Welfare Reform Bill

I suspect that we can look at the difference between ““occasional”” and ““regular”” in detail outside the House. Maybe we can exchange letters on the matter. In Grand Committee, the noble Lord, Lord Best, spoke of the experience of owner-occupiers, explaining that 83.9 per cent would fail against our definition of underoccupation. I put it on record, however, that a similar proportion of working-age owner-occupiers, 86.7 per cent, are in work. We are not suggesting that households in the social rented sector should live differently. We all share the aspiration for a home in which our children can thrive, concentrate on their homework or leave to study or find work, but still have the option of returning home sometimes. To realise that, though, must the taxpayer be expected to pay in full for those extra rooms just because those people live in the social housing sector? The Government believe that it is reasonable to ask for a contribution toward the rent where there is, by definition, some degree of underoccupation. It is not a change to the allocation rules; it is a measure for housing benefit purposes only. The research from the Housing Futures Network explores how those claimants affected by the measure might respond. As well as the 29 per cent who were likely to try to find work or increase their earnings, around 15 per cent thought that they would take in a lodger or ask another family member to move in. Another sizable group, perhaps 20 per cent to 25 per cent, thought that they were likely to seek help to pay the rent from someone within or outside the household—someone they know. Around 25 per cent thought that they were likely to downsize. There were also those, as some noble Lords have pointed out, who feared that they were likely to get into arrears; that figure was around 35 per cent. We will do our utmost between now and the measure coming into force to minimise that risk. This is what we are looking at as part of our work with the implementation group. That said, we cannot ignore the financial position. I emphasised at the beginning of my response that the introduction of size criteria is fundamentally about savings. Without the inclusion of those who underoccupy by one bedroom, we would not achieve the £500 million savings expected from 2013. The noble Lord, Lord Best, challenges our savings estimate. As I have set out in the evidence, though, a majority of people will pay the additional amount for the larger property. The cost of renting in the private rented sector may generally be higher but those who choose to move out of the cheaper social housing into private housing because they are underoccupying will by definition free up accommodation in social housing that can be offered to those on the housing waiting list or those living in expensive temporary accommodation. That argument from the noble Lord simply does not stand. If we excluded one-bedroom underoccupiers, we would lose around £300 million of the estimated savings. The fiscal case driving this measure forward must not be underestimated. One other point made by the noble Lord, Lord Best, is about who is affected, and about concern for children. But by definition we are looking at people whose children have left, and so are underoccupying. The impact assessment shows that claimants with children are less likely to be affected by the measure than those without children. Only around a third of the claimants potentially affected have children living with them. The other point raised by the noble Lord was about the difficulty of this working-age group pre-empting the room that pensioners might be transferred to. However, this measure will, over the longer term, help ensure that people are in suitably sized accommodation before they become pensioners. Our expectation is that the proportion of pensioners who need to or could downsize will in future be lower. The other concern raised by the noble Lord, and indeed by the noble Baroness, Lady Hollis, is the implementation risk of costs to landlords. We are planning to work through these issues as part of our engagement with other departments, including the devolved Administrations, and with social landlords and local authorities. An implementation group has been set up which is already being used to explore the potential impact on landlords’ costs as a result of this measure. We should bear in mind, however, that social landlords already collect rent from many claimants: for example, where the claimant has some income and only receives partial housing benefit, or where they have a non-dependent living with them. The Government recognise that households are sometimes allocated properties with at least one extra bedroom by their landlord. This measure does not preclude them from continuing to do so. It is of course important that any household being allocated a larger property is aware of the implications in relation to housing benefit. We will work with stakeholders to ensure that communications are effective. Exempting this group is simply unaffordable. I beg the noble Lord, Lord Best, not to move Amendments 14 and 49. Amendments 14ZZA and 49A would effectively modify that exemption to where there is no suitable alternative accommodation within the social rented sector, alongside Amendments 14 and 49. I will now explore that issue in relation to these amendments, and with regard to Amendment 17A. We have heard a great deal about the lack of housing supply, and therefore the lack of suitable alternative accommodation. I recognise that there is not the sufficient range of stock in many areas that would enable landlords always to suitably house people according to the size of their household. That was acknowledged in the impact assessment. Noble Lords have highlighted some clear examples of when an extra bedroom is not spare, but is actually being put to good use, such as in the case of teenagers under 16 of the same gender having their own room to do their homework. As I have said, the LHA size criteria are more generous than the bedroom standard, in that they provide for an extra bedroom for every adult from the age of 16 rather than 21. However, these size criteria are for housing benefit purposes only. We are not insisting that everyone is housed according to those rules, but it is right to expect those who have that additional space—whether it is spare or not is not necessarily the point—to make a reasonable contribution to the rent. This puts those in the social rented sector on a more equal footing with those claimants living in the private rented sector where size criteria have always played a part in the housing benefit claim. Indeed, owner-occupiers also have to consider what they can afford. This exemption is too broad, and would be complex and costly to administer. Suitability of accommodation will vary according to an individual’s circumstances. If there is a smaller property in a location 60 miles away, where there happen to be jobs, is that suitable? It would not be possible to pin down through regulations unless they were so broad as to open the door to exempting almost everyone, thus significantly reducing the potential savings. It is not possible to predict the loss in savings, given the uncertainty surrounding this amendment, but it is not hard to see how the number of exemptions through this approach could spiral out of control. In most cases where there is no suitable accommodation, we expect that claimants and their partners will find ways of meeting the shortfall—through employment, we hope, or through increased earnings. For those who are genuinely struggling to meet the shortfall and who have exhausted all possible options, the local authority might consider a discretionary housing payment. I beg the noble Lord, Lord McKenzie, not to move Amendments 17A, 14ZZA and 49A. In summing up, I emphasise that this is not the end of the process. We have had to make some hard choices here to make the necessary savings as part of the deficit-reduction plan. We are balancing that by protecting those for whom being able to remain in their adapted homes and lead an independent life is rightly not something to be messed around with. Likewise, we recognise the vital work of foster carers and have in place additional funding to ensure that they are not discouraged. A watchful eye will be kept on the £30 million boost to the discretionary housing payment pot. A review will inform our evaluation of this measure. We have more than a year until implementation and we are using that time to explore the risks for landlords and claimants alike to minimise the potential for arrears and all the associated costs that can arise from them. We will continue to work closely with our stakeholders and draw on their expertise in this House. I ask for this amendment to be withdrawn.