Universal Credit: Rent Arrears

Debate between Lord Freud and Earl Cathcart

Wednesday 13th July 2016 Lords Chamber

[Lord Freud]

The best evidence I have got at the moment is a gateway review, which shows that a rather high figure—48%—of the singles on UC have got arrears, but, interestingly, half of them were pre-existing arrears. That compares with 31%—so it is higher—but the interesting thing is how quickly it comes down. In the second wave—that is, three months later—it comes right down to very close to the JSA figure. There is a lot of complexity here; it is not straightforward at all. I am looking at it with some urgency.

[Earl Cathcart (Con)]

My Lords, during the passage of the recent welfare Act the Government were warned by several noble Lords from around the Chamber that, if they did not allow tenants to choose to have the rental part of their universal credit paid direct to their landlords, then rent arrears would increase. As the noble Lord, Lord McKenzie, has just said, arrears are increasing dramatically, but at the time the Government said no. Why can universal credit be paid directly to mortgage lenders for mortgage interest but tenants cannot choose to have the payment made directly to their landlords?

[Lord Freud]

What we are aiming to do with universal credit—and there is evidence of success in this—is to get people to take control of their own lives. It is much more difficult for people to switch to going into work if their rental situation is locked up in a dependency situation. We are aiming to free people from that so that they can move into work. There are good signs that we are being successful in getting people into work.

Welfare Reform and Work Bill

Debate between Lord Freud and Earl Cathcart

Monday 21st December 2015 Lords Chamber

[Lord Freud]

I will not resist the temptation of pointing out that there is no such thing as a bedroom tax; it is the removal of the spare room subsidy, and I will be answering a Question on that tomorrow. Interestingly, the direct payments project provided a lot of insight into this issue. It started off with direct payments and then people started taking on the removal of the spare room subsidy as well. I will try to find the precise figures for the noble Baroness, as I am speaking slightly from memory. We found that the people who had learned how to go through the direct payment process were able to handle the removal of the spare room subsidy more efficiently than others. I will aim to get the noble Baroness chapter and verse on that.

[Earl Cathcart]

My Lords, I am disappointed by my noble friend’s response to these three amendments. He seems to have said no to all three of them and I find that very disappointing. I do not think he has said anything this evening that has given any encouragement to private landlords to take on people who are on universal credit. In fact, he has probably reinforced the idea that one should not take on people who are on benefits, but that is not what my amendments are trying to do; they are intended to get people on benefits to go into private rented accommodation. I do not think that my noble friend has helped at all this evening, but I will read what he has said more carefully tomorrow or over the holiday period. At this stage, I beg leave to withdraw the amendment.

Housing: Underoccupancy Charge

Debate between Lord Freud and Earl Cathcart

Tuesday 22nd July 2014 Lords Chamber

[Lord Freud]

This report was based on evidence from last autumn and we have had data since then that show that people are adapting. The numbers affected are falling and are now down 70,000 people; arrears have fallen in the past two quarters and rent collection remains for the Homes and Communities Agency for the social sector at 99%; homelessness numbers are reducing and are down 7% on the year. As for DHPs, we had a quarter of a million payments last year to people affected by this policy and we had £20 million returned to us unallocated. Finally, the Court of Appeal has upheld the Government’s position that DHPs are the proportionate remedy for looking after people with problems from this policy.

[Earl Cathcart (Con)]

My Lords, as a landlord I recall that the last Labour Government brought in this very same measure for the private rented sector. So why is Labour making such a fuss now—with the Liberals apparently jumping on the bandwagon—when all this Government are doing is rolling out to the public sector what Labour did in government to the private sector?

[Lord Freud]

My Lords, the private sector had the LHA introduced, as my noble friend pointed out, by the previous Government. We had to take steps to constrain the spending on that. We have taken £2 billion out of that benefit for savings. The results of that also came out last week. The final report was dramatically less in its impact than the predictions that we had. Instead of landlords pulling out of the market, they have increased their supply by 7%. There has been very little evidence of displacement; a very marginal probability of moving home; and again we have had homelessness acceptances coming down. We are on the same trajectory with the spare room changes as with the LHA changes.