Living Standards

Karen Buck Excerpts

Wednesday 30th November 2011 Commons Chamber

[Mr Byrne]

Perhaps the hon. Lady’s memory of history is suddenly faltering, because she should surely remember that in the Chancellor’s emergency Budget, borrowing turned out to be £20 billion less than my right hon. Friend the Member for Edinburgh South West projected when he was Chancellor. Unlike his, the Conservatives’ borrowing forecasts have come in £158 billion higher than originally projected. That means thousands of pounds more for every household in this country—and of course, the price of the consequences is being paid by the hon. Lady’s constituents. More than 7,000 families in her constituency are now seeing their tax credits cut to pay the higher bills of higher unemployment.

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

Can we turn from history to current affairs? One of the key messages from the Government was that they were going to make work pay. Following from my right hon. Friend’s argument about how additional spending is being generated because of the failure of their policies, would he comment on the fact that in-work benefits for working households, such as housing benefit for those in work, have risen by 42% since the general election, as 115,000 more households have been forced on to in-work benefits?

[Mr Byrne]

That underlines an extremely important point, and I hope that in the Secretary of State’s response he will say a little more about how he reconciles the “Budget” that we heard yesterday with his own honourable intention to ensure that work pays. Right now, in my constituency, I have working parents, especially women, coming to me and saying that they are now giving up work—because the Government are cutting benefits, meaning that it is no longer economic to work. Surely that cannot be right.

Oral Answers to Questions

Karen Buck Excerpts

Monday 28th November 2011 Commons Chamber

[Chris Grayling]

I have been very encouraged by the participation of employer groups and the TUC in the Löfstedt proposals. The fact that we had people from both sides of the employment and political spectrums supporting the report at this morning’s launch was a tribute to the work of everybody involved. It is a sign that we now have a cross-party blueprint for the future of health and safety in this country.

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

Since last May, an extra 155,000 working households have been forced on to local housing allowance—an increase of 42% on the previous year. Is that because rents have risen or because wages have fallen?

[Mr Duncan Smith]

As the hon. Lady knows, when we entered office we inherited a housing benefits system in a mess and local housing allowance was already spiralling —it has approximately doubled in the last 10 years—so she should look at what happened before as much as at what happens now.

Oral Answers to Questions

Karen Buck Excerpts

Monday 18th July 2011 Commons Chamber

[Chris Grayling]

I absolutely agree with my hon. Friend and want to see fewer cases going to appeal. This is one reason why we have stepped up the reconsideration process in Jobcentre Plus, so after the initial decision is made we actively seek out further evidence, if such evidence exists, and use it to reconsider our decision. I hope and expect to see the number of successful appeals reduce significantly as a result.

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

Local Jobcentre Plus officials have advised me that there is already a significant delay in the work capability assessment test in my local area because the assessments are taking around twice as long as was originally predicted. Can the Minister reassure the House that this is not the situation across the whole country and that there is no backlog in the work capability assessments, with all that that would imply for claimants and for the service?

[Chris Grayling]

We have remained on schedule to start the process for individuals. It is not the case that assessments are taking twice as long. There is an early element of bedding in for the personalised statement, as was recommended by Professor Harrington, but we are not aware of any long-term factors that would change the timetable for the whole reconsideration process.

Welfare Reform Bill

Karen Buck Excerpts

Wednesday 15th June 2011 Commons Chamber

[John McDonnell]

I understand, and, coming from a local government background—both as a councillor and as a local government officer—I very much support the localist agenda of freeing up local authorities to do as much as they can to reflect the direct wishes of the local electorate. However, we are talking about people in severe poverty, and one of the overall duties of government at every level is to ensure that people in our communities are not put at risk as a result of that poverty. Therefore, there is a danger in the localist agenda, which I support, of allowing a free-for-all. Without establishing national standards and monitoring, we could have a number of local authorities failing to fulfil their responsibilities as we would wish. Although I agree with the hon. Gentleman that the local electorate should hold those authorities to account, we have unfortunately had numerous examples—I speak as an advocate of local government—of that mechanism for keeping local authorities in check not being effective, particularly on the detail of administering such schemes. I am sure that we can all cite examples of that on a cross-party basis, no matter who has been in control.

I am not talking about just my individual concerns. Virtually every organisation dealing with the poor in this country has expressed its concerns about this element of the legislation. My local citizens advice bureau has provided me with numerous examples—which I will not take the House through—of the benefits of both social loans, particularly crisis loans, and community care grants. I would like to take this opportunity to thank Heather Brown, director of the Hillingdon CAB, and all her team for their hard work. They have emphasised the need to explore all the implications locally and nationally before the Government leap into a new system.

Shelter and Crisis, the housing charities, have undertaken their own assessments of the process. Crisis surveyed 250 of its housing advisers. Numerous Members across all parties work closely with Crisis, and we have the greatest of respect for its work. That survey showed that 69% of clients used crisis loans for rent in advance, with 87% using them to help furnish their properties. In its briefing, which many Members will have seen, Crisis quotes one person as saying that unless we have a system that is at least as effective as the social fund, the effect on efforts to get people to move into independent accommodation would be “catastrophic”. Anxieties have been expressed across the board about the fact that we have not yet had that assurance.

I am concerned about the lack of analysis in the Government’s proposals of people’s needs. There is also a lack of detail on how the proposals will work. My worry is that poor and vulnerable people will be put at risk as a result. It therefore behoves us as a House in discussing this Bill, as well as the Government, to come forward rapidly with detailed proposals that have statutory backing, in order to assure our constituents and all those working in the field that we will have a system to provide emergency support to people who are poor and vulnerable, but not one in which local decision making risks diverting those resources away from where they are needed. It is on that basis that I have tabled this amendment for discussion. I hope that, as a result of this debate, we will at least gain a clear understanding of how the Government are going to address these issues—and address them fairly urgently—given that they are causing considerable concern.

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

I congratulate my hon. Friend the Member for Hayes and Harlington (John McDonnell) on the way in which he has introduced this group of amendments. His amendments and those tabled in my name cover much the same ground. Like him, I am deeply concerned that the Government propose to remove the discretionary element of the social fund without giving us a great deal more clarity about how the poorest and most vulnerable will be protected, about the adequacy of the replacement system, about the protection of vulnerable people without a local connection—a matter to which I shall return in a moment—and about the lack of a proper system of review. As my hon. Friend rightly said, the numbers involved are significant, with 640,000 applications for community care grants and 3.6 million applications for crisis loans. We are not talking about a modest amount of money, and those figures represent a great deal of need. He also suggested that they represent only the tip of the iceberg of need. Of course we accept that there cannot be unlimited capacity to meet need, and it is clear that, were more resources to be made available, more need would come out and be met.

I want to pick up on a point that my hon. Friend made in response to an intervention. Despite the numbers of people who apply for and receive loans and grants under the discretionary grant, and the fact that when local government takes on this responsibility it will be accountable, in the spirit of localism, to its electors, we must recognise that the characteristics of people who seek assistance from the social fund do not make them a cohort of people that is likely to influence local politicians on a significant scale. This will tie into comments that I will make in a moment about what we should do with people with no local connection.

All the evidence that I and my hon. Friends have received from our law centres, citizens advice bureaux and other organisations shows that the claimants of discretionary social fund elements are very likely to be highly mobile people in a crisis that frequently severs their connections to the local community. They are not likely to be over-represented among those on the electoral register, or to wield a significant amount of local clout. They would not always need to do that; a good, responsive local authority will map and respond to their needs without it, but the reality is that, in a competition for scarce resources, that will not always be true of all local authorities.

We are completing the stages of the Welfare Reform Bill today, having been asked to make decisions on a number of important elements, which we discussed on Monday and are debating today, without having been given a great deal of substance or detail about how those elements will work. The Government called for evidence on the discretionary element of the social fund in February, but the consultation did not close until we were in the middle of the Bill’s Committee stage. That worries me. Yet again, the Government seem to be pushing ahead with their proposals even though we have not had a proper opportunity to reflect on the breadth of views and opinions of people with experience of and expertise in the subject.

The Minister might care to report to the House on what the responses to the consultation actually said. It would be nice if she assured us that all the responses would be placed in the Library. I think I can guess, however, that their overwhelming tone will be one of deep disquiet, and that they will be urging the Government to think again, which is consistent with the principles outlined by my hon. Friend the Member for Hayes and Harlington. As he said, almost all the organisations with expertise and specialist knowledge in the operation of the social fund have told the Government of their worries. Let us take note of who they are. They include: Age UK; the Association of Directors of Adult Social Services; Barnardo’s; the Child Poverty Action Group; Citizens Advice; Community Links; Crisis; Disability Alliance; Family Action; the Family Fund; the Family Rights Group; Gingerbread; Homeless Link; the National Housing Federation; Oxfam; Platform 51; the Prison Reform Trust; Save the Children; Scope; and St Mungo’s. I am sure that there are others.

Those organisations are the big society in action. In many cases, they provide complementary services to the social fund, and they are expressing their concerns about the Government’s proposals and about their capacity to deliver to the people who will need their services when the changes are introduced. If the Government are serious, as I have always thought they were, about the idea of the big society and about a partnership with voluntary and community organisations, surely the first principle must be to listen to what those organisations are saying. Let us take an example from that list. Oxfam has said:

“The Social Fund provides vital support for people in times of crisis. The government proposes to devolve much of this money to local authorities, but without any statutory duty on them to provide an equivalent system of protection. This runs the risk of driving people to use high-cost lenders, reducing their chances of managing their debts successfully. This is particularly important as Universal Credit constitutes a radical reform, and it is almost certain that its introduction will suffer from teething troubles. These are likely to cause significant need for emergency payments like crisis loans, just as they are abolished. The Social Fund needs to play an important role in protecting people during this transition, which further supports the need for a delay to the change.”

The Committee also heard directly from people who know more about the social fund in all its strengths and weaknesses—we know that there are some weaknesses in the operation of the existing scheme—than anyone else. They included Sir Richard Tilt from the Social Security Advisory Committee, who said:

“Community care grants are the bit I am most concerned about—£141 million. By the time that you have dished that out to 100 plus local authorities, there will not be a great amount of money at local level, and I think, as it is not ring-fenced, it is likely to disappear into other things.”

He also said:

“My view on all this is that we have a UK social security system and that, for the past 25 years, the discretionary social fund has been the ultimate, final safety net for the poorest and most vulnerable…I would argue for a UK safety net underneath it.”––[Official Report, Welfare Reform Public Bill Committee, 24 March 2011; c. 82-3.]

Professor Kempson told the Committee, in respect of the role of local authorities:

“Some will provide a better service than we have now”.

I do not think that that is in doubt. There is excellent practice in local government. Like my hon. Friend the Member for Hayes and Harlington, I also came to the House after serving in local government and I am a great advocate of it. Professor Kempson said:

“Some will provide a better service than we have now; many will provide a worse service; and some, I fear, will provide almost no service.”

She also said:

“As I read it, there will be no ring-fencing, and I cannot even see that there is any proposal as yet to build in any form of accountability by local authorities. That is the very least that is needed.”––[Official Report, Welfare Reform Public Bill Committee, 24 March 2011; c. 82-3.]

We know that the social fund has many flaws and has been subjected to scathing criticism from the Public Accounts Committee, the National Audit Office and others. I completely accept that those criticisms need to be taken seriously. The issue before the House today, however, is whether the Government’s proposal risks making things worse by entirely removing that essential safety net without addressing the genuine concerns of the present system. The Minister made it absolutely clear to the Committee that

“there is no expectation that local authorities will replicate the current scheme.”––[Official Report, Welfare Reform Public Bill Committee, 3 May 2011; c. 731.]

She is nodding at that. She made it clear that, when the discretionary social fund is removed, local authorities will provide a service equivalent to the present one. She said that this was not devolution to local government, but something fundamentally different.

Central to that is the fact that the Government do not expect local authorities to manage loan schemes, as happens now with the crisis loan scheme, and that as loan repayments were topping up the available resource through the current crisis loans, the capacity to provide an equivalent level of service through emergency funding is now severely restricted. The figure I was given was 84%, although the Minister told us in Committee that it was 50%—and I am happy to accept her correction. None the less, the cash sum as an annual figure starting from now that will be devolved to local authorities does not tell us much about the funding that will available for the equivalent level of crisis service once the scheme gets under way because that 50% repayment will very quickly fundamentally erode the value of the service. As we have heard, the likelihood is that it will drive people into the arms of the cowboy and high-interest lenders as well as into debt.

--- Later in debate ---

[Sheila Gilmore]

Is it not also the case that many of the arrangements for people to purchase second-hand furniture are increasingly set up as social enterprises, which are intended to recoup money and make a working profit to go back into the business, so they will charge people, albeit less than for new goods, as otherwise their enterprise will not work? In any event, if this were going to be free, it would have to be heavily subsidised by someone.

[Ms Buck]

My hon. Friend makes an excellent point. The Government’s mindset is an old-fashioned one. There is an excellent case for making better use of recycled goods as a commercial or social enterprise facility, but there is also a strong empowerment argument for letting individuals make their own choices with cash at their disposal to meet their needs appropriately. As my hon. Friend rightly says, in many cases, the vision we used to have of a charitable sector simply opening a warehouse into which people can go to choose whatever donated goods might be available no longer applies.

[George Hollingbery]

I would counterpoint that on the basis that it is entirely possible to imagine a financial arrangement between the charity and the local council in which the council uses the funds provided for the purpose to future-buy services from the charity, giving people free access under certain circumstances to the products provided. There are many different ways to skin this cat; I can see these arrangements working perfectly adequately.

[Ms Buck]

The problem is that once we start creating a necessity for such an arrangement to be run at every single local authority, we will also create the potential for a mismatch between the goods that people need, the goods that are available, the charities providing those services and the area in which they are available. That also risks setting up a completely bureaucratic system in every single local authority to do what the current discretionary social fund does.

[George Hollingbery]

I do not suggest for a moment that what I said should be a prescription nationwide. I said simply that it is easy to imagine an entrepreneurial solution that used the social fund to provide services locally that were administered by local councils but did not involve money changing hands.

[Ms Buck]

I will do a deal with the hon. Gentleman. If he supports our amendment, I will accept his point. There is some truth in what he says: there is some excellent practice out there and plenty of innovation in the local government sector, but it is not consistent across the piece. The amendment effectively says, “Do not abolish the discretionary social fund without piloting or without allowing a proper ability for local authorities across the piece to demonstrate that they have the capacity to do what needs to be done”. The hon. Gentleman might well have enough confidence in that, but it cannot be guaranteed. At the moment, there is absolutely no assurance that a consistent level of innovation, expertise and commitment is available in some, let alone most local authorities.

[John McDonnell]

In my constituency we have done just that. A furniture fund has been set up by a voluntary organisation that is partly contracted by different agencies, but it has taken us 10 years to get to that. Now, because of people’s change in circumstances as a result of loss of benefits, we are setting up an arrangement for food parcels, which are being distributed by religious organisations. It is, however, extremely difficult, and it takes a long time to set this sort of thing up. My anxiety is that in the rush to legislate on this matter, none of the preparatory work has been done and there are considerable costs in setting these things up, particularly in the early years.

[Ms Buck]

That is an excellent point. As we have said so many times in debating this Bill, one does not necessarily disagree with some elements in principle—localism and the involvement of local government in shaping the response to local needs, for example—but these local projects take a long time and require investment to set up and they tend to come and go. In north Paddington, one of the most deprived communities in the country, two credit unions were set up over the last 15 years—with regeneration funding in both cases—but they have both collapsed. I do not want some of our most desperate and vulnerable people to be forced into reliance on a set of services that come and go, that might not be available and that might well collapse. I think credit unions are marvellous; I would like to see them flourish in all parts of the country, but they are much more vulnerable than people sometimes allow.

[John McDonnell]

Many of us have been through the same exercise that my hon. Friend described to establish credit unions, so the last thing we need at the moment is anything that destabilises our local credit unions. Loading this sort of responsibility on to them could undermine not only individual credit unions, but the whole sector.

[Ms Buck]

That is absolutely right. We need to carry on growing the local expertise and the local voluntary and community organisations, including credit unions, which need to come up with innovative and practical responses to help deal with our social problems. However, they are not a replacement, but a complement, and they have to be approached with a great deal of care.

[Jim Shannon (Strangford) (DUP)]

I commend credit unions to all Members for the work they do, but for those in financial difficulties, the crisis is already there and unless someone is already in a credit union, they cannot borrow from it. With respect, I do not believe that credit unions are an option.

[Ms Buck]

That is absolutely right. The Government mention credit unions as part of the package of alternatives that they want to see picking up the slack. They may have a role for some people, but the hon. Gentleman is right that they are not an emergency response. As I said in my opening remarks, precisely because a disproportionate number of the individuals who need crisis intervention do not have a local connection or a stable household background, they are the ones who will not be in a credit union. They are disproportionately unlikely to be in a credit union or to have the scope to be able to join one. That is precisely why the social workers—expected to be a part, although admittedly not the entirety, of the gatekeeping process for the replacement of the discretionary social fund—are so concerned. Although they will not be alone, they will be very much on the front line of gatekeeping for this dramatically reduced and very different type of service, which is patchy and might be flourishing in some cases and not in others. As I said in Committee, the consortium of community care stated a few months ago that social workers are anxious about having to deliver the social fund, knowing that applications for community care grants are already turned down in 60% of cases. They say that their role as advocates and supporters for people in need through a crisis in their lives is dangerously undermined by the new financial gatekeeping role that they will be asked to take on.

In evidence to the Committee, Councillor Steve Reed, speaking on behalf of the London Councils and the Local Government Association, said that local authorities have expressed an in-principle willingness to be part of this process. I understand why he would do that. He also told the Committee that he was worried that the localisation of the discretionary social fund should be fully funded and that it should cover all the costs, including the administration costs, which, for the community care grant alone, were £19 million in 2008-09. As we have drawn out in the debate over the past hour, the likelihood is that the administrative process for local government and the gatekeeping, which will not simply be about deciding whether to give a crisis loan or community care grant but whether to find people alternative levels of support, are likely to put an increased financial burden on local authorities.

Some Government Members on the Committee argued that social workers and others will be able to provide more intensive, personalised intervention for people in crisis, helping to end a cycle of repeated loan applications, but that is likely to make the situation worse. If the 3.64 million crisis loan applicants or 640,000 applications for community care grants have to be funnelled through a more intensive and personal level of intervention, who will do that work? Where are the social workers and the available time in local government to improve on this? The answer is that they will not be there. Local authorities are retrenching and they are on the back foot financially, and the likelihood is that they will have a smaller pot of money as they act as gatekeepers for an even wider group of individuals.

The Minister tells us that there is an expectation that there will be some form of review process, but the current review process is national and now every local authority will be expected to set up its own, leading to huge complications with differences in approach and the structure and bureaucracy of setting up a process in every local authority to determine how initial decisions will be reviewed and appealed against. I know that that causes a great deal of alarm in the advice sector.

Let me return to the vexed concern about local connection. Sample work on discretionary fund cases was carried out by the Department last year, which considered a basket of 500 different cases, and 20% of those cases involved people who were homeless. Some 20% and more of the applicants in such cases—the amount varied between different parts of the country—had no single connection with any individual local authority. That is my single biggest concern about the Government’s approach to this agenda.

One example, which was highlighted in the media last week, is the case of victims of domestic violence. A group of the women’s charities has written to the Minister for Women and Equalities, warning that some councils will not be financially able or willing to help women escape violent partners on the grounds of the provisions in this part of the Bill. The belief is that there will be an increased postcode lottery of provision that does not reflect the Government’s previous claim that tackling domestic violence is a priority and the fear is that councils could impose a local connection test that could disadvantage women fleeing domestic violence who are often, almost by definition, forced to move into another local authority area. The charities say that many women fleeing the home have to leave everything behind, including household furnishings and essential items, such as cookers, that most families take for granted to rebuild their lives in a new home. They quoted a mother from Croydon, south London, who left her abusive partner in 2003 and said that she had only been able to escape a life of domestic violence thanks to a £700 grant that helped her to rebuild her life. The chief executive of Women’s Aid said:

“The social fund is a vital resource for victims attempting to rebuild their lives after domestic abuse and, if it is not available, victims may be forced to return to their abusers.”

The director of Refuge added that if the discretionary social fund is abolished, there is a risk that

“more women will be forced to delay their escape from their partner.”

--- Later in debate ---

Amendments 39 and 40 would impose criteria set by central Government on arrangements to replace the discretionary social fund if it were abolished. Some of the requirements in amendment 39 are activities that we are already undertaking in our work on the replacement of the discretionary social fund. Other elements in the amendment would not be helpful to what the reform of the social fund is trying to achieve. As I said, in some ways the amendment misses the point of the reform, which is that local authorities are better placed to understand the needs of their local communities and to make sure that the money is getting through to the right people for the right activities.

[Ms Buck]

Why does the Minister think that almost every specialist organisation, voluntary group and charity in the field thinks that that is a problem? Is it because they do not understand it?

[Maria Miller]

The hon. Lady will know that we have had a call for evidence, and we will be considering the many different views of the organisations she mentions. We will of course want to work with those organisations to make sure that our policies work well. I remember some confusion in Committee about whether we were talking about the social fund or the discretionary social fund, so perhaps we need to make sure that people really understand our policy. Empowering local organisations at local level—the sorts of organisations that the hon. Lady named—to work with vulnerable groups in the individual community will, I think, be welcomed by many organisations on the ground.

--- Later in debate ---

[Priti Patel]

My hon. Friend is absolutely right. We are talking about taxpayers’ money, so we have to be resourceful.

I do not believe that Labour amendments 39 and 40 would make the delivery of the social fund more effective, and nor would they further support applicants and people in need. They would put additional bureaucratic burdens on the Government and risk delaying the implementation of the reforms. Amendments 53 and 54, which were tabled by the hon. Member for Hayes and Harlington (John McDonnell), would dogmatically block change by retaining the existing top-down system that is nowhere near as effective as we want it to be.

The hon. Member for Westminster North (Ms Buck) talked about several of the anomalies and dysfunctional problems in the social fund, as well as the National Audit Office’s criticism. Members of the Public Bill Committee know that the number of crisis loan applications has soared since 2006 from 1 million to 2.7 million, while more than 17,000 people have received crisis loans in the past 12 months. Given that such a significant number of people require multiple crisis loans, delivering the social fund locally will help to signpost them to support mechanisms, rather than encouraging the top-down approach that has been in place thus far. Many of the arguments put forward by Labour Members have been flawed and inaccurate, and I think that the amendments would be counter-productive to the Bill’s objectives.

[Ms Buck]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I do not think that the hon. Member for Witham (Priti Patel) is giving way; she has concluded her remarks.

Oral Answers to Questions

Karen Buck Excerpts

Monday 13th June 2011 Commons Chamber

[Maria Miller]

I can absolutely assure my hon. Friend that that will be the case and that we will carry forward that provision from disability living allowance.

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

I am sure that it is not the Government’s intention in time-limiting employment and support allowance—the other disability-related benefit—to leave nearly 7,000 cancer patients potentially up to £94 a week worse off. Today, Macmillan Cancer Support and others warn that that is exactly the consequence of the Government’s policy. Will the Under-Secretary take the opportunity of the Report stage of the Welfare Reform Bill to modify that damaging policy?

[Maria Miller]

The hon. Lady has asked about employment and support allowance. We will obviously ensure that people in the most difficult circumstances continue to receive the support they require through the support group. For disability living allowance, it is absolutely vital that we do not analyse people on their condition, but examine the problems that they encounter in living independent lives. I think that she would expect us to do that.

Welfare Reform Bill

Karen Buck Excerpts

Monday 13th June 2011 Commons Chamber

[Harriett Baldwin]

Yes. We were reassured earlier by the Minister that any kind of sanction regime would apply only once children joined school at the age of five.

This linear move into work is an important aspect here—it is probably even more important for parents than for any other group in society—so I am pleased to see that it would be possible under the Secretary of State’s proposals. I am also pleased that the £2 billion which has been mentioned will still be in place to provide support for families making that transition into work.

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

The hon. Lady is making a powerful argument. Will she confirm that Labour Members are not arguing that child care assistance should not be available to people working less than 16 hours? Of course if the financial envelope is large enough it is right that that assistance should be available, for all the reasons she is outlining. What would she say to people who live in high-cost areas, such as my constituency, to parents of larger families, and to parents who have no choice but to work longer hours? Their child care is going to be reduced or lost, because their child care is going to be capped to pay for the things that she is talking about.

[Harriett Baldwin]

I shall deal with some of those other points in my later remarks, because they are all important subjects for debate. Indeed, the proposals in new clause 2 suggest a figure of £300 a week for this element. I was genuinely surprised that there were people who were getting as much as that. I do acknowledge the cost of child care in central London: I have paid it for many years, so I recognise what we are talking about. However, £300 a week is a lot of money—it works out as £15,600 a year. It is indeed a generous cap.

I propose that we turn the child care element on its head. The initial move in what we might call the slide into work should be reimbursed at 100%. When people make the difficult first choice to go into work, the first few hours of child care, perhaps up to the earnings disregard—I ask the Minister to ask the Department to consider some of the maths involved—should be reimbursed at 100% as they make that important transition. When they reach the level of annual earnings represented by the disregards that we are talking about, the tapering of the contribution that the person in work would make to their child care would begin.

--- Later in debate ---

[Guto Bebb]

My hon. Friend makes an important point. It is something that was reflected in the comments of the hon. Member for Edinburgh East, who, in relation to the aim of our welfare proposals to support people into micro-jobs, was quite disparaging of that type of job. Indeed, she stated on more than one occasion that we should consider the “type” of job that people will be able to take up as part of our reforms. I think that that is a symptom of the problem.

In my constituency of Aberconwy we have worked extremely hard to try to turn the tourism industry from something that is seasonal to something that is year-round. We have put a lot of emphasis on trying to ensure that the seaside resort of Llandudno is no longer somewhere that attracts people only for three months in the summer. By investing in conference facilities and so forth, we have tried to ensure that the hotel and service industries supporting tourism in the town work throughout the year. We have seen a huge growth in employment in the tourism sector in Llandudno over the past 10 years, yet that growth has been filled largely by people from eastern Europe who are willing to work hard.

From my point of view, the incredible sadness is that those individuals who have gone into what some Opposition Members would call “poor jobs” have ended up working themselves into positions of responsibility and management. I despair when I go out knocking on doors during election campaigns and meet people in the town who have lived there all their lives but have not grasped those opportunities. They live in a system that has allowed Opposition Members to forget their consciences because they have been able to say that they are providing money. There is more to the welfare state than providing money: we have to provide aspiration and a concept of self-reliance. We have to send out a message not just as a Government, but as a society, that work not only has to pay, but that it is the route to better oneself and one’s family. That seems to have been missing from the Opposition’s contributions to the whole debate.

Finally, it is also worth making quick reference to the comments made by the hon. Member for Bridgend (Mrs Moon), who is no longer in her place. She said that she was sincerely of the view that the Department for Work and Pensions should make no effort to hassle and harass people who are unable to take up opportunities to work because of child care issues and so forth. I was intrigued by the use of the word “harass” in relation to trying to support people back into employment. One aspect of the Bill that we must understand is that it is not happening in isolation, but hand in hand with investment in the Work programme, which will try to ensure that people are not left to fester on benefits or have an existence on welfare. The Government are trying to reform the welfare state, but we are doing so in a way that tries to support people back into employment, and that aspiration should be shared by all Members of the House.

New clause 3 makes an important point. I disagree with it as it has been tabled, but I think that we will need to look very carefully at how we deal with free school meals in the system, because it is an issue of real concern to parents. Yes, of course they want to take the opportunity to have a job, and of course they are reassured by the fact that the reforms we are putting in place will make work pay, but as part of that, if they have three or four children, how we deal with free school meals is clearly appropriate and does not work against the proposals to ensure that work pays.

I fail to understand why the Government are being castigated for not providing enough detail in the legislation. The reason that we have not yet done so is that this is an incredibly difficult proposition to get right, as Members on both sides of the House have agreed. I see nothing wrong with saying that we will endeavour to get it right and that we are going to ask the experts to look at the issue on our behalf. I am reassured by the Minister’s comments in Committee, when he stated categorically that our aim was not to make any family currently in receipt of free school meals worse off.

[Ms Buck]

The hon. Gentleman is arguing that the Bill will make work pay and that we should accept it without these crucial details. Does he accept that key child care charities, when making their submissions to the Government following the seminar, pointed out that 250,000 families would see their entitlements cut by £30 to £35 a week, that some would face a marginal rate of deduction of 100%, and that a lone parent on the minimum wage working for more than 24 hours a week would have a marginal rate of deduction of 94%? If we are being asked to believe that the Bill will always make work pay, we should be able to understand what its impact will be and have a chance to interrogate the Government properly.

[Guto Bebb]

That is an interesting contribution, but in truth I fail to see how those charities can make those calculations when we have not yet brought any proposals to the table. It is difficult to understand how those calculations were made, unless they were based on hearsay or assumptions.

Asking the experts to look at this on our behalf will enable us to introduce a set of proposals that will work. Also, hon. Members should be reassured by the fact that we will allow Parliament to look again at the proposals before they are enacted. That will allow scrutiny once they have been developed in detail. I agree with Opposition Members who have stated that the free school meals policy needs to work. Ultimately, there is no point in creating a reform to the welfare state to make work pay if it does not take into account the impact of the free school meals entitlement.

We need to be careful about new clause 4, because it fails to take into account the complexities that I have discussed with colleagues in the Department for Work and Pensions relating to the different arrangements for prescription charges in the various parts of the United Kingdom. Of course universal credit must take into account the need for some kind of support for prescription charges in England, but the situation is different in Wales and Scotland, where, for reasons best known to the Governments in Cardiff and Edinburgh, people do not need to pay for their prescriptions. I find that policy very odd. I can walk into a chemist in Llandudno and get a free prescription, whereas I would have to pay for it in London. Personally, I would be happy to pay a small contribution rather than getting support in that way.

The issue of passported benefits relating to prescriptions is an important one that needs to be looked at. We cannot end up with a system that builds compensation for prescriptions into a universal benefit for the whole United Kingdom without taking into account the complexity that I have just described. I applaud the fact that we are looking at this in detail and trying to introduce a policy that will be fair to all. I am surprised that the Opposition see the fact that we are giving these matters a great deal of care and attention as something to belittle, rather than something to celebrate.

As a Conservative Member, I would find it difficult to argue against the presumption of people saving for a rainy day. I find surprising some Opposition Members’ arguments that people who fall on hard times should not use their savings. If that had always been the argument in relation to every possible hard time, there might be some merit to it. However, we heard the bizarre argument from the hon. Member for Edinburgh East against someone who had had their working hours reduced having to use their savings rather than rely on universal credit, even though I suspect that she would be willing to continue with the current situation, in which someone who becomes unemployed, which is much worse, is expected to use their savings before being able to claim anything from the state.

--- Later in debate ---

[Paul Uppal]

I will modify my speech to highlight some of the concerns expressed by the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) on new clause 6. That will be the beef of what I will say. We spoke about this issue at great length in Committee and I spoke about it personally. Like my hon. Friend the Member for Aberconwy (Guto Bebb), I feel like we are back in Committee. I assure the hon. Member for Rutherglen and Hamilton West that it was always a pleasure to sit on that Committee, and I am sure that Opposition Members will concur.

We received representations from various groups on the merits of paying housing benefit directly to landlords, principally from Citizens Advice, Crisis, the National Landlords Association, the Residential Landlords Association, Shelter and the British Property Federation. As the hon. Member for Rutherglen and Hamilton West said, and as was said in Committee, there are persuasive arguments about paying housing benefit directly to landlords. It is perhaps ironic that it was the last Labour Government who changed the system in 2008. Before that, rental payments did go directly to landlords.

As was rightly said in an earlier exchange, the Minister has highlighted that there is provision in the Bill for paying housing benefit directly:

“We recognise that in some circumstances, direct payments to landlords may be necessary, and the Bill makes provision for that.”––[Official Report, Welfare Reform Public Bill Committee, 5 April 2011; c. 363.]

I hope that that gives the hon. Member for Rutherglen and Hamilton West some comfort on his specific concerns. I hope the Minister will forgive me if I am pre-empting his response, but we discussed this matter at length in Committee.

I think that there is a deeper point on the issue of responsibility. The Leader of the Opposition raised this issue this morning as the cornerstone of his speech. I do not want to go over what has been said too much. The essence of my point is that it is easy to talk about responsibility, but the Government are actually delivering on it. I have my concerns about the payment of housing benefit, but having sat on the Committee, looked at the findings of the reports and considered the evidence, I have come to the conclusion that if we are sincere about the aim of this Bill of getting people off benefit and into work, the first step is not only getting people into work, but individuals taking responsibility. The concerns underlying new clause 6 are addressed by the Minister’s remark that the whole essence of the Bill is to tackle the issue of responsibility.

I am sure, Madam Deputy Speaker, that you were as enthralled as I was by the exchange involving the hon. Member for Edinburgh East (Sheila Gilmore) and my hon. Friends the Members for Aberconwy, for Dover (Charlie Elphicke) and for West Worcestershire (Harriett Baldwin) about the number of people who have not worked in the past 10 years—a time of plenty compared with the situation that we face now. The point that was missed in that exchange was the pernicious nature and corrosive effect of what we have seen over the past few years; this is not just about getting people into work. We have arrived at a situation in which not only are there people who have never worked, but there are whole families who have never worked. The exchange missed that point, but it was eloquently covered by my hon. Friend the Member for Aberconwy.

[Ms Buck]

The hon. Gentleman is right that addressing worklessness that has crossed generations should be a concern on both sides of the House, and it is. However, does he agree that the number of people growing up in households where nobody has ever worked through two generations is 20,000 at the most, which is 0.1% of people on working-age benefits? That is far too many, but it is only 20,000 people.

--- Later in debate ---

[Charlie Elphicke]

I rise to speak against new clause 2. One of the major achievements of the reform of introducing universal credit is enabling people to have greater flexibility in taking on part-time jobs—so-called mini-jobs. I have made the point several times in interventions that it is critical that we enable people with child care responsibilities to have the maximum flexibility in how they organise their child care and for how long they wish to work, so that they are reintroduced to the world of work.

I praise the Government particularly for making the effort to consult all parties in their recent seminar. It was not just members of the Public Bill Committee who were there, but members of the Work and Pensions Committee. Such engagement is important, because it enables us to get everything right. The Government have introduced a Bill that is a bookcase into which the books will later be slotted, and they are making an effort to ensure that the books read well and effectively.

One of the most telling parts of the briefing that we were given in the seminar was about what parents had told the DWP that they wanted. It informs the decision on whether new clause 2 is right. The DWP publication—“briefing” is probably a better description—is entitled “Childcare support in Universal Credit” and dated May 2011. It states:

“Recent findings from a survey of lone parents on Income support and with a child aged 5-6 found a strong preference for working part-time.”

Among those looking for work or expecting to do so in future, the majority stated a preference for 16 to 29 hours’ work a week, with 45% giving a preference of exactly 16 hours. Why exactly 16 hours? It has been drummed into everyone that they have to go out and work for 16 hours, not a moment less, or they will not get any help with child care. Subsection (5) of new clause 2 makes it clear that the Opposition want that prescribed minimum number of hours a week to remain. In other words, they do not want the mini-job, and yet we know that lone parents show a strong preference for working part-time, which should be respected. People are not here to dance to the Government’s tune: Governments should dance to the tune of the people, and be as flexible, helpful and enabling as people wish.

[Ms Buck]

While the hon. Gentleman is on the subject of the survey of parents’ opinions, does he know how many of the 250,000 parents who are expected to lose between £30 and £35 a week under both options in the Government’s proposals said that they wanted less support with their child care?

[Charlie Elphicke]

I have not conducted a detailed survey on that. I am also unsure what the 400,000 or 430,000 who will win approximately £50 say. There will always be winners and losers, but what I like about this policy programme is that there are almost twice as many winners as losers, and they will win an awful lot more money, which helps the transition to the policy.

Let me return to the evidence of parents. The Government document states:

“Many out of work mothers, both lone and partnered, are looking for jobs that will fit in with their children’s schooling—i.e. jobs that are part-time and preferably within school hours.”

That is obvious and self-evident—any parent knows that—but it is important to have survey evidence so that the argument has an element of objectivity. The document goes on to say that out-of-work mothers

“tend to look for work that is local and flexible, so that they can be available if, for example, their child is taken ill.”

All of us parents have been there—have we not?—when our children get sick and we send them off in the morning, tying their scarves up tight and hoping that no one notices. When they do notice, we get a call. I have had to make that run—even though, as I am told, as a man I have no rights in respect of child care responsibilities. Some of us in the younger generation are new men, although I hesitate to apply that description to myself.

The document also states that those factors—locality and flexibility—

“are often seen as being more important than the type of job they move into.”

It is all about flexibility, which we need. All of us parents have been there and understand that. Child care is quite often a nightmare, and always a juggle. Half the time parents are terrified that they will get a call just when they have an important meeting to go to.

The document also states:

“A study of lone parents who had recently moved into work had overwhelmingly chosen jobs where their hours fitted with looking after their children. It was common for interviewees to be working between 16 and 29 hours per week.”

Again, there was almost certainly not the flexibility to have a mini-job. Mini-jobs are important in enabling such flexibility. It is not right for parents, particularly parents of little children, to be forced into endless hours of work, or to work for more than 16 hours. New clause 2(5) is therefore extraordinarily unhelpful, and a retrograde step.

On parental employment, what happens when children are five and six is telling. This is about the youngest tots. When children are that age, parents are just going out into work, having previously perhaps been full-time parents. Employment of lone parents of children that age is about 55%, but the employment of partnered mothers is 75%, which is the parental employment rate. We can see, therefore, that there has been a massive societal shift into joint working among couples. There has been a move away from the traditional old-style model, whereby the bloke goes off to work and the woman stays at home to mind the kid and the kitchen sink, to more economic sharing and greater equality, which is a positive thing.

[Charlie Elphicke]

My hon. Friend makes an extraordinarily powerful point. Part of the reason for that is that a lot of scaremongering is going on. The scaremongers deny that the Bill provides that flexibility and say that people will lose out, but we know, from the detailed figures in the Budget and the briefing document to which I have referred, that most people will be far better off under the reforms, that they will have more money, and that work will always pay.

[Ms Buck]

On the subject of scaremongering, is the hon. Gentleman aware that in their letter to the Secretary of State on this issue, the organisations that could fairly be said to have a good grasp of the issue—from the Daycare Trust to Gingerbread, Family Action, the Child Poverty Action Group, Working Families, the Children’s Society, Save the Children and the Resolution Foundation—said that they were concerned that the proposals could effectively end the prospect of full-time work for single parents and second earners, and for couples on low and middle incomes who need support with child care costs, and that that will have the result of hampering their ability to find work, and making it more difficult for them to lift their families out of poverty?

The hon. Member for Dover (Charlie Elphicke) supports the flexibility for people to work fewer hours—in principle, we all agree with that—but he wants to restrict the flexibility for people who want and need to work longer hours.

[Charlie Elphicke]

I do not make my money out of campaigning, and I never have. Anyone who has done that will know that maximum fear is the way to get the most subscriptions, the largest membership and the highest amount in grants. I make my money out of my only job, which is serving my 71,000 or so constituents and trying to do what is best.

Perhaps I am old-fashioned, but I occasionally open the Budget Red Book and look at the detailed figures. Table A2 on page 80 makes it clear that a lone parent with one child working 35 hours a week would have £105 without universal credit, and more or less the same with it. However, when parents work 10 hours, things change. A lone parent working 10 hours rises receives £20 without universal credit, and £53 with it. If we move to universal credit, those people will end up, broadly, with more money. That mini-job is massively incentivised by universal credit, which makes part-time working much easier.

Why does part-time working matter, and why should we give greater incentives for it? To answer that, we must look at the proportion of parents with child care responsibilities who are in work. Some 61% of lone parents who have children aged between five and six, who would find things difficult under new clause 2(5), work part-time, as do 64% of partnered mothers of children of that age: 64% of all mothers work part-time. The statistics are pretty clear that we have had a joint working revolution: there is much more sharing of economic power in couples, and more pooling of income. To a great extent, universal credit recognises that in the system.

There has also been a revolution involving women in the workplace. Often they work part-time, because even now there is a bias towards women having primary responsibility for child care. Finances might be shared, but the responsibility for child care tends to fall to women. That is what comes out pretty clearly from the figures. For that reason, we should allow women maximum flexibility. Why have a 16-hour cut-off, as new clause 2(5) proposes? I, for one, cannot agree with that. It is not the right way to go; it is a retrograde step.

--- Later in debate ---

Housing costs

[Ms Buck]

I beg to move amendment 31, page 5, line 29, at end add—

‘(6) Regulations are to provide for the Secretary of State for Work and Pensions and the Secretary of State for Communities and Local Government to review not less than annually the relationship between housing costs in the private rented sector and the level of the housing component of Universal Credit.

(7) Regulations are to provide that the Secretary of State for Work and Pensions must amend the calculation of housing costs where this is necessary to ensure that at least the 30th percentile of the list of private rented properties in each locality remains affordable to claimants, in light of the review under subsection (6).’.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following: Amendment 32, in clause 68, page 52, line 19, at end add—

‘(4) After subsection (7) insert—

“(7A) In relation to a dwelling of which the landlord is a local housing authority or a registered provider of social housing, regulations under this section shall not permit the AMHB to be less than the actual amount of the liability in a case where a person has provided the relevant authority with such certificates, documents, information or evidence as are sufficient to satisfy the authority that the person is disabled and is living in a property specially adapted or particularly suited to meet the needs of that person.”’.

Amendment 72, page 52, line 19, at end insert—

‘(4) The Secretary of State must lay before Parliament a report on the impact of subsection (3) within 12 months of the coming into force of that subsection.’.

[Ms Buck]

These amendments draw out two strands from the wide-ranging set of debates that we had in Committee on the treatment of housing costs before and going into the universal credit. In today’s DWP questions, the Secretary of State, who is in his place, told my right hon. Friend the shadow Secretary of State that I wanted to spend more on housing benefit whereas the shadow Secretary of State wanted to spend less. I want to put it clearly on the record that nothing could be further from the truth. I do not want housing benefit expenditure to rise and never have done. Nothing would give me more pleasure than seeing lower unemployment, rising incomes and low rents in both the private and social sectors that bring down the total housing benefit bill. I believe that Governments of both persuasions have been in error over the past 30-plus years in letting housing benefit take the strain of rising housing costs, especially given the deregulation of the private rented sector in the late 1980s, rather than investing in affordable housing supply over those three decades in a way that would have helped significantly in bringing down that total cost.

What I do not want to see, and what I fear may arise from the Government’s policy, is a set of arbitrary and ill-thought-out cuts to housing benefit and, indeed, local housing allowance that create homelessness and distress for vulnerable people and cause damage to the 400,000-plus working households in private rented accommodation whose housing support is going to be cut. It is worth noting that the homelessness statistics that the Department for Communities and Local Government produced on its website last week send out a warning message. For the first time in years there has been a significant increase in the number of households declaring themselves as homeless. There was a rise of 23% in the number of people approaching local councils for housing help—26,400 people approached their local authority for help in the first three months of 2011, and 11,350 applicants were accepted as being owed a main homelessness duty in the first quarter to March 2011, which is an increase of 18% on the figure for the same quarter last year and the first rise for seven years.

[Sarah Newton]

Surely the hon. Lady is going to acknowledge that all this is because of a very important step that this new Government have taken. We are honestly collecting the data on the number of homeless people. It was shameful that under the previous Government the whole system of counting homeless people was so rigged. It is no wonder we have seen this rapid rise, because we now have an honest appraisal of the situation and we can start to tackle the appalling legacy that we have inherited.

[Ms Buck]

I will be very interested to see the evidence for the hon. Lady’s assertion. Although I know that our two parties have differed in the past on their interpretation of “rough sleeping”—on street homelessness—and that there is a genuine debate to be had about how that is measured, I was not aware, and I stand to be corrected, that there has been a shift in the data set for the measurement of the number of people approaching local authorities as homeless and being accepted as such. Nothing on the DCLG website indicates that, so I dispute her definition and it seems to me that we are facing a genuine problem.

Even more worryingly, rent arrears and mortgage default were to blame for a growing share of the number of people who were approaching local authorities as homeless; although not the main cause, that is a growing cause of those applications. It gives me no satisfaction to see that; I do not want people to be made homeless. As we discussed in Committee, homelessness is one of the greatest traumas that any household can possibly face. The hon. Member for Truro and Falmouth (Sarah Newton) and other Government Members must face up to the fact that the statistics show a growing trend just as the cuts in housing benefit begin to be flagged up and as people react to the changes in the incoming benefits.

The second set of data to come out in the past week of which we need to be cognisant was a survey released on Friday by the National Landlords Association. It found that 58% of all private residential landlords plan to reduce the number of properties they let to tenants on local housing allowance. Some 80% of landlords expressed concern about the reduction in local housing allowance rates from the average market rents of the bottom 30% and the same number were worried, as I shall discuss in the context of the relevant amendment, about the future local housing allowance increases being linked to the consumer prices index rather than true market rents. The survey also found that 90% of landlords stated they cannot afford to reduce their rents to absorb changes to the local housing allowance as the large majority are faced with mortgage repayments and rising running costs.

The worrying picture is that our discussions are put in context by the cuts in housing benefit that have already been through the House and were opposed by the Opposition, which are feeding through into the concerns of landlords. One point of concern is that when the Government assert that 30% of properties will remain available to tenants on local housing allowance, they ignore the fact that not all the properties in that threshold will be available to tenants because it will not necessarily be the landlords within that cohort who are prepared to let in the first place.

We will have to wait and see, but it is entirely reasonable for alarm bells to ring on the impact on homelessness when we look at those two sets of statistics. If we find either that households are in an affordability crisis or that landlords simply pull out of the housing benefit sector, particularly in those areas where the demand for private rented accommodation is greatest—that is, London, the south-east and some of our cities—we will have a severe problem and many the assumptions being made by the Government about savings are unlikely to be realised. Homelessness is an expensive process and places considerable pressure on local government.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

Is there not a third warning bell, also, in the evidence that is being produced almost weekly that the inability of first-time buyers to obtain a reasonable mortgage means that they are forgoing the possibility of ever becoming homeowners and are renting? That is increasing not only in cities but across the country, apparently.

[Ms Buck]

My hon. Friend is absolutely right. Without any question, we are seeing a growth in the private rented sector for all those reasons, including the affordability crisis and the lending pressures in the home ownership sector. That means that the private rented sector, which we all applaud and support—we want a healthy private rented sector—can draw from an increased pool of potential tenants who are not on housing allowance. There will be competition for those properties between tenants who do not require housing allowance and those who do and are on the transitional protection path through the caps and reductions in the 30th percentile on which we have already agreed—I shall turn in a second to the further ratcheting down that is intrinsic to the future use of the consumer prices index rather than a local housing allowance determination—and that pressure will mean that a larger pool of people are frozen out of such accommodation.

--- Later in debate ---

[Mr Aidan Burley (Cannock Chase) (Con)]

I am following the hon. Lady’s arguments closely. I represent a Birmingham constituency where the average salary of a working family in the private sector is £22,450 a year. Even under the Government’s reforms, such a family could still claim £26,000 a year in benefits, which is more than they would receive by going out and working in a proper job. Does she accept that there is a problem that people in low-paid jobs who want to work see other people getting more and having a better quality of life by choosing not to work and to live on benefits?

[Ms Buck]

The hon. Gentleman makes an interesting point but is mixing lots of different arguments, if he does not mind my saying so. The whole point of local housing allowance, as I was obviously explaining imperfectly, is that it is an in-work benefit. If a household’s income dips and they are in the private rented sector, they are entitled to the allowance, so we cannot compare an out-of-work household and an in-work household in the way he is trying to do. It is intended as a cushion for that household. Similarly—I know that you, Mr Deputy Speaker, would not wish me to be diverted—the overall benefit cap needs to be considered, among other things, in terms of an equivalent household size, and we will no doubt return to that debate because it is much less clear whether the Government’s core argument holds any water at all.

The argument about whether the maximum percentile that a household can claim in the private rented sector should be 50% or 30% of the local market has been and gone, so let us not return to it. All the amendment is arguing is that we must have a statutory mechanism for review to make absolutely sure that, as the CPI uprating bites further into the private rented sector, which it will, 30% of all private rented accommodation in a broad market rental area remains available. That is the Government’s commitment, and without such a mechanism that accommodation simply will not remain available.

We have to be very careful about monitoring that. The rate is to come down from 50% to 30%, but even 30% might not be achieved, because the CPI will further undermine what is available in the sector and landlords will withdraw from it because of the insecurity of the income stream; we are already seeing significant warnings of that. Property will not only be unavailable at 30%, but sometimes it will not be available at all. The projections for 2016 show that in parts of London it will go down to 19% or 16%, and in my borough it could go down to almost nothing—but let us not worry too much about that now. The anxiety is that we must ensure that at least that 30% remains available to people in the private rented sector, because if it does not, when they lose their income or their job they will be cast away from the labour market, from the work they were doing and, on top of that, from the networks of family, friends and connections that the Secretary of State, with great passion—I am absolutely convinced of his sincerity—believes is so important.

We simply cannot argue that we believe in stable communities, in family networks and in connecting people with the workplace if we then take away the very mechanisms that make all that possible. The argument has been developed, with convincing statistical underpinning, by academic experts that there is a real danger of that happening unless we have an adequate review mechanism. No proposal for such a mechanism exists at the moment, although there is a willingness to understand that there could be a problem. In Committee, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller) said:

“The Secretary of State will be able to adjust rates to ensure that the housing support available does not become completely out of kilter or out of touch with local rental markets. We will monitor the impact of these measures and make further adjustments if it is right to do so”.––[Official Report, Welfare Reform Public Bill Committee, 3 May 2011; c. 711.]

That willingness to recognise a problem has therefore already been expressed by the Minister.

Also, I think that all three Ministers who are on the Front Bench have told us that the CPI rating will not last for ever, and that the arrangements could be reviewed at the end of the spending review period. However, the wording of the Bill is so wide that CPI or other measures could be used as a basis for setting rents under universal credit, and I think that Ministers are attracted to a permanent shift away from the idea of linking private sector rents to a market-based formula. That would be very dangerous and risky. We want the Government to offer clearer guarantees on how they will prevent an affordability and access crisis, which could in a very short time become even greater than the one that could be created by reducing the maximum percentile for local housing allowance claimants to 30%. We need a statutory assurance that monitoring will take place, and that it will lead to a proper review.

When we discussed child care and other elements of universal credit earlier, my right hon. Friend the Member for East Ham (Stephen Timms) said that the success of universal credit would rest heavily on child care costs. I hope he does not think that I am disagreeing with him when I say that the treatment of child care and passporting costs will not be the only critical test for millions of people; the treatment of housing costs will be, as well. I am genuinely concerned that an underestimate of the real cost of housing is already feeding through into universal credit, which will lead to a lot of people being disappointed when universal credit fails to deliver on its promises in the way that we want it to.

Amendment 32 deals with under-occupation and adapted properties. The Government are planning to reduce housing benefit payments for 670,000 social housing tenants: one third of all working-age housing benefit claimants living in social housing can expect to see their benefits reduced in 2013. Under the new restricted size criteria, any household deemed to be under-occupying its home by one bedroom would lose 13% of its total housing benefit, while those under-occupying by two or more bedrooms would lose 23% of the total. The average cut across all households would be £676 a year.

We know that only a tiny minority of those affected will be able to downsize to avoid the penalty, due to the shortage of smaller properties and the striking regional imbalance between the level of housing need and under-occupation. That is because of the competing pressures that social landlords are under when it comes to meeting their statutory obligations to house homeless households and other people in priority need. Alarmingly, the Government do not want those affected to move, because if they did move, the Government would not be able to meet their savings targets. We have not so much an incentive scheme as a straightforward cut in income for poor households. When we discussed this in Committee, the Minister was unable to give us any assurance on exactly the true purpose of the benefit cut, as explicitly spelled out in the impact assessment.

I want to concentrate for a moment on disability and adapted properties. Of the 670,000 claimants—

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The hon. Lady was present at oral questions this afternoon, when I tried to link the situation of 25 to 34-year-old single people who will be looking for shared accommodation with that of social tenants who have a spare room. Is she interested in the idea of social tenants, be they local authority or housing association, renting out spare rooms, thereby covering a shortfall in housing benefit and helping young single people at the same time?

[Ms Buck]

That is a reasonable option to allow people to take, but I seriously doubt whether it is an answer to the problem, for a whole host of reasons. In particular, there is a striking imbalance between where the social housing occupation is and where the demand for private rented accommodation is.

Many things worry me about what the Minister has just said, because here we are on Report, months after an impact assessment set out what the proposals are likely to mean, and suddenly an option as to how the Government think that the penalty might be avoided is thrown in. Let us sit down and have a proper impact assessment—a proper review. Let us see, for example, how any income from rental would be treated in the benefits system, because that could become subject to the same rules as non-dependant deduction, which would not leave people better off at all. Before the Minister asks me to regard it as a serious option, let us see exactly how it would be workable as regards the match between demand and supply and how it would be treated for the purposes of tax and other benefits.

[Kate Green]

Does my hon. Friend accept that there is a likelihood that from time to time, at least, if not constantly, disabled people may need extra space to accommodate overnight care? Therefore, the prospect of a tenant—a stranger, possibly—moving into their home would be completely impractical as well as potentially rather alarming.

[Ms Buck]

That is absolutely right; my hon. Friend makes a valid point. I am not going to say that just because someone is in a social tenancy they would not be able to have somebody else living in their home. People make that decision in the private sector; morally, it is not a completely absurd thing to do. However, I do not know whether it deals with the problem in any meaningful sense or what all the implications will be.

People with disabilities are, by definition, much more likely to have formal or informal care or to want the capacity to have friends and relatives coming in to provide them with care. Yet we know from the Government’s impact assessment that 66% of all those affected by the cut in benefit in the social housing sector are categorised as disabled—not all severely disabled; I understand that—and that between 101,000 and 108,000 of those properties, depending on which definition one accepts, are specifically adapted for their needs. In Committee, the Minister made some reassuring noises about the problem. She told us that the Government were prepared to

“look in detail at how we can ensure that there are exemptions for individuals who are disabled, where their homes may have been subject to extensive adaptations to accommodate that."

However, earlier in the debate she had told us:

“Providing an exemption for all adapted accommodation would not be the right approach”

and that exemptions should be applied only where making a fresh adaptation would cost more than

“allowing someone to stay where they are.”––[Official Report, Welfare Reform Public Bill Committee, 3 May 2011; c. 685-716.]

That prompts several important questions about the sheer level of bureaucracy that will be necessary to send somebody into every single one of those 108,000 adapted properties to carry out an official survey to establish the extent of those adaptations and come up with a cost-benefit analysis to see whether a move to alternative property will produce a cost benefit, and if it does not to assess the margin of error. If an adaptation would cost £10,000, but it was deemed that the cost saving would be £9,500, would the person with the disability be expected to move from their flat? Would the difference be £1 or £20? This is one of those counter-arguments that sounds seductively simple until one starts picking away at it and finds that it does not sound very good at all.

[Dame Anne Begg]

Does my hon. Friend agree that the problem is not just the cost, but the upheaval and the incredible time it takes to adapt a house? I know about this because I have done it three times myself. It takes at least six months, and all that time, the person might not be able to get into their own home.

[Ms Buck]

My hon. Friend is absolutely right. I have been drawn into arguing with the Government on their own terms, which is a clinical, cash-led way of debating such things: if it will cost £5, someone may have to lose their home; that is the only measure. However, my hon. Friend is right, and we expressed such anxieties about the whole under-occupation policy in Committee. We could be talking about somebody in an adapted property, somebody who has been in their family home for 30 years, or somebody who has been in their home for 30 years but has recently been widowed or lost a child and is suddenly deemed to be under-occupying.

[Glenda Jackson]

Is there not another bureaucratic hurdle for people who are in adapted homes or, as is often the case in my constituency, elderly people who have lived in a place for a long period whose families have moved? Both categories could be defined as vulnerable. I am not saying that all young people in this country are necessarily hell-raisers, but would there not be a justifiable cause for an additional tenant to go through a Criminal Records Bureau check?

[Ms Buck]

I am not going to be drawn into debating the advantages and disadvantages of an argument that has just been thrown into the air by the Minister. In some circumstances, the idea may work. Some individuals of working age will actively want to downsize and will say, “We are in a three-bedroom property and it is too big for us. We have been waiting for years to get into a one-bedroom property.” In the real world, we all deal as constituency MPs with people with a huge number of different needs. There are people in all different circumstances, and these different options will work for some people.

The point, surely, in discussing this amendment is that there are 101,000 to 108,000 households in properties that are specifically adapted for their needs who, despite the slightly more sympathetic noises coming from the Minister, in just over 18 months will lose up to 23% of their housing benefit. I am not sure that the vague and general ideas being thrown out by the ministerial team are doing anything to help us deal with that reality.

[Sarah Newton]

Does the hon. Lady agree that what we are talking about is treating people like people? All people have their individual circumstances and the decision makers are best placed to use their discretion to tackle these issues. Within housing benefit, there is discretionary funding so that people can be treated like humans. Finally, to reassure the hon. Member for Hampstead and Kilburn (Glenda Jackson), pensioners are of course excluded from the concerns that she raised.

[Ms Buck]

Pensioners are excluded. As I have argued, the attempt to move people of working age in order to avoid the disability penalty is likely to stop registered social landlords from moving pensioners who want to downsize voluntarily, because there simply is not enough flexibility in the social rented sector to allow that to happen. The hon. Lady is making my point for me: there is no discretion. The 670,000 social housing tenants who will be subject to the housing benefit cut, and the 101,000 to 108,000 people in specifically adapted properties, will be subject to a benefit cap. There will not be any discretion. All that the Government can say, apart from mentioning the possibility of people taking in a lodger or moving to an alternative property in a few cases, is that the discretionary housing payment will sort it all out.

[Dame Anne Begg]

Grampian Housing Association, one of the social landlords in my area, has written to me and said:

“If this goes ahead it will increase demand for property sizes that we simply cannot supply and lead to a great deal of stress for the families involved.”

It knows its housing stock, and it knows that it does not have houses of the size required.

[Ms Buck]

My hon. Friend is absolutely right. We know from all the evidence that has been given to us by the experts who are running housing associations that they do not have flexibility in their stock. The one and two-bedroom properties that are needed for people downsizing from three and four-bedroom houses are not available. They simply do not exist. There is not a supply that will enable anything other than a tiny minority of people to avoid this punitive benefit cap, because people will not be able to move. The property is not there for them to move to.

Nor is the property there for people who need adapted properties. I think it was my hon. Friend who made the point that when the cost-benefit analysis tips in favour of someone being required to move because of the value of their adaptations, they then have to make adaptations to another property. I had someone in my surgery last week who had an occupational therapist from Westminster council visit them in November about adapting their property, and they had not heard another word. That person, a wheelchair user who is unable to use their own bathroom, has been waiting eight months for the process of adaptations to be even started. We can multiply that situation by 108,000.

[Sheila Gilmore]

Has my hon. Friend noticed yet another anomaly that will arise? If somebody moves from an adapted home to another home that then has to be adapted, what guarantee is there that the first house will get a tenant who needs the adaptations that have already been done? There is therefore a waste of resources, not the best possible use of property that housing associations and councils attempt to achieve.

[Ms Buck]

There is the remotest chance of the property that such a person is leaving being occupied by someone who requires the same level of adaptation. It is like playing three-dimensional chess—it will be almost impossible to fit all the people into the properties that exist. At the moment there is supposed to be a flood of people who will leave under-occupied properties in the north-west of England and swap with people in London and the south-east. Then when all the individuals who need adapted properties are considered, it becomes a literal impossibility to ensure that properties match people’s needs properly.

[Sarah Newton]

The hon. Lady is being very generous in giving way to me.

I imagine that there are a great number of vulnerable people who are sitting at home listening to this debate, or who will read Hansard. For the sake of clarity, I think it is incredibly important to go back to something that was said earlier and remind the whole House that people who are disabled are not subject to the benefits cap.

[Ms Buck]

To be absolutely clear to the hon. Lady, I am not talking about the overall benefit cap. [Interruption.] No, it is a benefit cap. It is a benefit cut.

[Steve Webb]

You are confusing people.

[Ms Buck]

I am not confusing anybody. It is a cut in housing benefit of up to 23% for 670,000 households, of which, according to the Government’s own impact assessment, 400,000 include a disabled person and 108,000 are in adapted properties. Most of those people will have no means of avoiding the cut in their housing benefit, because there is nowhere for them to go. Even if there were, the Government do not want some of them to go there, because then they would not meet their own savings targets.

[Jenny Willott]

The hon. Lady said that she thought that there was no earthly chance of somebody with a similar level of disability needing a property that had become available. I am sure that, like me, she must have an awful lot of people coming to her constituency surgery who have disabilities and have been waiting a very long time for adapted homes. [Interruption.] Disregarding the rest of the debate, and the Labour Members who are hollering at me, the chances are that there will be somebody who wants those properties. That is not a reason to go ahead with moving people, but it is not true to say that there will not be people waiting who need those properties.

[Ms Buck]

The point that the hon. Lady misses is this: when people come to my advice surgery and say that they need an adapted property, they do not mean that they need one in Merseyside. That is the fundamental problem. Not only is there a regional imbalance in the supply of accommodation, but each individual has individual needs. If they do not, why does my local authority employ Dependability Ltd to send occupational therapists to assess individual needs? I am sure that my hon. Friend the Member for Aberdeen South (Dame Anne Begg) would support me on this, but every individual with a disability is likely to have personalised requirements. That is my central argument. Not everybody has wheelchair access adaptations or larger bathrooms or lower counters. Adaptations are highly tailored to the individual’s circumstances, as they should be.

In some cases, the Government’s proposals will work like a dream. Nobody is arguing that in no instance will a perfect match be found and people will be satisfied. My central point is that that will involve a minority of the 108,000 who will be affected. I cannot see—housing associations support my analysis—how the result could be anything different. The measure is likely to result in a phenomenal waste of money on adapted properties and/or to trap people with disabilities who are by definition on low and fixed incomes with a cut in their living standards, which is exactly what the Government told us they wish to avoid.

Last year, the Secretary of State claimed that disabled people had “nothing to fear” from his welfare plans, adding:

“It is a proud duty to provide financial security to the most vulnerable members of our society and this will not change.”

If disabled people are in an adapted property with an extra bedroom, they have every reason, as things stand, to worry.

To return to the intervention from the hon. Member for Cardiff Central (Jenny Willott), the discretionary housing payment, which the Government repeatedly say is a panacea, is the philosopher’s stone, as I described in Committee. Somehow, the £40 million a year fund will stretch to cover overall cuts in housing benefit of £1.5 billion. There is no earthly way in which it can stretch sufficiently to cover the protection of vulnerable younger people who are affected by the single-room cuts, of people in accommodation that has been adapted for disabled use, and of all those whom we want to keep in their homes because we want them to keep their jobs when their property becomes unaffordable owing to overall housing benefit cuts and the downrating from CPI.

[Glenda Jackson]

As my hon. Friend the Member for Hayes and Harlington (John McDonnell) mutters from a sedentary position, the scheme is not voluntary. That is surely the antithesis of what Government Members have argued—they say that their plans treat everybody as individuals. The scheme is an imposition.

[Ms Buck]

My hon. Friend is absolutely right. The scheme is not voluntary. Voluntary downsizing has a proud history. Good local authorities and housing associations provide voluntary downsizing, which is sensible. The Government’s measure requires 108,000 households whose properties have been adapted for disabled purposes to take, within the next 18 months, a significant cut in their housing benefit, or to move, regardless of the value of that adaptation. The Minister implies a mammoth bureaucratic exercise to evaluate every one of those adaptations, and to establish individual cost-benefit analyses in every case, in the hope, which I suspect will be a forlorn one, that an appropriate property will be available for people to move into when they fall foul of such analyses. That appropriate property does not have to be within the local authority area or even the region where those people have family, friends, support and, in some cases, employment.

Those two concerns, of the many that the Opposition have on housing costs, are the subject of the amendments that we have tabled. I hope that the Minister, who has made sympathetic noises on both issues in Committee, goes a little further tonight, and gives us solid and binding reassurances that there is a way of resolving the benefit trap that will catch so many people, in order, as Ministers have frequently stated in the media, to deal with a very small number of high-value claimants who dominate the media agenda. It is not fair to capture 108,000 disabled people and 750,000 claimants of local housing allowance, all of whom will be affected by the housing benefit cuts, in order to deal with a small number of extreme cases, on which we could otherwise have had a sensible debate about attempting to resolve.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I thank the hon. Member for Westminster North (Ms Buck)for taking the time to talk to us about her amendments today. When I heard some of the reports on the radio this morning I thought that today would be a big day, when we would really be able to understand the Opposition’s approach to welfare reform—but on the basis both of Question Time and of the debates on the Bill, many of us feel that there is a lot more work to be done.

Today was an important opportunity for Opposition Front Benchers to set out their amendments and how they would change the Bill, to show how they would deal with housing benefit. I have listened hard, but there is still no clarity. In fact, what we have heard is more and more contradictions from the hon. Lady. In her opening remarks she said that she did not want the housing benefit bill to rise, and she did not agree with housing benefit taking the strain. However, the amendments run completely contrary to those objectives. Amendment 31 would significantly erode the savings that the Government propose, and amendment 32 would draw the exemption so wide that it would be far broader than anything recommended by the specialist organisations. That is a concern.

Nor are we any wiser as a result of the Opposition Leader’s speech today, which did more to create further confusion in this area. He talked about supporting people into housing as a result of their volunteering or working. That may sound familiar, but if the Opposition seek to link volunteering and work with housing, we hope that they do not intend to undermine eligibility for lone parents when it comes to their housing needs. It is difficult to comprehend how the hon. Lady will achieve her objectives with her amendments.

--- Later in debate ---

[Maria Miller]

Will the hon. Lady forgive me for making a little progress? Many other hon. Members want to come in on this debate, and I want to set out my response to the amendments before we run out of time.

Before I turn to the specific amendments, I want to pick up on what the hon. Member for Westminster North said about rising homelessness. I am sure that she believed in the effectiveness of the previous Government, but she cannot expect the sort of impacts on homelessness that she implied after just one month of a policy being in place. I do not accept that the policies we are advocating will have the impacts on homelessness that she talked about. She has to get real: these policies have only been in place since April, and could not be driving the sorts of changes that she mentioned by this stage.

The hon. Lady said that her premise was affordability and access to housing. May I remind her that, given that 40%—and in some areas, including coastal towns, 70%—of those in the private rental market are in receipt of housing benefit, it is critical that we keep control of the amount of money going out in housing benefit? That way we can help the very first-time buyers whom she purports to want to help, who are finding it so difficult to get into the purchase market at the moment, and who need to go into the rental market. The previous Government let those people down by not keeping control of housing benefit rents during their tenure.

[Ms Buck]

The statistic that 40% of the market is subsidised by the local housing allowance is central to the Government’s argument. Will the hon. Lady finally, helpfully source that figure? Figures released in the English housing survey last month confirmed that only 24% of those in the total private rented sector in England were on LHA. Although there are regional variations, it would be helpful if we could finally and definitively have the source for that 40% claim.

[Maria Miller]

I thank the hon. Lady for her question. I shall be happy to write to her with the full details, and to remind her that the proportion is only 40% on average; as I said, it is 70% in some coastal areas. That is a significant issue that helps to determine the rental rates that many people—[Interruption.] I think I just said that I would write to the hon. Lady with the details. I do not have them to hand now.

The important matter to which I now turn is my response to the two amendments tabled by the hon. Member for Westminster North and the one tabled by my hon. Friend the Member for Cardiff Central (Jenny Willott) for us to consider today. We said in the universal credit White Paper that an appropriate amount would be added to the universal credit award to meet the costs of rent for claimants. We also said that levels of support for rent would be broadly similar to the support provided through housing benefit at the time that claimants began to move on to universal credit. In the private rented sector, we will build on the local housing allowance approach, incorporating the reforms that we are making over the coming year. This will give private rental tenants access to about 30% of the rental market in their areas, including most of London.

We also need, however, to do more to constrain the growth in rents, which is why increases will be limited in line with the consumer prices index. This will ensure that we continue to put the sort of downward pressure on rents that is so important to keeping control of our budgets and to affordability for those not in the housing benefit market.

Oral Answers to Questions

Karen Buck Excerpts

Monday 28th March 2011 Commons Chamber

[Mr Duncan Smith]

With respect, I think the hon. Gentleman will have to wait until I bring the proposals forward. As I said earlier, there is no point in introducing the universal credit unless we stick with our principle that work should always pay better than being out of work.

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

Work incentives are only effective where there is work. As we now know, unemployment is projected to be at or above 2 million for the life of this Parliament. Will the Secretary of State update us on whether the Treasury has provided him with additional funding to expand the Work programme so that it can take up the additional demand from the workless?

[Mr Duncan Smith]

The Work programme is well set to cope with all the ups and downs that might take place over the next few years. The reality is that the Opposition go on about there being no jobs, but even now, advertised through the jobcentres, nearly a million new jobs have been placed in the past three months—that is 10,000 a day and about half the total number of new jobs created in the outside world. I say to the hon. Lady, with respect, that we are making these reforms and changing this complex system because more than half those jobs are likely to go to those from overseas, which does not help at all unless we reform the system to ensure that British people get a shot at the jobs, too.

Housing Benefit

Karen Buck Excerpts

Thursday 10th March 2011 Westminster Hall

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

As others have done, I congratulate the Select Committee, on producing such a comprehensive report into the Government’s proposals in the June Budget. I also congratulate my hon. Friend the Member for Aberdeen South (Dame Anne Begg) on her thoughtful, balanced and comprehensive introduction to the debate. It is a great credit to the Select Committee that the report sought to be so balanced, and that the Committee so rigorously examined the proposals. It is striking and a tribute to the generosity of my hon. Friend’s character that the report ended up being just a touch more generous to the Government than to itself in terms of the Government’s impact assessment, which warned of the danger of increases in the number of households facing rent arrears, eviction or presenting as homeless, and of rising crime, increased pressure on the legal aid budget, increased overcrowding, disruption to children’s education and lower educational attainment.

The Social Security Advisory Committee also comprehensively rubbished the proposals, and warned of unintended and perverse consequences of the changes, which will in many cases lead not only to hardship, but to additional expenditure in other areas of Government service.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Just for the record, will the hon. Lady confirm that the SSAC produced its report before the nine-month transition period, before the October and April changes were brought together and before the 10% housing benefit change was reversed?

[Ms Buck]

I certainly confirm that. I am happy to commend the Government on their decision to withdraw the proposal to reduce housing benefit by 10% for people who have been on jobseeker’s allowance for more than a year. I also accept entirely that there has been a phasing in of the cap on housing benefit, which particularly affects central London. As the Minister knows, that was more than compensated for in cash terms by bringing forward the reduction to the 30th percentile for housing benefit for local housing allowance claims, which affects the rest of the country for new claims.

We have heard a range of contributions this afternoon. My hon. Friend the Member for Hampstead and Kilburn (Glenda Jackson) was highly critical of the proposals, and she raised concerns about their impact particularly on families with children. She made it clear that one of the areas that has not been properly addressed by the Government and many commentators on this agenda is the variance between London housing costs and those in the rest of the country.

The hon. Member for Cardiff Central (Jenny Willott) raised a number of thoughtful and important points about the structure of the broad market rental areas and the complex lives of real individuals who will be affected by the move to the single-room accommodation rate. She made an important point, which I accept entirely, when she said that one reason why we have a dilemma about how to pay for low-income households and housing is due to a 30-year-long reduction in the availability of social housing. I do not want to divert too far from the central topic—I know you will not allow me to, Mr Sheridan—but in 1997 the Labour Government inherited social housing stock in such a poor condition that huge investment had to go into improving the physical conditions of council housing through the decent homes initiative. I have gone on the record extensively over the years to say that I, too, regret that we did not build more social housing. We would still, however, have had a significant number of low-income households in the private rented sector, and we would still be facing some of the same problems.

My hon. Friend the Member for Stockton North (Alex Cunningham) drew attention to the risks of homelessness and eviction in another part of the country. This debate has so often focused on London, and it is good and right for us to recognise that it is not only a London problem. The hon. Member for Brighton, Pavilion (Caroline Lucas) spoke powerfully about the experience of a city with a large private rental market, where the changes will have a profound impact in terms of squeezing out low-income households on local housing allowance across the city.

Since the cuts were introduced by the Government, the debate has concentrated largely on London and a few individual cases. It was good to hear many speakers emphasise that such cases involve a tiny minority of larger households living almost in very high-value properties, something none of us would defend. As the Select Committee report reflected, depending on which figures one uses, the few thousand cases that are at the significantly higher end of the cost market are an issue that the Government could have tackled, if they had wanted to. They could have confined themselves to that, but instead we have almost 1 million—936,000—households that will lose by an average of £12 a week over the course of a full year, once housing benefit changes to the local housing allowance are introduced. It is important that the public understand the sheer scale and spread of the changes, and there will be a nasty shock starting in April with the new cases calculated on the 30th percentile and the other changes phased in later.

[Steve Webb]

It is important that those who listen to our debates understand whether the hon. Lady opposes all the changes. She has mentioned 1 million losers. Does she accept that roughly 500,000 households would have lost in any case through the abolition of the £15 excess, which the previous Government were going to implement but put off until after the election? Does she support those losses affecting 500,000 households, or does she oppose them?

[Ms Buck]

It is right that the Labour Government intended to remove the £15 excess. However, the Minister will accept that the sheer number of people who will lose as a consequence of these changes far exceeds the small number of high-profile cases to which people on his side of the argument usually confine the debate.

We have rehearsed this argument before, so I do not want to spend too much time on it. None the less, the argument was made again during yesterday’s debate on the Welfare Reform Bill that housing benefit is out of control. We know that expenditure on housing benefit increased from £11.5 billion to £21.5 billion over the decade, and only half of that is down to inflation. Social housing rents have risen significantly as a consequence of rent restructuring, and above all—this is the key factor and the reason behind so much concern in the Labour party—case loads have risen. Case load increase has been the main driver of increased expenditure on housing benefit. In the two years since the local housing allowance was fully extended across the country, 87% of the rise in that allowance was driven by case load. During those years of recession, almost half that case load involved either people in work, or those on jobseeker’s allowance who were therefore connected with the labour market and seeking to get back into work.

It is also worth emphasising that local authorities have been making far greater use of the private rented sector in order to place homeless households. That is not a party political point, because the previous Government did that as well, reflecting the shortfall in social housing. In the past year, 60,000 households were placed in the private rented sector at far higher unit cost than if they had been in social housing. Many of those high profile individuals who found their stories in the Daily Mail and the Daily Express were placed in that accommodation by a local authority, because it had no other place in which to put them.

Professor Wilcox was, I believe, an adviser to the Select Committee and has worked extensively for the Department for Work and Pensions. Writing in the new UK Housing Review, he refuted the central Government claim that the local housing allowance was the main driver of inflation in costs:

“The Government have argued that increased rents charged to clients reflect exploitation of the housing benefit regime by private landlords and that this has also been a substantial factor accounting for rising programme costs. The evidence for these claims is not robust. Even if it is assumed that all the above-inflation rise in private rents is attributable to landlord action, this would account for only 10% of the total cash increase in Housing Benefit over the decade.”

We therefore have a rising case load, including a rising case load of those in work, of people who are at risk of losing a substantial share of their income either from April or during the 9 months afterwards. There will be new claims, and many of those people will be forced to move.

We already know that 47% of all local housing allowance tenants have a shortfall between their current rents and the allowance—I stand to be corrected if that is wrong. Therefore, the ability of tenants to absorb an additional shortfall is already small. We know that a substantial number will need to move to a reduced and continually decreasing pool of available property. The National Housing Federation has stated that in London alone, 160,000 claimants will need to fit into 46,000 homes.

There will be a major movement of people. The hon. Member for Woking (Jonathan Lord) made the case that his constituents find it hard to justify people living in high rental areas, and that they want to see costs come down and fewer people living in expensive areas, which may well be true. I understand that concern and that members of the public, particularly outside London, find it a struggle to justify those rents. There is less of a clamour, however, among the communities that seek to accommodate all those who will be required to move, whether that is further out into Brighton, to the edges of London or outside London.

It is worth reflecting on the response given by the London borough of Barking and Dagenham to the housing benefit cuts. Barking and Dagenham is one of the cheapest areas in the south-east, and it is likely to receive a large number of out-movers. I will quote its report:

“Given that Barking and Dagenham has the lowest private rent levels in London…it would be logical to expect that displaced households might…of their own choice look for private rentals here,”

or they might be placed there by other local authorities.

“Such an influx would place additional pressures on waiting lists, social, educational and welfare provision as well as greater demands for support in preventing debt and homelessness.”

It has been estimated that at least 3,000 households will seek to move to Barking and Dagenham. The report goes on to say:

“If rental demand does decrease and housing benefit claimants do migrate to the borough, this may have a significant impact upon the Council’s ability to move its own residents from waiting lists”

into local accommodation. That would lead to increased tension between Barking and Dagenham residents and in-movers—as we know, Barking and Dagenham is a community where we do not want to increase tension between in-movers, many of whom will be black and minority ethnic, and the resident population.

The areas that will be expected to accommodate out-movers are not prepared for it financially: they do not have the resources; they do not have the school places; they do not have the social capacity; and many of them are seeing their grants cut as well. The move to using the consumer prices index will further ratchet down the availability of accommodation until, as the Cambridge centre for housing and planning research has shown, 34% of all local authorities will, within a decade, be unaffordable to everyone on the local housing allowance.

The Minister will say that discretionary housing payments will meet the shortfall and take the strain. It is welcome that additional money has been put into the discretionary housing payment pot and into the homelessness prevention fund for local authorities. However, it is estimated that that money will assist only about 60,000 of the total pool of households. Conveniently, 60,000 is also the figure for the households placed by local authorities in the private rented sector. It will therefore go no further than merely meeting the shortfall of local authorities’ placements of their own homeless households. If it is asked to stretch further, it will not meet the shortfall at all. Therefore, as welcome as the money is, it will go only a very short way towards offsetting the disadvantage.

The measures will mean homelessness, hardship and all the risks set out in the Select Committee report, the Social Security Advisory Committee report and the Government’s own assessment. They will mean, as we have heard, that huge numbers of people who are currently in work—including 1,000 local housing allowance claimants in my borough alone—will lose and lose big. Those people have jobs, and they will be forced a long way out of inner London. They will, of course, face commuting costs that make it extremely difficult for them to make work pay in the new environment.

I want to say a few words about the measures on social housing under-occupation, which so far have not received the attention that they deserve, because they are being phased in a little later than those relating to the private sector local housing allowance. We have seen the equality impact assessment released yesterday by the Department, and we know that the introduction of the size criteria for social housing will affect an estimated 670,000 people throughout the country. That number will rise as the pension age rises. It is 32%—almost one in three—of all housing benefit claimants in the social rented sector.

Most extraordinarily—I think this astonishing—the equality impact assessment states that the number of people with disabilities who will be affected by the change is twice as high as the number of people without disabilities. The Government are seeking to require, in two years’ time, 450,000 households with a disabled recipient of housing benefit to move to an alternative property. That is what the impact assessment says—450,000. The figure is 670,000 people in total. If those people do not move, they will face a shortfall of £13 a week between their rent and their housing benefit. Not only is that a disproportionate and extraordinary impact on older and disabled people, but one wonders how on earth the whole policy of downsizing in relation to the under-occupation rule will work. The total number of households that moved in the social rented sector in the last year for which figures are available was less than 200,000. In 24 months’ time, the Government will expect 670,000 people to try to avoid a penalty on their housing benefit by moving to smaller accommodation. That is three times more than the total number of people who get moved in the social rented sector every year.

Housing authorities, housing associations and councils simply will not be able to meet the demand for downsizing. The position is even worse, because there is a huge regional disparity, with by far the highest level of under-occupation in the north-west of England and by far the highest level of overcrowding and pressure on housing in London and the south-east. Local authorities will not necessarily be able to meet even the demand in their own local authority area. They will be seeking to obtain accommodation from other local authorities in other areas at the very moment when local authorities are tightening their criteria for housing allocations. Westminster council—my local authority—has just announced a 10-year residency qualification for people seeking to move into the area. It will not be offering any of its accommodation to people outside the area who are seeking to downsize.

The sheer mismatch between the legal duties on local authorities and housing associations, their own lettings criteria, their homelessness duties and reasonable preference requirements and what the Department for Work and Pensions expects to happen is extraordinary. I asked the Minister parliamentary questions to try to find out, before we got to the Welfare Reform Bill, what the practical implications of the measures would be. Of course, the reply that I get is that the Minister and the Department are still working on what the practical implications will be.

The scale of the problem is far greater than the Government have admitted, including in their response to the Select Committee. There will be huge practical difficulties in implementing the policies, which I suspect will end up in many cases either not saving any money or being completely impossible to implement, leading to greater responsibilities and homelessness costs in relation to other authorities. That is before we get into the extraordinary situation in which the new affordable housing delivery programme—150,000 new homes—welcomed by the hon. Member for Cardiff Central, will involve higher levels of housing benefit than most properties currently in the private rented sector, thereby pushing up the housing benefit bill at the same time.

A great deal of work needs to be done by the Government to see whether any of the proposals are workable, let alone able to accommodate the sheer hardship and social stress that will be caused by them. It would be nice to be able to house people who are on low incomes and in need for nothing, but that is not a possibility. We have to work with the resources that we have. What the Government are proposing will potentially create a perfect storm of housing need and difficulty with implications going far beyond the housing sector.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Let me begin, quite properly, by congratulating the Select Committee on its thorough and detailed report and by thanking members of the Committee and other hon. Members for their contributions to the debate. Members of the Committee and other hon. Members who have spoken have a lot of expertise on the benefits system in general and on housing and housing benefit in particular, and we have all benefited from that expertise today.

It would have been nice if the Government response to the Committee had been available slightly earlier than the day before the debate, but it was in the hands of the Committee yesterday, ahead of the debate, as I was keen for it to be. Rather than my standing up here and giving the Government response and then everyone going away and deciding what they thought about it, the Government response was already in the hands of the Committee and, as we have seen, members of the Committee have been able to read it, form a view and give further feedback, which has enabled us to have a useful dialogue this afternoon as part of the conversation. From that point of view, this has already been a worthwhile afternoon and a valuable process.

I thank the Chair of the Select Committee, the hon. Member for Aberdeen South (Dame Anne Begg), for acknowledging some of the important steps forward that have been made since the Committee’s report was tabled. There was some suggestion that we had paid no attention to it, but in her opening remarks, the hon. Lady graciously flagged two particular areas in which there has been significant progress since the Committee’s report was produced. One was on research into the impact of the changes. The other, which was the subject of several paragraphs of recommendations from the Committee, was on the previously proposed 10% cut in housing benefit after a year on jobseeker’s allowance.

It is tempting to say that Government responses to Select Committee reports should be judged by action, not words. If a Select Committee recommends a specific change in policy, and a change in policy subsequently takes place, it is a little ungenerous of members of the Committee to say, “Ah, yes, but the wording of the response was not good enough,” or something similar, especially if it were done at significant cost to the Exchequer. The hon. Lady, of course, was characteristically gracious.

It may help if I update hon. Members on where we are on monitoring the impact of the changes. The Committee issued a press release to accompany the report three days before Christmas—it is good to see that they were working right up to the deadline. In it, the hon. Lady said that

“it is too early to determine if this will happen in reality, which is why it is hard to say exactly what the impact of these changes will be.”

There is an element of uncertainty, which is why we always intended to commission research and to monitor the impact of the changes. Discussions with their lordships prompted a fuller discussion of the form that it would take.

The research that we undertake will be independent. It will include comprehensive primary research on the effect of the changes on different types of households in a range of areas. The debate has shown that the impact of housing benefit in Blackpool is different from that in Cambridge or central London. We accept that, which is why the research will cover the whole of England, Scotland and Wales. It will be done over the next two years, due to a factor that was given insufficient attention in our debate. With a nine-month transition period, and with no change happening until the anniversary of claims, some people will not be affected by the change until December 2012.

That is the roll-out period, which is significant. Rather than there being a day when everyone’s housing benefit is reassessed, with everyone competing for the same properties, new tenancies will be dealt with under the new rules, which is precisely the point of the exercise. We did not want people to be locked into new tenancies at above the new limit, day after day and month after month, only for us to say, “Oh, no, we’ve cut the limits, so the decision that you made three months ago is not valid.” Instead, from April new tenancies will come under the new rules, so people starting new tenancies will face the constraints that anyone else will face, as we discussed earlier, rather than having a more generous system. It is right to make new tenancies under the new rules and to give existing households more time to adjust.

[Ms Buck]

Does the Minister mean new tenancies or claims, or changes of circumstance that affect existing claimants?

[Steve Webb]

That is a helpful question. We are talking about what happens after April. For people who are working but who become unemployed post-April, it will clearly be a new claim, and it will be dealt with under the new rules. The fact that they happen to be living in the same house as before will not affect the claim. However, as their circumstances change, they will face the new regime. They will have to decide whether to take the new rules—the new regime—and stay where they are. For example, if someone becomes temporarily unemployed but has a pretty good chance of getting a new job—many folk who become unemployed are typically back at work within three to six months—a short-term period on a tighter housing benefit regime can be accommodated before moving back to work.

The hon. Lady asked about the existing case load and the protection that we give those cases. The majority of relatively minor changes in circumstance will not affect ongoing entitlement.

[Ms Buck]

I am grateful to the Minister for allowing me to interrupt him again. In many parts of the country, the shortfall will be relatively manageable, which would accommodate his point about people being temporarily out of work. In London and some other high-cost areas, however, the difference could be £5,000 or more over three months. In those areas, the shortfall will be such that people who lose their jobs will also lose their homes.

[Steve Webb]

The phrase “lose their homes” is rather evocative and misleading. When people say that they have lost their home, they are usually describing repossession—their home; their loss. What the hon. Lady describes is someone who has presumably managed to sustain a very high rent—if the shortfall is £5,000 in three months, the rent must be enormous.

The suggestion that the taxpayer should keep paying a vast rent while the claimant decides whether to stay in the property brings me back to my fundamental concern about the tone of the debate, which relates to balancing the responsibilities of the individual and of the Government. It was evident to some extent in the remarks made by the hon. Member for Aberdeen South, and particularly in other contributions, that almost every combination of circumstances, every possible need and every possible variation was deemed to be responsibility of the Government.

The hon. Member for Hampstead and Kilburn (Glenda Jackson) mentioned our response to the Committee’s report and some specific needs. For instance, she said that people living in a larger house might need somewhere to put a wheelchair and questioned whether it should be included in statute. The implication of what Committee members were saying is that they did not want it decided on a discretionary basis, but wanted it written into law. The point about our allowing an extra bedroom for carers is that we have legislated for it; after deciding on a category of clearly identified people and clearly specified needs, we wrote it into legislation, and it has become a right. However, there is a dividing line between identifiable, clearly categorised groups with particular needs and the much broader group listed in the Committee’s recommendations that may need a room for a wheelchair or something else.

The question is not, “Do we give a damn?”—I am sorry; I mean, “Do we care?” The hon. Lady implied that the Government do not care and that we are telling people to get lost. No; as my hon. Friend the Member for Cardiff Central (Jenny Willott) said, the Government believe that some needs should be written into statute, which we have done in cases where previous Governments did not act. However, other needs are so diverse that we should have the local flexibility to respond when the need arises. That is better than sitting down in Whitehall, trying to think of all possible circumstances and writing primary legislation to deal with them, which is not a sensible way to proceed.

--- Later in debate ---

[Steve Webb]

As the hon. Gentleman has said, local authorities are making plans to reduce staff over the coming years. Some local authorities have chosen to frontload more than is necessary—more than is proportionate to the cuts that they have had—for their own political reasons. Nobody disputes that this is a difficult financial environment for local government; it is. Part of the problem is that spending has been allowed to get so out of control that we have had to rein it in rather rapidly.

[Ms Buck]

rose—

[Glenda Jackson]

rose—

[Steve Webb]

I will give way to the hon. Member for Westminster North in a second. One of the reasons why deficit reduction is so vital is that so many items of spending have become too large. Some of the concessions that we have talked about would be £100 million here or £500 million there. Very soon they add up to serious money.

[Ms Buck]

Let me make one thing clear. Of course the financial context is important. When I used the word resources, I was not only talking about money, but making an important point. With the social housing stock, we only have so many units into which we can pack people on lower incomes. We know that many people—we know how many—need to be accommodated in the private rented sector, and we know the geographical distribution of those properties. One of my big concerns is that we are attempting to do something with that that cannot be done.

[Steve Webb]

That is where I fundamentally disagree with the hon. Lady. The flaw in her analysis is this static view of the world: housing stock and the private sector is as it is and nothing can ever change. The figures that she quoted from the impact assessment assume that nothing changes. The losses she quoted assume nothing changes. Nobody can find somewhere cheaper to live; they just stay where they are and lose the money. Rents do not go down; they stay exactly as they are. The impact assessment from which she quoted is the worst-case scenario.

However, what actually happens is different. Let me give an example. If we were able to reduce rents by £10, that would wipe out nearly 500,000 people with shortfalls. One of the questions that was asked in the debate was: how will landlords respond? Guess what? When landlords were surveyed, they said, “Oh, we won’t cut our rent.” Well, there is a shock. Of course they would. They do not want these cuts because they are the ones who will be most affected. I was very surprised by the hon. Member for Brighton, Pavilion (Caroline Lucas) for whom I have a lot of respect—sadly, her contribution was 90% polemic and 10% substance—because she seemed to be defending private landlords. They are the people who get this money. They are the people who have got the £21 billion that used to be £11 billion 10 years ago. I did not know that they were her best friends. That is where the money is going.

The question is: if we go to direct payment in cases in which it will secure a tenancy, will landlords bite? We have 1 million private sector tenants on housing benefit. We have all seen adverts that say, “No housing benefit” but there are also 1 million people with private sector landlords getting housing benefit. Therefore, someone out there is renting to people on housing benefit. If a private sector landlord is renting to someone whose housing benefit gets squeezed and they or the council says to them, “You can have a guaranteed rental stream straight into your bank account month after month if you will reduce your rent to a level that will enable the tenancy to carry on” that is hugely attractive. It is turning a tenant into a triple A credit-rated tenant rather than someone who may or may not pass on the rent.

--- Later in debate ---

[Steve Webb]

The hon. Lady can have 5,000 families, but she is, I think, losing sight of zeros. For someone in the Department for Work and Pensions, £100 million does not seem such a big figure, but it is a colossal amount of money that is not providing value for the hard-pressed, low-paid taxpayer, who often does not live in brilliant accommodation. It is not a good use of £100 million.

[Ms Buck]

I will try to make this my last intervention. Given that the Minister says it is a colossal amount of money, does he agree that introducing affordable rents in the social rented programme, which will add £200 million to the cost of housing benefit, is also not a good example of joined-up government?

[Steve Webb]

As the hon. Lady knows, a lot depends on who takes those tenancies. If they are people who would have been in lower-rent social tenancies, the housing benefit costs will be higher, but if they are people who would have been renting in the free-market private sector, the costs could end up being lower. The numbers that she quotes are spurious.

--- Later in debate ---

[Steve Webb]

Across the country. It has risen since November 2008 by 440,000. To listen to the hon. Lady talk, one would imagine that tenants on housing benefit cannot find anywhere to live. There are 1 million tenants on housing benefit in the private rented sector. To listen to her, one would think that those people do not exist. Unfortunately for her, I am afraid that what she describes is at variance with the facts.

[Ms Buck]

Will the Minister give way?

[Steve Webb]

As such a wide range of issues were raised during the debate and a number of hon. Members have contributed to it, I will make a bit more headway and then I will be happy to give way again.

I was about to describe the evaluation and assessments that we will be carrying out, because a lot of the points that were raised during the debate were about particular groups of people. I want to identify the facets of the research that we will be undertaking.

To ensure that we gather the evidence required on key areas of concern, such as the behavioural and market responses of claimants, landlords and external organisations, we will commission primary fieldwork that will cover a number of issues, which I will now take the House through. They are: homelessness and moves; the single shared accommodation rent, which I will come back to later because there were a lot of misconceptions about that during the debate; the impact on Greater London, which is explicitly in the terms of reference for the research; the impact on rural communities, which I think has been mentioned in the debate; the impact on black and minority ethnic households, which has been mentioned; large families, family life and children’s education, and schools, for example, were mentioned in the debate; older people, who were mentioned in the debate; people with disabilities; working claimants; landlords, and housing and labour markets. There will be comprehensive evaluation that will start imminently and that will run over a two-year period. We will be watching—very carefully—what goes on and we will be reforming the system, with measures such as the allocation of discretionary housing payments.

Discretionary housing payments are quite important. Although the allocation of those payments for 2011-12 has been determined, the allocation has not been determined beyond that time. The total budget has been determined and it will treble. This year, it will be £20 million and then it will be £60 million a year for the next three years. We will treble the total budget. However, where the money goes will be informed by the early roll-out and by the research. We will base the policy on the evidence about the impact on the ground. If there are particular areas—hot spots—where there is particular pressure, we will be able to gear the discretionary housing payments money to those areas.

I enjoyed the observations of the hon. Member for Aberdeen South, who is the chair of the Work and Pensions Committee, about how often we refer to discretionary housing payments. I take her point. I read the Government response myself and I noticed the same thing. However, there is a reason for it. It is that the Select Committee’s report quite properly identified specific sets of circumstances that need to be addressed and they will be addressed by a response that is tailored to the local situation. If there are particular geographical areas where there are particular local pressures—we heard about a number of such areas during the debate—the DHP system will be tailored to those areas. It is almost a circular argument. That is the reason why the DHP system is our answer to most of the questions put to us, because it is the best way to respond to different but equally significant local issues of the type that have been raised during the debate.

I now come to the issue of the shared accommodation rate. Technically, I know that the title of the Committee’s report is, “Changes to Housing Benefit announced in the June 2010 Budget”, but as the shared accommodation rate was covered in the report I will address it.

The question is, “Why do we pay a shared accommodation rate to the under-25s only, because many young people are sharing and is it fair”—to come back to the point about fairness made by my hon. Friend the Member for Ealing Central and Acton (Angie Bray)—“that someone in their early 20s on housing benefit can, in principle, get a flat to themselves but someone in their early 20s who is in work and beyond the reach of the housing benefit system has to share, because they cannot afford a flat of their own?” That is the thinking and in fact that was why the shared accommodation rate was introduced. I think that it was introduced about 15 years ago, if I remember correctly. It has certainly been a feature of the system for many years.

When we have looked at the 25 to 35 age group, we have found it striking that a very high proportion of individuals who are not on housing benefit in that age group are also sharing accommodation. The number of people sharing accommodation does not tail off dramatically at the age of 25. More than 40% of non-students—single people—in this age range are sharing accommodation in a range of situations.

Various questions were asked about shared accommodation during the debate. For example, “Is any of this sort of accommodation available?” One of the notable things is that about 50% of those being paid the shared accommodation rate now are over 25. We have to think about that for a moment. The shared accommodation rate is only imposed on the under-25s, but if someone applies for housing benefit from shared accommodation and they are over 25 they receive the shared accommodation rate, even though they could receive housing benefit for a one-bedroom flat. There is a set of people over the age of 25, therefore, who could receive housing benefit for a one-bedroom flat but who are living in shared accommodation. That suggests, first, that some of those people have chosen to do so and, secondly, that the properties of that type exist. That helps to counter the suggestion that those properties simply do not exist.

Of course, there will be local variations. I accept that point and I will come back later to the point about houses in multiple occupation. However, I think that the hon. Member for Aberdeen South, the Chair of the Select Committee, wants to intervene.

--- Later in debate ---

[Steve Webb]

No. The hon. Gentleman, possibly with my help, might be confused. We have already had lengthy debates on CPI as a measure of inflation for uprating benefits, and our judgment is that it is the most appropriate measure of inflation. What I am talking about here is what we do to the LHA rates in 2013. We will put a brake on them rising faster than inflation for two years, and at that point we will look at the impact. That is all I am saying. We are putting in place a mechanism that will cause a pause in that remorseless rise, and I have heard almost nothing in this debate about how we will tackle the growth, apart from building more houses, which is vital—in the past year, we have had the lowest rate of private house building on record, or certainly for a very long time. The argument appears to be, “Lie back and take it,” but that is not the action of a responsible Government.

My hon. Friend the Member for Cardiff Central raised the issue of broad rental market areas, which is relevant in the CPI context. If LHA rates are to be subject to CPI, ideally the broad rental market areas should not move around because the base figure subject to CPI would not be clear. The broad rental market areas must be frozen at the point at which one goes to CPI, and the question is what they would be at that point. My hon. Friends the Members for Cardiff Central and for Cambridge (Dr Huppert) have properly highlighted the problems with the city of Cambridge and the wider area of Cambridgeshire, and although there have been changes to the BRMAs around that area, the idea is that they will be fixed in 2013. My hon. Friend the Member for Cardiff Central mentioned coterminosity with local authorities, in relation to Wales, and that is one of the options being considered. It is an option that has a number of attractions. In London, it would mean that the BRMAs were smaller, and the affordability figures would therefore be within a tighter geographic area. We would be unlikely to make significant changes this side of 2013, partly because every time the rules are redrawn, another set of gainers and another set of losers are created. So, we would rather do that at the point of moving to CPI in 2013.

Local authority boundaries are not without their own problems. Many of my Liberal Democrat colleagues represent seats in Cornwall. Cornwall is now a unitary authority and the whole of Cornwall would be one BRMA—I think that BRMAs can be smaller than that. My colleague who represents Land’s End, my hon. Friend the Member for St Ives (Andrew George), and my hon. Friend the Member for North Cornwall (Dan Rogerson) might have views about the interchangability of their two areas. There is no simple solution, but we are certainly looking at local authority boundaries in response to the points that my hon. Friend the Member for Cardiff Central has raised.

Universal credit has been mentioned, and it was asked whether housing benefit would go in at a flat rate. The details of that will be discussed more in the Welfare Reform Bill Committee, but my certain understanding is that the intention is not simply to have a “so much for housing” number in the universal credit. I think that the approach will be much more tailored, but I am sure it will be discussed much more fully in the Committee.

On the under-occupation rules, it was asked whether people would be moving from three-bedroom houses to one-bedroom flats. The data show that about three quarters of the under-occupation in the social rented sector is by only one bedroom, so the move from three bedrooms to one bedroom would represent perhaps a quarter of the change. The impact might not be quite as great as I think the hon. Member for Westminster North suggested, but we have just published some more data on that.

[Ms Buck]

I am grateful to the Minister for giving way again; he is being generous. We will be addressing this issue in the Committee on the Welfare Reform Bill, so we must think about it.

In my contribution, I mentioned that the total number of transfers in social housing stock in one year was only one fifth of the total number of people who will need to move to avoid the under-occupation penalty after its introduction. Has the Minister thought about that and discussed it with the Department for Communities and Local Government? Surely any penalty applying to people in the social security system must be avoidable. The question is whether the capacity in housing stock makes the under-occupation penalty avoidable.

[Steve Webb]

It is important to remember that we are discussing a change that will not be introduced for more than two years. The fact that local authorities and housing associations know that the change is coming two years down the track will affect tenancy decisions and allocations now, so it will be part of the mix. Putting someone into a property that they are under-occupying, knowing that in a few years’ time they will not be covered by housing benefit, would raise issues. The situation will be ameliorated partly by forward planning. However, these are issues in the Welfare Reform Bill rather than the report. I fully accept that they are important issues and will need to be managed.

I propose to allow the Chair of the Select Committee to respond at the end of the debate, if she would like to do so, so I will leave some time for that, but first I will consider some of the main themes that have emerged during the course of this debate. The dropping of the 10% cut after a year was an important theme of the report, and we have heard several hon. Members discuss their quite proper concerns about that. We took the view that the measure was not necessary after 12 months on benefit, given the introduction of the Work programme, which will support people, and the universal credit. We took account, obviously, of what the Select Committee and others who made representations had to say. Naturally, I was pleased that the proposal was withdrawn. It is another example of how we have responded to the proper concerns raised by the Select Committee.

Since the proposals were first published, they have been considerably improved. On the nine-month transition, the changes will start to have an impact from April, but rather than a cluster of people chasing after the same properties, we will see the rental market start to adjust. Landlords will adjust their rent-setting behaviour; we will see whether the mechanism that we have implemented—direct payment, where that enables a tenancy to happen—is working; and we will be able to refine it over the next nine months before almost nobody with an existing claim starts to be affected. I stress that people will not be affected until the anniversary of their claim. For some people, that will be 18 months or more. The process will be gradual, giving us a chance to monitor what is going on and to consider the allocation of discretionary housing payments as we go, which improves the proposition considerably.

To draw the threads together, one thing that strikes me about this debate is that it is clear that whoever was running the country at this point would have done a number of the things that we have done and are now being criticised for. We have heard figures quoted on the losers: 500,000 people will lose an average of more than a tenner a week from the abolition of the £15 excess. The previous Government decided to delay that change by a year, because there was an election coming, but we are going to do it, yet the figures for losses have all included that. It would be unfortunate if anyone gained the impression that we are making new policy and new decisions. This would have happened anyway and was part of what was planned.

As my hon. Friend the Member for Cardiff Central said, the previous Government applied bedroom caps. They drew the line at five, and we draw the line at four, but the principle is identical. The outgoing Administration stood on a platform of restricting housing benefit to what somebody in work could afford. What does that imply? The 30th percentile. Using the 30th percentile, getting rid of the excess and applying bedroom caps is virtually there. I hesitate to say this, but almost everything that we are doing is Labour party policy, yet the Opposition suggest that this is some sort of evil right-wing plot to attack the poor.

The idea is that the housing market is not static. It is influenced by what the Government do. We cannot spend £21 billion a year subsidising rents without influencing the housing market. Does anyone think that if we abolished housing benefit tomorrow, it would not have a massive effect on the rental market? It would have a huge effect. We are players in the market, and we have a huge effect.

Our challenge is to ensure that the system is fair. In most rental market areas, 30% of properties will be affordable. There will be a transition to the new system of at least nine months for existing tenants and up to a year after that to ensure that in difficult local situations treble the amount of discretionary housing payment will be forthcoming. The fact that the budget is £20 million this year and will be £60 million in two years’ time, repeated over a three-year period, indicates that we accept that there will be difficult individual cases in which adjustments must be made, which is why we have provided the money.

I do not apologise for tackling something that has gone untackled for too long. The budget was growing remorselessly by billions year after year. We must ensure that taxpayers’ hard-earned money is well spent, and we believe that the housing benefit changes will make that difference.

Oral Answers to Questions

Karen Buck Excerpts

Monday 14th February 2011 Commons Chamber

[Mr Duncan Smith]

Absolutely. The interaction between the universal credit and the Work programme is critical. In a sense, one without the other will not work as effectively. The purpose of the universal credit is to ensure that entering the world of work becomes much easier, because people will retain more of their own money: we will be lowering marginal deduction rates. In some cases, on average, those in the bottom two deciles will see an increase in their weekly pay of about £25 a week after they enter work—a significant increase. The Work programme, which my right hon. Friend the Minister of State was talking about, will help with those who are more difficult to place. For the first time, they will get a tailored programme that helps them to deal with their problems, and gets them into work and maintains them there for up to a year, and in some cases more.

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

Will the Secretary of State confirm that the Government intend to save £1.3 billion between now and 2015 by reducing the child care element of the tax credit? Will the universal credit be sufficiently resourced to ensure that no working parent out of the 488,000 households that stand to lose anything up to £30 a week will be any worse off than at present?

[Mr Duncan Smith]

We are returning the levels on the child issue that the hon. Lady is talking about to the levels left by the previous Government in 2006. It is all very well for the Opposition to nit-pick and say that they are desperately in tune and on side with all those people who are going to feel the squeeze, but in reality the Labour party now has a leader who was responsible, with his colleagues, for spending money like there was no tomorrow. That has left us with a major deficit, and now we have to get that money back. If she does not like what we are doing, please can she tell us where she would intend the money to come from?

Work and Pensions

Karen Buck Excerpts

Wednesday 12th January 2011 Ministerial Corrections

The following is the answer given by the Secretary of State for Work and Pensions (Mr Duncan Smith) relating to a question from the hon. Member for Westminster North (Ms Buck) during Work and Pensions Question Time on 10 January 2011.

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

Does the Secretary of State accept the Office for Budget Responsibility figures, revealed to my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander), that an extra two thirds of a billion pounds will be spent on housing benefit as a result of rising unemployment over the next four years?

[Mr Duncan Smith]

The OBR is independent and the Government of course accept what it publishes as independent figures. We go by what the OBR’s figures say. As the hon. Lady knows, we inherited a financial mess left by the previous Government. What we are doing is to make sure that we reduce the ballooning cost of, for example, housing benefit that she left behind—a bill that doubled in the past five years.

[Official Report, 10 January 2011, Vol. 521, c. 9.]

Letter of correction from Mr Iain Duncan Smith:

An error has been identified in the oral answer given on 10 January 2011.

The correct answer should have been: