Welfare Reform Bill

I welcome the noble Lord, Lord Taylor, to what I think is his first duty on the Front Bench on this Bill. I do so specifically as his first duty is to support the Government’s position. I urge him to continue in that Front-Bench role for as long as he possibly can. I am pleased that the noble Earl, Lord Listowel, is back among us and speaking, as ever, with passion on the cause of young people. I am grateful that we have the opportunity to contribute to an important debate on the future of the single room rent, or the shared room rate as it will become under the local housing allowance. I shall deal with the two amendments separately. In essence, Amendment No. 103A would seek to restrict the application of the single room rent only to those aged under 21. It is, in a sense, a compromise amendment between the status quo and the argument to completely abolish the single room rent. The proposed change to the upper age limit for the single room rent might seem small but, in fact, it attacks the root of the principle behind the single room rent. The single room rent applies for those aged under 25 and not for those who are older, because there is a clear split between those aged 18 to 24 and those aged 25 and over. The aim of the single room rent is to set a level of housing benefit that enables a customer to access accommodation of a type similar to that of their working peers. This is therefore not a compromise based on evidence; with respect, it is purely arbitrary. For example, we know that those aged 18 to 24 have average earnings of about two-thirds of those aged 25 and over. That means that generally there is a real difference between the accommodation which a working person under 25 can afford and that which a working person aged 25 and over can afford. It is therefore only fair that we reflect that in housing benefit levels. However, there is no such difference in the average earnings of those aged 18 to 20 and those aged 21 to 24. There is, therefore, no logical reason why those aged 21 to 24 should not have their housing benefit restricted by the single room rent but those under the age of 21 should. I suggest that there is an inconsistency in the approach. This arbitrary compromise runs counter to the spirit of the rest of the Bill of weighing an individual’s rights and responsibilities relative to their capabilities. If we were to accept this amendment, we would simply create a band of people aged between21 and 24 who would be able to afford accommodation that many of their working peers would not. There is no evidence-based reason why the single room rent should end at 21; there is, however, such a reason why it should end at 25. Amendment No. 104 would remove any age-related restriction on a customer’s maximum housing benefit. In particular, the amendment would abolish the single room rent, as the noble Lord, Lord Oakeshott, made clear. As the debate on the single room rent has developed, the accusation has been levelled that the Government are sticking to the principle of the single room rent at the expense of the realities of life for customers of the benefit. We disagree with that view and we stand by the principle of the single room rent. Three-quarters of single young people without children who pay their own rent and receive no housing benefit currently live in shared accommodation. We have a responsibility to ensure that taxpayers’ money is always spent in a way that is not only fair but also reflective of the realities faced by all people, not just those on benefit. So when three-quarters of the same group who do not receive benefits share, I do not think that it is unreasonable to ask the same of those who do receive benefit. However, just because we are strongly wedded to the principle of the single room rent, that does not mean that we ignore the needs of the more vulnerable customers who receive that rent. It should also be noted that young people who are severely disabled and certain young people leaving care under the age of 22 are exempt from the single room rent restriction. Those who are in supported accommodation or social housing are also not subject to this restriction. For some people, it will be hard for them to share a house, but perhaps I may draw a parallel here with an earlier part of the Bill. For some who have been on incapacity benefit or who will be on the new ESA, it will be hard to move back into work. Hard, I suggest, but not impossible. In the past, those for whom it has been hard to move into work were just written off. But in Part 1 of the Bill we are making efforts to change this and bring them back into the mainstream, to bring them out of exclusion. Since 1997, this Government have had unprecedented success in improving the prospects for young people. Through the New Deal for young people nearly 700,000 18 to 24 year-olds have been helped into work. With the single room rent we have a choice: do we go against the grain of all this success by exempting them from it, increasing their out-of-work income and so extending the poverty trap? Do we say, ““It is hard for you to make the bonds and social networks to learn to live in shared accommodation, so you do not have to try””? That, I suggest, would push them out of the mainstream and reinforce the path to exclusion. Or do we include them and ask them to participate in a way of living that is so common to their non benefit-receiving peers? We believe that this is the path that provides them with the best chance of escaping the trap of benefit dependency. I should like to pick up on one or two specific points that have been made. The noble Earl, Lord Listowel, asked about the cost, and cited the figure of £10 million. I suggest that this is a minimum. If customer behaviour were to change as a result, the costs could be many times that. Certainly I am happy to meet with the noble Earl, together with officials or otherwise. We must set that in train before we reach the Report stage. I shall ask for that to be followed up with urgency. The noble Earl also referred to the UNICEF report. This may not be the occasion to debate it in depth, but it is clear that quite a lot of the data on which that report is based are somewhat out of date. We are not complacent. Indeed, the noble Earl did acknowledge the progress the Government have made in helping young people, particularly on long-term unemployment rates which for young people are almost extinct. The noble Lord, Lord Oakeshott, spoke as though there was no possibility of anyone in receipt of the single room rate being able to access shared accommodation. The single room rate, as the local housing allowance, will be set by rent officers based on the actual situation in the particular locality. It will be set at the medium level. Logically, therefore, it would be possible for at least half the accommodation in that population of opportunities to be available to people in receipt of the single room rate. I accept that there is an issue generally about availability both for those on the single room rate and for those on the housing allowance in any event, but I do not think it is right to assume that no one receiving the single room rate would be able to access accommodation in the way he suggested. I will not quote the detailed figures in terms of the difference in earnings levels, but I think I have touched on that. The noble Lord also referred to discretionary housing payments and said that the system is a postcode lottery. In fact, since their introduction, the discretionary housing payment budget has never been used completely, so on that basis I do not think it could reasonably be said to be a postcode lottery.