Clause 29 — Local housing allowance

Orders of the Day – in the House of Commons at 7:45 pm on 9th January 2007.

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Photo of Andrew Love Andrew Love Labour, Edmonton 7:45 pm, 9th January 2007

I beg to move amendment No. 48, in page 20, line 16, at end insert—

'( ) The AMHB shall vary only for those aged under 21.'.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

With this it will be convenient to discuss the following amendments:

No. 5, in page 20, line 33, at end insert—

'( ) The Appropriate Maximum Housing Benefit may not vary according to the age of the claimant.'.

No. 67, in page 22, line 9, clause 30, leave out 'five years' and insert 'twelve months'.

Government amendment No. 12

No. 70, in page 29, line 39, clause 35, at end insert—

'(4) In respect of determining the local housing allowance, the rent officer upon request, shall make available within a reasonable period the evidence and data used to calculate the local housing allowance.

(5) In determining the broad rental market area or areas in relation to a local authority, the rent officer, upon request, shall make available within a reasonable period the evidence and data used to determine the broad rental market area or areas.

(6) In determining the broad rental market area or areas, the rent officer shall consult with the relevant local authority or authorities on the boundaries and extent of that area or areas.

(7) Consultation undertaken under subsection (6) shall be in accordance with such requirements as may be specified in regulations made by the Secretary of State.

(8) In this section "broad rental market area" means an area—

(a) comprising two or more distinct areas of residential accommodation, each distinct area of residential accommodation adjoining at least one other in the area;

(b) within which a person could reasonably be expected to live having regard to facilities and services for the purposes of health, education, recreation, personal banking and shopping, taking account of the distance of travel, by public and private transport, to and from facilities and services of the same type and similar standard; and

(c) containing residential premises of a variety of types, and including such premises held on a variety of tenancies.'.

Photo of Andrew Love Andrew Love Labour, Edmonton

The amendment would end the shared room rate at the age of 21 rather than at 25, as at present. It is a compromise that we hope reflects the debate held in Committee, which I read with great interest.

I tabled the amendment for several reasons. It maintains the shared room rate principle that seems so important to the Government, but for a more restricted age range. Twenty-one better reflects the age of maturity, or majority. When I was a kid, the saying was that at 21, we got the key of the door. The amendment attempts to reflect that reality.

More seriously, by the time most young people reach 21, they have had a period of training and many will have had significant periods of employment. They will have made a contribution to society and that should be reflected in the way we treat them in the benefits system by the provision of full housing benefit. That would help them to achieve independence and the stable accommodation necessary for them to fulfil their life's ambition.

A number of issues in the Committee debate were of great interest to me. The first was the supply of shared accommodation, a subject that took up much time during the debate, which surprised me. Several Members talked about the recommendation in the Barker housing review for a much larger supply of social rented accommodation, as well as the need to increase the overall building of houses and the impact of buy-to-let on the provision of additional accommodation in the private rented sector. Some of those things are being achieved, but no one, either in the Committee debates or Ministers in other debates or in answer to questions, has suggested any specific plans to increase the amount of shared accommodation that will be necessary for young people if the single room rate is maintained. That is important as it is widely recognised that there is scarcity in some parts of the country; indeed, shared accommodation is almost non-existent in many areas.

I welcome the previous extension of the definitions of single room rent and shared room rate and the further changes proposed in the Bill, but part of the reason for widening those definitions was the hope of increasing supply of that type of accommodation. However, research conducted after the first widening in 2001 showed clearly that it had no impact on young people's ability to access accommodation. Similarly, research on the pathfinders project found no appreciable difference in either the supply or quality of accommodation, so the changes did not help.

There have been negative features. It is becoming increasingly clear that many landlords are reluctant to rent to people on housing benefit, which particularly applies to young people and to those on the more restricted shared room rate suggested in the Bill. Not only is their housing benefit restricted but their jobseeker's allowance and income support is paid at a lower rate, which makes them an even less attractive proposition to landlords.

It has been noted that there has been a decline in the number of houses in multiple occupation. It is clear that whatever the reasons are—I am sure they are complex—the number of units of shared accommodation offered by landlords in the future is likely to continue to decline. Neither the Bill nor outside factors are doing anything to increase the supply of such accommodation. Indeed, the solutions are long term, as Barker proposed, but if we are to address the problems faced by young people we need shorter-term solutions.

Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

In some areas there has been a substantial increase in the availability of HMO accommodation, but it is generally in areas surrounding universities, where there is demand from students and much money to be made by buy-to-let landlords. However, those landlords are not at all interested in letting to young people who need housing benefit, or a contribution from housing benefit, to afford their rents.

Photo of Andrew Love Andrew Love Labour, Edmonton

My hon. Friend is undoubtedly correct. For those and other reasons, landlords are increasingly reluctant, in whatever part of the private rented sector, to consider people on housing benefit, which particularly affects young people.

Costs were not much discussed in Committee, but they are important. Any estimate of the cost of the amendment would vary according to the assumptions written into it. If behavioural factors are not taken into account, the DWP estimates the cost of the proposal at about £20 million. On that basis, we can assume that my amendment would cost about half that—about £10 million; but to be sure, let us say £12 million, as there may be more people at the top rather than the bottom of the system.

When behavioural factors are considered, we have to go back to before the restriction was introduced. The number of people in such accommodation is 12,000 at present but was about 32,000 in 1996, before the introduction of the restrictions, so when we add in behavioural factors we reach a figure of £30 million. During the debates in Committee I was interested to hear the Minister suggest that part of the reason the number of people in single room rent accommodation had gone down was the fact that many more of them were in employment. If we take that into account, the figure is likely to be smaller. None the less, whichever way we work out the figure, my amendment is unlikely to cost any more than £30 million or, if we take behavioural factors into account, £40 million or £50 million. To put that into context, about 800,000 people who live in the private rented sector are in receipt of some form of housing benefit and the overall housing benefit bill is about £12 billion. This is a modest amendment.

Much discussion took place about tenant empowerment. When the restriction was introduced, it was suggested that tenants should negotiate with landlords, but the research carried out in 2001 blew out of the water the idea that that was a practical reality. The latest proposals suggest that tenants in whatever part of the housing benefit regime should be able to shop around because they will know in advance what their housing benefit is likely to be. The evidence from the pathfinders does not offer a great deal of support for that proposition. Although there has been a welcome and recognised fall of about £3 in the gap between the rent that tenants pay and the benefit that they receive, the percentage of those under 25 who are affected by a shortfall has stubbornly been maintained at 70 per cent.

Photo of David Lepper David Lepper Labour, Brighton, Pavilion

On the point that my hon. Friend has just made about tenants shopping around and the experience of the pathfinders, it might help him to learn that I spoke this afternoon to Julia Harrison, the housing manager for Hove YMCA, which manages housing for young people in the city of Brighton and Hove. She tells me that one of the consequences of the single room rent is that young people are forced into inappropriate shared accommodation often with no proper tenancy contract at all. That makes them increasingly vulnerable. They have certainly not been empowered.

Photo of Andrew Love Andrew Love Labour, Edmonton

I thank my hon. Friend for that intervention. I agree entirely. Where there is a lack of supply and the shortfall is so significant, it is likely that all the power will be in the hands of the landlord rather than in the hands of the tenants, who will be forced into situations not of their choosing.

Photo of Madeleine Moon Madeleine Moon Labour, Bridgend

In a similar vein, I have been talking to local housing providers—Llammau and Hafod's Yellow project—and to my local authority and the assistant director responsible for housing. Along with the Welsh Assembly Government, they have called for the abolition of the single room rent. The person to whom I spoke from Llammau made the point that the best outcome that young people can currently hope for is debt. The worst outcome is eviction, harassment, repossession and severe debt. A Labour Government cannot allow that to continue. Does my hon. Friend agree that we need to give these particularly vulnerable young, who do not live in the idyllic world of "Friends" and do not share a luxury apartment, the opportunity to move forward?

Photo of Andrew Love Andrew Love Labour, Edmonton

I agree entirely. I was about to come to the wider Government objectives that will be achieved by the Bill, but I did not want to comment particularly on poverty, homelessness and social exclusion. My hon. Friend has done so on my behalf, so I shall focus my brief remarks on incentives to work and on the disincentive that the proponents of this restriction suggest occurs. They suggest that if the restriction did not exist, those on housing benefit would have an incentive to stay out of work because they would get better accommodation than they would have if they were in low paid employment. However, that view fails to recognise reality in a number of respects.

First, the restriction affects those in work and, in particular, those in low paid work who will receive the shared room rate as part of their housing benefit. Secondly, the restriction has not been effective. The research shows clearly that it has not been effective in encouraging claimants to enter shared accommodation. The proportion of young people in shared accommodation has declined since its introduction. The shortfalls in the shared room rate concept exacerbate hardship for young people, including those who are employed and facing enormous difficulties in sustaining employment. The restriction has created a whole generation of what we term the "hidden homeless"—young people living on the sofas of friends and relatives. The lack of stable accommodation will threaten the employment and the employment prospects of the young people concerned, and the evidence shows that quite clearly. A whole series of negative consequences have occurred because of the introduction of the restriction.

My amendment would do a number of things. First, it would maintain the principle enshrined in the shared room rate that the Government feel is important in the new housing benefit regime. It would also allow those who have reached the age of maturity—the amendment sets that at 21—to obtain the more settled accommodation that I hope would provide them with the springboard for better employment prospects and to realise their ambitions. That is what the Government say is their overwhelming objective for young people. The amendment would achieve the objectives that the Government have set, and I commend it to the House.

Photo of Danny Alexander Danny Alexander Opposition Whip (Commons), Shadow Spokesperson (Work and Pensions) 8:15 pm, 9th January 2007

It is a pleasure to follow Mr. Love, who has rightly stated the strong case in principle for the change that he proposes. In Committee, I moved an amendment similar to amendment No. 5, which is on the amendment paper today. It goes a little further than his amendment in that it proposes the abolition of the shared room rate altogether. I do not know yet whether he intends to press his amendment to a Division. If he does not, may I indicate at this stage, Madam Deputy Speaker, that I intend to divide on amendment No. 5, if that is in order?

The hon. Gentleman and Mrs. Moon have shown a degree of consistency with their party's position. When the single room rent was introduced in 1996, it was opposed fully by the then Labour Opposition. The Prime Minister, the Chancellor of the Exchequer, the Deputy Prime Minister and the Secretary of State for Work and Pensions all went through the Division Lobby to vote against the introduction of the single room rent. They were right to do so and we would be right either to ameliorate the impact of the single room rent on young people or to get rid of it altogether. The statistics that some of the lobbying groups have presented show that 87 per cent. of all claimants who are currently in receipt of the shared room rate face a shortfall between what they receive in housing benefits and what they pay in rent. That shortfall averages out at £35.14 a week.

As the hon. Gentleman rightly said, there is a shortage of accommodation that satisfactorily meets the SRR available to under-25s. The point was made about YMCAs. Charities working with young homeless people report that they are often unable to move those young people on to appropriate accommodation after they have, for example, spent time in a hostel. That is because of the impact on affordability of the shared room rate for young people who seek to move on from those circumstances and to take responsibility. Taking responsibility is part of the principle that the Government seek to develop behind the local housing allowance. However, the current system of a shared room rate militates against young people taking responsibility for themselves, finding their own accommodation and getting the support that they need to do so. The shared room rate can be a real disincentive for young people when it comes to leaving supported accommodation, because they know that they will face a shortfall. Indeed, the YMCA reports that 35 per cent. of young people in YMCA accommodation are ready to move on, but are unable to find anything that they can possibly afford to rent.

Affordability is not the only barrier. As the hon. Gentleman rightly said, there is substantial evidence that landlords are more unwilling to let to under-25s who are on benefits. With his amendment, that unwillingness would at least be reduced, but it would still apply to under-21s. According to Shelter, although 46 per cent. of one-bedroom properties were affordable to those entitled to the one-bedroom rate—in other words, over-25s entitled to the one-bedroom rate—only 26 per cent. of the properties matching the shared room rate definition were available at or below the shared room rate. I can give a local example that may help to illustrate that. In Sutherland and Easter Ross in the Highlands, the shared room rate is set at £35 a week. I know that to Members who represent urban constituencies that might seem very low. In that part of the world, only one landlord provides accommodation matching the shared room rate definition—£95 a week. Any young person under 25 in that part of the world, on benefits and looking to rent accommodation, faces a shortfall of £60 a week.

Since we debated the matter in Committee—I know that the Minister made her response then—there has been further evidence from the Department for Work and Pensions that helps to support the case that is being made in the amendments. Recent evidence indicates that landlords are becoming increasingly reluctant to let properties as houses in multiple occupancy and that they are reluctant to let at all to housing benefit—or local housing allowance, as it will be—claimants. There is often—this comes through from, for example, research that Shelter has been doing—increased competition for rooms in shared accommodation. That competition comes not only from students and professionals, as was mentioned in an intervention, but from migrant workers. That is a relevant point for consideration in terms of the effect on rents and supply. That phenomenon has been reported by Shelter.

The pressure and the competition faced by young people who are entitled to only the shared room rate is getting worse, not better. That competitive pressure will mean that the shortfalls that those young people face will become more dramatic and the consequences of those shortfalls for those young people, in terms of debt, hardship, eviction and having to go into supported accommodation, will all become more severe.

In a sense, I will close on the same point as the hon. Gentleman closed on. He quite rightly referred to incentives to work. Incentives to work are really the whole thrust of a large part of the Bill. However, this is one area where, for some reason, the Government seem unwilling to embrace a suggestion that, as he said, could be delivered relatively cheaply. I did not necessarily like the way in which the figure got inflated in a matter of seconds. None the less, in the context of the overall Bill, the proposal is relatively cheap. Even complete abolition of the single room rent has been costed at £20 million, in ministerial answers. Even taking into account behavioural consequences, the cost would still be relatively low. However, the impact on work incentives for young people can often be dramatic.

Those of us who attended a briefing session held on the issue by Shelter, the YMCA and other organisations involved in the coalition campaigning against the situation, heard directly from some young people who had been living in supported accommodation about the impact that the situation can have on their ability to find a job. Earlier, we discussed the importance of the fact that many of the people we are talking about want to work and just need assistance to do so. For no group is that more true than the young people addressed by amendment No. 48. However, the problems of having no fixed address, building up debt problems and being unable to afford rent all represent substantial disincentives to work. If for no other reason than to address that situation, which would be consistent with the Government's thinking on welfare reform, I urge the Minister to reconsider the position that she took in Committee and to endorse amendment No. 48.

Photo of Terry Rooney Terry Rooney Labour, Bradford North

I wish to speak to amendments Nos. 70 and 67, which I tabled.

Amendment No. 70 relates to rent officers. Many people might be totally unfamiliar with them. They are peculiar figures in our society who have enormous power and can influence an incredible number of people's lives, yet, sadly, they are subject to little accountability or scrutiny and there is little transparency in their work. At the moment, under the housing benefit system, a rent officer decides what localities will be used to measure rents for different types and sizes of property. He then sets the local reference rent, which is effectively the maximum amount of housing benefit that one can get in an area. Under the local housing allowance scheme, he will set the broad rental market area, which is the area in which different types of property are situated, and set its local housing allowance rate, which, again, will be the maximum amount that claimants can get.

A rent officer does that without reference to anyone and without consulting anyone. The decisions appear to be unchallengeable and are not subject to any scrutiny or serious investigation. A rent officer is not even required to consult the relevant local authority, which is strange when one considers that even those local authorities that are no longer landlords still have a strategic housing duty and a duty to homeless people. Guidance on homelessness from the Department for Communities and Local Government instructs local authorities that they should have regard to the private rented sector, yet local authorities have no input into a rent officer's assessment of those rental rates.

Photo of David Taylor David Taylor Labour, North West Leicestershire

Is it not also the case that a rent officer does not have to explain, justify or provide evidence to support a calculation that he or she has to undertake? A couple in my constituency assembled a dossier of all the rental accommodation in a certain category that had been advertised over quite a long period, and none had been available at the rent that the officer had suggested.

Photo of Terry Rooney Terry Rooney Labour, Bradford North

Sadly, my hon. Friend's experience is all too common in all too many parts of the country. I understand that there are some good rent officers. I have yet to find one, but I am told that they do exist.

The simple fact of the matter is that this system affects millions of people's lives. It affects the amount of housing benefit or local housing allowance that people can get. Rent officers operate under a regime of secrecy, unaccountability and serious inconsistency, as my hon. Friend said, and there can be no challenge to the decisions at which they arrive. Amendment No. 70 would bring transparency to the system. It would require a rent officer to publish the data and evidence on which his calculations were based. It would also allow the Secretary of State to make directions about how that evidence should be collected, assessed and used. In this day and age, to have a public official with such incredible powers, yet subject to no public scrutiny at all, is just plain wrong. I accept that the amendment might not be perfectly worded, although I think that it is pretty good, and I look forward to hearing the comments of my hon. Friend the Minister.

Amendment No. 67 addresses the antisocial behaviour aspects of the Bill that relate to sanctions on housing benefit. I have to say first—I have made this point several times in the past and although no one has listened, I hope to carry the day—that it is plain wrong and a massive injustice that there is a sanctions regime that applies to only one type of tenure in the housing market. As everybody knows, on virtually every housing estate in the country, two thirds of the old local authority stock has been sold. If two neighbours are found guilty of the same antisocial behaviour, but one is an owner-occupier, and the other is a tenant, the tenant could lose his home and 100 per cent. of his housing benefit for up to five years, but there would be no sanction whatever against the owner-occupier, and that is not right.

I accept that the proposals in the Bill are to be piloted—God help the 10 pilot areas—but a serious rethink of the principles underlying the measure is needed. I utterly opposed the proposals in 2003, and the Government saw sense and withdrew them. I accept that the proposals have been revised and refined, but they are still simply wrong. I remind hon. Members that if a person's behaviour does not change in the first four weeks after the original possession order, there is a 10 per cent. reduction in housing benefit. Between five and eight weeks after the order, there is a 20 per cent. reduction, and after that, for up to five years, there is a 100 per cent. reduction. The person gets nothing. Of course, if the housing benefit officer thinks that that will cause hardship, the 100 per cent. rate can be reduced, but it is evident that it will cause hardship. If someone is on income support and is entitled to 100 per cent. housing benefit, but instead they get nothing, they will obviously be in hardship.

That is not to undermine in any way the serious implications of antisocial behaviour. We have all seen, experienced, and had to deal with it, and most of us welcome the legislative action that the Government have taken. However, let us be fair: there is a personal responsibility on the individual who causes the antisocial behaviour, whether they be a householder, a parent, or an older teenager, but there is a responsibility on the state, too. If we reach the stage at which a family has been evicted for antisocial behaviour, the mechanisms that we have put in place, and the state, have failed in dealing with the family and its problems; we need to recognise that. The 100 per cent. reduction in housing benefit for five years is an abuse of human rights. The amendment, which possibly does not go far enough, would limit the 100 per cent. reduction to 12 months. I hope that we will hear co-operative words from the Minister on that amendment.

I now turn to the amendment on the single room rate, which was so ably moved by my hon. Friend Mr. Love. I understand, but I do not agree with, the philosophy behind the single room rate, which is that it is not right that someone can leave school at 18 and go straight on to benefits and enjoy a lifestyle that is not available to people who are in a similar situation, but are in work. However, the reality is that most people to whom the single room rate or the shared room rate applies are not in that category. Most of them have, at some time, been in care. I know that people under 21 are excluded if they have been in care, but when they are 21 and one day, the regime applies. All the evidence about people who have been in care shows that they remain vulnerable long after they turn 21.

A large number of the people affected have disabilities. Severely disabled people are exempt from the single room rate, but disabled people are not, but where do we draw the line between disabled and severely disabled? People make those decisions every day, and they affect people's lives. People who have been in drug, alcohol or substance abuse programmes and ex-offenders are affected, too. Those two groups—people who come out of prison, and people who have been through detoxification programmes—were, under one part of the social security system, given the community care grant, because we recognise that they are in a difficult situation. They need resettling in society and they need help to get over their problems. Under another part of the system, however, we tell them that they will have restricted housing benefit, which means that they can only live in accommodation that is at the allowance rate that has been set, but in most places, that is not available.

In addition, people who have been in care until the age of 21 are exempt, but most local authorities do not make that information available when someone makes a claim. It is almost by accident that they discover that they are exempt. Similarly, local authorities do not state in the information that they issue that severely disabled people are exempt. If someone forgets to state on their claim form that they receive higher-rate disability living allowance, they are overlooked and they receive the single room rate. Too many of those things are subject to individual judgment. Some authorities attempt to deal with the problem by making discretionary hardship payments, but many authorities do not spend anything on such payments. Some of them publicise the payment, but others do not do so. Once again, there are different attitudes in different parts of the country.

Photo of Madeleine Moon Madeleine Moon Labour, Bridgend 8:30 pm, 9th January 2007

Is it not the case that discretionary hardship payments should not be used to make up permanent housing benefit shortfalls? How can such payments help vulnerable people, who need that extra money to secure accommodation?

Photo of Terry Rooney Terry Rooney Labour, Bradford North

What I am about to say will probably result in someone being sacked tomorrow, but if a vulnerable person who receives single room rate has mounting arrears in one local authority area, the authority makes a discretionary payment. My hon. Friend is right that such payments should not be ongoing, but the authority makes the payment to clear the arrears. I do not think that that is what discretionary payments were intended for, but some housing benefit officers believe that the rules that they are asked to implement are not right, so they use their imagination, although I accept that that may not be a good thing.

Time is pressing so, finally, the Government must look at the circumstances that lead people to claim single room rent. As I said, many of them have taken part in drug and alcohol abuse programmes, and many of them have mental illnesses and other problems. We must be honest about the impact of non-dependant deductions. In many parts of the country, the maximum non-dependant deduction is greater than the weekly rent that people pay, which leads to one of two results. Either it encourages fraud—the householder declares that someone has left when, in fact, they are still living at the house—or parents are forced to kick out their children because they cannot afford the impact on their benefit. Non-dependant deductions have grown out of proportion to the problem that they were originally designed to tackle. The issues extend beyond the arguments ably made by my hon. Friend the Member for Edmonton, and I hope that we receive positive signs of a rethink from my hon. Friend the Minister.

Photo of Jeremy Hunt Jeremy Hunt Shadow Minister (Work and Pensions)

This important set of amendments deals with the serious problem of access to housing for young people under 25. The facts have been comprehensively set before the House by the hon. Members for Bradford, North (Mr. Rooney), for Edmonton (Mr. Love), and for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander).

At the heart of the problem is the fact that the number of claimants of single room rent fell from 31,600 in 1997 to 11,900 in 2005. Evidence from Shelter, the YMCA and many other organisations suggests that is not because young people have experienced a sudden surge in employment opportunities and earnings. On the contrary, as the hon. Member for Inverness, Nairn, Badenoch and Strathspey said, 35 per cent. of the young people using YMCA accommodation would like to move into their own accommodation but cannot afford to do so. The British Property Federation says that

"many of our members are reluctant to let to under-25s because of the inadequacy of their Housing Benefit payments to meet the rent required."

As a result, there is a significant reduction in the supply of affordable accommodation for young people, particularly houses in multiple occupation.

This is not simply about the level of housing benefit. The increased burden of regulation which, for example, requires landlords to place basins in every single bedroom, has had an impact, too.

The amendment follows the terms of similar amendments that we debated in Committee. There is an important distinction between principle and practice. Is the problem one of principle, whereby people under the age of 25 should not be required to accept a lower level of housing benefit than other people, or is it one of practice, whereby the level of the single room rate under current regulations, or the shared room rate under the Bill, has not been set at a level that adequately reflects local housing market conditions?

It is worth looking at what happened in the pilot areas for the local housing allowance. The Department for Work and Pensions report refers to the rent officers, to whom the hon. Member for Bradford, North drew attention. It states that

"rent officers in some areas" of the pilot

"were facing particular difficulty in gathering evidence in order to set the shared room rate . . . this could mean that as a result the rate is a less reliable reflection of the market, thus compounding claimants' problems".

There were clear problems in the pilot in setting the right level of the shared room rate, which may be due partly to the highly complicated nature of what the shared room rate has become. The Minister told the Committee that it should be assessed as the rate payable for a room with shared use of either a living room, bathroom, toilet or kitchen.

Photo of Danny Alexander Danny Alexander Opposition Whip (Commons), Shadow Spokesperson (Work and Pensions)

In Committee the hon. Gentleman abstained when we voted on the abolition of the single room rent. Has he changed his position, and is he willing to support the abolition of the single room rent?

Photo of Jeremy Hunt Jeremy Hunt Shadow Minister (Work and Pensions)

My argument is that the problem with the shared room rate, as it will become, arises from the way it is implemented in practice. The amendment is not the solution. The measure is complicated and rent officers find it difficult to set the rent at an appropriate level. The problem, as the hon. Member for Bradford, North said, is the lack of transparency in the way the rent officer makes his or her calculations as to what the shared room rate should be. Because of that lack of transparency, it is impossible to challenge what may be an arbitrary rate that inadvertently makes it unlikely that young people will be able to afford even shared accommodation.

Given that the Government are unlikely to accept the amendment, will the Minister give assurances that she is prepared to consider ways to improve the process whereby the shared room rate is calculated? I draw her attention to a particular concern with respect to disabled people. She knows that one of the critical issues for disabled teenagers is the transition into adulthood, which is often poorly managed by local authorities and was correctly identified as an area of focus in the "Life Chances" report.

The Minister said in Committee that the shared room rate does not apply to people in supported accommodation, but not all young disabled people are in supported accommodation. For many, accommodation in the private sector is a vital first step towards independence and finding a job. Can she give further assurances that the shared room rate will be structured in a way and set at a level that enables young disabled people to make that transition into adulthood and independence?

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

As I said in Committee, I am pleased that we have had the opportunity to discuss issues relating to the single room rate, because I know that it causes great anxiety for many colleagues, particularly many of my right hon. and hon. Friends. I hope that over the next few minutes, I will be able to give some comfort to my colleagues and assure them that they can have confidence in what we are attempting to do with the local housing allowance under the new system.

For the record, Government amendment No. 12 is a technical amendment which modifies clause 35 to meet the information sharing principles of Her Majesty's Revenue and Customs, once the transfer of the rent officers has taken place in 2009.

The debate has been wide ranging, and some of the issues raised are of general concern and not specific to the single room rate. The debate has had added value because of that. I emphasise that we are moving to a local housing allowance partly to get rid of the problem highlighted by my hon. Friends the Members for Edmonton (Mr. Love) and for Birmingham, Selly Oak (Lynne Jones)—the anathema of "No DHSS customers" in the private rented sector. What we are doing generally in relation to the local housing allowance, and specifically in relation to young people under the age of 25, is giving people the authority to pay their own rent by having the money given to them as individuals instead of through an intermediary through a housing benefit office, which initially stigmatises them as housing benefit recipients. I hope that that general principle will be accepted.

Photo of David Lepper David Lepper Labour, Brighton, Pavilion 8:45 pm, 9th January 2007

From my experience of the pathfinder area in Brighton and Hove, I do not believe that the local housing allowance will have the beneficial effect on young people that my hon. Friend believes that it will have when it is rolled out across the whole country. Will she undertake to continue to review the working of the single room rent and the shared room rent as they are rolled out nationally?

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

On Second Reading, my right hon. Friend the Secretary of State stated that we would review the rolling out of the local housing allowance over the next two years to monitor its impact.

Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I do not think that the Minister's proposals will deal with the problem that I identified when I chaired the Birmingham bond scheme—that is, landlords' reluctance to provide shared accommodation for non-student tenants, whether or not they possess the rent. Landlords are unwilling to provide accommodation for people sharing communal areas, whereas they are willing to provide one-bedroom self-contained accommodation.

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

That is an issue for young people irrespective of whether they are on housing benefit or in work and not on housing benefit. The problem is not specific to young people on housing benefit—it is a general attitudinal problem of landlords in relation to single under-25s. With the greatest respect to my hon. Friend, who has great knowledge in this field, a wee bit of a red herring is being drawn across the debate.

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

I appreciate the intensity with which my hon. Friend holds these views, but I should like to move on to deal with some of the specific issues that have been raised.

The Government's view is that many single people under the age of 25 and not on benefits live in shared accommodation, regardless of questions about the number of accommodation units that are available. If we accepted the amendments, those who are under 25 and on benefits could be trapped in the benefits system, whereas if we continue with the shared room rent we encourage them to start to think about how they can move into work. There is a disadvantage to getting rid of the separation. We went through all the arguments in Committee and I used a specific example of two young people who share accommodation, one on housing benefit and the other not. One moves out and retains maximum housing benefit while the other, who is in work, is no longer entitled to that benefit. It makes a difference.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

My hon. Friend makes an interesting point about the possible disincentive to work that accessibility to benefits provides. What is the difference between someone aged 26 and someone who is under 25 in respect of that factor?

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

I hope that my right hon. Friend asked the same question when we considered many other aspects of our support system. Someone aged 25 or over who works at least 30 hours a week is entitled to working tax credit. For those aged 25 and over, contribution-based jobseeker's allowance has a different rate. That also applies to income support. There is, therefore, consistency. I appreciate that it is sometimes difficult for those who are 24 years and 364 days old to understand why they do not qualify when those aged 25 do, but there must be a dividing line. Depending on one's view of where it should be, one can object to when that age differential occurs. The age limit is consistent for a range of benefits and I believe that the clarity of the rule is important.

In many respects, we have moved away from the principles behind a single room rent to practicalities. Mr. Hunt made that point. Let me be clear: the changes that we are making to the current housing benefit rules will make a difference to the way in which the single room calculations are made and to the number of accommodation units that will be brought within the remit of the new system.

In response to Danny Alexander, I appreciate that the policy was restrictive when it was first introduced. It meant a shared living room, kitchen and toilet. As my hon. Friend David Lepper highlighted, the accommodation in the pathfinder areas meant exclusive use of a bedroom and shared use of a kitchen, bathroom, toilet and living room. The new system that we are introducing is a dramatic improvement and means the exclusive use of a bedroom—obviously—and sharing one or more out of a kitchen, bathroom, toilet and living room. We have therefore replaced, "and, and, and" with "or, or, or". That is a significant change.

When the local housing allowance is rolled out nationally, we shall look to define shared room rate accommodation. I believe that that will mean a significant increase in affordable accommodation because we shall use a different calculation system. It will no longer disadvantage young people because we will use the mid-point—the median. The mathematicians among us will recognise that 50 per cent. of the accommodation will always be available to let at or below the local housing allowance rate.

Photo of Andrew Love Andrew Love Labour, Edmonton

Although in theory the median is defined as having 50 per cent. below and 50 per cent. above, one has to take into account the likely difference between the rents that are set by the rent officer service and existing market rents. In the past, the difference between the two has caused difficulties and adversely affected young people in particular. Can my hon. Friend reassure the House that the 50 per cent. figure will be borne out in reality?

Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

I hope that I can give my hon. Friend that assurance. He is right to say that, under the old system, the calculations used to involve knocking off the highest and lowest amounts. We are now putting in place a system that will involve the calculation of a genuine median across the market. Some of the issues raised by the hon. Member for Inverness, Nairn, Badenoch and Strathspey will be dealt with by that system. I can give my hon. Friend the Member for Edmonton the assurance that 50 per cent. of the accommodation will always be available—

Several hon. Members:


Photo of Anne McGuire Anne McGuire The Parliamentary Under-Secretary of State for Work and Pensions

I want to move on, because I want to give my hon. Friend the Member for Edmonton the opportunity to consider what I am going to ask him to do in a few minutes.

I should also like to acknowledge the contribution of my hon. Friend Mr. Rooney. We are committed to a review after the implementation of the new local housing allowance, and to assessing the impact that all this will have on young people. We shall also look at the way in which the rent officers operate. Many of them work in close consultation with organisations across their various areas, but we need to improve the way in which the system operates. We need to improve its transparency, consistent with commercial confidentiality. I had a meeting recently with my hon. Friend Kali Mountford and Niall Holland from the Catholic Housing Aid Society, who were very vocal on this issue. Niall Holland has also met the chief executive of the rent service to allay some of his fears and concerns. We want to ensure that the guidance that we produce will support our wider aim of encouraging mixed and sustainable communities, and my right hon. Friend the Secretary of State has clearly stated that there will be a review over the two years.

I want to give my hon. Friend the Member for Edmonton an opportunity to consider his amendment, but first I want briefly to comment on the sanctions period, as I know that it is a matter of concern to my hon. Friend the Member for Bradford, North. We believe that the setting of a period of five years is reasonable. That will come at the end of a long process and, at any point in that process, someone who is the subject of a sanction can have the sanction lifted by improving their behaviour. We are trying to alleviate the pressures in communities where there are tenants engaging in serious antisocial behaviour, while recognising that we must always give people an exit strategy and an opportunity to come back into the system. We will do that faithfully, and I hope that that assurance will allow my hon. Friend the Member for Edmonton to consider withdrawing his amendment.

I am sorry that I have had to rush my response to the debate. These are serious issues and, as I said earlier, I know that they cause great concern and anxiety among my colleagues. I ask my hon. Friends in particular to recognise that we are keeping faith with the principle of supporting young people. The whole Bill is about supporting people, and about giving them opportunities that they have not had before. However, on the issues of the age of 25 and of the single room rent, given the changes that we have made, the guidance that we will issue, the support that we will give to local authorities, and the recognition that there are exempt categories, I ask my hon. Friend to withdraw his amendment.

Photo of Andrew Love Andrew Love Labour, Edmonton

I thank my hon. Friend for the way in which she has responded to the debate. I am disappointed that there has not been more movement towards a recognition of the impact that the single room rate, and now the shared room rate, will have on young people. Indeed, that impact is already being felt in the pathfinder areas. I take the Minister's reassurances, however, that the median will be a genuine one that reflects real rents, and not just the rents set by the rent officer service. I hope that that is put to the other place when it debates the Bill. On the basis that that will happen, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

It being Nine o'clock, Madam Deputy Speaker proceeded to put forthwith the Questions necessary for the disposal of business to be concluded at that hour, pursuant to Order [this day].