Housing Benefit

Michael McCann Excerpts

Tuesday 9th November 2010 Commons Chamber

[Mr Alexander]

I am keen to make a little progress.

According to a study commissioned by Shelter from the Cambridge Centre for Housing and Planning Research—I wonder if the Government will dispute the integrity of that body—more than four in 10, or 42%, of landlords currently letting to LHA claimants planned to scale back. Shelter estimates that that will equate to 100,000 landlords. Liz Peace, the chief executive of the British Property Federation, said:

“Landlords might decide to abandon the social sector.”

The Conservative Mayor of London—I wonder what the Government will say in relation to this evidence—says that the Government’s proposals will lead to

“the loss of the private rented sector as a major safety net for London boroughs”.

He continued:

“We expect landlords to leave the housing benefit market due to the perceived instability of housing benefit in the short and medium term.”

Those are the words not of the Labour Front Bench, but of Boris Johnson.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

Has my right hon. Friend seen the Daily Mail today? Under the headline “Archbishop is wrong about…welfare…says Iain Duncan Smith”, the opening paragraph states:

“Iain Duncan Smith has attacked the Archbishop of Canterbury’s claims that housing benefit cuts will lead to a cycle of despair that will socially cleanse the poor from Britain’s cities.”

The article goes on to quote the Secretary of State as saying of the Opposition and special interest groups:

“‘They have even tried to suggest that our real purpose is not just to cut the budget deficit but to remove poor people from the heart of our cities.’”

If that is not the purpose of the Government’s intentions, surely that will be the net effect.

[Mr Alexander]

I can understand the embarrassment of those on the Government Front Bench, but whether it is the Deputy Prime Minister attacking the Institute for Fiscal Studies or the Secretary of State for Work and Pensions attacking the Archbishop of Canterbury, they diminish the case that they are trying to make.

--- Later in debate ---

[Mr Heald]

My hon. Friend, who makes an important contribution to the Committee, makes an important point. If we look at the effect of the policy, we find no doubt that landlords will reduce rents, because all the evidence to the Committee suggests that they will.

There are arguments about how much effect the changes will have, but the British Property Federation and the Residential Landlords Association have said that 29% of landlords would reduce rents voluntarily. The Cambridge university research for Shelter shows that 29% of tenants will not be able to negotiate a rent reduction or make up the difference. It concludes that of the remaining 29%, 50% of the group will be in difficulties because landlords will not accept the lower rents paid and will not forbear. It says that some £42 million to £82 million a year will be needed to help those who do not get that forbearance from the landlord, are unable to negotiate a change, and so on.

Let us bear in mind, however, that the Government have set aside very substantial resources for exactly this problem. One might say that the mid-point is around £60 million, which is the figure that the Government are moving towards, although the Secretary of State said, very reasonably, that he will keep it under review and see what exact figure is needed. It is completely wrong to suggest that the Government have gone into this without realising that they must match hardship if it is found.

[Mr McCann]

If this is about a recalibration of rent, why are the Government using the poorest and most vulnerable in society as a battering ram to get there?

[Mr Heald]

To be fair, the hon. Gentleman should think occasionally about the hard-pressed taxpayer. Working people on the lowest incomes pay lower rents than housing benefit claimants. Surely the principle should be that we all want to help someone worse off than ourselves, but that the average taxpayer should not be expected to put a person into a better position than he himself would ever be able to afford.