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17 Oct 2002 : Column 481—continued

Mr. Smith: The hon. Gentleman implied that we were the first Government to try to get to grips with the problem since Beveridge. He might have given us some credit for grasping the nettle. I listened in vain throughout his remarks for a basic comment about whether the Conservative party thinks that our proposals are the right direction for reform or the wrong direction. I should have thought that the Opposition would welcome the move towards greater personal responsibility and choice for tenants; the tenants who will benefit from our reforms will certainly do so.

The hon. Gentleman asked a number of questions. As I said in my statement, we propose initially to roll out the proposals in 10 pathfinder areas. We wish to extend the approach nationally, but clearly we must learn from the experience of the pathfinders in so doing.

As regards the number and the proportion of recipients of housing benefits who are affected, there are 4 million claims and about 20 per cent. of those—800,000—are in the private sector. We hope to roll the scheme out to between 5 and 10 per cent. of that case load through the pathfinders, so the hon. Gentleman can see that the number of people affected will be substantial. He asked whether those are pathfinders or pilots. We want to get on with rolling out the scheme.

In selecting the areas to be the pathfinders, yes, we want to ensure that not only the various regions of England, but areas in Scotland and Wales have the opportunity to try the new approach. The criteria that we will apply in selecting pathfinders is that they include a mix of high-cost, low-cost and medium-cost areas; we want to include substantial rural areas as well as urban areas; we want them to be in different parts of the country, and they need to be areas with a substantial case load of private rentals. We shall approach a number of authorities as soon as we can to see whether they are able to take part.

With regard to the Government's performance on housing benefit, I cannot help but refer to the utter shambles that we inherited and the Opposition's failure to take responsibility for the awful mess that they bequeathed us. We have invested in tougher action against fraud in the form of the benefit fraud inspectorate, we have sent help teams around the country and we have intervened in a number of local

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authorities—for example, we have substantially addressed the backlog in Hackney. Moreover, the ombudsman's recent report noted that complaints to him about housing benefit administration were down by a quarter.

I do not deny that a great deal more needs to be done to improve the efficiency of administration and to crack down on fraud, but our proposals will help us to achieve that end. We are putting resources and investment behind our commitment to efficiency and modernisation. Not only have we allocated #200 million from next year to modernise IT and to train staff, but #60 million has been explicitly dedicated to measures to combat fraud.

The key point is that these proposals will help. They make the system clearer and more straightforward and they remove the perverse incentive for corrupt landlords to collude with tenants in setting high rents. This is a big step forward towards tenants in the private sector who are dependent on housing benefit having some of the same rights and responsibilities that the rest of us take for granted.

Mr. Frank Field (Birkenhead): I thank the Secretary of State and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Croydon, North (Malcolm Wicks), for the work they have put in behind today's statement, and I congratulate my right hon. Friend on the courage and determination that he is now showing in reforming housing benefit. Had some of that been shown five years ago, he might have been announcing the completion of the reform rather than its commencement.

Does my right hon. Friend accept that when his statement is reviewed it will be seen as the abolition of the last vestiges of serfdom in our welfare system, and that instead of directing how claimants spend their money it will give them the freedom to spend it themselves?

Will my right hon. Friend give us some assurance about how the reform will be rolled out in the pilot areas? Will all claimants in the private sector be brought into the scheme, or will they become part of the scheme only if they wish to move or have to move?

Mr. Smith: I thank my right hon. Friend for his welcome for the measures. With regard to the timing of their implementation, earlier steps were taken on modernisation and tackling fraud and rent restructuring measures are now under way for the social rented sector, but we are now getting on with these measures as quickly as we can.

With regard to how the reform will be rolled out in each of the pathfinder areas, our intention is that all private rentals where tenants receive housing benefit will be part of the pathfinder, except, as I said, where people are vulnerable and unable to manage their affairs or where there are substantial rent arrears. Another protection that the House will be interested in is that it makes sense for the initial payment to be made directly to the landlord, but thereafter it will be the responsibility of the tenant.

I am not sure whether I would describe the measures in exactly the same terms as my right hon. Friend did, as the abolition of serfdom—I would be proud to have played a leading role in such a cause—but they certainly

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extend rights, responsibilities and opportunities to tenants in the private rented sector that they have been denied in the past and that the rest of us take for granted.

Mr. Steve Webb (Northavon): I thank the Secretary of State for his statement and for grasping a nettle that his two immediate predecessors signally failed to grasp. It is all the more welcome that he has brought forward the proposals today. The aims that he set out are entirely laudable and many of the proposals, such as pensioners not having to reclaim within five years, are entirely sensible, and we shall welcome and support them. However, I have two fundamental concerns.

First, a political party recently said that it was proposing to complete the Thatcherite agenda. I had assumed that that was the Conservative party, but I hear that the right hon. Gentleman proposes to use housing benefit sanctions for antisocial tenants, which sounds good, macho and as though the Government are on the side of the decent against the antisocial, but in practice the consequence will be to move the problem around rather than to deal with it. Would not the money that these measures will cost be better spent on the many schemes around Britain that are working now to tackle the causes of antisocial behaviour? These measures will simply move the problem around when it has already occurred.

I have some serious concerns about rent restructuring. I get the impression that the Secretary of State lives in a world in which tenants are faced with a wide array of choice properties at decent prices, and that they pick and choose, then haggle to set a decent rent with the landlord. Well, it ain't like that, and I think that, deep down, the right hon. Gentleman knows that. Many tenants are price takers, and have little choice. They have to take what they are offered or they have to lump it. The Department's own research shows that shopping-around incentives have been a complete failure; they simply do not work. Tenants are not free choosers among a range of choice properties. Does the Secretary of State not agree that tenants will be forced to live in the cheap rent, ghetto part of town because they will not be able to afford to live in the decent part?

If the right hon. Gentleman's proposal is for the standard allowance to be set at the reference rent—effectively, the maximum rent—how will the pilot schemes tell us anything? Half the people will be paying less and have some free money—and will say thank you very much—while the other half will get what they are getting now. So what will the pilots actually teach us? With rents as they are, there is a real danger attached to the flat-rate payments. Rents still vary far too much, and people will be forced to move because their housing benefit does not cover their rent. That will mean children leaving their schools, and people moving away from members of their family who can provide child care. It will also disrupt employment. If the measures do not have the effect of causing people to choose different properties, what is the point of them? If they do, will they not Xghettoise" and distort people's lives?

Mr. Smith: It is clear that the Liberal Democrats are no part of the reformed agenda. That was an hysterically negative response to our radical proposals. I would caution the hon. Gentleman against lecturing me on the world I live in. My home in my constituency is on an

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estate where people are sick and tired of neighbours from hell making their lives a misery, day in and day out. This Government can take pride in linking rights with responsibilities, and if housing benefit has a part to play in the wider measures to tackle antisocial behaviour, so much the better.

On the hon. Gentleman's speculation about people being worse off, I said in my statement that no one will be worse off as a consequence of these proposals. Indeed, those whose rent is below the reference rent level will be better off. In resisting these proposals, the hon. Gentleman would condemn those people to the unfairness of having less money for their housing costs, just because they live in a cheap area. There is nothing liberal or democratic in his remarks if he would prefer to leave poor people ensnared in an incomprehensible state bureaucracy, rather than putting some power in their hands. I believe in empowering poor people, and that is what these proposals will do.

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