of Social Policy, and Stephen Finlay from Ipsos MORI, names that I know that the noble Lord, Lord Best, approves of. That will give us a cumulative understanding of the impacts of direct payments and inform the detail of delivery under universal credit.
Research published by the Joseph Rowntree Foundation in 2007, Paying Housing Benefit to Claimants, on both private and social tenants’ experiences of and their hypothetical attitude toward the management of their own housing benefit confirms that a significant proportion of social tenants have the potential to manage their own housing benefit payments. We will also have an advisory group for the demonstration projects and a wide range of local government, money advice, voluntary sector and other external stakeholders who will be invited to join that group.
We had a slight exchange about what “choice” means and we have been teasing each other about the imbalance of power when you have choice. It concerns us that while there is theoretical choice today, only 5 per cent of people take it. As it stands, tenant choice does not go far enough, which is why I am concerned about it. I hope that the noble Lord, Lord Best, will accept that we are making incredible efforts here to be transformative and not to undermine the housing sector, and on that basis will feel that there is enough going on for him to withdraw this amendment.
Lord Best
My Lords, I am very grateful to all of those who have joined this debate. I am sure that we all feel much reassured by the passion that the Minister brings to this subject and by the genuine efforts that he is making to see that the behavioural change that he wants is triggered and that the disadvantages of going down this route are mitigated. The excellent research that he is announcing tonight—and I thank him very much for it—might show that it is not possible for only 20 per cent of the tenants within the social sector to be regarded as vulnerable and to have their rent paid directly and that there is a rather larger number.
However, I think the Minister is keeping an open mind as to what proportion of the sector will get their rent paid directly, and I greatly welcome him saying how much he is concerned not to undermine the social housing sector, the production of new homes, the sector’s lending and the security of income within that sector. If those discussions with bankers fail and the products do not materialise, we must place our faith in the Minister and hope that he will recognise that the difficulties still exist and that rent direct to the landlord is going to be necessary for a larger proportion of people. On that basis, I am happy to withdraw my amendment.