Welfare Reform Bill

My Lords, I start by saying that it was good to hear a defence of the noble Lord, Lord German, who arrived in the House at the same time as I did. However, I thought that being asked questions and dealing with them was a wonderful preparation for being Minister, and I hope that the government Whip has taken note of that. It is difficult to add to the words of the noble Baroness, Lady Hollis, who, as the Guardian said last week—and only the Guardian could use these words—gave a ““frankly beautiful speech””, and an astonishing one today, as it was described by my noble friend Lady Sherlock. I hope only to add a few remarks in support of what she said. First, I remind us, as did my noble friend Lady Turner, of the special nature of a home. We know the importance of feeling secure in one’s home and that one of the biggest causes of stress is a house move. It affects all of us, whether we are owner-occupiers or renters, old or young, rich or poor. As the noble Lord, Lord German, said, it is one of the worst things that we have to do. However, there are things in the Bill that will make extra home moves necessary. Moreover, they will increase the threat of a move and related insecurity. It is an insecurity that will arise not simply from not knowing whether there is suitable accommodation to move into if people have been deemed to be underoccupying; it will also be harder to settle into a job with that threat hanging over you. It challenges the ability to put down roots and dilutes the neighbourhood esprit—or the big society that we are meant to recognise is part of a good life. It makes it harder to relate to the society that cares for us and for which we care. Families will have to struggle to work out not simply whether there is somewhere to move to but whether they can afford to move. The penalty for not moving will be high. Therefore, not only will they have to think about the new premises, it is also likely that more affordable housing will be in poorer areas where there are fewer jobs. The new variable council tax benefit is likely to be lower in exactly those areas because the larger number of potential claimants will mean that local authorities can be less generous in their help with it. Similarly, in those areas the local replacements for the Social Fund grants and loans, which could help to assist resettlement, are also likely to be lower. All these factors will make the decision on a move uncertain, in addition to the normal stresses of uprooting, finding new schools for children and settling them, and the other issues that my noble friend Lady Hollis has mentioned. Council tax benefit is a particular issue to which we will return. Last week the CLG Select Committee in the other place pointed to the ““significant financial risk”” for councils of funding council tax benefits through a fixed grant. Indeed, the same committee urged consideration of delaying the localisation of council tax benefit. Although we will return to direct payments to landlords in due course, the same committee also called on the Government to investigate seriously whether that change could adversely affect the supply of social housing. It is clear from what my noble friends and noble Lords all across the Committee have said that underoccupation is likely to lead to arrears, poverty and homelessness, and in only a tiny proportion of cases to a much better use of social stock through trading down. However, the new size criteria will for the first time affect a family’s weekly income. It is a harsh penalty for a new fault that was not of their making, as my noble friend Lady Hollis said. It is not comparable to the private rented sector, where families can underoccupy if they rent something within the relevant rent limits. There will be a real drop in income, as was emphasised by my noble friend Lady Wilkins. The noble Lord, Lord Wigley, has mentioned Wales. For the sake of myself and other Welsh people I was going to demur from mentioning Wales today, as we are still in mourning. However, since he brought up the subject I will continue. He described the situation in rural Wales, but there are 40,000 social housing tenants in Wales who are described as underoccupying, which could lead to a cut of up to 25 per cent in housing benefit for those with two or more spare rooms. However, there is no alternative accommodation. In the UK, as we have heard, 180,000 two-bedroom homes are underoccupied, but less than half that number of one-bedroom homes is available. As my noble friend Lady Hollis said, less than 5 per cent of the social rented sector is actually overcrowded. Therefore, I should like to spend a moment looking at just one aspect of this, not in a rural area, which many noble Lords in the Committee know about, but in an inner-city area in Lambeth. Of a total of 25,000 council tenants, nearly 17,000 claim housing benefit. The research done in Lambeth shows that 5,700 of those would be deemed to be underoccupying those homes. More than 3,000 are not of pensionable age and would therefore be affected by the restrictions. However, of those 3,000, nearly 2,500 are underoccupying by only one room. Therefore the Kirkwood amendment, if I may call it that, would meet a large part of the Lambeth problem. I am remaining in Lambeth for the sake of this part of the discussion. It might be assumed that tenants who have applied for a transfer are already willing to move. There are 3,300 tenants on the transfer register in Lambeth, but only 650 of those are underoccupiers and half of those are under 60. However, in Lambeth only a very small number of underoccupiers manage to move voluntarily, partly because there are no places to move to. In 2009-10, only 19 moved; and in 2010-11, just 21 were able to downsize. This is despite Lambeth already operating a transfer incentive scheme to encourage the underoccupying tenants to move. Lambeth offers a good incentive by giving a high priority to those people. There is a cash incentive of £1,000 per bedroom given up, and there is assistance with removal and reconnection expenses. Even with all that incentive, because of all the breaks in social connections, schools, and the lack of availability, very few are able to move. The number of claimants’ benefits affected is large and these changes will force many tenants to look at downsizing, but that will not be an option. It is very doubtful that Lambeth would be in a financial position to offer the same sort of incentives. If hundreds or thousands were to move, it should be considered that in Lambeth only about 400 tenants a year transfer to one-bedroom accommodation, but at least 2,700 tenants would require that. If all Lambeth’s one-bedroom lets were exclusively available for council tenants, it would take more than 10 years to house them. That is a long transition period. We cannot really call it a transition. Other housing options such as taking in lodgers may be an alternative. However, we know the risks of that. The only other way is for tenants simply to take a hit on their income. Lambeth, which made those figures available to me, knew that it was obvious what would happen if it set up that incentive; it sees the rationale for making better use of housing stock, but it recognises the problem. The impacts of this enforced policy would be dire for tenants and for the providers of social housing. The word ““unacceptable””, which the noble Lord, Lord Kirkwood, used, is the correct one. I turn now briefly to the second part of Amendment 48. We hope that the Government respond positively to the suggestion that benefit should not be reduced for disabled tenants when accommodation has been significantly adapted to their needs. It is not simply to save their having to oversee new adaptations in a new home; it would save money already expended on the existing modifications of the building to adapt to their needs, modifications that may have to be ripped out at more cost to accommodate a newly allocated family to which they were unsuitable. Those points were already made by the noble Baroness, Lady Thomas of Winchester. I am sure that the Committee is aware that the Minister in the other place committed to, "““look … at how we can ensure that there are exemptions for individuals who are disabled, where their homes may have been subject to extensive adaptations””.—[Official Report, Commons, Welfare Reform Committee, 3/5/11; col. 716.]" That commitment was given some months ago, in May this year, but we have yet to hear the outcome. My noble friend Lady Hollis has made the intellectual case—a devastating case, in the words of my noble friend Lady Lister—in a way that the Minister will find somewhat unchallengeable. We ask the Minister to reply to her points and to inform the Committee how much thought has been given to the real effect of the threats of quite unnecessary moves on the people concerned; to give some comfort on the question of adaptation for disabled claimants; and to respond to the concerns of authorities such as Lambeth with the challenges that they will face. To put it in words that the noble Lord, Lord German, would not use, will the Minister answer the question that I think the noble Lord posed: can this policy ever work?