 House of Commons |
Session 2005 - 06 Publications on the internet Standing Committee Debates Welfare Reform Bill |
Welfare Reform Bill |
The Committee consisted of the following Members:John
Benger, Chris Shaw, Committee
Clerks †
attended the Committee Standing Committee AThursday 2 November 2006(Morning)[Mr. Jimmy Hood in the Chair]Welfare Reform Bill9.10
am
The
Chairman: Due to technical problems over night, amendment
No. 263 to clause 28 was printed incorrectly. Copies of the correction
have been distributed to members of the
Committee.
Clause 27Local
Housing
Allowance Danny
Alexander (Inverness, Nairn, Badenoch and Strathspey)
(LD): I beg to move amendment No. 258, in clause 27,
in page 19, line 15, at end
insert— ‘( ) The Appropriate
Maximum Housing Benefit may not vary according to the age of the
claimant.’. I
am pleased to serve under your chairmanship again, Mr. Hood.
To continue the meteorological theme, I must say that it is good
weather here and, according to what I have been told, it is replicated
in the north of Scotland for the first time in our deliberations. I am
looking forward to such weather continuing this
weekend.
The amendment
is designed to address an issue that my hon. Friends and I, as well as
other hon. Members, regard as important. Its purpose is to provoke a
discussion about single room rent, which the Bill will convert to a
shared room rate under the new local housing allowance, although the
effect of the two is pretty much the same. The Bill will provide
tenants under the age of 25 with a considerably lower rate of housing
benefit than everyone else. It is my contention that shared room rent
should be abolished and that everyone, no matter what age, should have
access to housing benefits on the same basis. The single room rent is
unfair: it is discriminatory; it causes hardship, poverty and
homelessness; and it should be
abolished. I
note that early-day motions 816 and 2573 on the subject have between
them attracted the support of 169 hon. Members, including, I am pleased
to say, the hon. Members for North-East Derbyshire (Natascha Engel) and
for Daventry (Mr. Boswell), who are members of the
Committee. I hope they will contribute to the debate, because the issue
is important for the long term.
Since its introduction in
October 1996, the single room rent restriction has limited the maximum
amount of housing benefit that a single private sector claimant under
the age of 25 can receive for the average cost of a room in a shared
property, regardless of the property occupied. In contrast, single
people aged over 25can receive housing benefit for
one-bedroom, self-contained properties or shared accommodation. Anyone
aged under 25 and reliant on housing benefit who chooses to live, for
example, in a self-contained bedsit or self-contained, one-bedroom
accommodation will find that their benefit does not in any way cover
their costs. In fact, even the amount that people receive to rent a
single room in shared accommodation is usually insufficient to pay for
what is available
locally. The
restriction has been carried out in the local housing allowance
pathfinder areas where the new benefit has been piloted, and we shall
no doubt discuss it in more detail in our clause stand part debate.
Unless the Under-Secretary tells us otherwise, it seems that the
restriction will be continued under the new title of the shared room
rate in respect of the local housing allowance roll-out proposed under
the Bill. Revisions to
the definition of the single room rate have been found to have little
impact on the problems that young people face because of the current
restrictions. Adam
Afriyie (Windsor) (Con): Does the hon. Gentleman share my
concern about the implications with regard to age discrimination
legislation?
Danny
Alexander: That is a relevant point,
which perhaps the Under-Secretary will address. I welcome the positive
tone of the intervention, because I know that when the single room rate
was introduced by the Conservative Government in 1996, it was strongly
opposed by Labour Members. It may interest the Committee to know that
among those who voted against its introduction were the current Prime
Minister, Chancellor of the Exchequer and Secretary of State for Work
and Pensions. In fact, I think that any member of the Cabinet who was
elected to the House before 1997 voted against it. The Ministers
present in Committee today have no parliamentary record on the subject,
as they had not then been
elected.
Danny
Alexander: Indeed. However, I know that the Minister of
State was actively involved in student union politics at the time when
the single room rent was introduced, and I should be very surprised if
he was not actively involved in campaigning against
that. I
make these points because I hope that there are still Labour Members
who continue to hold the view held by their hon. Friends in 1996 that
the idea that under-25s should receive a lower rate of housing benefit
is wrong, discriminatory and unfair, and that it causes hardship to far
too many young people. In previous sittings of the Committee,
Conservative Members have frequently shown off their new credentials
and the new approach by which they are trying to set aside their
history and turn over a new leaf. The amendment is a test for them,
too, because it is a chance for them to show whether their conversion is
real or skin deep—whether it is a matter of presentation, or
whether it affects the substance of policy. I hope, therefore, that if
the amendment goes to a Division, Conservative Members will support the
abolition of single room
rent. Mr.
Jeremy Hunt (South-West Surrey) (Con): To clarify matters,
is the hon. Gentleman saying that all that we have said to date in
Committee would go only skin deep, if we were not to support the
amendment?
Danny
Alexander: I do not want to try the Committee’s
patience, but what I am saying is that the substance of policy is the
ultimate test of political conviction. The amendment is about policy
substance, so I look forward to hearing the Conservative response,
although I do not know which Front-Bench spokesman will make
it. Mr.
Tim Boswell (Daventry) (Con): I hasten to disabuse the
hon. Gentleman of the idea that I shall be making a substantive
response to the debate, but as I almost certainly voted for the
provisions in 1996, I shall take a moment of the Committee’s
time to remind him—I am sure that he was coming to
this—that it would assist the Committee if he were to identify
the likely cost of the change. As the amendment is also signed by the
hon. Member for Yeovil (Mr. Laws), who is, or who sets
himself up as, a pillar of fiscal rectitude, perhaps he will explain
how the cost will be
met.
Danny
Alexander: The hon. Gentleman has raised an important
point, which I shall come to, because the question of cost has been
specifically identified in written answers over the past year or
so. Specific problems
that are caused to young people by the current single room rent rules
will, I believe, continue under the Bill. Eighty-seven per cent. of
single room rate claimants experience a shortfall between the housing
benefit that they receive and the rent that they pay. According to
Shelter’s calculations, that shortfall averages £35.14 a
week, which is
substantial. The
last written answer that I have seen on the subject dates from May 2005
and states that 11,990 people were in receipt of the single room rent.
There is a severe shortage of accommodation available to people under
25 that meets the single room rent or the shared room rate definition.
That causes a real problem for those charities that are working with
young homeless people, because it is often hard, if not impossible, to
move those people on to accommodation that is appropriate to their
needs.
At a seminar
on this matter hosted by a coalition of charities including Shelter, I
attended a presentation by young people who were in YMCA hostel
accommodation because they had been unable to meet their rent due to
the shortfall in the single room rent. The current arrangements for
housing benefits for under-25s can be a real disincentive for young
people to leave supported accommodation, as those young people know
that they will face a shortfall. In 2005, YMCA England surveyed 23
local YMCAs, and it identified the single room rent as a significant
barrier to people moving on from YMCA accommodation. Some 35 per cent.
of young people in
YMCA accommodation were ready to move on but were unable to find
anything affordable to rent, given the benefit
situation. Affordability
is not the only barrier facing young people. There is substantial
evidence that landlords are unwilling to let to under-25s on benefit
because they know about the benefit situation and the fact that many of
those young people will face shortfalls. They know that that may cause
debt, hardship and an inability to meet rent payments, which from the
landlords’ point of view can cause severe difficulties. Shelter
has carried out research which shows that while 46 per cent. of
one-bedroom properties were affordable to those entitled to the
one-bedroom rate for over-25s, only 26 per cent. of properties that
matched the shared room rate definition were at or below the shared
room rate of housing
benefit. That research
related to the local housing allowance pathfinder areas, which is where
the Government have been trying out the new system proposed in the
Bill. The Minister may seek to allay my fears by saying that under the
new system there will be an improvement in the position of under-25s,
but Shelter’s research found that even under the new system only
26 per cent. of accommodation in the pathfinder areas was affordable to
those people in receipt of the shared room
rate. The
single room rent also applies to pregnant women. Once the baby is born,
the restriction no longer applies, so more housing benefit is
available. However, it is particularly difficult for a young person to
find and manage a move to more suitable accommodation with all the
extra costs and changes at that time. The Minister of State rightly
made great play of the importance of tackling child poverty during our
deliberations on part 1 of the Bill. I would argue that these
provisions have a damaging impact on child poverty for all the reasons
that I have just
described. I
will not go through the various case studies, although they are
instructive. I am sure that all members of the Committee will have been
supplied with briefing material and information that gives detailed
case studies of people under 25 who are in severe hardship as a result
of these restrictions. I shall simply highlight a couple of extra
points. The single room rent or the shared room rate is particularly
problematic for people for whom shared accommodation is not suitable
and would create difficulties, for example, people, who are undergoing
rehabilitation for an alcohol or drug
problem. The
hon. Member for Daventry raised an important point about the costs of
abolishing single room rent and extending the housing benefit
provisions to people under 25. In April 2006, in a parliamentary answer
to the hon. Member for City of York (Hugh Bayley), the Under-Secretary
of State for Work and Pensions, the hon. Member for Warwick and
Leamington (Mr. Plaskitt), said that to abolish the single
room rent would cost “at
least £20 million per year”.—[Official
Report, 18 April 2006; Vol. 445, c.
407W.] Other estimates have
suggested £60 million a year. It may be somewhere between those
two figures.
Mr.
Boswell: The hon. Gentleman suggested that many landlords
are reluctant to make such lettings at present. Does he appreciate that
there could be a dynamic effect if the proposal were accepted, because
more young people would take that opportunity and the cost would be
upwards in the spectrum rather than the somewhat conservative estimate
of
Ministers?
Danny
Alexander: The hon. Gentleman is right to refer to the
dynamic effects, but there would be at least as powerful a dynamic
effect, or an even greater one, in the opposite direction. After all,
these young persons are trapped in hardship, their debts are building,
they are moved between temporary accommodation and they may be living
in a hostel. Finding employment, the subject of part 1 of the Bill, is
harder and making ends meet is harder. It is possible to foresee
dynamic effects in the opposite direction. Making provision that allows
young people to have a more stable footing in life means that the
majority of young people who need the assistance of housing benefit can
afford to live without having a dramatic shortfall in their benefits.
That may well lead to much more positive economic benefits, which would
more than counteract the effects that the hon. Gentleman, legitimately,
described. The hon.
Gentleman asked where the money would come from. Abolishing the single
room rent is Liberal Democrat policy, as it was at the last election
and will be for the foreseeable future. The policies were set out in a
carefully costed manifesto. He rightly referred to my hon. Friend the
Member for Yeovil, who is indeed a pillar of fiscal rectitude, a
characteristic that I try to emulate.
[Interruption.]
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