Welfare Reform Bill

My Lords, I shall also speak to Amendment 48B. There are some other amendments in the name of my noble friend Lord Kennedy. In some ways I am hesitant to return to a subject on which I commented in the last, very lengthy and complex group that we considered the other night, because there was an amendment tabled by my noble friend Lord Kennedy that dealt very much with the same subject. I shall attempt not to repeat all my arguments in our previous sitting, but I am afraid that I shall have to repeat some of them. Indeed, the exchange between the Minister and my noble friend Lady Hollis, immediately preceding the brief break that we had, seems to give greater weight to what I am saying and indicates that the Government are, or appear to be, at least two-thirds of the way down to what I am asking them to do in these amendments. My centre of contention is that this is a monster of a Bill and a huge problem for the Government to deal with. We have seen the complexity of the impact of their proposed changes on the housing costs element on the different groups and their differential effects. My argument the other night was that there is a difference between the housing cost element and every other part of the welfare system that we are trying to take into the universal credit system. All the other parts relate to the circumstances of the individual or the household. Housing costs—housing benefit as is—relate to that but also to the particular housing market, by type of tenure and geographical location in which the particular household finds itself. That is a different basis. We can see, as another of the exchanges between my noble friend Lady Hollis and the Minister indicate, drastic differences in different parts of the country and in different types of tenure on how costs are moving and the relevance of the housing benefit level that is now being proposed, compared with the reality of the rents or housing costs structure. The Government are proposing huge other changes in the Localism Bill and elsewhere in relation to tenure, housing revenue and the whole management of social housing. The Minister briefly alluded to their targets for more affordable homes, which I applaud. I applaud the Prime Minister’s announcement in Manchester the other week about increasing the number of homes, although he did not give any great details about what leverage he had to reach those targets. The Chancellor announced that he would extend the right to buy but without any indication as to what he would do with the proceeds and whether that would increase or decrease the supply of affordable housing as a result. Housing market issues are addressed both by the Government in CLG and by reference to the banking system, which seriously affects the top end of the market. If people cannot get credit for mortgages it has a downward cascading effect on the rest of the forms of tenure. That is a huge problem for the Government. I am not pretending that the previous Government got it right: they certainly did not. But it is worse and the Government recognise that there is a serious problem. How you then apply the household subsidy to a rapidly changing housing market and bring it at the same time into a universal benefit is an incredibly difficult problem. Reference to the concession that the Minister made to the noble Lord, Lord Best, some time ago relating to the review indicates the size of the problem. The Minister has described that review as the best since Roman times in terms of assessment of what the housing needs of the population are. If that is the case, surely he should be prepared to accept my amendment, or something like it, which says simply that we need to decouple the housing costs element from the rest of this Bill, or at least give the Government the opportunity to do so and allow for a major review on the totality of housing policy before we finalise the provisions on the housing cost element. That is all the amendments are asking for. The Minister indicated that the review will take us to 2013 before we will really be able to assess the position and drive something logically from that which will apply to the benefits side of the equation. If that is the case, he needs full scope to take a different course on that part of the welfare system from the other parts. He may say that under the commencement provisions at the back of this Bill he has a bit of flexibility anyway. But I am also asking to write into the legislation that we conduct that review of the totality of the scope of the housing policy and take it into account before finalising those provisions. My noble friend Lord Touhig asked the Minister’s colleague a Question this morning on the risk to this whole project. It was interesting to learn that the Treasury did not have a risk register, which probably explains quite a lot. However, it was also clear that the main concern in the House was about the IT implementation of the Bill. I agree with those anxieties. My noble friend Lord Knight will have something to say about them a little later, as he did this morning. However, before we get to the implementation there is a risk to this project in that we do not have a coherent approach to housing policy in order to write the specification for the IT implementation of this system. If the whole of universal credit provision requires us to get that right, it endangers the whole project. I am arguing here that the Minister should accept that the housing side is so complex, and has such multiple and differential effects—on the markets, the credit system and the welfare side—that before the Government take a coherent view on that, it would be wrong to go into quite as much detail on the housing costs element until we have been through the review. I have not yet seen the full terms of reference but I hope the Minister is right and that this will be a very thorough review and one of the best that the Government have ever undertaken into housing. I look forward to it and will congratulate the Government if that is the case. However, they must follow the logic of that. If that is the case, and it is a fundamental review of the kind that the Minister claims, it has profound implications for the Bill, how we deal with it in this House and how the Government implement it thereafter. Therefore, I strongly suggest that the noble Lord accepts at least the principle of these amendments, even if he is not prepared to accept the exact wording. I do so because most, if not all, of us in this Room believe that the housing cost element should eventually feature in the universal credit. However, it will be a very difficult and fraught path to get there. On the one hand, it could upset the housing market if his assumptions about the level of private rented sector rents are wrong, or indeed if they are right in certain respects. On the other hand, it could differentially affect many of the very vulnerable groups that we have been discussing. If the Minister gets any of that wrong, he discredits the whole project. Therefore, the Government have to take what is suggested here very seriously. Let us move housing aside on to a slightly different track with the same ultimate goal; have the review that the Minister is talking about; come back and consider it; and then finalise the way in which the housing cost element will move into universal credit. I beg to move.