Housing Benefit (Abolition of Social Sector Size Criteria)

Karen Buck Excerpts

Wednesday 17th December 2014 Commons Chamber

[Rachel Reeves]

People affected by the bedroom tax are facing impossible decisions that, frankly, no one should have to make: whether to pay the bills or put food on the table; or whether to pay the rent, at the risk of getting into debt, or risk losing their home. We have seen the evidence from the Trussell Trust and the Child Poverty Action Group, but we do not have to turn to that report to see the devastating impact of this vicious policy; we need only look at the evaluation commissioned by the Government themselves. It was conducted by the centre for housing and planning research at Cambridge university and slipped out this summer, when the Government no doubt hoped no one would notice. Its findings are clear and damning.

[Ms Karen Buck (Westminster North) (Lab)]

London is not the area worst affected by the bedroom tax. In fact, regional variation is one of the striking things about it, because there is more overcrowding in the south and more under-occupation in the north. Despite that, we have 860 households currently affected by it. Does my hon. Friend share my astonishment that in recent years councils and housing associations, such as Westminster city council, have sold 240 one-bedroom properties, thus removing the very opportunities people need to downsize in order to avoid the bedroom tax?

[Rachel Reeves]

That is a really important point. Six months after the restrictions on housing benefit had been applied, only 4.5% of those affected had moved into smaller homes within the social sector, despite that being, as the report put it,

“a key aim of the policy”.

The vast majority of claimants said that they were unable to move because of their need to remain close to work, services or support networks, or simply because, like the Rutherfords, they needed the room that the Government had decided was surplus to their requirements.

The Government’s evaluation also found that a shocking 60% of those affected were in arrears. Social landlords were beginning eviction proceedings in some cases, even though they knew that their tenants could simply not afford the rent increases. Most devastating of all are the official findings on how tenants have struggled to pay the shortfall. The evaluation reported

“widespread concern that those who were paying were making cuts to other household essentials or incurring other debts in order to pay their rent”.

It reported that 57% of claimants had said that they had cut back on household essentials.

There are not many of them here, but let me say a few words about the Liberal Democrats, who took the publication of the independent evaluation as an opportunity to try to wash their hands of this notorious policy. The Deputy Prime Minister said he had changed his mind after seeing the evidence in the report that most people were unable to move in order to avoid the tax, but what did he expect? Did he expect that half a million households would find new, smaller, affordable homes and that everyone would live happily ever after?

The reality is that it was always obvious that that was not going to happen. The Government’s own impact assessment, published in June 2012, assumed that no one would move and warned that if they tried there would

“be a mismatch between available accommodation and the needs of tenants”

meaning that

“in many areas...there are insufficient properties to enable tenants to move to accommodation of an appropriate size”.

Indeed, the very report that the Deputy Prime Minister cited as the “trigger” for his attempted U-turn points out that the smaller number of moves that had taken place were actually

“higher than some had expected”

in the Department for Work and Pensions. The utter disingenuousness of the Deputy Prime Minister’s attempts to excuse his collaboration with the Tories on this issue once again confirms that we simply cannot trust a single word he says.

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[Mr Harper]

With the greatest respect, the period during which the housing benefit bill rose so fast, as the hon. Gentleman has just said, was of course when his party was in government. He is quite right about the need to build more houses, but housing starts fell to a historical low under Labour. We have actually increased the building of new homes. Nearly 500,000 homes have been built since 2010, and a further 275,000 affordable homes will be built from 2015 to 2020. More affordable homes are planned over the next Parliament than in any equivalent period in the past 20 years. The point he makes is right, but this Government have absolutely dealt with it. Overall, the changes we have made to housing benefit will save £6 billion during this Parliament.

The removal of the spare room subsidy is a key part of the reforms. Despite some outlandish claims about its effect, it is working. In the interim evaluation, half of those affected and unemployed had looked for a job, and one in five of them intended to plan to earn more. It was alleged that the change would move people into poverty. In fact, the figures show that thousands of those affected have moved into work.

Despite the Opposition’s scaremongering about evictions and arrears, the evidence has been to the contrary. The latest statistics show—[Interruption.] If we are to have a sensible debate about such matters, it would help if people did not make outlandish claims. I listened very carefully to the intervention by the hon. Member for Westminster North (Ms Buck). It is worth remembering that, when we discussed the benefit cap, she said that huge damage would be done to the 400,000-plus working households in private rented accommodation. However, we know from work that we published this week that 41% of people affected by the benefit cap are more likely to go into work. People are doing more to find work, and the policy has actually been very successful. In London, where the highest number of people are subject to the benefit cap, very few people have actually moved, and those who have moved have not moved great distances.

[Ms Buck]

Will the Minister give way?

[Mr Harper]

Since I mentioned her, I will of course give way to the hon. Lady.

[Ms Buck]

Perhaps the Minister will explain to the House why, in the last year alone, there has been a rise of almost 30% in the number of households forced outside the area in which they originate? That is in contradiction to the advice given by Housing Ministers for years and years that homeless households should not be placed outside their local authority.

[Mr Harper]

It is simply not the case that people have been pushed out of London: 84% of the capped households in inner London that have moved continue to live in the central boroughs. The idea that hundreds of thousands of people would be forced out of London is simply not true.

Oral Answers to Questions

Karen Buck Excerpts

Monday 24th February 2014 Commons Chamber

[Steve Webb]

I entirely agree with my hon. Friend that the funding being made available to local authorities for cases where it would be inappropriate for individuals to make up the shortfall should be spent. In addition, this Government have made available an extra £20 million, in-year, but less than a quarter of local authorities bid for that money. We want local authorities to spend the money being made available, so that those who can move do so, but those for whom that would be inappropriate have the top-up that they need.

[Ms Karen Buck (Westminster North) (Lab)]

One of the worst cases that I have dealt with recently was of a homeless mother with a severely disabled child who receives disability living allowance. That allowance was taken into account in deciding their discretionary housing payment, which left the family with virtually nothing to live on. Will the Minister issue guidance to local authorities saying that they should not take into account disability living allowance when making DHP payments?

[Steve Webb]

The hon. Lady is very knowledgeable about these matters, and she will know that local authorities make their decisions on a case-by-case basis. Clearly, they do not have to include income from DLA, but they are free to do so. If she believes that her local authority should not have done so in an individual case, she should make representations to it.

Housing Benefit

Karen Buck Excerpts

Tuesday 12th November 2013 Commons Chamber

[Rachel Reeves]

It will be interesting to see which way the hon. Gentleman votes this evening given that his own party conference has said that this is an unfair tax. Will he vote with the Conservatives or with his own party? Let me be very clear: if I am Secretary of State in 2015, the first thing I will do is reverse this unfair and pernicious tax. It is a shame that his party and his Minister will not do likewise.

There is a contradiction at the heart of this policy that shows how disingenuous the Government’s justifications are for it. On the one hand, they say that it is necessary to deal with under-occupation and overcrowding, yet on the other that the benefit savings they are claiming assume that nobody moves. So which is it to be, because it cannot be both? Is this a policy to cut costs by getting social housing tenants to pay more, or is it a policy to move people out of their housing to avoid paying the tax, in which case it does not raise any money? It just does not add up.

[Ms Karen Buck (Westminster North) (Lab)]

Government Members have been calling out that this is a legitimate policy response to help with overcrowding, but the Government’s own impact assessment says that

“the highest rates of overcrowding are also those with the lowest percentage of under occupiers…this mechanism for encouraging the more efficient use of social housing may make less of an impact in those regions most affected.”

So the Government’s own impact assessment states that this policy is a nonsensical response to dealing with overcrowding.

[Rachel Reeves]

I thank my hon. Friend for that intervention. The justifications for this do not stack up. People are not moving but they are not paying either. More and more people are falling into arrears. As many as 50% of them, hit by the tax, are now behind with their rent. The loss to local authorities and housing associations is already running into tens of millions of pounds, and the cost of evicting all those who have not paid their rent and then dealing with the resulting homelessness could cost many times more. While the Government preside over the lowest level of new home building since the 1920s, their answer is to make the housing crisis even worse by making it harder for housing providers to meet local housing need by blowing another hole in their budget and destabilising their fragile finances further.

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[Andrew George (St Ives) (LD)]

I voted against this policy before and I will again be voting against the Government today, but I have to say that the Labour motion is tortuous and convoluted and not very well argued. My hon. Friend the Minister who opened the debate for the Government is right that the Labour party is incoherent in that it brought forward policies introducing a bedroom tax in the private sector yet opposes it, on the basis of a principle it claims to abide by, in relation to this measure.

[Ms Buck]

I want to nail that argument, which we have heard time and again from the Conservative party. The fact is that the local housing allowance did not apply to existing tenants. That is the fundamental difference.

[Andrew George]

The point still applies because ultimately the previous Government were seeking to achieve exactly what the current Government want to achieve in respect of the social rented sector.

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[Ms Karen Buck (Westminster North) (Lab)]

In powerful speeches from the Front and Back Benches, we have heard arguments against the bedroom tax, all of which were predicted and laid out by the Government in their impact statement. The impact statement made it clear that if this policy worked, in so far as it allowed people to downsize and their properties to be occupied by other social tenants, it would not save money, and that savings would come about only if the policy did not work. Contrary to the statements from some Government Members, those two objectives are mutually incompatible.

The impact statement showed that an estimated one in three of those affected would go into arrears. The Government knew that arrears were the likely consequence of this policy, and that is what we have seen. What we have not heard is another truth, which is that two thirds of those people affected by the bedroom tax are also affected by the Government’s cuts in council tax benefit. Out of their very low incomes of £75 or £105 a week they are having to make a contribution of £14, or in some cases £20-plus, for their bedroom tax and their council tax.

[Mr Jim Cunningham (Coventry South) (Lab)]

Is not one of the big problems the lack of accommodation? It is ridiculous to try to move people from large to small accommodation when we do not have it. Will that not contribute to the housing bubble?

[Ms Buck]

My hon. Friend is absolutely right. I was about to make that point. The impact assessment also told us—as has been mentioned already this afternoon—that the distribution of properties across the country does not match the two objectives of downsizing and dealing with overcrowding. In the north-west, in Yorkshire, 43% of social tenants are affected by the bedroom tax, and I think the figure is worse in Wales. That is more than double the rate for London, yet it is London that has the most serious problem of overcrowding: one in six properties is overcrowded. So the policy is predicated not just on people moving from one property to another in their neighbourhood or community, which might have some sense to it, but on people moving from one part of the country to another, from one end of the country to another. Frankly, that is not how people live. People are not sticks of wood. People are not crates of dry goods that can be put in a container and taken from London to Liverpool or Wales, because that is how the distribution of property suits their needs.

[Chris Ruane (Vale of Clwyd) (Lab)]

I agree entirely with my hon. Friend that this will lead to the mass movement of vulnerable people around the country. What impact does she think that will have on seaside towns, which have many hundreds of houses in multiple occupation, which are not fit to bring children up in, or for anybody to be living in?

[Ms Buck]

My hon. Friend is right. We are already seeing some of the impacts of this and other housing and welfare policies impacting detrimentally on seaside towns, in the same way as happened in the 1980s and 1990s. But the fact is that this policy simply cannot achieve the objective of tackling overcrowding because the larger properties are in the wrong place, and the numbers demonstrate that. It will work only if people do something that they do not want to do, which is to leave their homes, communities, networks, grandchildren, and families—to leave the people for whom they provide care.

That is also why those Government Members who have repeatedly made the argument that the Labour Government introduced a local housing allowance that applied a restriction on bedrooms in the private sector are so fundamentally wrong. A third of all private tenants across the country have lived in their homes for less than a year. Whether we like it or not, and whatever changes we might want to make to it, the private rented sector is highly mobile. Some 40% of all social tenants have lived in their homes for 10 years or more.

People went into a social property believing that it was a home for life. They believed that they would be able to bring up children, look after elderly relatives, care for people, live in their communities and contribute to them because they had a home there. That has now been removed, and it has been removed—this is the absolute cruelty of the bedroom tax—retrospectively. The situation simply cannot be compared with the private rented sector, because people in that sector move around much more and they are not impacted retrospectively.

[Dr Coffey]

I agree with the hon. Lady that this is retrospective, unlike her point about local housing allowance, but the principle is the same, although it might not have been applied retrospectively when it was introduced by the previous Government. On her point about private mobility, it is we on the Government Benches who are trying to help people buy their homes.

[Ms Buck]

There is no attempt to do anything of the kind, otherwise people would be looking at longer-term tenancies and introducing that. The fact is that there is no principle in this. The principle of a tax being retrospective, as it is in this case, is the only principle that matters.

Even within the Conservative-led London borough of Westminster, which has a serious overcrowding problem, people are still unable to move. They are unable to move within the borough, let alone to Liverpool or Wales. Of the 405 families affected—it is a small number, because London is not the most affected by the bedroom tax—only 40 have been able to move. Half of them are in arrears and half of them are disabled.

I will conclude my remarks by referring to one of the many difficult cases that have been brought to my attention. A gentleman e-mailed me at the weekend. He wrote:

“I’m a 50-year-old single man living in a two-bedroom flat and have been hit by the so-called Bedroom Tax. I’m on employment support allowance and have been suffering from Chronic Depression and Anxiety for several years now and I’m now finding these latest attacks on the weakest and most vulnerable in society very difficult to deal with. I have little money and now find my rent arrears total nearly £800 as a result of the Bedroom Tax. I’m continuing to pay the previous level of rent, but the council have now sent me a letter saying that the next step will be to serve me with a Notice of Seeking Possession if I don’t pay the arrears in full. I simply can’t do this.

I’m loth to downsize for several reasons. My main reason is that I’ve lived at my present address for over 29 years and there is a lot of sentimentality connected with my home… because I lived here with my brother, who sadly passed away… This is my last link to him and I really couldn’t envisage living anywhere else. I’m feeling increasingly fatalistic and helpless and my thoughts are turning more and more to ending my life, which is something I’ve successfully avoided since my brother’s death. This latest setback just seems so insurmountable and there really doesn’t seem to be any sympathy or understanding… I no longer have anywhere to turn.”

He asked me to vote against the bedroom tax this afternoon, and I will be very proud to honour an obligation to him by doing so.

Oral Answers to Questions

Karen Buck Excerpts

Monday 1st July 2013 Commons Chamber

[Esther McVey]

My hon. Friend asks a timely question, because tomorrow we will publish a detailed, cross-departmental action plan on how to help disabled people in many different respects. That plan has been developed with disabled people, and it ranges from employment to education to transport to social participation.

[Ms Karen Buck (Westminster North) (Lab)]

In 2011 Lord Freud told peers that in theory his housing benefit policy would cause rents to fall, that it is a matter of market forces, and that it was irresponsible to suggest that thousands of people would be made homeless as a result. In fact, rents have soared, most new claims for housing benefit are from working families, and in London there has been a 91% increase in homelessness applications from people losing their private sector tenancies. How is that theory going?

[Steve Webb]

The hon. Lady refers to soaring rents, but I hope she accepts the evidence from the Office for National Statistics, which last week published figures for rents in London in the private rented sector that showed an increase of 2.2% below the rate of inflation.

Budget Resolutions and Economic Situation

Karen Buck Excerpts

Friday 22nd March 2013 Commons Chamber

[Ms Karen Buck (Westminster North) (Lab)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

I will make a little progress and give way in a minute.

--- Later in debate ---

[Mr Byrne]

Unemployment is 50,000 higher than it was at the general election. Those are the facts and the hon. Gentleman cannot deny them.

[Ms Buck]

Does my right hon. Friend share my frustration at the constant repetition of the mantra from the Conservative Members that there are more people in work than ever before? Will he confirm that the employment rate is still lower than it was in 2008?

[Mr Byrne]

I can confirm that, and I will also say to the House that families are now paying an extraordinary price. They are doing anything and everything to get work. On average, people have taken a £1,250 pay cut since the election, and that is why it is such a bad idea to cut tax credits and give a tax cut to millionaires in two weeks’ time.

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[Ms Karen Buck (Westminster North) (Lab)]

We have heard a great deal in the Budget debate—not unreasonably—about public debt, but less about the private sector crisis that generated the public sector debt crisis. We have also heard about the impact of private debt and deleveraging, including from the hon. Member for North East Somerset (Jacob Rees-Mogg). In that context, it might be worth mentioning that private debt and deleveraging are connected with the substantial decline in the number of people who can afford their own homes because of house price inflation in the past decade. That feeds into the core of my argument on the extent to which housing and housing costs have led us to a crisis in the welfare state.

We have heard less in the debate about flatling growth, the crisis in unemployment and under-employment, and the crisis in real wages and living standards. It is worth noting that real wages fell by 0.7% last year, and that average earnings will have fallen by 2.4% over the course of this Parliament. That fall in purchasing power is contributing to the continued stalling of growth.

Unfortunately, housing costs are at the heart of the living standards crisis, particularly in respect of first-time buyers, younger people, and those in what we call generation rent. Home owners have benefited for a decade or so from low interest rates. The tragedy is that many people are not aware of the fact that low interest rates are sustaining lower mortgages. A third of home owners have interest-only mortgages, and are extremely vulnerable to a future rise in interest rates.

Shelter has demonstrated consistently the crisis in home affordability. Some 7.8 million people struggle to pay their rents and mortgages, and 2.8 million people rely on unauthorised overdrafts and payday loans on a regular basis to cover the cost of their mortgage or rent. With underemployment and the continuing flatlining of real wages, that situation will only get worse.

In turn, that has contributed to a dramatic rise in the number of people who are caught in generation rent—they cannot save for a deposit and cannot get a mortgage because of the high house prices we have seen for generations. Two million more people now rent in the private sector than 10 years ago—26% of all Londoners now rent privately. That driver into the private rented sector has led to an escalation in rents, particularly in London. London rents now average £2,200 a month. Naturally enough, people are unable to afford such bills. That explains why the housing benefit bill has risen. It is due not to Government policy, but to the increased case load in the private rented sector, together with unemployment and flatlining wages. The Government, despite their rhetoric, will spend £12 billion more in real terms on housing benefit in this comprehensive spending review period than the last Government spent under the previous comprehensive spending review. That was the figure before the Office for Budget Responsibility upgraded that expenditure this week.

If I were the Secretary of State for Work and Pensions, I would be furious that the Department for Communities and Local Government had driven up the bills of my Department through its housing policy, with the failure to build and the halving of the affordable housing investment programme, and its rents policy. However, if I were the Secretary of State for Communities and Local Government, I would be equally furious at the extent to which the Department for Work and Pensions policy of capping housing benefit had increased the pressure on my budget, particularly through homelessness. Today, we have heard about a further rise of 10% in homelessness, with an increase of 22% in London. That is not only a human tragedy; it costs money.

Will the Budget proposals address the crisis in housing and housing affordability? No, they will not. David Orr, the chief executive of the National Housing Federation, has said that if the investment had gone into affordable housing supply instead of the mortgage guarantee schemes, it would have delivered 175,000 new homes and a £30 billion boost to the economy. We know that the money is available because the Chancellor has secured £13 billion to underpin the mortgage schemes. Those schemes are effectively the rebranding of existing schemes that have not worked over the last two or three years. As other Members have said, the schemes risk inflating a housing bubble.

A consistent theme is emerging not only from the Opposition but from commentators on the right. Even the Daily Mail has said today, “Could the great state mortgage scheme be hijacked by the rich?” The answer is probably yes. It will be a boost to older buyers and second home owners, rather than the young. Mervyn King, of the Bank of England, has warned that the mortgage guarantee is not the answer to the housing crisis. It will stoke up house prices and continue to freeze younger homebuyers out of the housing market, which will keep them locked in generation rent. That will in turn lead to an increased housing benefit bill, which Ministers will scurry to try to cap.

The housing crisis is being exacerbated, not relieved, by Government measures. That has a fundamental impact on private debt, the banking crisis, in-work and out-of-work poverty, work incentives and welfare. The Government inherited an imperfect position on housing supply, but they are making it considerably worse. Beveridge and Keynes, those giants of post-war economics, knew that affordable housing was the key to—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I call Stella Creasy.

Housing Benefit (Under-occupancy Penalty)

Karen Buck Excerpts

Wednesday 27th February 2013 Commons Chamber

[Steve Webb]

The structural deficit, which is the part of the deficit that does not disappear as the economy grows, was estimated to be approximately £80 billion. That is what we have had to tackle, regardless of the ups and downs of the economy. That is the core deficit that the Labour party left us to deal with—these are Labour cuts.

[Ms Karen Buck (Westminster North) (Lab)]

Will the Minister take this opportunity to confirm his own impact statement, which makes it clear that if this policy works and encourages people to downsize to smaller accommodation, there will be no savings? Will he explain to the House which of the two objectives he supports: saving money or encouraging downsizing?

[Steve Webb]

No, I am afraid that the hon. Lady is not correct in saying that. There will be a range of responses to this change, which I will run through later in my remarks. Some people will stay where they are and will pay the shortfall; some people will use a spare room for a lodger or for sub-letting; some people will work or work more hours; and some people will move. Our impact assessment has a range of modelling on how people will respond, but it clearly includes people staying where they are and paying the shortfall—that is where the saving comes from.

Welfare Benefits Up-rating Bill

Karen Buck Excerpts

Tuesday 8th January 2013 Commons Chamber

[Mr Byrne]

I suspect the hon. Gentleman feels that very keenly, as 7,500 people in his constituency are on tax credits. I think that the best way to bring the welfare bill down is by getting people into work. The tragedy with the Bill is that it fails the Ronseal test set out by the Prime Minister yesterday. It does not do what it says on the tin. We are told that this Bill is all about reducing welfare spending. Actually, if we put tax credits to one side, the welfare bill for the period covered by this Bill will not rise by 1%; it is going to go up by 4%. It will go up by £8 billion because the Secretary of State is doing so little to get people back to work.

The reality of the debate is that there is a Labour way to bring down welfare spending and there is a Tory way. The Tory way, aided and abetted by the Liberal Democrats, is to attack tax credits. The Labour way is to bring down welfare spending by getting people into jobs—jobs in which they will pay tax rather than sitting on the dole taking benefits. That is why we tabled our amendment. We think that it is right to introduce a bank bonus tax to get 100,000 young people back to work, and to reform pension tax relief to create a two-year limit on jobseeker’s allowance. We think that it is right to send the clear signal that anyone who can work must not, and will not, be allowed to languish or to live a life on welfare. That is the kind of tough-minded but fair policy that we now need.

[Ms Karen Buck (Westminster North) (Lab)]

We have heard many interventions from Government Members about the unsustainability of tax credits and top-up benefits for working families. According to the Government’s own impact assessment,

“households towards the bottom of the income distribution are more likely to be affected and have a slightly higher average change because they are more likely to receive the affected benefits.”

What does my right hon. Friend think is the reason for that statement?

[Mr Byrne]

I note that the impact assessment is based on assumptions very different from those that formed the basis of the Treasury costings in December last year. However, the Government cannot change the simple truth: this is a strivers’ tax pure and simple, and it will hit people on tax credits.

We oppose this strivers’ tax. We believe that welfare to work will not work without jobs, and the Bill does not create a single job. It creates a heck of a mess, and asks Britain’s working families to clear it up. I urge the House to oppose the Bill’s Second Reading, to strike a blow for Britain’s strivers, to send the Government back to the drawing board, and to demand from them a proper plan to get our country back to work.

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[Ms Karen Buck (Westminster North) (Lab)]

Over the past hour and a half, the parties on the Government Benches have thrown various lines of argument into the mix, but possibly the most absurd is that the whole agenda and the Bill are about deficit reduction. That argument is already in tatters. We have seen the economic recovery deferred and a double-dip recession possibly turning into a triple-dip recession. The rate of reduction of unemployment has been so slow since 2010 that it will not return to pre-recession levels until 2019, and we have seen a systematic and structural increase in under-employment. It is no wonder that total expenditure on welfare, despite the protestations, has been going up.

Let us take one example about which there has been a great deal of sound and fury over recent years—the housing benefit bill. Over this comprehensive spending review period, this Government will spend £12 billion more on subsidising private tenants than was spent by the Labour Government during the previous CSR period, so let us not hear anything from the Government about their successes on welfare reform and reduction and our failure.

For the first time in decades we see more working than workless people in poverty—now a record 6.1 million. It is no wonder that the new head of the Secretary of State’s favourite think-tank, the Commission for Social Justice, told an interviewer:

“I would say we have missed in-work poverty”.

Yes, the commission did, and yes, the Government did, but rather than the Government facing the evidence, we have been subjected to a barrage of rhetoric about the people behind the closed curtains and the shirkers rather than the strivers.

[Meg Munn]

Does my hon. Friend recognise that in half the workless households the adults are under 25, which is a reflection of the growth in unemployment among that age group?

[Ms Buck]

That is correct; I recognise that figure. We have seen from the Bill and the debate behind it a political debate and a set of wheezes that the Government think will pay off for them. The problem with wheezes is that they tend to fracture when they come into contact with reality. The Government cannot make serious money out of an assault on out-of-work benefits, whatever the Conservatives like to say. Just 3% of all welfare spending goes on jobseeker’s allowance. Indeed, all out-of-work benefits account for only 3% of GDP between them. The House of Commons Library advises me that if only out-of-work benefits were subject to the 1% cap, but in-work benefits were uprated as normal, 80% of the proposed savings would disappear. If one factors in the changes to the personal tax allowance, one finds that working people, as the Resolution Foundation demonstrated to us, take 60% of the hit.

If the Bill is passed, 2.5 million workless households will lose out by about £215 a year by 2016, and of the 14.1 million working-age households with someone in work, 7 million will be hit: 30% of all households will take a hit on their income because of this Government’s obsession with the tiny minority of long-term or multigenerational workless.

The distinction between those in and out of work is far less rigid than the Government would have us believe. That is an extraordinary piece of rhetoric, given that the universal credit, the centrepiece of the Government’s welfare agenda, is designed to blur the distinction still further, and it has that one significant advantage of seeking to do that. Millions of our constituents, in Conservative and Liberal Democrat constituencies as well as in Labour ones, churn between those states of being in and out of work. Last year there were between 244,000 and 357,000 new claims every month for jobseeker’s allowance, while between 242,000 and 370,000 left benefit every month.

It is a myth that the welfare reform agenda put forward by the Government is about tackling worklessness. It is an assault on low-income working families far more than on working households. It is an assault on both, and on very low-income families, but it is real and not mythical families who will be hurt as a consequence. It is real children who are at increasing risk of going to school hungry, as teachers unions are already reporting, and it is real children who will return to homes that cannot be heated by parents who cannot manage to balance all the bills.

We live in a country that apparently can afford tax cuts for millionaires but requires low-income, working families to go to food banks and pay their mortgages with payday loans. Every day in London 100 homes bust the £1 million value level, yet 70,000 children were homeless this Christmas. Today we should not be reducing the capacity of 9.5 million families and households across the country to pay their bills.

What the crash and its aftermath demonstrated beyond doubt was that the future cannot be like the past. We want everyone who can work to do so, we want that work to be secure and fairly paid and for the costs that consume an unsustainable element of people’s incomes to be reduced.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Did my hon. Friend notice that the Secretary of State accused Labour of having a new idea with our job guarantee? In fact, the pamphlet produced by my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) on a job guarantee is dated January 2012. We have been discussing these ideas for more than a year.

[Ms Buck]

We have indeed been discussing these ideas. The future jobs fund demonstrated value for money in getting people back into work, but the Conservative party, which claims to like evidence, trashed it in favour of the Work programme, which, as we know, has been less effective than doing absolutely nothing would have been.

Without jobs, deficit reduction is doomed, however much the Government cheese-pare away at the income of the poorest. While housing and child care costs consume an ever-larger portion of the incomes of poorer families, work cannot pay and families cannot thrive. It is jobs, fair pay, affordable homes and good affordable child care that will get us out of the trap we are in, whether it is the trap we want to spring to get people into work or the trap of deficit reduction. The trap that the Government are setting today will catch 30% of households in a worsening squeeze on their incomes at the very worst time for them to be facing it.

Oral Answers to Questions

Karen Buck Excerpts

Monday 10th December 2012 Commons Chamber

[Esther McVey]

Should there be another adult in the house, that is then a separate household, so both have to be assessed separately. However, I reiterate the fact that those who are exempt from the cap include those on working tax credit, all households with someone who is in receipt of a disability-related benefit, war widows and widowers, and those in receipt of war disablement pensions. A lot of people are therefore exempt.

[Ms Karen Buck (Westminster North) (Lab)]

Ministers have repeatedly stressed that a household containing anyone in receipt of disability living allowance will not be affected by the benefit cap, but constituents of mine who have an adult disabled child are now being told they will be affected by the cap because the regulations appear to state that if a family has an adult severely disabled person living in the household, that person is not a member of the household. Please will the Minister clarify whether the benefit cap will apply to someone who is looking after a severely disabled adult child?

[Esther McVey]

I will reiterate what a household is: a household is a basic family unit, and for the purposes of paying out-of-work benefits that will be a single adult or a couple and children, so once another adult is in the house, that is a separate household. [Interruption.] That has been the definition for a very long time. However, in the instances the hon. Lady mentions, discretionary payments are available and will come to fruition. [Interruption.] There is no point in Opposition Members huffing and puffing. That is the situation, and an extra £30 million has been put in place for this. [Interruption.]

Disability Benefits and Social Care

Karen Buck Excerpts

Wednesday 20th June 2012 Commons Chamber

[Ms Karen Buck (Westminster North) (Lab)]

The economic crisis that engulfed the developed world in 2008 was not, of course, caused by the number of people on disability living allowance. Indeed, the proportion of the population on out-of-work benefits fell between 1997 and the beginning of the crisis. Although reform is needed, that point gives the lie to the suggestion that the scale of the situation required us to introduce the kind of measures that are causing such distress and grievance to hundreds and thousands of people with disabilities throughout the country, and leading to such a number of appeals. That is evidenced by the terrible e-mail that emerged from the Department for Work and Pensions today.

Rather than discussing benefits, I want to talk about the social care agenda because, unlike the situation with working-age benefits, we face an emerging crisis in that area. Over two years, the Government have failed to make progress on a way forward on paying for social care, which would be of value to those who need that care and their families who worry about them. In addition, several events that are unfolding, especially in local government, are undermining the agenda.

We have heard from the Government about scaremongering, but nothing can compare with the advertising campaign that ran in the preamble to the general election that featured gravestones alongside a warning about the “death tax” that Labour would apply to fund a social care programme. If there was ever an example of an inability to hold a constructive debate about such a major challenge facing our country, that was it.

The costs of care have been increasing due to a rise in the numbers of the elderly and people with disabilities, as a result of progressive and thankful improvements in medical science. Those costs will double from £14.5 billion today to £27 billion by 2030, and there will be a 100% increase in the number of people who have to pay for their own care.

Changes are taking place in the national health service. A consultation will shortly be held in my NHS region on the closure of five out of nine accident and emergency units as part of a reform to the health service that is designed to move people away from hospitals and into social care in their communities. In itself, that is a positive development, but only if that social care is available and affordable, and we are seeing that the opposite is the case.

On the Sunday before the election, the Prime Minister said on Andrew Marr’s television programme:

“What I can tell you is any cabinet minister, if I win the election, who comes to me and says: ‘Here are my plans’ and they involve frontline reductions, they’ll be sent straight back to their department to…think again.”

After the election—on 28 February 2011—the Secretary of State for Communities and Local Government told the House:

“If councils share back-office services, join forces to get better value from their buying power, cut out excessive chief executive pay, and root out overspending and waste, they can protect key front-line services.”—[Official Report, 28 February 2011; Vol. 524, c. 13.]

I will leave it to the House to decide whether there has been a complete lack of understanding on the part of the Prime Minister and the Secretary of State, or whether this is mendacity, but we know that there has been a £1 billion cut from social care in local government. Councils are front-loading a 28% cut in Government support and producing graphs of doom showing that care costs will swallow up so much of local government’s agenda in the next 15 years that councils will be able to provide only care and waste collection services.

A quarter of Westminster’s £52 million savings programme has come from adult and social care. Some 3,000 older and disabled people have lost care, while £15 million has gone by reducing meals for older people and day care for vulnerable people by 50%. An adult social care survey ranked my local authority as one of the worst in the country. Mr Ash Naghani, one of my constituents, told a local newspaper:

“The attitude before last year was how my council could help you to become more independent and contribute to society…since last year, it’s been as if I’m not important any more. All they are talking about is ways to cut down my care package to see how much money they can save.”

In addition to the cuts in social care, the removal of the taxi card from everyone above a benefit threshold has taken away independence from elderly and disabled people who cannot use public transport. Many of them have pointed out that their savings from a frozen council tax are heavily outweighed by the amount they must spend on travelling now that they are without their taxi card.

Times are tough and the pressures of an ageing population are inescapable. Not all needs will be met, but we must avoid denying what is going on. The Government, however, continue to be in denial about the impact of local government cuts on front-line services, in denial about the reality of more intensive means-testing, and in denial about the extent to which the drip, drip of scepticism about the reality of disability, especially invisible disability, is poisoning the atmosphere, and even feeding into hate crime and abuse.

Welfare Reform Bill

Karen Buck Excerpts

Wednesday 1st February 2012 Commons Chamber

[Chris Grayling]

There might be an element of that—it is difficult to escape that conclusion. The Opposition proposal would have more credence had it not been made at the 59th minute of the 11th hour. We should not take them seriously when they make such ill-thought out, last-minute proposals.

The Government are clear that average earnings are the right way to determine the level of the cap. We do not need the Opposition’s proposed independent body—another quango, I hasten to say—to tell us otherwise. The cap needs to be a single, national one for the policy to make sense. The Government will lay before the House a report on the policy’s impact evaluation after a year of operation.

[Ms Karen Buck (Westminster North) (Lab)]

rose—

[Chris Grayling]

I will give way one more time as the hon. Lady was on the Committee.

[Ms Buck]

The Minister knows that the Committee extensively discussed the impact of housing costs and their interaction with the cap. If a household loses income through the benefits system through no fault of its own, can it claim legitimately to a local authority to be statutorily homeless, in line with existing homelessness legislation?

[Chris Grayling]

I am sorry, but I simply do not buy the homelessness argument that Labour Members keep making. We are talking about a cap equivalent to a salary of £35,000 a year. Labour Members were vociferous 12 months ago when the housing benefit cap was introduced, but we have not seen the consequences of which they warned in the terms they used. I simply do not accept that somebody receiving the equivalent of £35,000 a year should be categorised as homeless and unable to find anywhere to live.

Much was said in the other place on the importance of child benefit. Let me make it clear that the introduction of a benefit cap will not result in a single household losing its entitlement to child benefit, which will continue—rightly—to be paid to the current recipient. That important principle will not change.

We are, however, changing another important principle: households on out-of-work benefits should not in future expect to receive unlimited financial support from the state. Like other welfare benefits, child benefit is funded by taxpayers. We therefore believe that it is right for its value to be taken into account along with other state benefits when applying the cap.

--- Later in debate ---

[Mr Byrne]

I will come to the localisation of the benefit system, which, as the hon. Gentleman will know, we have had for 70 years in this country, when I set out how I believe our proposal can work in practice.

[Ms Buck]

Will my right hon. Friend help those Government Members to understand one simple fact: that housing support and council tax benefit are in-work benefits, and that—thanks to those benefits and the tax credits policy—it is virtually impossible for any household of comparable size and comparable housing costs to be worse off in work than on benefits? The whole system is constructed to avoid precisely that scenario. Will he also help those Government Members to understand that the impact of the cap hits not only Knightsbridge and Mayfair—the Government want to run the policy by anecdote—but outer London boroughs and suburbs, such as Enfield, Barnet and Brent, as well as Birmingham? Where will those households find somewhere that they can be priced into?

[Mr Byrne]

My hon. Friend did an extraordinary job of deconstructing the Bill as it went through Committee, and she is an acknowledged expert on this subject. Her point is absolutely right. The Minister was not able to confirm that somebody on £35,000 could receive, for example, housing benefit. I am reliably informed that that is, in fact, the case. Because the Government have not thought this measure through, we are now confronted with the extraordinary spectacle of a cap that appears to cost more than it saves. As was pointed out by the hon. Member for Shipley (Philip Davies), who is not in his place now, in some parts of the country that will not send the signal that people are better off in work than on benefits. Only the Government could have introduced a proposal that is, frankly, that much of a dog’s breakfast.

Let us take the cost side first. In this debate, we are in the happy position of not simply having to rely on costing an assertion made by Opposition Members. We are very grateful that we have got the analysis that was presented by our good friend, the Secretary of State for Communities and Local Government. In a blunt warning—not to just anybody, but to the Prime Minister’s Office—the principal private secretary in the Department for Communities and Local Government said:

“we think it is likely that the policy as it stands will generate a net cost”,

and that was before the Government burnt all the money that they have sent up in smoke just this afternoon.

A cursory glance at some of the scenarios that we will see in, for example, the constituency of the hon. Member for Cities of London and Westminster (Mark Field) confirms exactly what is going on.

--- Later in debate ---

[Mrs McGuire]

I will certainly not give way at the moment.

My hon. Friend the Member for Westminster North asked Ministers at the Department for Communities and Local Government what constituted under-occupancy, and they said that it was two spare bedrooms, whereas the Department for Work and Pensions has a far more restrictive interpretation.

[Ms Buck]

We know from the Government’s own impact assessment that under-occupation is a problem particularly, but not exclusively, in the north of England, and that overcrowding is a problem particularly, but not exclusively, in the south. Local authorities have legal duties to their tenants, and if somebody from Salford is seeking to downsize, local authorities in Doncaster or Hull are not permitted to take them because of residency qualifications. Will my right hon. Friend help me to understand something that the Government have completely failed to explain? How will tenants be able to move from one local authority to another?

[Mrs McGuire]

Frankly, I do not think the Government know how. The DCLG and local authorities certainly do not know.