Benefit Cap (Housing Benefit and Universal Credit) (Amendment) Regulations 2016

Earl of Listowel Excerpts

Tuesday 8th November 2016 Lords Chamber

[Lord Shipley (LD)]

My Lords, I thank my noble friend Lord Kirkwood of Kirkhope for moving this regret Motion. He has raised a very specific issue about the need for additional support to be made available to help those affected by the cap to find work. But, as we have heard, the issue is broader than this. The Government need to get to the heart of the problem, which previous speakers have identified, which is that they have not been building enough new homes, and as a consequence prices have been rising steeply, whether for owner occupation or for rent.

Crucially, the Government’s emphasis on subsidising owner occupation has left the social rented sector seriously short of funding and therefore of supply. Those who cannot afford to buy are increasingly forced into the private rented sector, with its high rents in most parts of the country. We heard from the noble Lord, Lord Best, about the implications for the private rented sector and the likelihood that the availability of homes in the private rented sector will decline for those who are on housing benefit.

Building more homes will help to hold down rents, which in return can reduce the Government’s revenue costs in terms of housing benefit. I understand that there is to be a White Paper on housing supply shortly. That is welcome, but can the Minister confirm whether the purpose of that White Paper is to address the lack of social rented accommodation? Might it also address the absurdity of calling a home “affordable” when for many people such homes are nothing of the kind?

Meanwhile, the impact on homelessness of lowering the cap could be severe. The Government are already committed, as we have heard, to supporting the Homelessness Reduction Bill, but their support for the Bill seems to sit oddly with this cap, which will actually increase homelessness. We have heard a whole set of disturbing figures, from the right reverend Prelate the Bishop of Leeds and others. I understand that Shelter has estimated that there will be more than 120,000 children in temporary accommodation at Christmas. I find that disturbing. Also disturbing is the fact that since the original cap was introduced, around 70% of those affected have not found work. So doubling the number subject to the cap and worsening it for those already subject to it means that many more people who are already poor are going to be made poorer.

When the Prime Minister took office, she declared that his was a Government for all the people. But this is a dubious claim when poor people are being made poorer. The Government must show that they are prepared to invest further in helping people back into work, at decent rates of pay, thus overcoming the barriers so many can face daily in their attempts to do so. If the Government do not do that, they are simply widening social and financial inequalities in our country, which is unacceptable.

[The Earl of Listowel (CB)]

My Lords, I support this Motion to Regret, over three issues in particular. First, the noble Baroness, Lady Lister, referred to the 17% of mothers who have a child under the age of one. I would add pregnant mothers to that. Can they not be exempted, or can that at least be looked at? The Maternal Mental Health Alliance report published last year highlighted to all of us the terrible bane of post-natal and pre-natal depression and the risk that if a mother’s mental health deteriorates, her relationship with her young infant is damaged. This costs society huge amounts in the long term.

My second concern is about more children being taken into care. We were reminded earlier by the noble Baroness, Lady Lister, that most children coming into care come from poverty. Has the Minister examined this policy to look at whether it increases the risk of children being taken into care?

Thirdly, the noble Lord, Lord Shipley, alluded to the fact that we face having 120,000 children in Britain in temporary accommodation this Christmas. There has been an 18% rise in the past year in the use of bed and breakfast accommodation for such families. I followed a woman’s journey through temporary accommodation last year. First, she was in a domestic refuge and then in a very small single room with her 16 year-old daughter and one year-old child. She was distressed by that, but most distressed by the uncertainty of where she would go next. She was evicted from there to another, even smaller room and then there was the fear that she might be moved away from London, as far afield as Manchester, where she would know no one; she was in despair about this situation. Finally there was resolution. She has, at least for now, a larger and quite comfortable place for the next six months, for which she is so grateful. But one cannot overestimate the impact on the mental health of families and children of being put into homeless temporary accommodation.

I recognise that the Minister may be limited in how far he can help the House today, but I hope he will take very much to heart the concerns that have been raised. I share my noble friend Lord Best’s gratitude to the Government for supporting the current homelessness legislation, the Homelessness Reduction Bill. I look forward to the White Paper on housing supply, and to the Minister’s response.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I support my noble friend Lord Kirkwood of Kirkhope and thank him for raising this important topic. As we have heard, the original rationale for the benefit cap was that it would give people an incentive to seek work, yet evidence shows that only 30% of those who have been hit by the cap left the benefit cap as a result of finding work.

A lot of the support that the Government claim will help people into work clearly is not there. For example, they made great play of how the troubled families programme would provide the answer, but evidence from the National Institute of Economic and Social Research recently showed that there is no evidence it has had the impact that the Government intended.

Prior to being reduced, the benefit cap at its current level mostly affected large families in areas with high rents, as my noble friend said. The new lower thresholds mean that some single-person households are likely to be hit by the cap for the first time, and there is considerable concern from Crisis and others that by affecting a far greater number of households the cap will have a more significant impact on homelessness. As the noble Lord, Lord Best, illustrated, private landlords are likely to stop taking families who are currently in receipt of benefits.

Analysis by Crisis examining the cap in relation to London housing allowance rates shows that the new cap will affect single jobseekers in most parts of inner London. Existing single claimants in the work-related activity group for employment and support allowance are likely to be affected in areas of inner and outer London, as well as in high-rent areas such as Guildford and Oxford. This is because they will still be eligible for the work-related activity component, which is due to be removed for future claimants but will still be subject to the cap.

The Government have acknowledged that these reduced benefit thresholds are lower than average earnings, arguing that the policy will encourage more claimants into work. However, to date the benefit cap has not performed well enough in encouraging people into work to justify that. According to the Government’s own evaluation, just one in 10 of people affected by the cap in February 2014 had found enough work to become unaffected by the cap by the summer of the same year. The vast majority, 78%, were still capped, including a significant majority with barriers to employment, including poor health and/or skills gaps. All the figures that I am quoting today come from the DWP’s own statistics.

Households that are capped have responded by cutting back on household essentials, including skipping meals, while a significant proportion—45% in summer 2014—were in rent arrears. As we heard from the noble Lord, Lord Best, people in rent arrears are unlikely to be allowed to continue their accommodation with private landlords. Many find that they cannot move house to reduce their housing costs because they are already living in the cheapest available accommodation in their area.

In recent months the Government have set out a clear agenda on homelessness prevention, which is to be welcomed. As we have heard, this includes a new funding programme and support for the Homelessness Reduction Bill, the Private Member’s Bill that is about to go into Committee in the other place. The lowering of the benefit cap risks undermining this important agenda by putting newly capped households at risk of homelessness.

We heard from my noble friend Lord Shipley about the effect that a lack of housebuilding is having on homelessness. The Bill includes a new duty on other public bodies to make referrals to local authority homelessness teams if they are working with people who are homeless or at risk of homelessness. There are already some examples of good practice from local authorities in response to the existing benefit cap in joining up employment support and housing teams to help capped households into work. This should result in their coming off the cap. It is to be hoped that the new duty to refer in the Homelessness Reduction Bill will promote even more collaborative working between different local authority departments to prevent capped households reaching crisis point.

We heard from the noble Baroness, Lady Lister, and the right reverend Prelate the Bishop of Leeds of the terrible plight of children: 800 families affected rising to 5,000. That is a terrible increase in the number of children who will be affected. Where is the family test in this policy, or the voice of the child?