Welfare Reform Bill

Lord Best Excerpts

Tuesday 13th September 2011 Lords Chamber

[Lord Best]

My Lords, my set-piece speech was going to cover a number of housing issues. To my slight surprise, housing has featured in an awful lot of your Lordships’ contributions and my speech is virtually redundant. Even at this late hour, however, I might be able to add one or two new points, because a couple of new reports have come out in the past 48 hours, specifically to help our debate today, dealing with housing benefit reforms, the restrictions and the cuts. Having a total benefit cap which impacts on housing is probably the seventh, or just possibly the eighth, restriction on housing benefit. With this underlying intention of the Government of saving some £2 billion per annum from the housing benefit bill, the question has always been: will that burden of an extra £2 billion fall on the tenants or on the landlords? The hope has been that the landlords will reduce rents to the new levels and that it will not be the tenants, who are, after all, some of the poorest people in this country, who will suffer from the benefit reductions.

The report that came out yesterday from the British Property Federation and the Chartered Institute of Housing looks at whether benefit reductions will lead to landlords reducing rents. The report takes it on a historic basis as well as a contemporary one. I am afraid that, although we must await the much more extensive research project which the Minister has put very properly in hand—I have congratulated him on doing so—it does not appear that benefit reductions will lead landlords to reduce rents. Therefore, the burden and the pain of cuts will fall upon very poor households and may impact on homelessness.

The second ingredient I was going to explore concerns the payment direct of housing benefit to social housing landlords or the local housing allowance to private landlords and the new measure which involves the benefit being paid instead to the tenant. The tenant would handle the money and would have to pass it on to the landlord in due course. A National Housing Federation report that came out today has done an opinion poll of tenants to see how they feel about the independence that this would give them and the preparation for work that this might help with. However, the outcome of this opinion poll is that 93 per cent of tenants felt strongly that their rent should go to their landlord. Perhaps they think that they do not want the temptation of using that rent for something else or simply want the convenience that the rest of us have with mortgage payments being made by direct debit to the building society and thus not giving us the temptation of handling that money.

We have to reckon that some people have difficulties of their own and that their budgeting could be very complicated. Some will have debts and sometimes people who are after them to repay those debts will be a lot nastier than social landlords. Today’s opinion poll confirms that paying rent to the landlord is a sensible option. Picking up on something said by the noble Baroness, Lady Gardner of Parkes, is it so likely that landlords will accept tenants at all unless the rent is paid directly to that landlord?

The third ingredient on which I was going to speak at more length is the penalty if one is found to have a spare room somewhere in one’s property in social housing if you are under pensionable age. It is expected that 670,000 households will be discovered to have a spare room and will be required therefore to downsize to something smaller or to face the cost of a reduction in their benefit, averaging between £8 and £11 a week. It will be taken from the other benefits that they receive and will be calculated without regard to any housing costs. Those averages are, of course, averages and in some areas the cost per week would be very much higher.

This seems to be a cruel reduction in people’s entitlements when one bears in mind that it may be physically impossible for some people to move to a smaller home. Of the people affected, 180,000 are in two-bedroom accommodation and would be required to move to a single-bedroom place. But, last year, there were only 68,000 vacancies in social housing in one-bedroom accommodation. Even if we allocated all the one-bedroom accommodation to people who were downsizing, which we cannot do because we have a lot of other people in priority need, it would take several years before people could move down from their two-bedroom property to a one-bedroom property. In the mean time, to penalise them seems very unfair. I am afraid that I do not have a new report out to tell noble Lords about that third ingredient.

I hope that the Minister will take account of the fact that so many of your Lordships today have hit upon housing and housing benefit reforms as a really important aspect of this Bill. Indeed, we will put amendments before him, which we hope he will consider favourably.