Welfare Reform Bill

My Lords, the change to the shared accommodation rate was comprehensively debated last Wednesday, 12 October, following the take note Motion raised by my noble friend Lord Kirkwood. Many of the noble Lords present today also attended and participated in that debate. The issues raised and my responses are therefore a matter of public record, so I do not propose to cover the same ground again today. For those not present last week, the main points I made are that sharing is commonplace in this age group and it is only right that claimants make similar choices to those not on benefit. The increase to age 35 will save around £200 million by 2013. Exemptions are available for those in vulnerable situations and we have introduced two more for the new age group. We do not yet know how claimants will react to this change, whether they will stay where they are, move into shared accommodation or move in with family or friends. A comprehensive evaluation on the April 2011 local housing allowance changes will also look at the effect of the shared accommodation rate. I can clarify for the noble Baroness, Lady Hayter, that the earliest that new claimants will start to be affected will be January next year. For those making new claims for housing benefit and for customers claiming from April 2011, the change will take place from the anniversary of their claim, if there are no changes of circumstance. I would like to take Amendment 46 first. This provides for a 52-week exemption from the use of the shared accommodation rate when working out the housing element within universal credit for those single and aged under 35. There is already a 13-week exemption from rent restrictions that applies to those who could afford their rent when they first took on that commitment. Most claims for housing benefit are short. It protects a person’s ability to pay their rent during that time. That in effect picks up the point made by the noble Baroness, Lady Hollis, and the example that she used for that period. Indeed, half of jobseeker’s allowance claimants in the 18 to 24 age bracket have been claiming for less than 13 weeks and fewer than 5 per cent have been claiming for over 52 weeks. The noble Baroness, Lady Hayter, is right in quoting my research from some time ago. Fundamentally, those statistics have not changed. This amendment would erode a significant proportion of the savings expected from the extension of the shared accommodation rate age threshold and would generate new costs through increased entitlement for some claimants aged under 25. Amendment 45 provides for a series of pre-existing and further exemptions from the shared accommodation rate within universal credit. The proposed new exemptions would substantially increase the number of younger people who could have benefit paid for self-contained properties. I remind noble Lords that we are already providing two further exemptions when the increased age threshold from age 25 to 35 comes into force. These exemptions are for certain ex-offenders who pose a risk to the public and certain former residents of specialist homeless hostels who have been supported back into living in the community. To pick up the point made by the noble Baroness, Lady Hollis, on women in particular fleeing from domestic violence, the definition of a homeless hostel may include a domestic violence refuge or drug rehabilitation hostel, so in practice additional groups may very well benefit from this particular exemption. We believe that the numbers involved are small, as the shared accommodation rate applies, of course, exclusively to people without children. We looked carefully at the arguments for exempting other specific groups, including people with disabilities, mental health problems and a history of substance misuse, as well as those seeking to maintain contact arrangements with their children. When considering any exemption, we have to ensure that limited resources are targeted most effectively. Those further exemptions are not a cost-effective way to address people’s needs given that, within these overarching groups, circumstances vary widely—a point made so eloquently by the noble Lord, Lord Stoneham—when we need to find an efficient way of channelling support to the people who really need it. The noble Baroness, Lady Lister, referred to disabled groups such as the autistic. The existing exemptions from the shared accommodation rate will remain, ensuring that people who are severely disabled and young people under age 22 leaving care are protected from the restriction. Those who are in supported accommodation or social housing are also not subject to this restriction, so it is not necessarily the case that all or most of those with autism will be affected. While sharing accommodation may be unsuitable for some, it is not unsuitable for everyone in any particular group. The exemptions proposed in the amendment would not be administratively straightforward, making them expensive to operate and more likely to generate fraud and error. They are also very broad and could lead to variations in interpretation. The term ““or other special reason”” is particularly open to interpretation. The solution that we are looking at is discretionary housing payments. I am aware that noble Lords are having a little bit of fun with the loaves and fishes analogy. If I am the Minister giving out loaves and fishes, I have to accept the point made by the noble Lord, Lord McAvoy, that I am unlikely on the surface to be a bad man, given precedent. It is clear that a lot changes are going to take place in the marketplace. Markets are responsive; people are going to change behaviour. There will be a residue of hard cases. That is what the discretionary housing payments are meant to deal with. They not only help support one-off adjustments but, as I said last week, provide long-term support in some cases.