Welfare Reform Bill

Noble Lords will be relieved to hear that I shall be brief on this. A non-dependent adult is likely to be a grown-up son or daughter, still living at home, with his parents on HB. It is assumed that the non-dependent adult will contribute towards the rent, and his parents’ HB is reduced accordingly. That is the present system, for those not familiar with it. This amendment would cap that deduction at 50 per cent of the total HB going into the property. Of course, it is sensible that he should contribute but, as the level of his contribution doubles up over the next couple of years to £90 a week, which is at or even in some cases exceeds the level of the entire social rent for the property, this may well exceed the full HB of his parents. So although he is in effect paying the entire rent, he has no legal claim on the property. He, a low-paid worker—otherwise he would probably be in a place of his own—is carrying the full rent bill for his parents in that situation. Not surprisingly, this is currently a source of family tension, which will grow and which affects about 200,000 people, as far as I am aware. In my own local authority in Norwich, 427 council tenant families, 63 housing association and 58 private tenants are currently affected; of those, 100 already have deductions on their HB of over £30 a week as a non-dependent adult, which is set to double. In modest accommodation, that would virtually cover the entire rent being paid for by an adult son, living at home on low earnings. The Minister may tell us—I do not know, because I am not very good at predicting what he is going to say—that we are only catching up with the freeze of a couple of years ago on NDADs. I accept that this a political point, but can he tell me in that case why it is okay to continue to freeze council tax but not to freeze NDADs along with cutting CTB, which fall on the poorest of us? I think that that is very unfair, and I do not think the Minister can think that that redistribution is right. I ask your Lordships to think what they would do if they were in the son’s place. He can do one or two things. Either he will move out into a more expensive private rented flat of his own, which he may share, if he is under 35; as a low earner, he may be eligible for some HB of his own. That will leave his parents entitled to their HB, so the total HB would therefore rise. Or he may decide to stay with his parents but calculate that it is not worth working given the £90 per week penalty out of his take-home pay, which will mean that his MDRs are up in the 80 per cent region. If he moves out, his parents become underoccupying in turn and lose some of their HB, ultimately risking running up arrears and losing their home, whereas if he stays at home and working this will be a sensible and economical use overall of housing space as well as a practical support for them if they need it. If instead he does not move out but drops out of work as he faces punitive MDRs on his low wage, the full HB bill on that house must be paid and two generations of workless family may then be in the same household. Neither of those possibilities seems sensible or desirable, but if you have an economic model of rational behaviour—it is not one that I fully share, but if you do—he is likely to take one of those two routes and to drop out of work or move out of the house: hence this amendment, which suggests that he should contribute to the rent but no more than half of it and that his parents should keep an entitlement to HB but only to half of what it would have been. Its virtues include using the housing space sensibly, keeping the house fully occupied and striking a decent balance between his responsibilities and contribution, that of his parents and that of all of us towards the rent. I beg to move.