Food Banks
Lyn Brown Excerpts(10 years, 5 months ago)
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Alun Cairns
I will give way in a moment. The limitations on the provision, which are rightly in place—
Alun Cairns
I will give way in a moment.
The limitations in provision, which are rightly in place for that very good reason, mean that only three parcels can be distributed—
Rachel Reeves
Yes, and although my hon. Friend refers to the festive period, for many it will not be festive at all.
A fortnight ago a young women with an 18-month-old daughter came to see me in my constituency. She had left her ex-husband to escape domestic violence but was worried sick because the benefits office had cut off her benefits when her ex-husband falsely claimed to have custody of her child. She has been waiting for weeks without any support while it fails to rectify the mistake. Without the food banks in my constituency, run by St George’s Crypt, St Bartholomew’s church in Armley and the Trussell Trust, that woman and her daughter would have gone without food. She has been badly let down by this Government and by their delays and sanctions.
Rachel Reeves
That is a really important point, but some Government Members and Ministers have suggested that people go to food banks because the food is free. The welfare reform Minister, Lord Freud, says that there is an almost infinite demand for that but, as my hon. Friend points out, people have real pride and are ashamed to go to food banks. As my hon. Friend the Member for Newport East (Jessica Morden) said, those are sad stories and real lives.
Jobs and Business
Lyn Brown Excerpts(11 years ago)
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Mrs Hodgson
I agree. There is obviously the unfairness, but there is also the fact that there was supposed to be legislation to protect football audiences from unscrupulous fans. Nothing stops any of those fans who might be able to get hold of that amount of money going along and ruining an amazing occasion such as the last match that Sir Alex will be in charge of. I certainly do not have any confidence in the websites that are now authorised by the clubs to sell tickets, because their ultimate aim is to make profits and I do not think that they are best placed to uphold the principles with regard to hooligans and segregation.
Lyn Brown (West Ham) (Lab)
What did my hon. Friend think of the Olympic ticketing system? That seemed to work quite well.
Mrs Hodgson
As my hon. Friend knows, we introduced legislation to protect the Olympic tickets. It was a proviso of the International Olympic Committee that the country that hosted the Olympics must protect the tickets, and it worked very well. Although the tickets were really hard to get hold of, the allocation was made fairly and they did not go to the highest bidder. Later I shall mention Operation Podium, the Met unit set up to police that legislation.
Despite the clear evidence in the “Dispatches” programme, and in a number of Penman and Sommerlad columns in the Daily Mirror since then, the sports Minister, the Minister of State, Department for Culture, Media and Sport, the right hon. Member for Faversham and Mid Kent (Hugh Robertson), has remained steadfast in his opposition to such a move. So I am now looking to the Secretary of State for Business, Innovation and Skills to look more favourably upon such measures in his forthcoming consumer rights Bill. The sports Minister has, however, always been at pains when we have debated this issue to say that his mind could be changed. Indeed, in a Westminster Hall debate on secondary ticketing secured by the hon. Member for Hove (Mike Weatherley), who also campaigns on the issue and who supported my private Member’s Bill—he was the only Conservative Member who did—the Minister said:
“Purely in my own opinion, the moment that the security services or the police say the activity is becoming a proxy for large-scale criminal activity, and that large amounts of money are being laundered through the system, the case for legislation will become much easier to make.”—[Official Report, 13 March 2012; Vol. 542, c. 65WH.]
Well, now the police have that evidence. Operation Podium, which Members may be aware was the Metropolitan police’s dedicated response to the serious and organised crime affecting the economy of the London Olympic and Paralympic Games in 2012, in a report entitled, “Ticket Crime: Problem Profile”, published in February to coincide with the unit’s abolition, set out the extent to which fans are being “ripped off” through dodgy practices. It also laid bare the involvement of organised criminal networks, which will always be involved where there are large sums of money to be made in a semi-legitimate way. As for large sums, the Met estimates that the “industry”, if we may call it that, is worth £1 billion a year—a not insubstantial sum of money.
Mrs Hodgson
That is exactly the point, and it is well made.
For the benefit of the House, I shall quote some highlights from Operation Podium’s report. It makes very interesting reading. It found that
“due to the surreptitious way that large numbers of ‘primary’ tickets are diverted straight onto the secondary ticket websites, members of the public have little choice but to try to source tickets on the secondary ticket market.”
It concluded that
“the lack of legislation outlawing the unauthorised resale of tickets and the absence of regulation of the primary and secondary ticketing market encourages unscrupulous practices, a lack of transparency and fraud.”
This is the Metropolitan police recommendation:
“Consideration must be given to introducing legislation to govern the unauthorised sale of event tickets. The lack of legislation in this area enables fraud and places the public at risk of economic crime.”
They went further still by saying:
“The primary and secondary ticket market require regulation to ensure transparency, allowing consumers to understand who they are buying from and affording them better protection from ticket crime.”
In short, the report sets out how this market is failing, and how it works in the interests of a handful of professional touts, middlemen and the criminal underworld, with dubious practices and tax arrangements. As an example, in the wake of the “Dispatches” documentary, it emerged that viagogo had transferred its formal head office for legal and tax purposes from the UK to Switzerland, despite the fact that all its staff are still working right here in London. One must ask why.
The Government could take action in the Bill to make the secondary market work in the interests of the consumer, which is to say the genuine fans and event-goers who want to enjoy and patronise the arts. In doing so they would also make the market work in the interests of those who are investing time, energy and resources, as well as talent, of course, who at present have to make the invidious choice between being leeched off by touts or getting into bed with them to get a little piece of the poacher’s pie.
This pie, as I said, is estimated by the Met to be worth in excess of £1 billion a year. No wonder there is such interest from the criminal world. We are talking about huge amounts of money to be made from doing very little. But this is not a victimless abuse. I get e-mails from dozens of victims every week. They are law-abiding regular citizens, adults and children, who have found themselves drawn into this murky world because they just want to see their idol play a gig or go to the theatre or an art exhibition. They end up feeling that they have no choice but to buy their tickets from the secondary market because that is the only place where the tickets are. Some realise that they are being fleeced and some do not, but all feel they have no choice.
These tickets end up changing hands for four, five or even more times their face value, as we heard—sometimes thousands of pounds. Who gets all that profit? The tout does, mainly, but as I mentioned, the situation is now much more complicated, as the Met made very clear in its excellent Operation Podium report.
Leaving aside the criminality, murkiness and lack of transparency, I am doing this for the fans—for the millions of music, sport, art, comedy and theatre fans out there who are routinely priced out of this wild west of a marketplace. It is not fair. I read all the e-mails I get. Some are heartbreaking, especially those from children. These are tickets to an experience, sometimes a once-in-a-lifetime experience. This cannot and should not be compared to the usual rules regarding supply and demand. As someone once said about football, “It’s not a matter of life and death; it’s more important than that.” I really believe it is. Other countries have chosen to regulate the market, most recently France under Sarkozy, who is hardly a left-winger. It did so because that is the right thing to do and we should do it as soon as possible.
The Bill is fundamentally a consumer protection Bill, so let us take the opportunity to protect live event consumers. Let us bring some transparency to a very murky market. Let us give those whose talent and investment create this demand in the first place greater control over the supply of their tickets. But most importantly, let us put fans first and let us take action on ticket touts now.
Julie Hilling
Absolutely; I am well aware of that. In fact, we said that we would halve the deficit over this four-year period. The Government said that they were going to cut it completely in one term, but they are not even three quarters of the way there yet. They told my local council that it would have to find £20 million-worth of cuts over the course of the Parliament. It has already had to find £100 million-worth of cuts. That is the difference between a planned deficit reduction and planned action for growth and a Government who sit there saying, “If we cut, something miraculous will happen to grow our economy.”
Julie Hilling
That is the million dollar question. I have no idea why the Government will not take responsibility. They like to trot out the same old line that it is all the Labour party’s fault, but they must start to take responsibility.
We can all see the cost of the Government’s policies for the poorest in our communities, who are being hit not only in their pockets but by cuts in the services they depend on. We can see the consequences of cuts to in-work benefits, no pay rises, and rising inflation for those who used to feel comfortably off. We all know that there are only two ways to balance a budget: cut expenditure or increase income.
The Government’s cuts are harming not only individuals and their communities but the economy. A recent Financial Times study showed that cuts in social security payments would take £19 billion out of the economy. However, it is not just about social security spending. The low-paid spend more of their income, so less money in the community means more jobs lost, which means more people on benefits, and more jobs lost again—a downward spiral. The only way to reverse that spiral is to grow the economy by investing in properly paid jobs so that people are not dependent on social security but are instead paying into the coffers.
The Government do not have any real answers to the problems that we face. Unemployment in my constituency is up. One in 10 people in Greater Manchester skips meals so that family members can eat. Nationally, homelessness and rough sleeping are up by a third, and Shelter says that every 15 minutes another family is made homeless. The economy may be flatlining, but people’s incomes and spending are not. The Office for Budget Responsibility has said that in 2015 people will be worse off than they were in 2010. Wages are £1,700 lower than in May 2010.
Behind those figures are real people having a desperately hard time—people who are losing their homes, having to choose between heating and eating, and relying on food banks to feed themselves and their children. The people of Bolton West are struggling, and many are more than struggling—they are finding it hard to survive day to day. The Government blame them and are hell-bent on making the situation worse. They say that they have to cut the welfare budget but neglect to say that the majority of that budget is made up of pensions and in-work benefits. That does not fit the picture they are trying to portray of the skivers who are ruining the economy. They forget to say that jobseeker’s allowance accounts for less than 5% of the budget and that cutting benefit not only forces people to food banks but harms the economy. They forget to tell us that the private rented sector is far more costly than social housing. They will do nothing to introduce fair rents and nothing to curb the cost of private rented accommodation; they simply cap benefits in the hope that that might just bring down the rents. They introduce a bedroom tax that drives people to desperation.
The Government refuse to acknowledge that the work capability assessments that are conducted on ill and disabled people are fundamentally flawed. Even people who are too ill to leave their homes are being found fit for work. People who have lost their jobs through illness or disability are being told that they should get a job, but jobcentres will not sign them on for jobseeker’s allowance because they are too ill to work. Even though our staff are dealing with suicidal constituents on a daily basis, the Government accuse us of blowing the situation out of proportion.
Pensions Bill [Lords]
Lyn Brown Excerpts(12 years, 7 months ago)
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Gregg McClymont
In the event that a modification in the timetable is necessary, and in answer to the questions about where the savings would come from, it may well be that the Government would do better to speed up the timetable for a state pension age of 67 and 68. That is something that we would consider. It is a much more sensible option than this disproportionate, unfair and unjust hit on women aged 57 and 58, of whom there are 500,000.
Lyn Brown (West Ham) (Lab)
My hon. Friend’s point is well made. The Government’s position seems to be based on an assumption that women work for pin money. There is no understanding that women take time out for child care, that their pension pots are much smaller than those of men, and that these changes will create genuine hardship for the women on whom they impact.
Gregg McClymont
My hon. Friend is right. She represents a constituency where many women will be affected, particularly low-paid women. The proposed change has a socio-economic dimension of which I am sure the Minister is aware.
The amendment would make a real difference to the lives of the women affected. It is designed to secure a limited reform, targeted at a specific group whom the Government are not treating fairly, and it would give rise to costs representing just over 1%—one 100th—of the annual pensions budget.
The Chancellor has previously said that
“we are not going to balance the budget on the backs of the poorest and the most disadvantaged,”
but the costs of this Tory-led Government’s acceleration of the state pension age equalisation timetable targets a group with limited resources.
Richard Graham
I do not believe that that analogy is relevant. As I pointed out earlier to the right hon. Member for Croydon North, any analogy that stretches to compare today’s announcements with those in the original pensions legislation in 1911 is inaccurate, because it leaves aside the critical factor that life expectancy back then was hugely different from what it is now. In fact, the vast majority of people then did not live long enough to collect their pension, whereas today people will be living for 40, or possibly 50, years beyond their pension age—[Interruption.] The hon. Member for West Ham (Lyn Brown) is chuntering away, but the reality is that there are people in the public service who are drawing their pension in their 40s or early 50s, and it is not inconceivable that they will live for another 40 years.
Richard Graham
I will not give way on that point.
The arguments of the Opposition, who tabled amendments 1 to 7, have been extremely disappointing. My constituents will have heard three main points from the Opposition Front Bench. First, the Opposition have opposed the changes made by the Government on the basis that they do not go far enough. Secondly, the Opposition have strongly intimated that if elected in 2015, they would not implement the changes that they recommend tonight, which reeks strongly of hypocrisy. Thirdly, they have made it clear that they are not concerned about the additional £11 billion costs of their proposals, as they could be dealt with in the future and, therefore, should not affect our debate today. That is an entirely irresponsible attitude, which is entirely in keeping with the words of the former Chief Secretary to the Treasury when he announced that he was sorry there was no money left. It is very disappointing that the same philosophy is still strongly in evidence from the Opposition Front-Bench team.
Dame Anne Begg
The hon. Gentleman has just made my point for me. Yes, we would feel a lot better, but if we had gone into the operation not expecting to lose either leg, but discovered afterwards that we had lost one, we would be absolutely devastated. The result would appear to be the same, but the emotional trauma caused in the meantime is quite different. That is exactly the position faced by these women.
The women we are talking about are not rich; they are not people for whom a billion pounds here or there amounts to pennies or not much money. These are women who have made the financial calculation that they will be able to get their state pension at a particular age. Some of them are still making the calculation that they will get the state pension at 60. I received an e-mail today from someone who could not understand why her pension age had gone up by 30 months. It is because she had not taken into account the original equalisation. That is no fault of the Government, but it illustrates the fact that people need a lot of time to prepare for the change, and even if they have had the time, they are not always prepared for it.
For the group of women who had not realised that the state pension age was going up to 65, it is a double whammy to discover that it is now going up to 66 and that they must face waiting that extra time, perhaps with no income at all. Many of these women will be in that position, even if they have taken early retirement for one reason or another. We know that by the age of 65, only about 40% of women are still in work; they might have fallen out of work for various reasons. Those women will have been depending on getting not just the basic state pension, but probably pension credit and all the other passported benefits that were mentioned earlier. For these women, there is a big hole in their financial planning. We have heard much about the Government’s debt meaning that they cannot possibly afford to do right by the group of women concerned, but the effect will be on those women’s personal debt. They will have to borrow money or in many cases live in pretty dire circumstances if they do not get the pension when they were expecting to get it.
Dame Anne Begg
Indeed, and there will be many such examples.
Women who hoped that their campaign would move the Government feel very disappointed. It is true that those in one group may have to wait for 18 months rather than two years, but they are still extremely disappointed at the Government’s failure to recognise that what they propose will have a disproportionate effect on a number of women who no longer have time to plan adequately for the future.
Housing Benefit (West Ham)
Lyn Brown Excerpts(13 years, 5 months ago)
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Lyn Brown (West Ham) (Lab)
I am grateful to have secured this debate, which seems particularly timely given today’s announcement by the Minister for Housing and Local Government. Time and again, we have been told that the aim of the Government’s welfare reform package, including the reform of housing benefit, is to make work pay. Today, we have found out that if people living in social housing get a new job, or a promotion or pay rise, they may lose their home. So much for making work pay. However, that is a debate for another day.
I have a strong feeling of déjà vu about this debate. Housing benefit, and the difficulties that it poses to my constituents, has been a theme to which I have returned over past years, campaigning with a number of colleagues on the Labour Benches to identify an approach that makes work pay, and, by doing so, protects the public purse. I hope that despite the fact that the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), and I do not sit on the same side of the House, we too might work together to find some common ground and work towards common aims.
For the record, I do understand why housing benefit is seen as such a prize when the Government want public spending reduced. If I have my maths about right, housing benefit, combined with council tax benefit, is almost equal to all the other means-tested benefits added together. There are some rather easy, even cheap, political points to be scored by citing examples of abnormally high housing benefit for highly untypical large houses in high-rent areas. However, I do not believe that the changes proposed by the Government will solve the real difficulties faced by many of my constituents. They will, I believe, compound social and housing problems and become a greater cost to the taxpayer. Incidentally, a point worth noting and often forgotten is that many of those worst affected by the changes will be taxpayers too.
I represent a London borough—Newham—which has the fourth highest level of child poverty and the sixth highest level of deprivation in the country. The gross earnings figure for the bottom quarter of employees in Newham last year was 23% lower than the figure for London, and the average wage for those living in the borough is just £455 per week. As I am sure the Minister will acknowledge, that does not go far in an area where the costs of day-to-day essentials, including child care and housing, are so very high. The average house price in Newham is £221,801, which is 9.4 times the average income.
The implementation of the Government’s proposals will result in many private renters having their housing benefit, and therefore their income, driven down by a harsh reduction in local housing allowance rates. It is not as though private tenants claiming housing benefit have had it easy up to now. Even at the current rates, nearly half of local housing allowance claimants in Newham currently face shortfalls of almost £100 a month in meeting their rent obligations. Estimates by the London borough of Newham suggest that, as a result of the change in local housing allowance alone, more than 6,300 people in Newham—three quarters of the LHA claimants in the borough—will face shortfalls between the LHA that they receive and the rent they have to pay.
Some 40% of local housing allowance claimants work, and Newham council’s housing benefit team tells me that their average net annual earnings are just over £8,000 a year. I am sure the Minister will acknowledge that that is not a fortune, and makes it genuinely difficult to make ends meet in an expensive capital city. The cuts will push many already struggling families to breaking point.
Community Links is a fabulous local charity that, among its many activities, provides debt and benefit advice. As I am sure the Minister will appreciate, it is particularly concerned, given last week’s announcement on legal aid, that it will not be able to provide advice services for some of the most vulnerable in our community, and I expect that that will be the subject of much further, more anxious debate in this Chamber. In addition, Community Links reports that the numbers seeking debt advice have doubled in the past two years.
As Shelter has said:
“For those households already struggling to balance very tight budgets, a reduction in LHA will only push more of them over the edge, triggering a spiral of debt, eviction and homelessness.”
Things can only get worse, as the LHA allowance will effectively be cut year by year for ever. I must admit that even the ingrained cynic in me was a little staggered to learn that the measure of inflation to be used in calculating increases in LHA is the one that deliberately excludes housing costs. Over the past decade alone, it has risen at a third of the rate of private sector rents. How cynical is that?
Citizens Advice believes that many will face eviction in a matter of weeks after the cuts are imposed. The non-regional, one-size-fits-all LHA cap will make it almost impossible for low-income households to rent in the private sector in inner London. That will have an impact on outer London areas such as my own. In east London, low-income households will be priced out of areas such as Hackney and Tower Hamlets, forcing people to look for accommodation where rents are lower. Rents in Newham are lower than in neighbouring Whitechapel, in Tower Hamlets, and far lower than in Islington and Westminster. According to information sourced from the Greater London authority, the cost of a two-bedroom property in Whitechapel ranges from £271 to £369 per week. In Stratford, which is just a few short miles away, it ranges from £204 to £250.
I believe we will see evictees from Tower Hamlets crossing the border to stay with families in Newham and declaring themselves homeless once there. The impact on homelessness rates could be catastrophic. The Minister will be aware that Newham is already home to high proportions and concentrations of low-income households. The private rented sector is large and expanding. In my borough, 30,000-plus people are on the council waiting list. Newham already has more people on waiting lists for social housing and living in temporary accommodation than any other London borough. As well as housing, other services will be badly hit as a consequence of the cap in other areas. Newham will be left dealing with more pressure on school places, doctors’ surgeries, jobcentres and social services. Our schools are already over-subscribed.
Those problems will emerge as the council and other providers are forced to retract services due to the swingeing cuts in their budgets, and—I assure the Minister that this is not rhetoric—the cuts to Newham council’s budget are, by any definition, swingeing. Just to heap coals on the heads of our people, it is also clear that the employed residents of Newham are very reliant on public sector jobs; indeed, they are in the highest category in that respect according to the latest survey. That is what is called a double whammy.
I want to touch on the suggestion that the changes will give us an opportunity to renegotiate rents and place more power in the hands of the citizen. Westminster council’s cabinet member for housing writes of the need to
“support the reduction of the housing benefit bill…which was distorting private sector rents.”
Councillor Roe explains:
“Once the lower rate is in place, we believe rents will fall, as landlords will not be able to charge such high sums.”
I gently suggest, first, that the distortion of private sector rents was brought about by the deregulation of rents. I would also suggest that Councillor Roe is sadly over-optimistic about the direction of private sector rents, certainly in London. A survey of London landlords finds that when the shortfall in rent rises to more than £20 a week, more than 90% of landlords renting properties to LHA recipients in London would look to evict tenants who fall into arrears or not to renew the tenancy at the end of the rental period. Controls to limit evictions for families with manageable arrears are completely absent from the system. Using Department for Work and Pensions figures and results from the survey, it can be estimated that 82,000 households across London will be at risk of losing their home as a result of the changes.
The elected mayor of Newham, Sir Robin Wales, wrote to Lord Freud outlining his concerns about the LHA cap and the impact on Newham. In his reply, Lord Freud acknowledges the concerns, stating:
“We appreciate that outer London boroughs could be faced with an increased number of new Housing Benefit customers needing access to additional services such as schools and health care. We will look at the wider impacts on local authority housing departments, and other local services particularly with regard to social mobility, homelessness and overcrowding…We will ensure that the full range of options for customers facing a shortfall in their rent, from renegotiating their rent levels through to applying to their local authority for assistance in obtaining alternative accommodation, is publicised, and that people are encouraged to consider those options in good time”.
Stephen Pound (Ealing North) (Lab)
I am reluctant to interrupt my hon. Friend because she is making an extremely powerful case, but is she as nauseated as I am by the use of the word “customer” in that context? A “customer” is a person who makes a decision on alternatives in a market economy, so are recipients of housing benefit—those human beings—to be denigrated as “customers”?
Lyn Brown
I am happy to agree with my hon. Friend. A customer has choice, but I am sad to say that the people of Newham will have very little choice. What options are open to those facing a shortfall in rent? What alternative accommodation and what options to renegotiate will they have? There are 35,000 households in private rented accommodation in Newham, almost a third of which are on housing benefit. Given that the rents in my area are relatively low compared with the boroughs immediately adjacent and to the west, it is absurd to suggest that the changes will force down rents in the area, or that residents will have the option to renegotiate their rents downwards. The private sector in Newham can and will soak up the properties left by those who, owing to the changes, have to leave their homes. The changes will mean that those dependent on housing benefit will be unable to afford to live in Newham.
The Minister will also know that, despite the Housing Act 2004, there is a dark side to a small proportion of the private rented market. Anecdotal evidence from head teachers in my local schools suggests that a new breed of slum landlords who rent out houses to families by the room is emerging. I am also told that some landlords will rent only to migrants, because they are less likely to know their rights. As we know, landlords should turn down families who have too many children for the rooms available. Instead, vulnerable tenants are claiming for space that they are not allowed to use as other families are squeezed alongside them. That is a benefit fraud, and it is perpetrated at the behest of landlords.
There are currently not enough resources to police the growth in multiple occupation, which will increase exponentially as the single-room rent is extended up to the age of 35. However, regardless of those extreme cases, it is clear that the cuts in housing benefit will force many more households into overcrowded and substandard accommodation.
My hon. Friends and I have spoken many times before of the knock-on effects on families of being shunted around from house to house and living in poor conditions; of the profound impact that that can have on health, education, inclusion in the community and mental well-being; and of the dreadful impact on children and their ability to achieve their potential. There will be more stress and conflict as unemployed family members are unable to pay their non-dependant deductions, which are set to increase disproportionately. As Crisis has pointed out, there will be more single homelessness and, yes, more NEETS—people not in education, employment or training—in this big society.
I believe that the situation will now get worse. Last week’s announcements by the Secretary of State for Work and Pensions compounded all the problems that I have outlined. The universal benefit and its cap, set at £500 per week per family, will effectively mean pricing low-income families out of the capital. Citizens Advice has stated that
“we are very concerned that the Government appears to be rushing into benefits policies that have not been thought through, or tested for their impact on individuals…The fact that the cap applies regardless of household size means that it will inevitably fall hardest on families with children.
Coming as it does on top of the cuts to housing benefit announced in June’s emergency budget, a cap of £500 a week on household benefits will price many low income families out of living in London and the south-east of England altogether, and if it goes ahead will inevitably lead to widespread hardship, debt and homelessness…For example, a couple with four children currently receiving £350 a week in jobseekers allowance…child tax credit…and child benefit…and £25 in council tax benefit would be left with a maximum of £125 per week for rent.”
The Government’s impact assessment had little to say about the impact on children and poverty, yet London Councils calculates that nearly 80% of the households affected by the cap in London will be households with children.
Let us also recognise that there will be many thousands of families whose breadwinners may lose their jobs, but be horrified at the thought of claiming benefits. It is insulting to suggest that those people will have made a lifestyle choice to claim jobseeker’s allowance. In Newham, it is currently estimated that 1,900 families will be affected by the absolute cap. There will be many more after the cuts to the public sector have impacted and unemployment in my constituency has risen. The 10% sanction on housing benefit for people who have been unemployed for 12 months will hit my constituents especially hard. There are 1,910 JSA claimants who have been out of work for a year or more in Newham, and 10,196 people claiming JSA in the borough. Nine JSA claimants are competing for each unfilled job vacancy in Newham, compared with a national average of 5:1. I genuinely believe that the 10% cut presupposes that living on £65 a week jobseeker’s allowance is a lifestyle choice.
The Budget and the comprehensive spending review proposals are unjust, and they appear to have been thrown together with a disregard for the consequences. This attempt to save money will, I believe, store up problems for the future. The problems of homelessness, debt, unstable homes and constant moves impact on children and families, preventing children from belonging to a community and fulfilling their potential, and storing up social problems that all the Sure Start facilities in the world will not be able to solve. It is truly difficult to see how that fits with the Government’s commitment to end child poverty. This is not the big society. Quite the reverse: it is the sound of doors clanging shut and communities breaking apart. There appears to be a poverty of compassion in the coalition.
I hope that I have begun to outline some of the difficulties that I believe my community will face, given the changing benefit scene. I hope that the Minister will be able to address those concerns and offer some understanding both of the circumstances of Londoners and my constituents on low incomes, and of their challenges ahead. I and many anxious residents of Newham will listen eagerly to what he has to offer.
The Minister of State, Department for Work and Pensions (Steve Webb)
I congratulate the hon. Member for West Ham (Lyn Brown) on securing this important debate and on her track record of raising such issues in the House—as she said, from the Government Benches, which are indeed still here. I agree with a good deal of what she has said in the past about the issue. Two years ago she told the House:
“My message is that the housing benefit system is in desperate need of reform.”
She then quoted one of her constituents, who had said that they were
“trapped in benefits, prevented from returning to work—all my wages would just go to pay the rent and I would be worse off.”—[Official Report, 5 November 2008; Vol. 482, c. 293-94.]
I suppose I was hoping that today she would come up with some suggestions for how housing benefit should be reformed to address those problems. In anticipation of her speech, I checked what the Labour manifesto said on the subject. Surprisingly, I found that I entirely agreed with that as well. It said:
“Housing Benefit will be reformed to ensure that we do not subsidise people to live in the private sector on rents that other ordinary working families could not afford.”
The basis for one of the key reforms to which the hon. Lady referred and which has most impact in Newham is the switch to paying rent based not on the 50th percentile, which is the current regime, but on the 30th percentile, which is more or less the typical rent for a low-income working household. That seems to be, almost verbatim, the policy on which she stood at the last election and which we are now implementing. Yet she is saying that the impact of that will have the single biggest impact on her constituency because the cap overall has relatively little impact, and that she now opposes that policy. I am not entirely sure that that is consistent.
The hon. Lady was critical of the universal credit, which my right hon. Friend the Secretary of State has proposed and which is designed to address just the sort of barriers to work that she is worried about by reducing withdrawal rates, albeit relatively modestly, and reducing barriers to work so that when people such as her constituents take jobs they will know that they are better off. I hope that on reflection she will be more charitably disposed to those reforms.
I will not dwell at length on the reasons for the reform, because time is limited, but it is true that cost is one. Housing benefit costs have risen by £1 billion a year in each of the past five years, partly due to the recession, but also to rising rent levels, so there is a need for action. But the issue is not just about cost; it is about fairness. The hon. Lady did not address why it is fair that someone on benefit, albeit not through any fault of their own, should have a wider choice of properties than someone in a low-paid job, and that is how the current system works. That is the current regime.
Lyn Brown
My basic tenet is that it is not possible to exist with the universal cap level and pay the rent of a London property, whether it is a two-bedroom flat over a fish and chip shop in Green street, or somewhere a little more palatial, perhaps further out. The taper in the benefit system, which the Minister rightly said I spoke about previously, is a disincentive for people who are trying to work, but we now have a cap and there will be no opportunity for them to negotiate their rent downwards. I cannot see how the reform that the Minister talks about will improve matters at all.
Steve Webb
With respect, the hon. Lady is conflating about three different changes. The universal credit is nothing to do with the cap. It is a separate proposition, and the details are yet to be announced. We have already announced exemptions, and people in work who receive working tax credit will not face the cap at all. That is part of the response to her point. No one in work and receiving working tax credit will be affected by the overall benefit cap, nor will anyone on disability living allowance, but the details have yet to be worked out. The universal credit—not the universal cap—is a separate reform designed precisely to address the points that she raises.
I shall try to respond to some of the more specific issues that the hon. Lady raised about her constituency. Our estimate is that in her borough of Newham, 32% of properties in the private rented sector will be available to people on local housing allowance.
Housing Benefit
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Meg Hillier
One reason why that has not worked is housing shortages. However, the self-denying ordinance that I set out at the beginning of my speech means that I cannot talk about wider issues.
Flexibility is important, but it is being abused by the Government, who are proposing changes overnight that might be in place from this autumn—I look to the Minister to give me guidance about that. People who have signed a six-month tenancy or a tenancy with a six-month break clause, for example, will have little option but to fund that shortfall somehow, as I shall address in more detail in a moment.
There is also a proposal to link housing benefit to consumer price index inflation, which will have a big impact on tenants and landlords. Research by Shelter has shown that CPI increased by 15% between 1999 and 2007, while there was a 44% increase in average rents. Had the local housing allowance been set to increase in line with CPI in 1999, it would now be 20% below the level needed to rent the average property. Whichever way the cut is made, people on low incomes—those people are often working—or on benefits are expected to fund the shortfall from their income to stay living in their own homes.
The impact on children and families is pertinent in my constituency, because some 22% of residents are under 16 and a lot of families need homes. People often come to my surgery because they are unable to access social housing. They are advised that they should look at what can be provided in the private rented sector, and I am sure that colleagues are in a similar position. More than one million children—a third of them in London—are living in overcrowded conditions. The cap will only exacerbate that problem because families will be forced to move into smaller, cheaper properties, and perhaps to push out their teenage children as they get older so that they can afford the rent.
I need to touch on a problem in the north of Hackney—not in my constituency, but in that of my hon. Friend the Member for Hackney North and Stoke Newington—where orthodox Jewish families will be severely hit. Such families typically have more than four children, and many of them live in the private rented sector, so the limit on benefit will have a devastating impact. The council and social landlords in Hackney will be unable to take the strain, so I need answers from the Minister on how councils will be supported in dealing with that.
Of the nearly 40,000 people in Hackney currently in receipt of housing benefit, just over 9,000 live in the private rented sector. Two thirds are in receipt of benefit, but one third are working tenants, many of whom would like to continue to work but, as a result of the proposals, will find a serious shortfall between their rent and the benefit provided for it, and will have very little income to make up the difference. In the three bands for the broad rental market areas that operate in my constituency—inner east, inner north and London central—all properties with more than two bedrooms are above the Government’s proposed cap. That is ludicrous. It means that those in Hackney living in a two, three or four-bedroom property—or a larger property—will have nowhere to go. They could go out of Hackney, but there are not many boroughs they could go to. I am not entirely clear how the Government propose to ensure that people can stay living in London—and, crucially, working in London and supporting its economy—because many people need that benefit to subsidise their rent so that they are able to live locally to their jobs.
Mr Mike Hancock (in the Chair)
Order. I urge hon. Members to consider that at least six more people have indicated that they wish to speak. If we have such a rate of interventions, they will not all get in. Please can we be fair to each other?
Lyn Brown
I am grateful, Mr Hancock. Other people would like to contribute to the debate but will probably find it impossible.
I want to make it absolutely clear that the hon. Member for North East Hertfordshire (Mr Heald) is talking about one case that has been cited in the Daily Mail, The Mail on Sunday or wherever. In Newham, in London, the rent for a five-bedroom house is £350 a week, not the ludicrous amounts that the hon. Gentleman is talking about. Perhaps he will focus his remarks on the real world, rather than the world of Notting Hill.
Mr Heald
The hon. Lady must recognise what has happened to the housing benefit budget. It has gone up in a decade from £14 billion to £21 billion, and has been pushed there the whole time. When the Work and Pensions Committee looked at the issue before the election, some people were seriously arguing that we should remove the five-bedroom cap so that someone could get a seven-bedroom house on housing benefit—there is no end to it. Someone needs to speak up for the ordinary taxpayer.
What about large families? The hon. Member for Hampstead and Kilburn (Glenda Jackson) talked about that issue in Hampstead. If ordinary working people want to have a large family, that is their individual choice, and it probably means that if they are not subsidised to a huge extent, they will be a bit more crowded and cannot live in the part of London in which they want to live. People with large families need to be more realistic about the way of the world.
Capital Gains Tax (Rates)
Lyn Brown Excerpts(13 years, 10 months ago)
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Andrew George
I am very grateful to my hon. Friend for that comment. There is not just a new coalition Government, but a new Parliament, and in it we should be able to debate issues both across the Chamber and within the parties of the coalition Government. That is not unreasonable. The Chamber should enable greater transparency and discourse across and between parties. The purpose of our amendment is to probe issues that need and deserve to be probed.
Andrew George
I shall not give way any more, I am afraid, because of the limit on time.
The motion refers to the Red Book, which, at page 67, in relation to chart A3, describes the VAT change as potentially “progressive”. I think that the notion is based on the expectation that those who spend the least will be less affected. Of course, those who spend the least are inevitably those on lower incomes, who will, as the Red Book explains, pay less VAT in absolute terms. But not everyone agrees with that: the hon. Member for Gainsborough (Mr Leigh) has described VAT as regressive, as have Labour Front Benchers.
The Institute for Fiscal Studies is rather equivocal on this issue. It says that when contrasted with income, VAT does look more regressive as it hits those with high expenditures the hardest. It also says that those with the lowest incomes tend to have the highest expenditures relative to their incomes, so there is an issue that needs to be investigated a great deal more. I believe that the Government should reasonably bring forward an impact assessment of the type that I have described and that we should have an opportunity to debate it not just in the Finance Bill Committee but in the Chamber.
I represent the poorest region in the country, so I am bound to be particularly sensitive to the impact of the Budget on the poor. However, I am not just concerned about low-income families; I am concerned about the impact of the VAT increase on rural travellers, who have a car out of necessity, not luxury, and on charities, as my hon. Friend described a moment ago. I am also concerned about the contrast between the effect on businesses that are engaged in the renovation of older buildings, for which VAT is applicable, and on those that build new buildings, for which VAT is not applicable.
The key themes underlying the emergency Budget turn on the challenges that any Government would have, such as ensuring that those who dropped us into the mess that we are in—due partly to the management of public finances by the Labour party and partly to those in the City who contributed a great deal—should be doing the most to help us out of it. As is made clear in the Budget, there is also an issue regarding wealthy people who have managed to pay less marginal tax than their cleaners. Those people should start paying their way. I hope that the Chief Secretary will consider very carefully our amendment and the reason behind it when he winds up. In this area of policy and policy making, we should have an impact assessment and an opportunity to debate this issue.