Welfare Reform Bill

Tom Greatrex Excerpts

Monday 13th June 2011 Commons Chamber

Many of the amendments and new clauses are interesting, but when one considers the Bill in full, it is difficult to support any of them.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

I listened with interest to the hon. Member for Aberconwy (Guto Bebb), who said that this debate reminded him of the Committee stage of the Bill. I feel a bit like an intruder, because I did not serve on that Committee. I am not sure whether he meant that he was enjoying the experience or enduring it.

I want to make a few remarks about new clause 6. I am not sure whether it comes into the category of superfluous detail to which the Minister referred—or blessed detail, as one of his hon. Friends described it—or deals with something that was considered in Committee. Last week, I had a discussion with people at Rutherglen and Cambuslang housing association in my constituency, who are concerned about the payment of the housing element of universal credit and the changes that are being made to the current arrangements on direct payments. As someone who is not an expert in these matters, the new clause seems to me to draw a good balance between the desire to try to ensure that universal credit gives people responsibility for the money that they receive and protecting the interests of tenants of social landlords and the effectiveness of social landlords such as the housing association I mentioned and, I am sure, many others around the country. The new clause would allow the housing element of universal credit to be paid directly to the landlord if the person in receipt of universal credit requests it or if the tenant is in considerable arrears.

Social landlords are worried that income streams might be significantly reduced because households facing financial constraints as a result of rising food and fuel prices and other calls on their budgets which may be greater in future choose to spend the money received from universal credit on items other than rent, for which the housing component of universal credit is primarily designed.

[Sarah Newton]

The hon. Gentleman is making a good point. Is he assured, as I am, by what the Minister has said—that the vulnerable types of household that the hon. Gentleman is so well describing can make those payments directly to landlords at the moment, and that because the Government do not want to disadvantage anyone in the transition to universal credit, that mechanism will be allowed to continue?

[Tom Greatrex]

I am seeking an assurance from the Government that that system will be able to continue.

The proposed change has potential difficulties for the social landlord as well as for the tenant. On several occasions over the past year, I have heard the Government express determination to try to ensure that organisations in receipt of public money are as efficient and effective as possible. That is also important for social landlords and housing associations. If we move to a new arrangement whereby direct payment is not possible, there is a risk that they will end up spending a disproportionate amount of their time, resources and effort on attempting to get arrears from tenants instead of trying to be as effective and efficient as possible in prioritising and concentrating on improving their stock and dealing with the other issues that they face. That could constrain their ability to repay private finance that they have borrowed to finance new building. If housing associations are seen as higher risks, they may face even stricter conditions on their borrowing, which would affect their ongoing business.

There is also the question of whether tenants may resort to doorstep lenders or other loan sharks. I am sure that I am not the only Member present who has seen examples in their constituency of people being driven into that sector. I know that Members on both sides of the House have addressed that issue in debates on other measures. In seeking to ensure that people are responsible for the benefit that they receive, we must not put ourselves in a worse position by removing that direct payment.

As I said at the start of my remarks, I am new to this area of debate. I was not on the Committee and have not dealt with it in the same detail as others. However, it is important to protect a system of direct payments, particularly for social landlords. I hope that the Minister reflects on that, even if he thinks that the new clause is superfluous.