Welfare Reform Bill

My Lords, I speak as someone who supported Amendment 14, and I am very happy to agree to the composite that the noble Lord, Lord Best, has now accepted and put to the House. I think that it is one of the most significant amendments in the whole of the Report stage. I am now speaking to my own side of the House because I support this amendment very strongly. If the noble Lord, Lord Best, feels the need to press this to a Division, I shall support him, and I shall do so for a couple of reasons. First, it is important to reassure people on my own side that this proposal would not interfere with universal credit, the introduction thereof or anything thereby, but it would mitigate some of what I call the Treasury claw-back—that is, the money that was required of the department to set up the universal credit system. I do not think that that is an easy thing for the department to do but, for me, it goes too far. It is claiming back too much money too quickly from too vulnerable a client cohort, and that is something that colleagues on this side of the House need to bear in mind. At the risk of embarrassing the noble Lord, Lord Best, I point out that he has been active in housing for longer than any of us care to remember and is an acknowledged expert. The noble Baroness, Lady Hollis, and the right reverend Prelate are experts in their own fields. I have had some experience myself as a former chairman of the Social Security Select Committee in another place, and I am telling the House that today we are looking at a qualitatively different sort of cut. Secondly—seen from the perspective of the summer of 2010, when this deal was done with the Treasury—it was not unreasonable to start looking for the green shoots of a recovering economy by 2013 to 2014. I am no economist but I think that there is no prospect whatever of that happening, as the Office for Budget Responsibility has recently confirmed. I think that we are facing dire prospects. If we are facing a 13 to 15 per cent cut in our national wealth then people like me will be able to accommodate that, but people at the bottom of the financial pile will not. Were the assessment of summer 2010 made today it could not, in all conscience, extend to the level of reducing household incomes in the social rented sector by £676 annually. That is not fair. This does not affect the implementation of universal credit; it is an attempt to claw back money for the Treasury. Again, I say this to my own side of the House. This amendment mitigates the Bill’s policy of tackling underoccupation; it is not a full frontal assault on the policy. The amendment targets the Bill to make it bite on high-level underoccupation. That is an important point. No one is saying that housing benefit does not have to be addressed in the long term or that underoccupation is not an important part of that, because it is. However, we should start as the amendment proposes and see how it goes. On 1 April 2013 we should extend the social security definition to the Department for Communities and Local Government definition and leave people with the flexibility to have one extra bedroom. We should see how that policy runs for a while. If it needs further amendment then the Government are perfectly entitled to return to it. They will be able to say they know how the provision has operated in terms of higher levels of underoccupation and now want Parliament’s permission to take it to another level. That is a much safer way of proceeding in view of the impact of the change. The one thing I know about social security is that households rarely survive a loss of their housing security. Benefits can be reduced and people are very resilient in their budgeting to deal with it—they box and cox, they rob Peter to pay Paul and they survive. They do not survive if their housing security is put at risk. If that happens, the local authorities and the other public provision that we make for challenged families will have to pick up the pieces in all sort of ways, including adult dependency services and special needs provision. Local authority colleagues are looking at what is going to happen on 1 April 2013 with huge trepidation. If they are not, they are not doing their job properly. Another objection—again, I say this to my own side—is that there is no sensible transitional protection, as I would call it, for this measure. I am not making the Minister’s job any easier although I am determined to stay best friends with him throughout Report. By saying that we have between now and 1 April 2013 for people to make arrangements, the Minister is suggesting that as soon as Royal Assent is given people will start looking for the houses that the noble Baroness, Lady Hollis, has just said do not exist. This is not a transitional protection of any kind. Most of the other changes in the universal credit in the Bill protect transitional arrangements, and rightly so. On 1 April 2013 people will hit a brick wall and arrears will spike in a way that means that we are transferring national debt through social sector working-age tenants into rent arrears. That will be picked up in other parts of public provision in a way that will not generate the savings that the Government think are to be drawn from these changes. It is impossible to quantify exactly how that cost-benefit analysis will work out in practice, but the impact assessment does not begin to give this House enough information to be confident. If we do not make these amendments, the Bill will cause dire consequences for 670,000 households across the United Kingdom. The consequences will vary in different regions. There is a spatial dimension to this problem. Some parts of the country will avoid the worst effects but some regions—it is quite clear which—will carry the weight. The effects will not be spread evenly throughout the United Kingdom. This is not something that local government will be able to deal with in bits and pieces. Some local authorities will be hit. The Prime Minister was trying to train a big bazooka on the French, I think, but he is training his big bazooka at 670,000 social-rented sector households on 1 April 2013, and there will be no place for them to hide, for the reasons that the noble Baroness, Lady Hollis, made out. If we are going to go for an unamended Bill, and if this amendment fails, it is unconscionable not to have a whole stream of exemptions. We discussed this upstairs in Grand Committee, and powerful cases were made by people who really know what they are talking about in terms of foster care and all the rest of it.There are all sorts of unintended consequences if we do not put a huge number of exemptions underneath this if the Bill’s provisions go through as they stand. My position is, yes, let us tackle underoccupation. It will be very difficult for the families that are hit by it on 1 April 2013, but if we leave the Bill unamended, it will be uniquely difficult for a very vulnerable set of householders in the social-rented sector who are going to be hit by other things as well. We can see what they are. The noble Baroness, Lady Hollis, made an important point about the context and what else will be happening at the time. We are facing a long stretch of austerity before better economic circumstances arise. I say to my own side that this is not an ordinary amendment. The provision is not simply about trying to save money; it is about saving money in a way that is more likely to disrupt vulnerable households than just about anything else, partly but not exclusively because the household benefit cap is equally destructive of household integrity. This amendment deserves serious consideration. If noble Lords do not vote for it we are going to have to live with the consequences. I predict that, in the long term, those consequences will affect the public purse more negatively than the Treasury Front Bench and the Minister expect. This is a very important amendment. If the noble Lord presses it, I will certainly vote for it.