Rent Officers (Housing Benefit Functions) (Amendment) Order 2001

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The Chairman: Order. Before we proceed, it might assist the Committee if I remind hon. Members that I must put the question by 6 o'clock. I say that to ensure balance and completeness in the rest of the debate, as far as possible.

5.39 pm

Mr. David Heath (Somerton and Frome): I understand your point, Mr. O'Hara.

I want to contribute briefly to the debate, which has been fascinating, as the hon. Member for Daventry said. I am grateful to my hon. Friend the Member for Hazel Grove for leading the debate and for spelling out in detail the effects on his constituents and the reasons why we should look at the order a little more closely than we might have done had he not been here to set us on the right path.

I have considerable sympathy for the Minister. He is an able Minister–I do not want to embarrass him too much–who is equally diligent in his duties and his Sunday evening activities, but is nevertheless required on occasions such as this to try to defend the indefensible with extremely weak and threadbare arguments. It must pain him to have to do so, and I admire his fortitude in never betraying the fact.

Let us start from the position of reality. As my hon. Friend said, some of his constituents in Stockport have arbitrarily had their housing benefit reduced by up to £40 a week–£20 a week on average. A person on a low income who is struggling to make ends meet is seriously affected when they suddenly find that their household budget has been reduced by up to £160 a month. If we are serious about social exclusion, surely a Government official, at whatever level, cannot make such an arbitrary decision without carefully thinking through the consequences for the individual and for the system and how those consequences can reasonably be mitigated.

Why did the rent officer make the decision to reduce the number of reference areas from two to one? The Minister has assured us that it is no part of an overall plan to reduce the number of reference areas for rent. That begs the question of why the decision was made. Clearly, it would have the effect of introducing greater homogeneity into the system, thus levelling down the limits of the housing benefit that could be paid. There must be a reason why the rent officer decided to change the process that had hitherto been adopted. It was either part of a programme or, more worryingly, was simply thought up in that particular office and has now become a trend or fashion extending into Cheshire and other parts of the country. Either way, it is a serious matter. The Minister has not said why the decision was taken. Was it to reduce costs, in which case the interests of the individual were completely ignored, or was it for other reasons that have not yet been explained?

The rent officer's decision was challenged in the Court of Appeal and comprehensively rubbished by

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the judges, who held that he had acted wrongly and improperly in interpreting the duties placed on him by the previous orders. We have been told that this order is carefully reasoned, but may nevertheless require amendment in the near future. To my mind, it does little to answer the basic questions about interpretation that the court put to the Government.

I agree with the hon. Member for Daventry. I find it difficult to understand the subtle difference between the terms ''locality'', ''neighbourhood'' and ''vicinity''. No doubt the Minister has been provided with arguments that he has not yet shared with the Committee. Although courts are not bound by such considerations, I took the precaution of consulting the ''Shorter Oxford Dictionary'' and ''Chambers English Dictionary'' to see whether there was a significant difference between the definitions of those terms. They both said that a locality can be defined as a neighbourhood and a neighbourhood can be defined as a locality, and that a vicinity can be defined as a neighbourhood. That is hardly surprising, given its Latin roots. The three terms are therefore interchangeable.

They could be used as synonyms, but the order uses them to differentiate between circumstances. The Minister owes us an explanation of why those terms were chosen, how a future court might interpret those distinctions, and why a future court should not hold to the judgment of the Court of Appeal in the case that gave rise to the new order.

Will the Minister help us with other terms in the order? He has already been asked the meaning of the references to more than one neighbourhood. He has not yet given us an answer, but I hope that he will have the opportunity to do so before the Committee concludes. I suspect that the term ''a variety of tenancies'' is helpful, and that the intention is to rule out those areas in which the housing stock is in the hands of a single landlord, so that there are no rents of the sort found in the Grosvenor estates for a vicinity, area, neighbourhood or locality. However, the question is whether that would include housing that is not in the private sector. If that interpretation is possible, it would help us to know. It could have an adverse effect on the individual if social housing through housing associations or municipal stocks were also included in the formula.

The Minister argues that reducing the grain and increasing the resolution of reference areas could disadvantage poor areas. That argument does not hold water. There is no logic to that, because we are talking about maximum housing benefit levels. The only people whom that would disadvantage would be those who had grossly anomalous high rents in an otherwise poor area, which is the purpose of the exercise. Although a larger area disadvantages someone in an area of high rent, it does not disadvantage someone on low rent if the reference levels are reduced to a reasonable level. No one would disagree with the Minister's view that some control must be exercised. It would be absurd to do so. We are, however, concerned to ensure that the order is

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fair. Lord Justice Sedley was explicit in his judgment that it would be wrong to interpret the areas for that purpose as necessarily geographical or administrative, and that in his view and that of his noble and learned friends the area should be no greater than would enable the rent officer reliably to make the specified calculations and judgments. That seems to be a correct definition of what the reference area should be, but it is not in the order. The Minister appears to be concerned to return to the status quo. Some of us think that the status quo before the court hearing was unsatisfactory, and we would like it changed. That is why we will oppose the order.

5.49 pm

Malcolm Wicks: Those of us who spend much of our time fascinated by housing benefit heard with humility but with sadness your instruction that we must conclude by 6 pm, Mr. O'Hara. We could discuss the matter all night, and I am sure that Liberal Democrat Members were trying to do just that.

The hon. Member for Daventry and I are used to discussing educational matters, and it is useful to hear his questions today. I repeat the point for the benefit of all members of the Committee that we are considering whether the rent officer orders can be made clearer. We are aiming for greater transparency, and we will consult local authority associations before laying further amending legislation before the House.

Mr. Boswell: Just in case the Minister was under a misapprehension, I am as concerned about the transparency of the effects of policy as I am about the prose, although both could do with improvement.

Malcolm Wicks: I am pleased that I have had an opportunity to elucidate the transparency of policy. The hon. Gentleman asked why there is one rent officer order for Scotland and one for England and Wales. In the past, the powers under section 122 of the Housing Act 1996 were exercised separately for those two jurisdictions. That is no longer the case. We intend to make provision for both jurisdictions in one order, which we will lay before the House when time allows. The Rent Service in England was established as an executive agency of the Department of Environment, Transport and the Regions in October 1999. We should emphasise that rent officers are statutorily independent.

The hon. Member for Daventry possibly wandered into broader territory about housing benefit, and–even if I had the time–he would not expect me to be seduced into that fascinating discussion. Because he does not like to make simple debating points, he will understand that when other parts of the social security or tax credit system change, we must issue regulations to update housing benefit. If he scrutinised the regulations fairly, he would see that it is not as easy as he might want it to be to reduce their number. I have recently established in my Department–the first meeting is in a few weeks time–a regulation scrutiny group, which includes representatives of local government, so that we can ensure that we get such matters right in future.

The hon. Member for Somerton and Frome (Mr. Heath) ably rehearsed many of the remarks made by

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his colleague, the hon. Member for Hazel Grove. It is not useful to go into that detail again. I am struck, as the hon. Gentleman will be, by the fact that it is all Lloyd George's fault. As a student of Liberal Government–one has to go back a long way to study that–the hon. Gentleman will know that the story began in 1915. Landlords were increasing rents in Glasgow because of the pressure on rents from rising numbers of munitions workers. On the red Clyde, the people initiated a rent strike, which worried the Liberal Government in the midst of war. [Interruption.] I hope that they are not going to tell me that I have my history wrong: I know my history concerning this matter. The rent strike persuaded Lloyd George to impose rent control: the first such legislation dates from 1915. We have dealt with the consequences of that action through numerous changes, including those in 1957, 1965, and today. Our two parties will undoubtedly debate whether the true origins of proper rent regulation lie with a radical labour movement in 1915, or the Liberal Government that gave in to pressure from the people.

We do not have time to go into the definitions of ''locality'', ''neighbourhood'' and ''vicinity'', though we could all have fun looking them up in the ''Oxford English Dictionary''. We set out definitions in the order, and I ask the hon. Member for Somerton and Frome to examine them. For my part, I promise that when I am fed up with my red box, as I occasionally am, I will look up the ''Oxford English Dictionary'' to see if there is any difference between Liberal, Whig and Liberal Democrat. I suspect that there is not much.

We are discussing the need to get right certain balances. I understand that getting it right for the individual is not always easy. We are trying to strike

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the balance between making housing benefit as generous as possible, because that is a way of housing working-class people, and the need to keep an eye on public spending. At almost £12 billion, the costs form a substantial part of our welfare state budget. That is not always an easy balance to strike. The other balance is between a housing benefit system that enables people to pay rent and the need for others not on housing benefit but in work and on low incomes to afford decent housing. In terms of equity between groups of people, we must get that one right.

We have had an interesting debate. I thank the hon. Member for Hazel Grove for raising an important matter, to which we will return in future. I thank other hon. Members for contributing so ably to the discussion. However, I am not persuaded to change our policy, and I ask the Committee to support the order.

Question put:–

The Committee divided: Ayes 7, Noes 2.

Division No. 1]

Edwards, Mr. Huw Prentice, Bridget Simon, Mr. Sion Smith, Angela
Turner, Mr. Neil Wicks, Malcolm Winnick, David

Heath, Mr. David
Stunell, Mr. Andrew

Question accordingly agreed to.


    That the Committee has considered the Rent Officers (Housing Benefit Functions) (Amendment) Order 2001.

Committee rose at three minutes to Six o'clock.

The following Members attended the Committee:
O'Hara, Mr. Edward (Chairman)
Boswell, Mr.
Brazier, Mr.
Dhanda, Mr.
Edwards, Mr.
Heath, Mr.
Mitchell, Mr. Andrew
Prentice Ms Bridget
Simon, Mr.
Smith, Angela
Stunell Mr.
Tuner, Mr. Neil
Wicks, Malcolm
Winnick, David
Wyatt, Derek

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