Welfare Reform Bill

We have debated this measure at length and I am grateful for the intensity and conviction of those who have spoken both in support of the measure and those who have challenged the Government. I acknowledge that the noble Lord, Lord Best, remains concerned about our proposals to reduce housing benefit and universal credit for working-age claimants living in social sector properties who are under-occupying their accommodation. Before I go into the detail, I remind noble Lords that we have announced an additional £30 million of funding for discretionary housing payments from the 2013-14 period, aimed at those living in adapted accommodation—disabled people who need those adaptations—and for foster carers. I remind noble Lords of the core argumentation. We do not think that taxpayers should be expected to meet the cost of somewhere approaching 1 million spare bedrooms, a cost of around £0.5 billion every year. Clearly this is unfair, or certainly different, to those in the private rented sector who receive benefits based on their household need. Based on our estimates, the original amendments could potentially reduce those savings by around £300 million, in addition to the £30 million to which I referred. That is real money. Maybe I should—or should not—remind noble Lords of the message from Moody’s. One of the things they make clear is that the Government’s ““necessary fiscal consolidation”” is key in stopping that potential downgrade. We in the House have had many discussions about the behavioural response of claimants to the measure. Clearly it is too soon to know what they will do. Some may decide to downsize. Others will decide to continue to live where they are and to cover the shortfall through other means. One thing that is interesting and different about the social housing sector is how little mobility there is. The figure runs at around 5 per cent per annum. The size criterion is potentially the kind of thing that will start to make people think about what accommodation they need to live in, and how much they can afford. If it does, it will start to free up properties for the 250,000 or so families who are living in overcrowded accommodation, as well as for those living in expensive temporary accommodation. One could see it as a nudge to help drive some of the outcomes intended to be realised through the Localism Act, which will allow landlords to use their existing housing stock more efficiently. One thing that people will be able to do is offer spare rooms to lodgers, which in some cases will be a sensible option. There will be a double benefit from that, certainly before universal credit comes in, because the room will not be considered to be a spare room, and the first £20 of weekly income from the lodger will be disregarded when calculating benefit entitlement. There has been misunderstanding and confusion about taking in lodgers. The confusion is between what a lodger is and what subletting is. It is worth pointing out that all social tenant residents can apply to their social landlord for permission to take in a lodger. We will expect social landlords to take a pretty liberal line on this. Some may have a policy not to allow it, but they will have a keen interest in reviewing the position, given the context of what we are doing here. We are emphasising the point to social landlords as part of our implementation work. The Chartered Institute of Housing is developing a toolkit for the implementation of the measure that will include this advice. Of course, there are other actions that claimants and landlords can take in response to the measure. Just a few hours' work may help some of those affected cover the shortfall, particularly where there is a disregard such as the £25 weekly earnings disregard for lone parents in work. Recent research from the Housing Futures Network showed that almost 30 per cent of claimants affected would look at increasing their earnings through work. One aspect that has not been explored in our debates is the response from social landlords. The rent they receive reflects the size of their property. If there were, for example, a very small room such as a box room that the landlord called a bedroom, they might reconsider, if they have not done so already, whether to count that room when deciding on the number of bedrooms that should be written into the tenancy, as well as on the rent associated with it. The designation of property size is another area where there may be flexibility. We are exploring this with social landlords as part of our implementation work. As we introduce the measure, we will also look at ways of minimising the risk of claimants falling into arrears. No one wants this to happen. Landlords have a key role to play and we are looking at how to support them in that role, and how to help them manage the possible risks. Finally, I need to emphasise that, despite some assertions that I have seen and indeed heard, we are not going to require what has been called ““an army of snoopers””. As now, we are going to rely on claimants to report their household circumstances to us. The original amendment could have cost in the region of £300 million every year. We have been clear that this is unaffordable. We have done what we can and will continue to do what we can to support these two important groups of people—disabled people and those who foster—through this change. I ask noble Lords not to insist on this amendment, and I beg to move. Motion B1 (as an amendment to Motion B) Moved by