I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts) on securing this debate today. I also congratulate him on his joint work with my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) on the Public Accounts Committee, of which I am a member. I want to focus today on the private rental sector, but before I do, I would like to urge the Government to ensure that the support they are providing to local authorities is sensitive both to the social and regional inequalities that exist. Throughout the public health crisis, we have seen that, far from the virus being a great leveller, it has disproportionately impacted those with lower incomes, those experiencing insecure working conditions and, of course, those from black, Asian and ethnic minority communities, as the Public Health England report has confirmed. The formulae for allocating covid funds should be weighted to deprivation factors, reflecting the different needs of the populations served by councils. We know that housing and health are intrinsically linked, which is why I want to talk about housing today.
Members of the House will be aware of the Shelter poll published this week, and the shocking figures that it contains. The number of respondents who usually report being in arrears has doubled, and estimations based on the polling mean that roughly 220,000 people across the country are facing possible eviction. It is easy to see this as a consequence of the pandemic alone, but that would be short-sighted, because we have not discussed the whole picture. In November last year, Shelter briefed that the average percentage of income taken up by private renting was 41%. That is, 41% of those people’s income is going purely to pay the rent. The New Economics Foundation has said that 1.2 million of the 5.6 million people at risk of losing their jobs live in private rented accommodation.
We can see the increased vulnerability of private renters in this week’s polling from Shelter. A breakdown of those figures shows that people in blue-collar jobs are twice as likely to report being in rent arrears. Also, thanks to movements such as Black Lives Matter, we have been talking about the racial injustice of the pandemic, and housing and private renting are not immune to this. BAME people are twice as likely to face rent arrears as other renters. Importantly, I have seen a breakdown of Shelter’s figures that suggests that those who have been furloughed are also more likely to experience problems. A 20% salary reduction will of course lead to the choice between eating and paying the rent.
We clearly have a structural problem where wages are too low and rents are too high, and covid-19 has made that situation even worse. I realise that it is not the role
of MHCLG, as a budget-setter, to raise wages, although I would say that many Labour councils, including Sheffield City Council, have implemented real living wages. Perhaps that is something the Ministry could look at funding. Whatever the limitations on the Ministry’s ability to raise wages, however, there are solutions that can come from action taken. It can do something about the cost of rents. We know that 63% of renters have no savings; in fact, many have debts. One of the reasons that rents are so high is high demand. People cannot afford to get on the housing ladder. We need more affordable housing, and local councils need the funds to be able to deliver that and the powers to hold developers to account. Coronavirus has exposed how precarious the housing situation is for so many people, but to build back better, we must provide proper funding for social housing and take action on housing crisis.