Draft Housing Benefit (Amendment) Regulations 2012


The Committee consisted of the following Members:

Chair: Mrs Anne Main 

Blenkinsop, Tom (Middlesbrough South and East Cleveland) (Lab) 

Bridgen, Andrew (North West Leicestershire) (Con) 

Fuller, Richard (Bedford) (Con) 

Godsiff, Mr Roger (Birmingham, Hall Green) (Lab) 

Hendrick, Mark (Preston) (Lab/Co-op) 

Herbert, Nick (Arundel and South Downs) (Con) 

Johnson, Joseph (Orpington) (Con) 

Lloyd, Stephen (Eastbourne) (LD) 

McKenzie, Mr Iain (Inverclyde) (Lab) 

Murray, Sheryll (South East Cornwall) (Con) 

Neill, Robert (Bromley and Chislehurst) (Con) 

Paisley, Ian (North Antrim) (DUP) 

Qureshi, Yasmin (Bolton South East) (Lab) 

Selous, Andrew (South West Bedfordshire) (Con) 

Timms, Stephen (East Ham) (Lab) 

Tomlinson, Justin (North Swindon) (Con) 

Vaz, Valerie (Walsall South) (Lab) 

Webb, Steve (Minister of State, Department for Work and Pensions)  

Mark Etherton, Committee Clerk

† attended the Committee

The following also attended, pursuant to Standing Order No. 118(2):

Reid, Mr Alan (Argyll and Bute) (LD) 

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First Delegated Legislation Committee 

Tuesday 16 October 2012  

[Mrs Anne Main in the Chair] 

Draft Housing Benefit (Amendment) Regulations 2012

8.55 am 

The Minister of State, Department for Work and Pensions (Steve Webb):  I beg to move, 

That the Committee has considered the draft Housing Benefit (Amendment) Regulations 2012. 

Good morning, Mrs Main. Committee members who sat on the Welfare Reform Public Bill Committee will have gone into the issues before us in great depth. These regulations implement one of the key measures of the Welfare Reform Bill relating to the annual uprating of local housing allowance in line with the consumer prices index, and reductions in under-occupancy among working-age social sector tenants. The regulations are regarded as being compatible with the European convention on human rights. 

I want to set out, briefly, the background to the regulations because it is easy, when we get to the nitty-gritty of the detail, to lose sight of what we are trying to achieve. The regulations achieve three separate things. First, we are seeking to close a huge budget deficit. That is familiar territory to all of us, but it is worth remembering that that is the context. The other day, I saw the statistic that for every £8 by which the coalition has sought to reduce public spending, the Opposition have said that they would reduce it by £7, so I assume that they will support at least seven eighths of the regulations or, failing that, suggest where else the significant sums that the regulations save could come from. 

We had to save money, and given that social security and tax credits are a third of all Government spending, and that we have ring-fenced the state pension, areas such as housing benefit are inevitably important places to look for savings, especially given the way that the housing benefit bill has mushroomed. 

Clearly, there is a fiscal imperative to look at public spending on housing benefit, but there is a housing imperative as well. We badly misuse current social housing stock. I was rather startled to see, when I looked at the figures, that simultaneously we have over a quarter of a million households living in overcrowded accommodation, a million with one spare bedroom and 390,000 with two spare bedrooms. So in the social housing sector, there are approaching 1.8 million empty bedrooms, of which more than a million are paid for by housing benefit. There are hundreds of thousands of families living in overcrowded social rented accommodation, and many more waiting to get into accommodation, so we must do better in how we use our social housing stock. 

Although there are good schemes in place—schemes to encourage people to downsize, house-swap schemes and various other initiatives—the regulations have clearly already given the process the jump-start that was needed. It is about making better use of social housing stock. 

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Stephen Timms (East Ham) (Lab):  The Minister said that the regulations had jump-started a process. Will he give us some evidence or facts to support that point? 

Steve Webb:  Yes, I am happy to do that. Take the example of Hartlepool, and Housing Hartlepool’s preparations for this measure. Bear in mind that it has been talked about for over a year; housing associations knew this was coming, and the good housing associations have already started dialogue with their tenants. 

We have found that housing associations and social landlords have had to find out more about their tenants—their circumstances, what they can do, and what support they need—and that has been an entirely positive dialogue. Housing Hartlepool has a dedicated officer who visits tenants affected by the size criteria. That officer starts with those under-occupying by two bedrooms, first to make them aware of the situation, and then to discuss possible solutions. In the visits, there is a personal approach; each individual discusses the options most appropriate to them. 

Later, we will talk about the different options open to people, but they include paying the difference in rent; re-housing to a smaller property; family members moving back home; or looking to agencies to help people find employment. Housing Hartlepool is also looking at risk factors such as debt problems and other vulnerabilities. The visiting officer acts on behalf of tenants who wish to move, helping them to seek out appropriate transfers and liaising with the allocations teams. 

That is one example; let me give the right hon. Gentleman another. I will not go on at length, Mrs Main, but it is important to get up-to-date information on what social landlords are actually doing. Wishaw and District housing association has a lodgers policy in place. Clearly, if people do not get housing benefit for a spare bedroom, taking in a lodger is one of the things that they can do. Obviously, that has to be managed, so the housing association has a policy to make sure that people do not move in and out of properties in an unlawful or uncontrolled way. 

The policy provides guidance to staff on implementing the correct procedures and to tenants on the requirements placed on them, but the association runs a supportive scheme where a housing officer helps a tenant to draw up a lodging agreement, helps with the application process and provides leaflets explaining the process, roles and responsibilities. We are not simply saying, “You’re on your own; get on with it.” Social landlords are contacting their tenants and working out their options. 

If taking in a lodger is the helpful thing to do, the Wishaw and District Housing Association, for example, will help tenants draw up lodging agreements. As one would imagine, I have a long list, but I want to give the right hon. Gentleman a flavour of some of the things that housing associations are doing. 

Returning to my point about the better use of the housing stock, at the same time as our requiring the under-35s to live in shared accommodation, they will be looking, for example, for rooms to rent and many of those living in registered social accommodation with spare bedrooms will be looking for people to rent them. Rather than paying housing benefit to a 34-year-old to live in their own flat, which someone in work might not

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be able to afford, and paying a social tenant housing benefit for an empty bedroom, we get the two together and have a single person lodging. That way, the tenant of the social landlord gets the income from the rent and gets the housing benefit shortfall covered, and the 34-year-old gets the accommodation without the shortfall on the housing benefit. We are trying to use the housing stock better. 

The third aim that we are trying to achieve with the regulations is fairness. First, we want fairness between private and social renters. If someone wants to rent in the private sector, we will pay housing benefit only for the rent on a property of the size that is needed. We will not pay for spare bedrooms. If someone is in the social sector, we will pay for spare bedrooms. Why is that fair? If there are two low-income households with one renting in the private sector and one in the social sector, why should we pay for a spare bedroom for one and not the other? We need to be fairer. 

Secondly, we are not being fair between different social tenants. If a household has two bedrooms and needs them both and down the road there is a household of the same composition in a three-bedroom property, we pay the full rent in either case. Somebody down the road with the same household composition is getting the rent paid on a bigger house or better accommodation. That is not fair. The proposal is about saving money, but it is also about better use of the social housing stock, fairness between private and social renters, and fairness within social renting. 

Mr Alan Reid (Argyll and Bute) (LD):  I am grateful to my hon. Friend for giving way. I agree with most of what he has said, and I support the principle, but we are discussing the nitty-gritty today and I ask him to consider the position of small islands or remote villages on the mainland, of which there are a lot in my constituency. All this matching of larger and smaller households that may be possible in a bigger town or city simply is not possible in a small remote community, where, for historic reasons, the houses largely have two bedrooms, but nowadays have a household suitable for one bedroom. What does the Minister suggest is the solution for small islands and remote villages on the mainland? 

Steve Webb:  I am grateful to my hon. Friend, who, coming from the type of constituency that he does, has been an entirely appropriately persistent commentator on the regulations. He knows that part of the flexibility that we have given to local authorities is the discretion to look at individual cases. We have funded additional discretionary housing payments due to changes in private sector tenancy arrangements. Some of the money relates to this regulation, but all of it is a pot, none of which is ring-fenced. 

If a tenant lives in a particularly extreme rural location, for example, where there really is no other alternative, where they could not work or work more hours, where they could not possibly be reasonably be expected to move, and so on, local authorities will have discretion to respond, but there are a range of things that people can do, and moving is only one of them. For example, they may be able to take someone in to live in a spare room. That could be one of many options. If they are working, they may be able to work more hours. 

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This is in response to my hon. Friend, Mrs Main, but it is of general relevance to the debate. There is a suite of things of that people can do, but the issues may indeed be more difficult on a remote island. However, the average housing benefit shortfall is some £14 a week, so if someone is actually in work, three hours at the minimum wage covers the shortfall. If they are not working and take a part-time job, that would cover the shortfall. If they can take in a lodger, that would cover the shortfall. If a family member can move back in, that would cover the shortfall. If they can move into private rented accommodation, that would help. 

There is a range of options. None of them will work for everybody, and there is some flexibility in the system. We will obviously have more to say in due course about the way we are allocating the discretionary housing payments, which is something that my hon. Friend has strong views on, but I stress that it is not simply a case of requiring people to move from one island to another. A range of options may be available. 

Let me focus on the detailed content of the regulations, which have two main purposes. First, they change the local housing allowance uprating to CPI from April 2013. At the moment, the provision is to review existing local housing allowance cases on the anniversary date of the claim or a change of circumstance. That will be abolished from January 2013. Instead, all claims will be reviewed annually on 1 April when the new local housing allowance rates are set, which will bring the LHA in line with annual changes to other benefits. In addition, there will be provision to review a case if the rent changes throughout the year, rather than tenants having to wait until the annual review date. 

Secondly, and perhaps of more interest to many hon. Members, the regulations introduce restrictions to housing benefit for working-age claimants who are living in the social rented sector and occupying accommodation larger than their household size requires. To stress the point that I made earlier, the same size criteria currently applying to claimants in the private rented sector will be used to determine whether accommodation is being under-occupied. Opposition Members and their noble Friends in another place, who discussed this yesterday afternoon, have set out their opposition to these plans. In response to today’s debate, I hope that hon. Members will clarify whether they think it is fair that we treat people in the private sector more harshly than those in the social rented sector. I hope that the right hon. Member for East Ham will make that clear. 

From April 2013, a percentage reduction will be applied to a claimant’s eligible rent for those considered to be under-occupying, for example with one or more extra bedrooms—a 14% reduction will apply for those under-occupying by one bedroom and a 25% reduction for those under-occupying by two bedrooms or more. As I said a moment ago, the average reduction in housing benefit will be £14 a week for those affected. The measure will ensure the same size criteria are used for calculating housing benefit for those in the social sector as is already the case in the private-rented sector, where housing benefit is already based on the size of the household. 

The housing benefit bill is growing dramatically, and we cannot ignore that. Asking tenants to shoulder some of the costs of their housing will be an important step

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in both managing the housing benefit bill and reducing the budget deficit. The change is also intended to help us to address the real shortage of homes and to provide impetus for landlords to manage their stock more effectively. There are a million extra bedrooms in the social sector, paid for housing benefit, which is a waste of valuable, good housing stock. 

Let us make no mistake, Mrs Main, that these rooms are desperately needed; with a quarter of a million households in overcrowded accommodation, we just cannot go on paying for some households to have extra bedrooms, while others struggle on in cramped accommodation. People will say that we need to build more social housing, and of course we do, but these are not new problems. These are not problems invented by the coalition; the presence of hundreds of thousands of people in overcrowded accommodation has been a long-term problem, as has the presence of spare bedrooms. 

The stickiness, for want of a better word, of people not downsizing and adjusting in the social sector has been a long-standing problem. Simply saying, “Just build more houses” would obviously help, but would not address the underlying problem that has existed for many years. 

Mark Hendrick (Preston) (Lab/Co-op):  What would happen in the case of a tenant who was disabled and had had many adaptations to a particular house, or of an elderly tenant who had made adaptations? The inconvenience of a move would be coupled with the need to make such adaptations to the other property. 

Steve Webb:  Indeed, the hon. Gentleman raises a perfectly fair point. He referred to someone who is elderly, but we are talking about working-age households, so that does not apply in this case. 

Mark Hendrick:  Not a pensioner, but elderly. 

Steve Webb:  No. If they were elderly, the provisions would not apply. However, I take the hon. Gentleman’s substantive point. We looked at whether we could simply exclude any house that had had any adaptation done to it. It quickly became apparent that there is a spectrum of adaptations—everything from knocking down walls, putting in extra rooms and all the rest of it down to installing a stair rail. 

Trying to define in legislation that this or that type of adaptation was or was not exempt was very complex. Rather than having a blanket exemption simply for a ramp or a stair rail, we have allocated money to local authorities, which broadly matches what we think would be the cost of protecting people in the circumstances that the hon. Gentleman has described—for example, a wheelchair user who has had significant adaptations made. 

We have allocated a total of £30 million a year of discretionary housing payments, so that local authorities can respond case by case to the very type of example that the hon. Gentleman cited. He is right that such people represent an important set of cases. Rather than trying to prescribe precisely in legislation, and getting it

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wrong, we have given local authorities the money to match need of the type that he has described. I am grateful to him for raising that point. 

As I mentioned earlier, a lot of good work has begun in preparation for the introduction of the size criteria rules, and there are plenty of examples of landlords being proactive and arranging moves in response to this measure. I give just one example of a creative local authority. Oldham has completed a successful letting chain involving six households and four different social landlords. So we had two overcrowded households, three under-occupying households and one homeless person. By juggling all of them together, they are now in houses where the people who had spare bedrooms do not have them; the people who were overcrowded have them; and the homeless person has somewhere to live. That is a much better use of a scarce resource. 

Stephen Timms:  I am grateful to the Minister for giving way. The impact assessment tells us that 660,000 households will be affected by these changes. How many of those does he expect to move as a result of the kind of initiative he is describing? 

Steve Webb:  As I stressed earlier, we think that people will respond in a variety of ways and it is difficult to know, without going case by case, what each individual person will do. So I ran through a whole list of things people can do, apart from moving. 

The impact assessment is based on the assumption that we get the full saving from people. Of course if someone moves, that has a knock-on effect—someone else moves in or they may move out of the private rented sector, for example, so there may be more or fewer savings. The impact assessment is not based on a single number, to answer the question. Our judgment is that there will be a wide range of responses. People will take in lodgers, family members will come back home, people will take jobs and people will work more. 

To give an example, we have been doing survey work on what people planned to do in response. Over a quarter said that because of the shortfall, they now anticipate looking for work when they were not previously working. We see that as positive for them and for the Exchequer. 

Stephen Timms:  Let me press the Minister a little further. He is making the point perfectly properly that there are a lot of initiatives under way on the part of social landlords to help mitigate the otherwise damaging effects of what is proposed here. Does he expect the number of households that are moving as a result of those initiatives to be, for example, more or less than 10,000 out of the 660,000 who are affected altogether? 

Steve Webb:  This has a slight feeling of an auction. If I say yes, it will be more than 10,000, he will intervene again. The research to which I referred, talking to tenants about their intentions, suggests the order of a quarter. That is what our research suggests might consider moving in response to these changes. As we get nearer, some will take the view that they will simply take the shortfall, some will work, some will work more, some will take a family member back home and some will take a lodger. There is a whole raft of things that people can do. 

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Stephen Timms:  I am grateful to the Minister. Usefully, he has told us that this research, which I have not seen, indicates that about a quarter of the 660,000 might consider moving. That is around 160,000 households. Is he telling us that that is the number he expects will actually have moved by April next year? 

Steve Webb:  Certainly not—that is not the number who will have moved by April next year, because the policy does not come in until April next year. We have surveyed people affected by the policy, asking them about the range of options that they would consider, and they have indicated the most likely routes they will take. However, that will take time and some people will do something different. 

For example, someone who did not initially say that they would seek work might between now and then see a job, apply for it, take it and not have a problem. We have orders of magnitude based on our research and I hope that gives the right hon. Gentleman the reassurance he seeks. 

Stephen Timms:  I hope the Minister will accept that this is quite an important point to explore. He has been reminded by his hon. Friend the Member for Argyll and Bute of the great difficulties in practice for people who are moving. It might well be that in Argyll and Bute quite a lot of people are saying that they are thinking of moving because of this, but the question is how many will actually be able to move. In my constituency in the east end of London—very different from the hon. Gentleman’s—the reality is that people cannot move. 

May I press the Minister again? He told us that 160,000 people are considering moving as a result of the measures. Does he in practice expect that more or fewer than 10,000 will be able move—if not by April next year, before this change takes place, within 12 months of that date? We need to have some sense of how many people will be able to take the action that he has commended. 

Steve Webb:  The right hon. Gentleman is one of my many predecessors in this role. When the previous Government introduced welfare reform policies, I do not remember anything remotely as precise as he is asking me for about the responses of individuals. 

Stephen Timms:  Anything will do. 

Steve Webb:  I have just given a very precise number. We are doing probably the most thorough evaluation of this reform among many I can think of. Based on survey evidence, of the order of a quarter are looking at moving house. I am not going to say whether it is more or less. 

The right hon. Gentleman said he did not know anything about the research we are undertaking, so it might be helpful if I tell him a bit about that. We have confirmed that, reflecting parliamentary scrutiny and in response to points made in another place, we will undertake independent monitoring and evaluation to explore the effects of the introduction of the size criteria. 

The monitoring and evaluation will start when the policy starts, in April 2013, although we are now doing pre-research on attitudes. Initial findings will be available

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in 2014, and final reporting in 2015, to include small-scale primary research with social landlords across England, Scotland and Wales. 

We will look—this comes back to the point made by my hon. Friend the Member for Argyll and Bute—at different types of authorities, including urban, rural and county district local authorities, and we will cover a range of different housing markets, so that we can explore the effects of the introduction of size criteria effectively and gain sound insight into the experience of tenants. It will include factors such as housing supply issues, rural impacts—which will reassure my hon. Friend, I am sure—people who are unable to share rooms, and the impact on vulnerable individuals, on people’s financial status, on health and well-being and on family life. 

The National Housing Federation is itself to commission work to understand the effects of the measure on its members, and we will keep in touch on that. I assure the right hon. Gentleman— 

Stephen Timms  rose—  

Steve Webb:  He is eager to get in, but perhaps I can conclude my description. I assure him that rigorous evaluation is to be done once the policy is in place. Inevitably, the research done ahead of implementation is hypothetical—“What would you do if this were to happen?” It is very difficult for people to know with any degree of certainty, which is why trying to pin me down to a single figure is absurd, frankly. 

I have given the right hon. Gentleman an idea of the order of magnitude of what people are telling us, but as more local authorities and housing associations go out and talk to their tenants, they will be gaining information all the time. Obviously, six months out from the policy’s even coming in, it is inappropriate to try to be precise on numbers. 

Stephen Timms  rose—  

Steve Webb:  I will give way one last time. 

Stephen Timms:  The hon. Gentleman protests a little too much. He has given us a very helpful figure on the proportion of those who would like to move. Can he just give us an order of magnitude of how many he thinks will actually be able to? I said 10,000 because I thought that might be a helpful figure to focus attention on, but I am interested in any figure. Of those 160,000 or so who would like to move, how many does he think will be able to? 

On the research—I welcome what the hon. Gentleman has told us about that—the former Minister for Employment, now the Lord Chancellor, the right hon. Member for Epsom and Ewell (Chris Grayling), envisaged the commissioning of independent external research to evaluate the impact of reforms to housing benefit, and I imagine that this is what this Minister has just described to us. The then Minister said of that research: 

“We intend to make final findings available in early 2013, with the initial findings available during 2012.” 

What is the timetable now for making available the initial findings and final findings from that research? The former Minister said: 

“It will be presented to both Houses, together with a ministerial statement.” ––[Official Report, Welfare Reform Public Bill Committee, 31 March 2011; c. 334.] 

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Does that continue to be the intention? When may we be able to read the conclusions? 

Steve Webb:  Just to be clear, the full evaluation that I described, starting in April 2013, runs for two years, and that is of the policy in force. Separately, we commissioned the Housing Futures Network to undertake research. I think we have already published some findings from that, but I will get back to the right hon. Gentleman to be clear about that. Obviously, we are keen for the House to be aware of the conclusions of that research, so we shall certainly publish the results. 

Perhaps I should move on, as I know many hon. Members want to contribute to the debate. 

Stephen Timms:  I just want to press the Minister on this point. Of an order of magnitude, how many people does he think will be able to move? 

Steve Webb:  The right hon. Gentleman is asking me the same question—ever so charmingly, but it is the same question, and he will get the same answer. 

People who rent from a social landlord have in large part had no restrictions on the size of property their housing benefit will pay for. As mentioned earlier, this has not been the case for private rented property. People have had to make hard decisions about what they can afford, and it is simply time we made the same requirements of social tenants. 

I want to touch briefly on some of the issues raised when the substantive policy was decided in the Welfare Reform Act. First, there was some discussion about what is a bedroom. It is not quite up there with what is the meaning of life, but it is an important issue in the present context. What is a bedroom? After discussions with the National Housing Federation, Riverside Housing and others, most of the stakeholders welcomed the flexibility of not having a specific definition of room size. We are leaving it to landlords to specify the size of property, as obviously they know the housing stock and are best placed to do so. However, we expect the information that they provide will be reflected in the level of the rent charged and therefore match what is on the tenancy agreement for each property.

We are considering the financial impact on local authorities from our work with the Department for Communities and Local Government on the new burdens protocols and that Department has also funded the Chartered Institute of Housing to provide guidance for landlords. “Making it fit” was published in May this year and included information on how to model and assess any risk to rental income. We have produced comprehensive guidance to local authorities to help them prepare for the introduction of this measure. This includes a toolkit with model letters, leaflets and posters designed to heighten awareness among claimants. These are available on the DWP website for both local authority staff and advice organisations. To ensure awareness and engagement from the outset we have held stakeholder meetings with hon. Members, the other place, local authorities and advice organisations throughout the development of this policy. The draft regulations and guidance were shared widely.

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There has been a lot of debate about who this measure should or should not affect and how it should work. A key principle for us has been simplification. For a policy to be simple and easily administered there have to be few exceptions. There are always groups that could be excluded from a policy or different provisions made, but then that policy would be less simple. So, with the exception of a few circumstances, the social sector size criteria in these regulations have been designed to apply to all those of working age receiving housing benefit for socially rented housing. There will be individual cases where someone may not be in a position to make up the shortfall in rent and where it is impractical for them to move to smaller accommodation. That is why we are adding £30 million to the discretionary housing payment fund on top of what is already available from 2013-14. As the right hon. Gentleman asked, it is aimed particularly at helping claimants living in significantly adapted accommodation and foster-carers. We are currently considering the best way to allocate this money between local authorities.

Some have said that we are relying too heavily on discretionary housing payments, but I do not believe that is the case. We have added what we think is affordable to the fund, but it is for local authorities to decide how they use it, taking into account priority needs. It was never going to make up everyone’s shortfall. That was obviously not the point. That would simply defeat the object and shift the financial burden from one mechanism to another. I hope that I have been able to respond to a few questions as we have gone along, but to summarise what we are trying to achieve: yes, there will be fiscal savings, but also a better use of the housing stock, greater fairness between the private and the social sector, and greater fairness within the social rented sector. In short, this measure is designed to engender change in people's expectations of what housing benefit will provide for and help create a more sustainable social housing market that can cater for all those who need it.

I commend the regulations to the Committee.

9.23 am 

Stephen Timms:  Mrs Main, I first bid you a warm welcome as Chair of our Committee. I am pleased to see you in your place. I thank the Minister for his explanation. He is invariably courteous and thorough, but we are going to disagree significantly over these regulations this morning. They put in place a process which, as well as the point that he made to us, will enable the Government to implement their policy of uprating local housing allowance in line with CPI. 

We have accepted that if it was clearly a temporary measure it would be a reasonable contribution to reducing the deficit. Ministers have indicated that this form of uprating will be applicable up to the 2014-15 spending review, at which point it will be reviewed. The Minister himself told the House in a debate last year: 

“CPI is not for ever. We have said that CPI on the LHA rates will be introduced in 2013, and will be reviewed at the end of the comprehensive spending review period in 2014-15”.—[Official Report, 10 March 2011; Vol. 524, c. 383WH.] 

He was very clear about that. In a debate in the other place last October, Lord Freud also foresaw a review. 

Of course, the problem with this kind of uprating is an obvious one. At the moment local housing allowance is uprated in line with actual rents in the area; between

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next year and 2014-15 it will be uprated in line with CPI, so local housing allowance may well get out of step with the rents that people actually have to pay. So this review is particularly important. Will the Minister tell us a little more about it? When will the review take place, how will it be carried out, how will the situation be assessed to see whether rents have got significantly out of step with the local housing allowance, and what will be “significant” in that sense? I know there have been suggestions that this review could take place as part of the research that the Government have commissioned from academics into the impact of LHA changes, which I think is probably part of the research that the Minister was just speaking to us about. I can see a good deal of merit in carrying out the review in that way—is it his intention to carry out the review as part of that research commissioned from academics? 

However, the bulk of the regulation introduces the so-called under-occupancy penalty. Let me say at the outset that there is a good case for addressing under-occupancy, and the Minister adduced a number of relevant facts in support of it. I agree with him that it is something that should be done: a serious effort to address under-occupancy could help to tackle overcrowding. So, in our debate on the Welfare Reform Bill, the Opposition argued that the penalty should not apply unless someone had been offered and declined a smaller and more appropriate alternative home, because the reality is, as the research from the Housing Futures Network makes clear, that most people under-occupying their home will not have the practical possibility of a smaller alternative to move to. 

The hon. Member for Argyll and Bute, who I commend for turning up to our Committee without being summoned to it, made a very telling point about the circumstances in constituencies such as his, but as I said in my intervention earlier, exactly the same point could be made in very different constituencies, such as mine. The smaller homes for people to move to are simply not available. The Minister got uncharacteristically bad-tempered about that and seemed unhappy to be pressed on the question of how many of the 660,000 households that will lose as a result of this measure, according to the Government’s impact assessment, he actually expected to move. I suggested that it would be more or less 10,000: I plucked that figure out of the air. It is certainly not going to be anything like 160,000. It is interesting to hear from the research that 160,000 are considering moving, but it seems implausible that more than a tiny fraction of that number will be able to move, in reality, in order to shield themselves from the impact of these cuts in benefit. New social rented homes are not being built in anything like adequate numbers. Of course, if people had somewhere smaller to move to and moved to it, the main purpose of this change, which is to reduce housing benefit spending, would not be achieved. 

Steve Webb:  The right hon. Gentleman is building his case on a false premise. His premise seems to be that the penalties should not apply unless somebody has been offered and turned down alternative accommodation. He seems to be saying that if you have somebody in work, where housing benefit is paying for spare bedrooms, and they could do an extra shift, we should not penalise them for not doing the extra shift; we should just go on paying for empty bedrooms because they have not been offered a smaller house. That is absurd. 

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Stephen Timms:  No, it is not absurd; it is the case that we made in this Committee—it may well have been in this very room—last summer. Our point is that if somebody is in—I will talk in a moment about somebody in this situation—social rented accommodation, is unable to work because of ill health and has an extra bedroom or is in a larger place than their household size would qualify them for in the terms that the Government are using, they should not face a big reduction in their income if there is absolutely nothing that they can do to protect themselves from that cut. The problem, which the Minister has tacitly confirmed, is that people in the great majority of cases will not be able to move to somewhere smaller to protect themselves. 

Steve Webb:  The Committee will have noticed that I asked the right hon. Gentleman about one group and he answered in terms of another. I asked him about somebody who was working, who could work perhaps three hours more a week at the minimum wage to cover their shortfall. Is it the Labour party’s position that somebody in that case should have spare bedrooms paid for by the taxpayer, rather than be expected to work a few extra hours? For that particular group, what is fair for them? 

Stephen Timms:  The Minister is right: I did answer his question in terms of people with a disability and people on employment and support allowance and disability benefits, and I will explain to him in just a moment why I have taken those particular cases. Actually—this is set out very clearly in the Department’s equality impact assessment—the great majority of those who are affected by this measure are people with a disability in their household. That is an important fact that the Committee needs to take account of in deciding whether to make the change in the regulation. 

Let me return to the question of what this is essentially about, which is saving money. It will not do very much, as far as we can tell, for tackling the problem of under-occupation, but it will save a substantial amount of money. 

Mark Hendrick:  I have held a meeting with the social landlords in my constituency in Preston, along with the local city council, and each of those social landlords has told me that there is not the number of one-bedroom properties available that would make this policy of the Government workable. We will find that many people with a spare bedroom who do not have the ability to move are penalised for not having that ability to move, when it is no fault of their own. Does my right hon. Friend agree? 

Stephen Timms:  My hon. Friend is absolutely right. Most of those households will be households with a disability, which I will come to in a moment. He is absolutely right to spell out the reality of the change that the Government want to make. 

Richard Fuller (Bedford) (Con):  I appreciate the shadow Minister giving way. I am not sure whether this question is for him or the Minister, but he was in government for 13 years. There is a disparity in the treatment of people in social housing compared with those in privately

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rented housing. People in privately rented housing do not receive the benefits that are being changed here. Could the shadow Minister explain why he permitted that discrepancy to continue in those 13 years in office? 

Stephen Timms:  What I suggest to the hon. Gentleman is that there is a significant difference between the position of those in social rented accommodation and those in the private sector, because in the private sector it is possible to move reasonably readily, if someone chooses to, to smaller accommodation. The practical reality in Argyll and Bute, in East Ham and, I expect, in the hon. Gentleman’s constituency as well, is that if someone wishes to move to smaller accommodation—we have just heard that it is the case in Preston—they cannot just go to the council and say, “Please can I have a smaller flat?” because the housing is not there. That is a significant difference between the social rented sector and the private sector. 

Richard Fuller:  I appreciate that answer. My experience with constituents in Bedford is that there is fluidity between social housing and the private rented sector. The privately rented sector is sometimes more expensive than the social sector, which means that these disparities were even more iniquitous to those in the privately rented sector, so I say again: the right hon. Gentleman was in office for 13 years, treating people differently, with a situation that was not as clear-cut as he said, because there was fluidity between the two. This measure is ironing out a discrepancy and being fairer to people, regardless of which accommodation they move into, rather than continuing unfairness, which is the argument that he is trying to make. 

Stephen Timms:  No, I do not agree with the hon. Gentleman about that. I am not sure whether he is saying that many people in Bedford are leaving the social rented sector to move into the private sector, but I would be surprised if that were the case; it is certainly not the case in most parts of the country. I am also pretty sure that he will find in Bedford that someone in a two-bedroom flat who only needs one bedroom will, according to the criteria, lose their housing benefit as a result of the change. They will find it extremely difficult to go to the local council and say, “Please move me to a one-bedroom flat.” In reality, they will not be able to do that. I do not think we should make the change for that reason. 

I am interested in establishing what would happen if the very large saving envisaged from this change is not realised in practice. I tabled a parliamentary question on that before the recess, but, as far as I can see, it has not yet been answered. If the saving envisaged from the measure is not realised, will the benefit cut be increased further to make up the difference? I would be grateful if the Minister could tell us what the Government’s approach will be. I know the National Housing Federation is particularly concerned about that. 

The Minister is being frank, and the explanatory memorandum is very frank. The measure is not primarily about addressing under-occupancy; it is about delivering cuts. Paragraph 7.1 of the explanatory memorandum, on the policy background, is frank: 

“This change is important”— 

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why is it important?— 

“as it is likely to deliver around a fifth of the expected annual savings”. 

It is helpful for us to be clear that that is primarily what the measure is about. The purpose of the measure is not to address under-occupancy—the Minister has not been able to give us any estimate of what the actual effect on under-occupancy will be—but to reduce spending. I am not saying that is a bad thing, but it is right that the Government should be clear about what they intend. 

Andrew Bridgen (North West Leicestershire) (Con):  Does the right hon. Gentleman not see that the amendment could encourage local authorities to manage their social housing stock better, to survey them and to act as a matchmaker between households that are under-occupied and those that are over-occupied, and through those actions create liquidity in the social housing market that we have not seen before? 

Stephen Timms:  That is why I pressed the Minister for an estimate of what that liquidity would amount to. Of the 660,000 households affected, I asked him to say how many moves he thinks there will be, and he was not able to do so. I am not surprised. My guess, and I suspect this will be the case in the constituency of the hon. Member for North West Leicestershire, too, is that in reality there will not be very many moves at all. 

I asked the Minister about the research that the right hon. Member for Epsom and Ewell, the former Employment Minister and current Justice Secretary, told us was going to be commissioned: 

“We intend to commission independent external research to evaluate the impact of the reforms to housing benefit…We want to get it right. The review will be comprehensive and thorough. It will be presented to both Houses, together with a ministerial statement. We intend to make final findings available in early 2013, with the initial findings available during 2012.”––[Official Report, Welfare Reform Public Bill Committee, 31 March 2011; c. 334.] 

The Minister said he thought that some findings had already been published. Will he confirm whether that is the case and where we can see them if they have been published? When will the final findings be published in early 2013? I think that will provide some relevant information for this debate. 

Having established—the explanatory memorandum and the Minister are both clear—that the measure is primarily about cost-saving, we need to ask ourselves who the money is being taken away from. The equality impact assessment is illuminating: some 660,000 households will be affected. Between them they will lose, I think, almost £1 billion. Almost two thirds of them, some 420,000, or 63% of the total, will be households with disabilities—households where the claimant or their partner report a disability recognised by the Disability Discrimination Act—63%. That is a good deal higher than the proportion of those claiming housing benefit in the social rented sector who have a disability. The Government have come up with a big cut that particularly hits disabled people, because the great majority of those households affected will be households living with a disability. I must say that an increasing number of people are asking why the Government have it in for sick and disabled people. Why are they targeting those who can do absolutely nothing to protect their position

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at exactly the same moment next April when they are cutting the rate of income tax for the highest-paid people in the country? 

Steve Webb:  Yet again, the right hon. Gentleman is saying that people can do absolutely nothing. Does he not accept that people can respond to the change in a range of ways? For example, they can use that spare bedroom or bedrooms for taking in a lodger; or, even if someone in the household is on a disability benefit, the claimant is not necessarily on the benefit so that person might be able to work or work more. The right hon. Gentleman is making out that people have to move house and that they have no options, but a range of options might be available. 

Stephen Timms:  What I say to the Minister, though, is that more and more people are baffled about why the Government are taking those two, completely different approaches: tax cuts for the rich few at the top and benefit cuts for those elsewhere—in this case those struggling with sickness and disability. I suggest that the Government ought not to be doing that, which is precisely what the measure is doing. 

Richard Fuller:  I cannot allow the shadow Minister to make such statements. He knows very well that under this Government the top earners in this country pay more tax every single year than they did under the 13 years of the previous Labour Government. Is he interested in rhetoric or in facts? 

The Chair:  Order. May I gently remind the Committee that in this debate we are not debating what the taxes are on the wealthiest in this country, or otherwise? 

Stephen Timms:  Thank you, Mrs Main. The approach being taken is completely divergent, and a lot of people are starting to wonder why that is. We have had the figure of an average cut of £14 per week, but I have been contacted by someone in receipt of employment and support allowance who will lose £40 per week. That £40 will have to be taken out of her £97 per week ESA. She cannot move to a smaller place, because none is available to her. From those 660,000 households, of which 420,000 are households living with a disability, a very substantial number of people will find themselves in the extraordinarily difficult situation of having no alternative but to dip into their ESA in order to pay the rent because there is nowhere smaller in the social rented sector to which they can move. 

The Minister might well have seen the briefing, “Closing the Door on the Law”, which I think has been circulated to the Committee. It gives us some information on the Burnip case, which was heard by the Appeal Court earlier this year. The case dealt with the changes, which we have mentioned, in the private sector. Mr Justice Henderson made this point about people having to dip into their ESA to help to pay the rent: 

“It would be wrong, in principle, to regard those subsistence benefits as being notionally available to him”— 

to the person involved in the case— 

“to go towards meeting the shortfall between his housing-related benefits and the rent he had to pay.” 

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The case was brought under article 14 of the European convention on human rights. Mr Justice Henderson went on to say that discretionary housing payment, the modest increase in the availability of which the Minister prayed in aid, was not an adequate substitute because we cannot be sure from one year to the next whether it would be available. It is a cash-limited sum and gives people no confidence in being able to pay their rent in the future. 

The Minister has told us that he is satisfied that this regulation is compatible with the European convention on human rights. Given that case earlier this year under article 14 of the convention, can he tell us that he is satisfied that the Government will not fall foul of that and, if so, why that is? 

We have mentioned a number of times in this debate that the National Housing Federation is deeply concerned that no flexibility has been given to social rented sector landlords to define whether a property is under-occupied or not. I agree with the Minister that the flexibility about what counts as a bedroom is helpful on the whole. However, there is a strong case for social rented sector landlords having the flexibility to define whether a property is under-occupied. For example, if a home has a double bedroom and two boxrooms, according to these regulations, it would be under-occupied if a couple and two children were living in it—despite the reality clearly being in that case that the home would be fully used—because the assumption in the regulations is that two children can share a room. If the room in question is a boxroom, that would not be practical. I think I am right in saying that, in that case, the landlord would be able to re-classify the property as a two-bedroom unit. However, it would then lose rental income. That does not seem appropriate. Can the Minister hold out the prospect of guidance that allows landlords discretion about when a home is and is not being under-occupied? Given that we are talking about organisations in the social rented sector with a reasonable degree of accountability, I hope that the Government can accept that that would be reasonable. 

Will the Minister clarify the impact of these measures on pensioner couples? This picks up the point that my hon. Friend the Member for Preston made earlier. In a case where only one of the couple is a pensioner, it is not clear—although perhaps if I had read the regulations more carefully it would have been clear—whether the couple would be penalised for under-occupancy. There are two separate questions. First, what will the position be from April 2013, when these regulations take effect and before the introduction of universal credit? Secondly, how will the position change once universal credit has been introduced? 

I know that the Minister's Department intends to exclude supported and sheltered accommodation from the under-occupancy rule, but I believe that it plans to do that by excluding properties that are deemed “exempt accommodation” under current housing benefit rules. Perhaps the Minister can confirm whether I am right about that. However, there is an important concern that a significant amount of supported and sheltered housing in the social rented sector is not formally classified as exempt accommodation under the housing benefit rules. Again, the National Housing Federation believes that the current definition in the regulations is unworkable, because it does not reflect the range of types of housing

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and support commissioned by local authorities and delivered by organisations in the social rented sector. That could lead to the housing benefit of people in supported accommodation being cut. It could lead to some sheltered housing schemes becoming unviable, and vulnerable people with support needs becoming homeless. I know that that is certainly not the Government’s or the Minister’s intention. Can he reassure us? How will he safeguard the position of people currently in supported or sheltered accommodation that does not, at the moment, count as exempt accommodation under the current housing benefit rules? 

During the Committee stage of the Welfare Reform Bill in the other place, the Minister there said, with reference to supported and sheltered housing, that 

“we envisage that people in this type of accommodation will not be affected by the size criteria”.—[Official Report, House of Lords, 18 October 2011; Vol. 731, c. GC102.] 

Although many people welcomed that assurance, it raised the concern that applying the definition of exempt accommodation to such properties would not produce the effect intended. Will the Minister comment on that? At the moment, very little social sector supported and sheltered accommodation is flagged as exempt accommodation, because the rents are not considered excessive, as recent DWP research confirms. 

Will the Minister monitor the impact of the size criteria on supported and sheltered tenants and report the conclusions of that monitoring back to Parliament? Will he also consider reviewing the definition of exempt accommodation to ensure that it captures the range of supported accommodation required to meet the needs of older and vulnerable people? 

I have some further brief questions on the regulations. The NHF has called for the provisions to recognise the need for foster-carers to have an additional room for their foster-child. Can the Minister comment on that point? I know that the Government have thought about it. Disabled children who need a carer must also be permitted to have another room. It is not permitted under the regulations at the moment. Will exemptions cover families with those particular needs? 

The regulations do not make any explicit provision for defining a temporary absence from the home that will not incur the under-occupancy penalty. The current housing benefit rules allow for 13 weeks in any circumstances or 52 weeks in certain exceptional circumstances. Do the Government intend those rules to apply to the regulations? For example, if a household becomes technically under-occupying under the regulations because someone is admitted to hospital, will they suffer the under-occupancy penalty? How will their position be safeguarded? What will happen in cases of students studying away from home, but returning every vacation—with their parents’ home continuing to be their permanent home? Will that household suffer the under-occupancy penalty? Such situations will affect large numbers of ordinary families up and down the country, but the regulations are silent on them. People need to know what the position will be. Can the Minister clarify it? 

We strongly oppose the regulations. There would have been a case for reducing housing benefit for people who were offered and refused smaller, more appropriate

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accommodation. These, in some cases swingeing, cuts will affect people who can do nothing to protect themselves, the majority of whom are living with a disability. I urge the Committee to oppose the regulations. 

9.54 am 

Mr Reid:  It is a pleasure to serve under your chairmanship this morning, Mrs Main. 

I voted for the Welfare Reform Act 2012 and I support the principle behind what the Government are trying to do. As the Minister explained, we have a situation in which some tenants are under-occupying and other tenants are overcrowded, so it makes sense to try to get a better match in our housing stock—in response to an earlier intervention he referred to it as juggling. My concern is that whereas that juggling, to use the Minister’s expression, may be possible in an urban situation, in the very rural situation of my constituency it will be very difficult. 

For those members of the Committee who are unfortunate enough never to have visited Argyll and Bute, I stress that it is very rural. It has many islands, and on the mainland many of the villages are more than 30 miles away from the nearest town—and this is an area where we count the buses by the week, not by the day. They are very small communities. Such was the make-up of the population decades ago, when council houses were built, that the council houses in the villages are largely two and three-bedroom houses. These days many are occupied by households that would only be entitled to a single bedroom, but often there is simply no one-bedroom accommodation in the village, or within many miles of the village, for people to move to. 

Under the original draft of the Welfare Reform Bill, the regulations were to be made by the negative procedure, but I and other hon. Members argued that the affirmative procedure should be used, because it was important that Parliament should be able to debate the detail as well as the principle. I was pleased when the Government tabled amendments to give us an opportunity to debate the detail, which we are doing today, but it is important to point out that the Bill is worded in such a way that only the first set of regulations require an affirmative resolution. This is therefore the only chance that Parliament will have to debate the detail of the regulations. 

I am concerned about how the regulations in this statutory instrument will affect my constituency. The Minister referred to the extra £30 million in discretionary housing payments that the Government are allocating to local authorities because of these regulations. The “Housing Benefit and Council Tax Benefit Circular” numbered A4/2012, states in paragraph 51: 

“The Government has provided an additional £30 million to the DHP budget from 2013/14 in support of this particular measure.” 

It continues in paragraph 52: 

“All the usual DHP rules apply and it is aimed specifically at two groups: 

Disabled people living in accommodation that has been substantially adapted for their needs, including new builds; 

Foster carers including those between foster placements”. 

Then, in paragraph 53, it states: 

“The expectation is that this money will be prioritised for these groups.” 

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That was also what the Minister said in his response to the intervention from the hon. Member for Preston. So the instruction to local authorities is that the extra money is to be prioritised to these two groups, and the existing discretionary housing payments that local authorities get is spent fully on special cases that arise out of existing rules, so there does not seem to be any extra money coming to local authorities as a result of these rules, other than that which is already allocated to the two groups referred to in the circular. 

My hon. Friend the Minister gave a lot of urban examples of where juggling is possible, but I noticed that he did not have any examples of remote rural areas. My concern is that if the regulations go through as they are, without any extra discretionary housing payments to take account of the problems of very remote communities, people will simply not have any choice other than a loss of income. As I have explained, in many cases, there will be no opportunity to move to another house, except by moving many tens of miles. Also, in a small community there may not be single people looking to rent a room. People who live in larger towns with a larger population may be open to taking a lodger, but in small remote community that may not be possible. I am concerned about the regulations will impact my constituency. I hope that the Minister will be able to reassure me in his summing up, but I am not reassured at the moment. 

10 am 

Mr Iain McKenzie (Inverclyde) (Lab):  It is a pleasure to serve under your chairmanship, Mrs Main. Listening to the Minister, we might be led to believe that the proposal is all about evening up private and social sector housing. I am all for that, but not on these terms. I would argue that people choose the social sector because they do not have a good experience with private sector housing. Many points should be raised with private sector landlords to bring private sector housing up to the same standard as social sector housing. 

We are now asking people to move and downsize their home. In my constituency of Inverclyde, that would be extremely difficult, as one-bedroom homes are scarce—in fact, I could probably count on one hand the number of streets that may contain one-bedroom homes. Many years ago, my local authority undertook a building programme recognising that families in my area from the ‘60s baby boom were looking for homes with two or more bedrooms, which are predominant in the housing stock. If people did want to move, they would find it extremely hard, if not impossible, to downsize. 

Are we really asking people to increase their working hours when many are finding it difficult even to get work? Are we really asking them to make up rent from other sources of income? They have no other sources of income. For some, it is unreasonable to ask them to take in a lodger for an additional bedroom, as they fear taking in someone that they hardly know; it puts their privacy and safety at risk. As for asking family members to contribute more, well, family members are already contributing a lot. In my constituency, family members are contributing to food banks that such people have to visit on a regular basis to meet their needs. The solutions that we are offering them, as outlined in paragraph 7.4 of the explanatory memorandum, are unreasonable. In

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paragraph 7.6, we are basically saying that we will treat them like sardines and pack them into a one-bedroom home. Quite honestly, the proposal is all about saving and not about improving the quality of housing or the experience of those who can least afford to be the subject of savings. 

10.3 am 

Steve Webb:  It is good to have a debate where a regulation is discussed in detail and at length by hon. Members on both sides who are concerned about the issue. Too often, such processes go through on the nod or in a desultory way, so this morning we are doing what we were sent here to do—except for the Opposition, who are sent here not simply to oppose, but also to propose alternatives. We have heard plenty about the limitations of the proposed way of saving, but nothing about better ways. It is clearly not straightforward to take money out of the benefits bill, but doing so in a way that leads to better use of the housing stock and fairness between private and social tenants, and does something about overcrowding, seems to be in the right area. 

I challenged the right hon. Member for East Ham to say whether he thought it was fair that people who are in work and could work more should be allowed not to do so and leave other people to pay for their spare bedrooms. I was struck by the fact that he had no answer, because he does not see it as a problem. That is the difference between us. We see it as a problem. The hon. Member for Inverclyde just said that we should not expect family members to contribute. Well, somebody is paying for these spare bedrooms and the answer is that it is the rest of us. In other words, it is the people who, for example, are also finding times tough, but are in low-paid jobs and are paying more tax than we would want them to do. It is their taxes that are paying for these spare bedrooms. If people can do more to occupy the spare bedrooms, to live in smaller accommodation, to work, to work more, to take a lodger or whatever, then we should expect that of them. That is the fundamental difference between us. 

In the time I have left, I want to try to respond to as many points as I can. The right hon. Gentleman asked about research into the impact of this policy and I think there is a bit of confusion—perhaps slightly spread by me and slightly spread by him— about which different bits of research we are talking about. Just to be clear, the former Minister of State for Employment, my right hon. Friend the Member for Epsom and Ewell, was talking about research into the local housing allowance changes—the 30th percentile and all that stuff. That is what he was talking about being published to the time scale to which the right hon. Gentleman referred. The research I referred to was not our research; it was the Housing Futures Network’s research. I apologise if I implied that it was ours. Just to be clear on what bits we are talking about, the four members of the Housing Futures Network—the four housing associations—have published the results of that research. 

In terms of future evaluation, we will be monitoring the LHA-CPI operating policy and we will be monitoring divergences which will arise between LHA rates and market rents. We will publish rates from the Valuation Office Agency and the rent services in Scotland and Wales each year, which will provide transparency to the

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public and to Parliament, and we will monitor the rates and market rents within each broad rental market area. The right hon. Gentleman will therefore know what the different market rents are and what rates we are paying under LHA, and will be able to compare them. We will review that over the next couple of years and form a judgment at the end of that period. I cannot give him chapter and verse on which week we will sit down and what the criteria will be in detail, but we will obviously be looking at the divergence between the two and taking a view at the end of the period. I hope that helps him. 

Stephen Timms:  I am grateful to the Minister for that clarification; it was very helpful. On the first piece of research about the LHA 30

th

percentile and so on, is he saying that some of that has already been published? When will the final finding be published? 

Steve Webb:  Yes, we have already published results of that research, but if I can give him any further information, I will. The information on that is already in the public domain. 

My hon. Friend the Member for Bedford intervened very helpfully, I thought, when he raised the issue of movement between the two sectors. Just to give a feel for scale, in 2010-11 the English housing survey indicated that 65,000 households moved from the social rented sector to the private rented sector, so there is more movement than the right hon. Gentleman was suggesting. That is another reason why our point about fairness between the two sectors is all the more important, so I am grateful to my hon. Friend for raising that subject. 

The right hon. Gentleman raised the issue of what one might loosely call mixed-age tenants—that is to say, where one is above and one is below pension age—and he made the correct distinction between the current rules for housing benefit and the future rules for universal credit. Under the housing benefit system, a mixed-age couple are treated as a pensioner couple, and under universal credit they will be treated as a working-age couple; but couples who are already in the pension category—for example, they receiving pension credit—will continue to be so, unless there is some change in circumstances. There will be a change, and the reason for that change—just to be clear—is that if a person happens to be married to someone who is classed as a pensioner but they are not, we think it is reasonable to expect the person of working age to be seeking work. That is the direction universal credit will be taking us in, but that does not apply pre-universal credit, so for people within the housing benefit regime, it will be a protection if either person is over pension age. I hope that answers his question. 

Stephen Timms:  I think the Minister has given a clear answer to my question, but I would like to be absolutely clear. Is he saying that what he describes as a mixed-age couple will not suffer the under-occupancy penalty prior to the introduction of universal credit, but they will afterwards. Is that right? 

Steve Webb:  More or less, so they will not suffer it prior to universal credit; if they are already in the system and protected by the time universal credit comes

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in, we will not go back, as it were, unless there is a major change of circumstance, but future claims will be treated in the opposite way. 

The right hon. Gentleman asked about foster carers. It is difficult to be exactly sure how many foster carers there are in the social rented sector, but based on indicative information from a variety of sources—a survey conducted by the Fostering Network in 2012; the Department for Education; the devolved Administrations and our own surveys—we estimate that there are less than 5,000 such households and we have specifically set aside DHP money for those cases. On a case-by-case basis, local authorities will have the money to make up any shortfall if they wish to use it in that way. If, for example, a foster-carer has an empty room temporarily but there is another foster-child coming in, local authorities will have the money to make up that shortfall. 

Stephen Timms:  rose 

Steve Webb:  I will give way, but I simply say that the right hon. Gentleman must judge whether he wants answers to all his questions, or longer answers to fewer of his questions. It is entirely up to him. 

Stephen Timms:  I am grateful to the Minister for giving way. I do not think that there is a time limit. It is important that we get the detailed information that the Committee needs. As I understand the way that discretionary housing payments work, no ring-fenced amount for foster-carers goes to a local authority. There is simply an amount placed in the national pot. I do not think that the Minister can assure us that a particular foster-carer in a particular local authority would be able to benefit from discretionary housing payment. 

Steve Webb:  I thought I had been relatively clear. These are discretionary housing payments. If we simply wanted a blanket exemption for every foster-family, we would have written it into the rules. What we have done is identify how many foster-families we think there are, how much it would cost to provide for the shortfalls that we think would arise in those cases, and we are giving that money in aggregate to local authorities. I hope that is clear and unambiguous. 

The right hon. Gentleman also asked about the example of students who move away from home temporarily. I will reassure him that temporary absences of up to 13 weeks will have no impact on under-occupation. That would cover, for example, a student who intended to return home during something like a holiday break; or someone who perhaps went into a care home for a trial period and then came back. We recognise that there will be short-term periods when there is a spare bedroom and in those circumstances we will not immediately come in and cut the housing benefit.

The right hon. Gentleman also asked about the recent Court of Appeal judgment in the case of Burnip, Trengove and Gorry. To be clear: we are seeking permission to appeal that case. However, the ruling as it stands will need to be applied and we have given guidance to local authorities on how to treat such cases. Even there, they will still need to consider the individual circumstances as to whether a disabled child should or should not be expected to share a bedroom. That was one of the issues that the case centred on. The right hon. Gentleman also asked about a disabled child, for example, who needed

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someone to come in overnight to look after them. The person might not be a member of the household, but there has to be a bedroom so that person can come in and be an overnight non-resident carer. To be clear: that is already covered by the size criteria. I am pretty sure that it is already covered in the private-rented sector. Not for children, but certainly when it comes to the social-rented sector, the size criteria already allow a room for an overnight non-resident carer. That covers the basic issue in the particular case. The court case that we are talking about was linked case in that there were two disabled children sharing who needed separate rooms.

Obviously this is a complex legal issue, but because it is before the courts and we are seeking leave to appeal, I will not go too much further. Clearly the judgment stands and we have given local authorities guidance on how to interpret it.

Stephen Timms:  I am again grateful to the Minister. He said that there will be guidance based on the judgment in the private sector. Presumably there will be some read-across to the social-rented sector as well. Will there be guidance reflecting that particular judgment applied to these regulations? 

Steve Webb:  Just to be clear, the size criteria currently apply to local housing allowance, which is the private-rented sector. That is what the case was about. The criteria we are talking about have not yet come in, so we do not have to give local authorities guidance on how to implement criteria that do not yet exist. Obviously, by next April, by the time these things come in, local authorities will need to know where they stand, but that may depend on whether we are successful in the outcome of the appeal. So we will take one step at a time. 

I will respond briefly to the issue of whether smaller homes are available. People say there are no one-bedroom properties, but to give a feel of the scale of this: based on the number of those affected by these policies—single people and childless couples—we might expect of the order of 400,000 under-occupiers looking for one-bedroom properties according to the size criteria. That is the kind of scale. Let us suppose that we took the 25% figure from the Housing Futures Network research. That would suggest we are talking of the order of perhaps 100,000 of those. To give a sense of context, in 2010-11 there were 100,000 new lettings of one-bedroom properties in the social-rented sector in England. Another 25,000 new dwellings were completed in the social-rented sector. Obviously not many of those are one-bedroom. Probably about one in seven will be one-bedroom houses or flats. There is supply, although clearly there always needs to be more supply over time. It partly comes back to the point made by the hon. Member for Inverclyde: we need to look at the social houses that we are building. If we are building social accommodation that does not match the housing needs, we need to look at the mismatch and we need to change the sorts of social housing that are being built. 

Andrew Bridgen:  In my constituency of North West Leicestershire, in the villages we have a rural housing association that visits the parish council and carries out an assessment across the whole village to find out the local housing need. It then puts an application in on the exception site to deliver the housing that is required by the local community. Surely other hon. Members have had a similar experience to that. 

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Steve Webb:  I am grateful to my hon. Friend. He is right that individual housing associations get to know their patch and tailor what they do, and we have already heard in this debate that these regulations will prompt housing associations to get to know their tenants better and to tailor what they do. I hesitate to say that there has been a “pile ’em high, sell ’em cheap” approach, but there has been a slight sense that we need now to move on to tailoring the housing stock much better to housing need. That does not seem to be an outrageous suggestion, although clearly it will take time to get from here to there. 

There is a presumption that everyone has to move and the right hon. Member for East Ham kept using the phrase “people have no choice”, but there is a set of things that people can choose to do in individual circumstances, many of which—the majority, in fact—do not involve moving house. It has been a counsel of despair from the Labour party, which says that none of these options are open. Labour Members say that taking in a lodger invades someone’s privacy and security and that no one can work extra hours, because there are no jobs, but that leaves aside the fact that there are more people in employment now than there have ever been before in the whole of our country’s history. 

There are many options for many people. There are some people for whom it would not be appropriate to expect them to move, and we have put in discretionary housing payments for them. There are an awful lot of options that people have, but they have not been asked to look at them in the past. Expecting them to look at the options is the right thing to do, because this is not a free lunch. Someone is paying for these spare bedrooms, and it may well be other people on low wages and people struggling to get by—the Opposition once said that they stood for them—who are paying the taxes to pay for these benefits, and their needs need considering as well. 

Andrew Bridgen:  One positive aspect of the regulations that we have not discussed in any detail is taking in lodgers and maximising the use of our social housing. How many people could we take off the list of those classed as homeless through that? 

Steve Webb:  Absolutely. I gave the case, which I think was with Oldham local authority, where six households were juggled, one of which was homeless and was got into accommodation, and that is just the sort of creative thing that we need to be doing. We probably should have been doing it anyway, and these regulations prompt us to do it. 

For the avoidance of doubt, I want to clarify this point about the court case, disabled children and carers and so on. The rules about having a spare bedroom for an overnight carer, which is the Burnip case, are specifically about the claimant or a partner, so we are talking about adults. The Gorry case extends the rights to allow disabled children to have their own room, and those issues are under appeal currently, just in case I created any confusion. We already allow a spare bedroom for a carer for a claimant or a partner, just to clarify that point. 

In the few moments I have remaining to me, I want to respond to my hon. Friend the Member for Argyll and Bute. Obviously, I have memorised the employment rate

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in his constituency, and I was interested to see that the employment rate, notwithstanding the barriers that rural constituencies have, is above the national average. That is no doubt due to having an excellent local MP since 1997. The employment rate is above the national average and the unemployment rate is below the national average. Neither of those things in any way diminishes his points about the issues faced by island and remote communities, but a lot of the growth in employment that we have seen has not necessarily been traditional full-time, full-week employment. An average shortfall of £14 a week across the country is three hours on the minimum wage. Even a very small part-time job could make all the difference. It may be that there are folk for whom there is nobody to take the spare bedroom, they cannot work extra hours or they cannot work at all, or they cannot move somewhere else—there may be a long list of considerations—but one of those options will work for many people. 

My hon. Friend read out the circular that he kindly drew my attention to in advance, which is why I have encyclopaedic knowledge of it. He is right: we have allocated money to local authorities to reflect the two key groups that came up in debates in this House, but we have not ring-fenced the money. That is the important point. We have indicated two groups who clearly have a strong case for discretionary support. But the key word is “discretionary”. Therefore a local authority will be able to take the discretionary payments for the social housing under-occupation, the discretionary payments for the private sector rent 30% rule and the discretionary payments associated with the benefit cap. All of those things will come together and will be a discretionary pot for a local authority to tailor to their local and individual needs. We recognise that every constituency is different, which is why we are giving local authorities, such as his, the flexibility to use that money to meet individual local circumstances. 

Mr Reid:  My hon. Friend said earlier that when calculating the money to local authorities the Government had taken into account the number of people in the categories of disabled and foster care. Does he have, and if he does not could he write to me, the Government’s estimate of how much of that £30 million will be required for those two categories? 

Steve Webb:  From memory, the vast bulk of this is for adapted properties. I mentioned that we are talking about only 5,000 foster-carers nationwide. I have a £5 million figure in mind but it is probably less than that. So the vast bulk of it is for adapted properties. The right hon. Gentleman probably knows better than I do. 

Stephen Timms:  Sadly, I do not. I know that the Minister is coming to the end of what he was going to say. Could he pick up those two particular points that I asked him about: the treatment of sheltered accommodation and whether local authorities might be given some flexibility in determining whether a particular property is under-occupied? 

Steve Webb:  Just to be clear. I was right. It is £5 million. I will come back to the point about discretionary housing payments. Just to be clear as to the scale we are talking

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about, the discretionary housing budget pre 2012-13 had a baseline funding of £20 million. For the current year, we increased that to £60 million, so we have trebled it. In 2013-14, it will be £165 million. So next year, eight times as much money will be going to local authorities. Of course, they have stuff to spend it on. There will be housing need that they will try to meet through that. 

Mr Reid  rose—  

Steve Webb:  I hope my hon. Friend will forgive me but I want to try to respond to the point raised by the right hon. Gentleman as well. There is a very substantial increase in DHPs and we still looking at how we allocate it to local authorities such as his. 

There is a difference between sheltered accommodation and supported accommodation. Obviously many people in sheltered accommodation are over pension age so none of these rules would apply. We are not planning to change the definitions but initially help towards housing costs will be broadly met as now, so under DWP legislation and delivered through housing benefit teams. For the longer term—I think this might be helpful—we are looking at a localised funding mechanism. We are talking to the Department for Communities and Local Government and the devolved Administrations. We are continuing with the definition of exempt accommodation, not a broader interpretation of supported housing. But we are talking to local authorities about how best we take this forward. 

It has been an exhaustive, if not exhausting, 90 minutes. I hope that we have exposed some of the key issues and seen that this is not just about saving money, vital though that is. It is about fairness. It is about trying to make sure that we treat social and private-rented sector people the same. 

Stephen Timms:  Will the Minister give way one more time? 

Steve Webb:  It is about fairness to the taxpayer. On the basis of that I commend the regulations to the Committee. 

Question put.  

The Committee divided: Ayes 9, Noes 4. 

Division No. 1 ]  

AYES

Bridgen, Andrew   

Fuller, Richard   

Herbert, rh Nick   

Johnson, Joseph   

Lloyd, Stephen   

Neill, Robert   

Selous, Andrew   

Tomlinson, Justin   

Webb, Steve   

NOES

Blenkinsop, Tom   

Hendrick, Mark   

McKenzie, Mr Iain   

Timms, rh Stephen   

Question accordingly agreed to.  

Resolved,  

That the Committee has considered the draft Housing Benefit (Amendment) Regulations 2012. 

10.25 am 

Committee rose.  

Prepared 17th October 2012