Housing Benefit

Amber Rudd Excerpts

Tuesday 9th November 2010 Commons Chamber

[Amber Rudd (Hastings and Rye) (Con)]

Fairness is a constantly recurring theme today, and fairness has been the dominant feature of this reforming Government’s coalition agenda. I agree with my hon. Friend the Member for Stockton South (James Wharton) that we must also be fair to the people who pay the taxes that pay for the housing benefit and local housing allowance.

I know what I am talking about, because my constituents earn extremely low wages. In the past 10 years the average wage in Hastings, which used to be £30 below the average United Kingdom rent, has fallen to £100 below that figure. I know about low wages. The hon. Member for Glasgow North East (Mr Bain) spoke of people who were vulnerable. People on low wages are also vulnerable, and I feel strongly that they should not be charged with paying the housing benefit of people who live in houses and in areas where those on low wages could not begin to live themselves.

[Caroline Flint (Don Valley) (Lab)]

Does the hon. Lady agree with councillors in Hastings who have expressed concern about the additional pressures that the Government’s policies will impose on their local community, including additional costs for education and children’s services?

[Amber Rudd]

I am grateful to the right hon. Lady for making that point, because it is exactly the one with which I am about to deal. Earlier in the debate, we heard about sensational articles in newspapers and unrealistic reporting. I am afraid that Hastings has been on the receiving end of quite a lot of that. I have spoken to the councillors who made those comments and to our director of housing, Andrew Palmer, who has done excellent work. I asked him how many London councils had made inquiries of him, and he said none. I asked him whether he had had an opportunity to speak to the people who run the bed-and-breakfast establishments that he very rarely uses—although he has had to do so occasionally—and to the landlords whom he uses for the purposes of the local housing allowance. He said that he had spoken to all of them, and that not one of them had received such an inquiry.

I strongly believe that we have been reading sensationalist reports in the newspapers. There is an apocalyptic vision of a group of Londoners arriving on the south coast, but it simply is not happening. I think it important to repeat that so that people do not become fearful. They do not have to believe what is said by the right hon. Member for Don Valley (Caroline Flint) about extra pressure on education establishments, because that is not happening at the moment.

We hope that rents will fall. Members will not be surprised to hear that I agree with much that has been said by Conservative Members about reducing rents. The right hon. Member for Greenwich and Woolwich (Mr Raynsford) spoke of the unrealistic aspect of falling house rents, and referred to an article in the Evening Standard that focused mainly on larger houses. In my constituency at least, between 80% and 90% of people who receive local housing allowance live in homes with one to two bedrooms. The larger house element does not feature so much, although it represents a large cost. I am told by Westminster council, whose representatives I have consulted, that house prices in its area are falling rather than rising.

[Mr Raynsford]

When the hon. Lady reads the record of the debate, she will see that among the quotations that I gave from the article in the Evening Standard was one from an agent who said that properties of all sizes were affected, from the largest to the smallest, and that all areas of London were affected.

[Amber Rudd]

I am interested to hear that London is affected. We will see the consequences, but at present I am receiving different answers and people are reaching different conclusions. It is not entirely clear how the private sector will respond, but one thing is entirely clear: we cannot continue with the cost as it is now.

[Mr Heald]

When the London councils gave evidence to the Select Committee, they said that 40% of landlords would cut their rents.

[Amber Rudd]

The 40% figure is totemic in this debate. As we know, 40% of private rented properties are used by the Department for Work and Pensions.

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

Like me, the hon. Lady represents a seaside town. If Kosovo-style clear-outs do take place in the inner cities—[Interruption.] It was Boris Johnson who used that phrase. If that does happen, it is logical to assume that people will go where there is cheap available accommodation: houses in multiple occupation in seaside towns such as the hon. Lady’s and mine.

[Amber Rudd]

The hon. Gentleman obviously does not want to let the facts interfere with a good story. Some of the newspapers have taken the same view. However, he too should try to look at the facts. He should establish whether London councils are making such inquiries, and whether B-and-Bs are being booked up. There is absolutely no evidence of that. Rents are expected to fall, which will make things less costly for us all.

[Ms Buck]

My local authority, Westminster council, has written to me and to Ministers in the Department for Work and Pensions and the Department for Communities and Local Government, asking for changes in the homelessness legislation because of the potential impact of the cuts, and stating that it will expect substantial out-of-borough bookings for temporary accommodation if the proposals go ahead unamended.

[Amber Rudd]

That is an interesting comment, but I can tell the hon. Lady that I have spoken to the cabinet member in charge of Westminster council—which has the largest supply of houses at the top level above the cap—and she told me unequivocally that the council was not doing that.

[Ms Buck]

I have a letter.

[Amber Rudd]

I also have a letter. Perhaps we can exchange letters later, and see what the conclusion is.

It is impossible not to see these reforms of housing benefit outside the context of the overall attempt to carry out the reforms of the welfare system to which the Government are so committed. I commend to all Members a fascinating article in today’s The Times by a former Labour Secretary of State for Work and Pensions, in which he draws strong parallels between our efforts to reform the welfare system and the proposals on which he had been working for the past few years, until the last two years or so, when he was unable to obtain any traction and had to resign. He spoke of the line that Government must tread between the poverty trap and the welfare trap. That is exactly what this Government are trying to do, but let me add that there is not just a welfare trap or a poverty trap. The welfare trap is a poverty trap in its own right. It is not a good place in which to be, but our efforts to reduce housing benefit and introduce a universal credit will start to change the present position and make a fairer society for us all.

[Several hon. Members]

rose—