Welfare Reform Bill

Lord Wigley Excerpts

Tuesday 18th October 2011 Grand Committee

[Baroness Lister of Burtersett]

My Lords, my noble friend Lady Hollis has made a devastating case. I simply want to read out an e-mail that I received from someone who stands to be affected. She says:

“We have two children. Both girls are currently living in a two bedroom flat. We have been assessed by Social Services and GP as needing a three bedroom property due to our eldest daughter’s medical and welfare needs. She suffers from frequent, severe UTI infections which can leave her very poorly and in a lot of pain. She also suffers frequently from incontinence. This is having a very serious effect on her emotional well being and indeed is having a knock on effect on the whole family as we have to go in several times a night to see to our daughter to change her bedding, give her pain relief, clean nightwear, etc”.

This family had been told that they could move to a three-bedroom flat but have now been told that they cannot because of the incipient welfare reform legislation. The e-mail goes on to say:

“The new welfare legislation means that we are no longer entitled to a three bedroom even though they have written proof that we need one. This is now putting serious strain on my family and is affecting my eldest’s welfare. I cannot fight the law, I wish I was able to. I just want people to be made aware that families like mine suffer needlessly when these legislations are made. I would love nothing more than to be told my eldest can have her own room as I know her welfare would improve dramatically. But this is not going to happen”.

When I read this I thought that it surely could not be the case. However, presumably a family in this situation will not be allowed the bedroom that they need for their welfare. I feel dreadful reading such an e-mail and I hope that the Minister feels dreadful hearing it.

[Lord Wigley]

My Lords, the case made in the excellent opening speech by the noble Baroness, Lady Hollis, did not concentrate so much on the disability side, which we will come to in another bank of amendments, but was very strong indeed. Yes, the second part of Amendment 48 applies to disability, but her main thrust was on the adequacy of supply of houses.

The noble Baroness referred in particular to the situation in rural Norfolk. I can certainly vouch for the circumstances in the areas that I know in rural Wales, where this is an enormous problem because so much social and council housing in rural areas, particularly in beautiful rural areas, was bought under the right to buy legislation of the 1980s. Many of those properties that used to be social housing are now second homes. If anyone is expected to move in order to match the circumstances of the housing benefit permitted under this legislation, such people just will not find accommodation to meet those needs. It is suggested that they will find it in the private sector, but in rural areas, particularly where tourism is a major industry, the private housing sector is dominated by the rent that can be attained in the summer months from the tourism industry. Therefore, the likelihood of finding a suitable place is remote indeed.

My fear is that so many exceptions to the proposed legislation will arise that it will not be workable. We heard about the circumstances in Glasgow and the problems of disabled people who will be caught in this. With regard to the rural dimension, the one aspect that I would like to see is the building particularly of bungalows in the proximity of villages to provide the housing need, albeit that that would be a longer-term solution, as the noble Baroness, Lady Hollis, mentioned. One knows that the one category of house in overwhelming demand everywhere is the bungalow. A programme that bought land on the borders of villages that was currently outside the development boundaries and towns into those boundaries, and that was therefore possible to acquire at an intermediate price between the market price for building land and the much lower value of agricultural land, should help to provide a stimulus for the building industry and an answer, over a period of time, for some of the imbalances in the housing stock.

I realise that this does not come under the purview of the Minister, but perhaps the Government could, in the seamless web that they create, think about that possibility as a longer-term solution.

[Lord Stoneham of Droxford]

My Lords, I declare an interest as chair of First Wessex Housing Group and chair-designate of Housing 21. I also appreciate the speeches of the noble Baronesses, Lady Hollis and Lady Turner, but underoccupation is a problem when there are great shortages in housing. It is fair to accept that we need to address this problem, but it would be unfair if we do not get right the details for the transition of these proposals.

I agreed particularly with what the noble Baroness, Lady Turner, said, in that we have to accept that we are dealing with people’s homes. They may be social homes or council houses, but they are people’s homes. We are not dealing simply with a marketable commodity. Some 670,000 tenants of working age are affected by these proposals and, as the noble Baroness said, many of the people in these homes are disabled. There are two fundamental problems. One is that underoccupation does not necessarily coincide with where there is the greatest housing need. The other is that the availability of supply to correct the problem is limited. I had the figures that the noble Baroness, Lady Hollis, mentioned but in a different context; I thought that there were 180,000 social tenants underoccupying two-bedroom homes and that if we wanted to move them into one-bedroom homes, in the past year only 68,000 became available. That seems to be a critical figure.

We know that the other problem is that if we drive people out of social housing in the public sector, we may well add to public spending through the higher rents and the allowances that will have to be paid in the private sector. We want to hear from the Minister, in due course if not today, on the need to get the period of transition right to allow people to adapt and for the stock to adapt as well. We should concentrate on genuine occupation that can be corrected, and we should consider leaving out certain categories: disabled people, foster carers and those in supported housing. We should also concentrate on homes with more than two bedrooms that are underoccupied, and we should, as the noble Lord, Lord Wigley, said, look at a programme of bungalows and one-bedroom homes for older people who want to downsize. I have recently been involved in a scheme where people’s pride in their new homes is remarkable. We had to encourage them to move, but when they saw what was available they were very willing and proud to do so. However, if we concentrate now on the transition as the result of all these changes, we shall dry up the number of homes and the capacity to help people who genuinely want to move. Getting the transition right is therefore key to this change.

--- Later in debate ---

[Baroness Meacher]

My Lords, I support all the amendments in this group, but I congratulate my noble friend Lord Best on his incredibly commonsense approach to this problem. It seems that allowing an extra bedroom would probably deal with most of the tragic exceptions that people have talked about—what a straightforward way to deal with those exceptions and normal life. I cannot think of any family that at some point does not badly need an extra room, and the case was so well put.

We talk about all the amendments individually, but what is so painfully obvious is that it is the combined impact of the changes in the Bill that are going to have such a devastating effect on so many people. It feels irrelevant to talk about ESA and people being reassessed and placed on to JSA, and therefore losing a section or part of their benefits, but the individuals at the front line are going to be hit by that, then they find their housing allowances upgraded in line with CPI, then they find that their housing allowances are pegged to the 30th percentile, then find that they have an extra room. Oh my God, their housing benefit will not cover the accommodation they are in and they are going to have to think about moving.

It is the impact of so many hits that feels petrifying, and perhaps the change that frightens me more than any is the pegging of housing allowances to CPI. If that goes on longer than two years—perhaps we do not pay too much attention to it because we assume that it will not—we are talking about families and households finding every few years that they have a growing gap between their rent and the allowances they are paid for housing. They will have to move, and move, and move—is that not correct?—over a period of time, into ever more distant areas, ever meaner properties, ever smaller properties. It is difficult to imagine the psychological impact on households of all these changes.

I do not know who devised this law, but I wonder whether whoever it was stood back and thought about all that. I know, and the Minister has mentioned many times, that the driving motivation behind the reforms is to provide an incentive for people to move into work. From where I come from, dealing with people with mental health problems, one thing that stands between them and work is their level of stress and distress and anxiety.

It strikes me that if all the legislative changes go through, we will create an even bigger gap between very large numbers of people who are prone to anxiety and depression—if not psychosis and other things that are even more problematic to deal with—and the labour market. That troubles me, because I respect the Minister’s commitment to providing an incentive for people to go back into work. I also know that he is very sympathetic and understanding about mental health problems. I would be interested to know what he has to say about the apparent contradiction in what the Government are trying to do.

Another aspect of this for people with mental health problems is that to force them to move away from wherever they are—probably away from the carers who might just about prop them up and allow them to survive and carry on—is the last thing we want. The underoccupation rule impacts even more, given the other provisions of the Bill. As I understand it, young people are going to be expected, in some circumstances, to share accommodation. There are an awful lot of people with mental health problems for whom this might be quite helpful. There are others for whom it might be a complete disaster. Indeed, let us not forget to mention the potential sharer. It might be quite difficult to share with some of our folk. We have to be sensitive to the impact, and the combined and compound impact.

I sympathise with the amendments that noble Lords have tabled about disabled people who have had adjustments to their homes, and those about looked-after children. Those are obvious and glaring problems. I would like to think that the Minister will think seriously about that, in the context that I know he very well understands.

[Lord Wigley]

My Lords, I speak very briefly in support of Amendment 35, to which I have my name, to endorse entirely the comments of the noble Lord, Lord Rix, in introducing this bank of amendments, and to support the other amendments that deal with disability particularly. In doing so I should declare my interest as vice-president of Mencap Wales. In fact, at the Mencap annual conference in Warwick on Saturday, there were people who asked specifically about these matters. They said, “They have taken away from us home ownership for people with long-term disabilities, and now they are going to start clobbering us on housing benefit, where people with disabilities may be in a particularly vulnerable position”. I should therefore like to ask the Minister, so that I can respond to people who raise these questions with me: do the Government still believe in home ownership for everybody, and if so, does that include people with long-term disabilities? If the Government, having taken away the previous scheme, are not going to put something in its place, surely that is a straight contradiction of what the party opposite has always put itself forward as believing in?

Secondly, with regard to people with disabilities and housing benefit—the amendments before us would make exceptions for them—I hope that the Minister will be able to spell out how he will ensure that they do not suffer. If the amendments are not acceptable, I hope that amendments will come forward from the Government on Report. If not, I hope that there will be an opportunity to vote on these matters to show exactly where each of us in each of our parties, including the coalition partners, stand on such a basic issue.

[Baroness Hollins]

I, too, support Amendment 35, as introduced by my noble friend Lord Rix. As we have already heard today, tidy laws are not always fair laws. I am concerned about some exceptional people whose needs cannot neatly be described and I hope that common sense will prevail.

I shall give the example of a young man with autism and learning disability, Theo. Since early childhood, Theo has loved and become very knowledgeable about cathedrals, churches and architecture. He is also a man with complex impairments and a history of behaviour which has challenged every shared setting he has lived in. With specialist advice from Housing Options, and support and endorsement from social services, his parents set up a safe and individualised housing and care package for him.

The Government’s view may now be that it has never been the intention that SMI would cover all a person’s housing liabilities, but Theo’s shared-ownership mortgage was offered precisely on the basis that it would cover the mortgaged part of his housing cost, as was DWP policy at the time. The past nine years of Theo’s life have been built on that. His home has provided the all-important stability that someone with autism needs; and his disabilities combine to make change much more disturbing than we would find it.

Theo has an interest-only mortgage, so the possibility of the acquisition of a valuable capital asset does not apply in his case. With careful management by his parents, he has been able to lead a happy life at a much lower cost to the public purse than the alternative arrangement of a secure hospital. However, the new FSA rules require mortgage-lenders to set aside more capital and to treat mortgages on shared-ownership properties as 100 per cent mortgages. The result is a sudden gap between the rate at which lenders have to lend—for example, 6 or 8 per cent —and what the new SMI rate, which I think is 3.63 per cent, will cover. In Theo’s case, this leads to a shortfall of £200 per month. You can imagine that the arrears are already quite high. A new mortgage would be at an even higher rate, but he would then have to find a 25 per cent deposit for his property. He does not have the money to negotiate another mortgage.

There has been quite a bit of publicity about the adverse effect of this reform on HOLD. Experienced housing experts say that fewer lenders are likely to want to deal with disabled applicants seeking this solution to support a non-institutional life.

Ageing parents of disabled adults have followed similar paths with the help of enlightened housing associations. Those parents have been making responsible arrangements in their own lifetime, hoping for some assurance of long-term stability and security for their child. Instead, Theo's parents now face the prospect of seeing Theo’s distress at being uprooted from his home and moved, probably, to an inappropriate and less sensitive institution, which will be much more costly.

As the noble Lord, Lord Rix, pointed out, there are probably about 1,000 customers with learning disabilities—0.4 per cent, I understand, of the total caseload looked at by the impact assessment. Some of those administering HOLD have suggested ways in which the cost of continuing higher-rate payments for this group of disabled people could be contained, but it would require acceptance that there are indeed exceptions to the rule.

Since the Poor Law 1601, society has tried to tidy away people whose needs do not fit present-day norms, but in today’s more enlightened society we have made huge strides towards creating an inclusive society in which every person's humanity and dignity are respected and in which they have a place regardless of the extent of the difference that the person presents. However, these gains are quite fragile and we need look no further than Winterbourne View to be reminded of the previous scandals in mental handicap hospitals such as Ely and Normansfield in the late 1970s. Surely, we must now realise that without adequate advocacy and diligence we could again allow such inhumane provision to be re-created—people shunned by society and placed out of sight and out of mind at considerable expense but in the interests of tidiness. The test of a humane society is how it treats its most vulnerable members.

I had little awareness of the lives lived by some people with learning disabilities until I had a disabled child. My eyes were opened. I should like the Minister to consider using the Bill to reinstate SMI at the higher level for people such as Theo, which would allow them the opportunity to live with dignity in their own homes.

--- Later in debate ---

[Lord Freud]

By the time we get to this again, I will come back with that answer.

[Lord Wigley]

My Lords, I speak at the request of my noble friend Lord Rix, who has had to leave the Committee, because we have now been going for well over four hours. I think he anticipated that we would have finished before now, and he has had to go to a 7.30 pm engagement outside the House. He has asked me, as I have my name on the amendment that led this bank of amendments, if I could respond briefly.

In doing so, I will touch on three points. In reverse order, taking up the point made by the noble Baroness, Lady Hollis of Heigham, a moment ago, with regard to the cost implication of the discretionary payments that are to be made by local government, has an assurance been given by the devolved Administrations that they have the resources to be able to do this? We are dealing with a non-devolved subject but are looking to devolved authorities, from a devolved budget, to fund the counterbalancing money that is required. If that answer is not available now, perhaps there will be an opportunity at some later stage to deal with that. It is clearly a matter that will be of concern, not only to the devolved Administrations, but to local authorities in Wales and Scotland.

[Lord Freud]

I can answer the noble Lord pretty rapidly on that. This is not a devolved area, so the discretionary housing payments are not devolved.

[Lord Wigley]

Of course—that is the whole point. The housing benefit is not a devolved area, but local government money is, unless there is going to be payment made from Westminster sources—Whitehall sources—to the local authorities in Wales. From the indication I get, payments will be made directly to local authorities, or via the Assembly to local authorities. In which case, fair enough, if enough money is going to be there; but if it has to come from their general pools, then that is from a devolved budget and will cause them problems.

[Lord Freud]

All I can confirm is that, just as anywhere else in the country, in those Administrations, the money will go by formula to those local authorities, in the same way that it currently does.

[Lord Wigley]

I accept entirely, of course, that housing benefit is run by the local authorities as a non-devolved portfolio, coming under Whitehall. However, the general funds that they have, unless there is additional funding coming from Whitehall to those local authorities and bypassing the Assembly, it would otherwise come out of the Assembly budget. All I was asking was whether that had been agreed with either the Assembly, or in the case of Wales, the Welsh Local Government Association? The Minister might be able to confirm that.

[Lord Freud]

What I can confirm is that the DHPs go directly to the local authorities, not through the local Assemblies.

[Lord Wigley]

Therefore, will any additional resources for discretionary payments that will be made, in line with the numerous references to discretionary payments that we have heard over the past few days, go directly and be over and above the payments that will otherwise be made.

[Lord Freud]

My Lords, yes.

[Lord Wigley]

We can put a marker down on that clear answer, for which I am very grateful.

Secondly, on one of the banks of amendments that dealt with disability and tried to get exclusions for people in certain categories of disability, the Minister, if I recall rightly, said that it would cost far too much, possibly £180 million. If that is the cost of excluding disabled families from the provisions of the Bill, it is, equally, the additional cost being faced by disabled families as a consequence of the Bill. That is an enormous cost. If it is a large sum for the Treasury budget, how much larger a sum must it be for disabled people trying to find it from their own domestic budgets? That is something that I suspect we shall need to come back to for clarification on Report. I hope that will be possible. I do not expect the Minister to respond at this point.

My third point is in regard to Amendment 35 in my name and that of my friend, the noble Lord, Lord Rix, which concerns home ownership among people with long-term disabilities. The Minister mentioned that only 400 people were affected by this. I am sure he is not decrying the importance of the scheme for the 400 people that it has helped; every single one is important in its own right.

[Lord Freud]

My Lords, may I make that absolutely clear? There are 430 people currently on the HOLD scheme. The bulk of them have an arrangement with a mortgage provider, Kent Reliance, which means that they can continue to pay the required rate of 3.63 per cent. Therefore, only a handful of people on the HOLD scheme are affected by any change.

[Lord Wigley]

Yes indeed, those 430 may well be safeguarded but there is the question of whether other people, who might in the past have come on to that scheme, will not be able to do so in the future. More importantly, the Minister referred to having had a meeting yesterday with people from Mencap to discuss this. From having a brief word with the noble Lord, Lord Rix, before he left, I understand that the people at Mencap are hoping that the Minister will at some stage, if not today, come back with some provision that will cover the requirements of this important group of people who are being helped by the scheme. I do not know whether they misunderstood that or whether the Minister will look at it again before Report to see what can be done. However, I very much hope that he will take on board the serious points that have been made by the noble Baroness and others, including the noble Lord, Lord Rix, about this important group.

We have gone well beyond our time. I put it to noble Lords that we ought to consider whether this is the most sensible way of undertaking our responsibilities, when the Committee runs for more than four hours without a break, we have disabled colleagues here and there are disabled people who want to follow our proceedings. I beg leave to withdraw the amendment.

Amendment 35 withdrawn.