There are some big housing battles still to come as the Welfare Reform Bill moves to its committee stage in the House of Lords but few signs yet of the movement the government has shown on direct payment of housing benefit.
The second reading debate on Tuesday saw Labour, Lib Dem and Crossbench peers raise concerns on issues including the household benefit cap, the cut in housing benefit for under-occupying social tenants and CPI indexation alongside particular worries about changes to benefits for disabled people.
On the household benefit cap, Lib Dem peer Baroness Tyler of Enfield cited this week’s research from the Children’s Society showing that it could affect 200,000 children and make 80,000 of them homeless. She pleaded for measures to mitigate the impact that would fall ‘disproportionately on children, large families, and various black and ethnic minorities’.
Lord Kirkwood, another Lib Dem peer and a former MP who was a party spokesperson on work and pensions until the election, said it was a step too far. ‘I give the minister fair warning that I cannot support the benefit cap as it currently cast and I hope he will look at it very carefully.’
He went on: ‘For me it is actually a question of principle. We have a system of entitlements in our social security system and, if you have the entitlements, you get the benefit. Here is an arbitrary system coming in and overlaying that by saying, “Well, you may well be entitled to it but we think it’s too much”. Parliament should not let that pass without some comment because it cuts straight across everything that we have known in the social security system since I started coming to Parliament.’
And it was too much for party colleague Baroness Falkner too. ‘We cannot find it fair to use a straitjacket to measure household costs, irrespective of where the household is, how large or small it is or what alternatives its members have to substitute income through employment and related means,’ she said. ‘I hope that factors such as actual housing and transport costs will also be taken into account to allow for regional if not local variation in the setting of the cap.’
For crossbencher Lord Best a crucial issue was whether the £2bn a year savings from the housing benefit bill would be met by falls in tenants’ incomes or landlords reducing their rents. He said that from this week’s research by the CIH and BPF ‘it does not appear that benefit reductions will be lead landlords to reduce their rents. Therefore, the burden and pain of the cuts will fall upon very poor households and may impact on homelessness’.
On the cut in housing benefit for under-occupiers, the Lib Dem peer Lord German said claimants would either have to pay the extra, or take in a lodger or move to a smaller property. ‘However, housing associations have not geared up for this third choice. They have focused on providing two and three-bedroom properties. If the result of these changes is an increased demand on housing associations for smaller units of accommodation, they will need time to adjust. I would be grateful if the minister would explain what modelling has been done on the changes to our housing stock for the social housing sector that will be needed as a result of the Bill.’
Labour peer Lord Morris of Handsworth, who chairs Midland Heart, warned about the impact on disabled people. ‘Many disabled tenants live in adapted, specially designed, supported and sheltered housing. Will they be evicted and, if so, where will they go?’
Crossbench peer the Earl of Listowel wanted reassurances that foster carers will not be penalised for spare rooms they keep for their foster children.
And Lord Best, pointed out that: ‘Even if we allocated all the one-bedroom accommodation to people who were downsizing, which we cannot do because we have a lot of other people in priority need, it would take several years before people could move down from their two-bedroom property to a one-bedroom property. In the meantime, to penalise them seems very unfair.’
That’s just a flavour of the debate on the main two housing provisions that does not begin to reflect the anger of peers raising the impact of the housing changes on disabled people or wider concerns about the administration and IT system for the new system or the way that CPI indexation breaks the link between benefit and the actual rent paid.
Meanwhile Labour peer Baroness Hollis of Heigham raised the contradictions between the DCLG’s affordable rent programme and localising of the council tax and the DWP’s work to bring down the housing benefit bill and centralise its administration. ‘With friends like the DCLG, who needs an opposition? I suggest that the minister explores a useful trade-off—that he drops the benefit cap, which the DCLG and most of us do not want; and the DCLG in return drops the localising of council tax, which the DWP and no one wants. The minister would have the better bargain.
All of which is an indication of struggles ahead for the government in the committee stage - but then the same could be said in the Commons when concern expressed by Lib Dem MPs did not translate into enough votes against the government to change anything much.
And in his summing up of the debate, welfare reform minister Lord Freud did not seem much inclined to make concessions on anything other than direct payment.
The new system would not require a large-scale IT system. The government was only committed to CPI indexation for 2013/14 and 2014/15.
The benefit cap was based on an important principle that ‘people should not expect a life on benefits getting more money from the state than people in similar circumstances could earn in work’.
There were 5m people on the social housing waiting list and 1m who were overcrowded yet at the same time ‘nearly 1m extra bedrooms are being paid for by housing benefit’. He went on: ‘If people continue to live in a property larger than they need, we will expect them to make a reasonable contribution to its cost through a reduction in housing benefit.’
All of them are familiar arguments from the government. But can the housing elements of the Bill survive another round of detailed scrutiny unchanged?
The government is clearly hoping so if yesterday's move to restrict debate by referring the Bill to Grand Committee is anything to go by.
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