Housing Benefit

Debate between Alex Cunningham and Anne Begg

Thursday 10th March 2011 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

I am pleased to have an opportunity to contribute to the debate. I congratulate my hon. Friend the Member for Aberdeen South (Dame Anne Begg) who chairs the Committee. This is the Committee’s first report and she has led us well to some excellent conclusions. I will concentrate my comments on evictions and homelessness, which I believe will affect many people in my Stockton North constituency, as well as across the north-east of England and beyond. The Government’s proposed cuts will, of course, have that result.

It is worth remembering some of the things that we heard while taking evidence. The Committee took extensive evidence from many organisations and interested parties on the subject. We took much evidence from Shelter, which—among other things—told us that 147,000 families with 250,000 children and 20,000 households with people over 60 would be put in serious difficulty by the proposals, and that is not just financially. The Mayor of London estimated that there would be a 50% increase in homelessness in London, costing £78 million for the 5,000 households in the city that could be placed in temporary accommodation.

There is more—much more. Nearly 3,000 people in the small borough of Stockton-on-Tees will lose out by at least £7 a week thanks to the changes. Most of those people are in my Stockton North constituency rather than in Stockton South, which is represented by a Conservative Member. To some people, £7 is not a lot of money. However, that can represent food on the table for a family for two or three days. Large families are particularly vulnerable to the changes proposed by the Government and could face temporary homelessness, especially in central London. There will also potentially be an increase in poverty, including child poverty.

I make no apology for referring time and again to Shelter, which is one of the most credible organisations that I know. It, along with other organisations, has expressed concern that the number of households living in overcrowded properties will increase as a consequence of the reforms. According to Shelter’s written evidence, 1 million children are living in overcrowded conditions across the country, which is not only a problem for large families. Shelter also estimates that 72,000 families with 129,000 children may be forced to move out of their existing homes and that children will be uprooted from schools, which impacts on their education and social development.

It is likely that the reforms will lead to a significant movement of local housing allowance claimants from higher to lower rent areas. Those areas are likely to be relatively deprived and lacking in job or training opportunities, transport links, good schools and so on. The reforms have other wide-reaching effects, which can only add to the considerable burden on already stretched local authorities and on resources such as schools and doctors at a time when local authority spending is being decimated by the Tory-led Government. In the Stockton borough, there is a 28% cut in grant over the next two or three years, most of which is front-loaded.

My hon. Friend the Member for Brighton, Pavilion (Caroline Lucas) mentioned that it is important we do not detach housing benefit from the broader issue of affordable housing provision and the difficulties for first-time buyers, especially in London and the south-east—although it is a problem across the country. The Government say that they will build 150,000 new affordable homes over the next five years, but that is less than a third of what the country actually needs. I recognise that Labour could have done much more in government to secure more adequate provision of social housing, but it is important to recall that, when we came to power in 1997, we were left with a £19 billion maintenance backlog by the previous Tory Government. I often wonder what the picture would be today if we had been able to spend that £19 billion on building new homes.

The Tory failure to fund the upkeep of social housing meant that hundreds of thousands of families were living in substandard and even dangerous conditions. Through our decent homes programme, council-owned homes have been fitted with more than 700,000 new kitchens, more than 500,000 new bathrooms and more than 1 million new central heating systems. More than £33 billion—£21 billion of it from central Government—has been invested in social housing, and we have reduced the number of non-decent social homes by 1.5 million. Yes, that created tens of thousands of jobs, but those jobs have now gone, forcing more people out of work and making them dependent on the kind of allowances we are debating today.

The Committee made a series of recommendations around the issues aimed at getting a balanced approach to change, and the Government responded just over 24 hours ago. Apart from the stark statement that the Government consider the estimates made by witnesses to have been exaggerated and that, in any event, the extra £190 million of funding will meet the challenges, however great, the response offers limited consolation to the people who will be most affected by the changes. Like others, I am not sure that the £190 million will go anywhere near to meeting the transition costs and other challenges. Paragraph 30 of the response states:

“If landlords reduced rents by £10 a week there would be a significant reduction in the number of customers in receipt of Housing Benefit under the Local Housing Allowance Scheme that would face a shortfall.”

There are two problems with that. First, I remain to be convinced that the claimed downward pressure on rents will happen, regardless of the number of people in receipt of that benefit. Secondly, why should families and individuals who have so little to start with have to face cuts in their weekly income for some politically motivated reason that I fail to understand?

Yes, I have heard the arguments, such as those made by the hon. Member for Woking (Jonathan Lord), who has left the Chamber, about it being unfair for people on benefits to live in the same or even better homes as people in employment. However, we surely do not accept the Daily Mail-type rhetoric that suggests the bulk of families on benefits are wasters and scroungers. They are not, and it is time we saw evidence of the care that the Government claim to have for our most needy. The Daily Mail line is disproved best by Shelter’s evidence that 0.01% of the entire local housing allowance caseload is represented by households claiming the maximum rent available.

Apart from the welcome decision to see sense and abandon the punishment of people on jobseeker’s allowance by fining them 10% of their housing benefit for being unable to find a job within 12 months, I am disappointed by the Government’s response to the report, which contains a set of recommendations put forward with the full agreement of the Select Committee. We have had a very thin response, indeed. As the Government’s programme is rolled out and the experts who gave us evidence are proven to have had well founded fears, I hope that the Government will take corrective action quickly and not allow a new underclass to be left deeper in poverty and struggling to find a home.

[Dame Anne Begg]

I wonder whether, with my hon. Friend’s experience as a local councillor, he has been able to quantify how much extra it may cost local councils to deal with the homelessness that will arise as a result of the Government’s proposals, and, indeed, the increase—perhaps return—of the bed and breakfast, which will be the only alternative that many people will have, as a result of being forced out of their homes?

[Alex Cunningham]

I do not currently have the specific details relating to Stockton-on-Tees, but I know that there are anxieties about everything, from how the council will deal with housing benefit in the future, to how it will deal with the people who are going to lose their jobs, as its responsibility is removed. It expects a considerable influx of people into the housing department seeking accommodation and further help. Whether that will be available, I do not know, and that is all the more reason why, as the Government have been proved to have been wrong on this issue, they will need to take quick action and correct it.