Housing

Siobhain McDonagh Excerpts

Wednesday 5th September 2012 Commons Chamber

[Mr Prisk]

With respect to the hon. Lady, the idea that budgets across the Government are impervious to or not involved with the deficit we have faced—[Interruption.] She has highlighted a point not only about the overall housing budget but about how that money is used. The point I was trying to make is that when dealing with affordable housing, it is not just about every pound we spend but about how we lever in other private sector funds, which is important. It is peculiar that the hon. Member for Birmingham, Erdington applauded that principle a moment ago.

We have reinvigorated the right to buy—supporting social tenants who want to own their own home. That is a policy of which the Government can, and should, be proud. We have reversed Labour’s cuts, and increased the right-to-buy discount cap to £75,000 across England from April. For the first time, every additional home sold under the right-to-buy scheme will be replaced by a new home for affordable rent, with receipts from sales recycled across the cost of replacement. I wish that the cultural opposition of Labour Members to this issue would reflect the reality. The right to buy promotes mixed communities and gives social tenants a financial stake in the well-being of their neighbourhood.

The hon. Member for Birmingham, Erdington mentioned the right to buy, and he might now be able to help. My understanding is that the Labour group on the Local Government Association opposed the right-to-buy scheme.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

rose—

[Mr Prisk]

One moment. Does the hon. Gentleman agree with that group?

--- Later in debate ---

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I congratulate the Minister on his appointment to what must be one of the most exciting jobs in Government. He will be at the heart of improving our economy by building more homes, and I am sure that it will be a really exciting period. I thank my hon. Friend the shadow Minister for calling this debate at such an apposite time.

I would like to ask the Minister to reconsider the introduction of the provision in section 124 of the Localism Act 2011, on the forced discharge of a family into the private sector if they are homeless. As the law stands, if a family are recognised as being homeless, they can be offered a property in the private sector, and they can be discharged to it if they accept it, but they do not have to do so. Under the provision, they would have to accept it. My reason for opposing the provision is not in any way because I am anti-private sector; it is because I believe that we should do everything we can to ensure that work pays. Work is the best anti-poverty strategy that anybody has ever known. It represents a moral good for individuals, helps them stay healthy and gives a good example to their children. The provision will force working families into a benefit dependency from which they are unlikely to ever be released.

I want to detain the House with three or four examples—depending on the time available—of how that would affect people in my constituency in south-west London. Although it is an expensive area compared with some other places in the country, it is certainly not in London terms. In the first example, Mr Brown is a postman and Miss James works in an after-school club where her two children go to school. They have an income of £26,000 a year, which is roughly £500 a week. If they were discharged to the social sector, the median rent for a two-bedroom property would be £95 a week. On their income, they would not be entitled to any benefit—they would be discharged, off benefit and would have to pay their rent.

If that same family on the same income were discharged to the private sector, the median rent would be £196.15 a week. On their same earnings, they would receive housing benefit. Even if their income increased by £200 to £700 a week, they would still get approximately £20 a week in housing benefit, but they would be £83 worse off than families in social accommodation.

If Mr Brown and Miss James’s income was £600 a week and it was increased to £700 a week, not only would they incur the cost of child care, travelling to work and so on, but the loss of their housing benefit would be such that they would gain only £25 out of that additional £100 of income. How is that an incentive to go to work? The marginal rate of tax would be 75% in the private housing sector and 32% in the social sector. That is not an oddity—I could give many other examples.

Mr and Mrs Ossai have four children and they lost their home as a result of the collapse of Mr Ossai’s business. Mrs Ossai is a district nurse—a fantastic person whom people would want to be their neighbour. The family’s income now stands at about £34,000 a year, which is £650 a week. This lady was willing to accept a tenancy in the private sector, for which the median rent is £253 a week. That meant that even if her income was £1,000 a week, she would still get housing benefit. I asked her not to accept that offer from the council—thereby earning the hatred of its housing department—and she is now in a three-bedroom flat in what is not the best estate in town, but in which her family can live and whereby she can earn enough to receive no benefits and to be independent. Moreover, she is a fantastic neighbour, because all the families, elderly people and those with kids who live nearby can go to her and see her going to work as a district nurse. She is a role model.

This is about communities that have all sorts of people, and it is about providing role models and getting people off benefits, but the Government’s simple provision will force, according to the their own figures, 20,000 working families into housing benefit, and that is wrong.