I begin by congratulating the Select Committee, in particular the Chair, on an excellent and extremely useful report. It is a thoughtful and well-informed cross-party report, so I hope that the Minister will be able to explain why, after a whole year, the Government have not been able to respond to it.
As the report points out, the Government set themselves three targets for their welfare reform programme and changes to housing benefit: reducing benefit expenditure, improving incentives to work and making the situation fairer. It is quite clear that the first test has been failed. The Office for Budget Responsibility shows that expenditure on housing benefit in 2009-10 was £20 billion. In 2013-14, the last year for which we have full statistics, it was £24 billion; and the OBR is predicting that by 2018-19, the spend will be £27 billion.
I was particularly struck by the table at the beginning of chapter 2 on the local housing allowance, which sets out the maximum amounts payable. For a one-bedroom flat or shared accommodation, the maximum amount payable is £250 a week. Everybody here will know, however, that a £1,000 monthly payment sustains a mortgage of £200,000. In my constituency, that would buy a four-bedroom house. The average cost of a new social housing unit is £120,000. How much better it would be if we could shift the finance from benefits to bricks and spend the money on building new homes.
The problem with this Government’s policy is that it has made life more difficult for many people, while the benefits bill has continued to rise. As my hon. Friend the Member for Edinburgh East (Sheila Gilmore) said, that has happened because the Government have not addressed the underlying issues. The OBR shows that while housing benefit to unemployed people has fallen and is projected to continue to fall, housing benefit to those in work will rise steadily between 2012 and 2019. This is yet another indication of the cost of living crisis that people face, and it demonstrates that the new poverty is in-work poverty.
The Select Committee quotes Lord Freud as saying that the case load in the private rented sector is up
“by around 8% nationally and by around 5% in London”.
That is because rents are going up, even though the quality of housing is going down. I hope the Minister will be able to clarify the position on rents, since the Select Committee reported before the Office for National Statistics admitted that mistakes were made in the assessment of rents in London. In other words, more people are in the private rented sector today, and more of them are on housing benefit.