Welfare Reform Bill — Report (5th Day) (Continued)

Part of the debate – in the House of Lords at 8:38 pm on 23rd January 2012.

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Photo of Lord Best Lord Best Crossbench 8:38 pm, 23rd January 2012

I shall speak to Amendments 60 and 61, which would constrain two of the more extreme aspects of the benefit cap proposed by the Bill. Your Lordships will not be surprised to hear me say that I note that most of those pushed over the cap are in that position because of their housing costs. They are paying high rents in London or the south of England. Why the Government's effort to change people's behaviour and psychology is almost exclusively concentrated on this part of the UK remains a mystery.

Let me take the amendments in turn. First, Amendment 60 would provide a period of grace of 26 weeks for those suddenly affected by the total benefit cap. The noble Lord, Lord German, said, in Committee:

"People need the breathing space to be able to find a new job and get themselves back into work. The rationale behind this Bill is making work pay ... giving people time to find another job ... should be a first and not a last resort.-[Official Report, 21/11/11; GC 344.]

Such a breathing space is currently the pattern before housing benefit/local housing allowance is curtailed in other circumstances. If, by contrast, the new £500 cap kicks in instantly, the household will run into serious financial problems as soon as any savings they have are exhausted. For many, rather than having savings the family may have loans and debts. Because of the new cap, many families in privately rented accommodation-or even some housing association accommodation-across the south of England who encounter unemployment or family breakdown that means loss of a breadwinner, will run into difficulty immediately. They will find the safety net of benefits-the social security they have been paying for in national insurance contributions-is no longer there to see them through the transition. Without a period of grace the cap will mean that the rent can no longer be paid and they are likely to face the prospect of having to leave their current home precipitously.

If people become homeless in this way, the savings the Treasury seeks will swiftly be absorbed by the extra costs for local authorities in finding them somewhere else, which, as we discussed earlier, will not be easy. If they are moved away to a low-cost area, say from Brighton to Bradford, job opportunities are likely to be few and far between. Long-term unemployment becomes much more likely than if they had had the chance to get a job in the locality they know. The move will disrupt children's education, cut helpful links with grandparents, and all the other disadvantages we have heard of in earlier debates. The harm done can continue for another generation, all because of impatience in imposing the new cap too rapidly. Finding a new home, even in a cheaper area will not be easy and it takes time to secure a rented property even if the council is trying to help. Surely the best approach is for the DWP to hold back on imposing the new cap long enough to enable the family that has run into difficulties to get back on their feet, rather than forcing them into a crisis with the double trauma of losing their job and losing their home in rapid succession.

I heard the Secretary of State say this morning-we hear it first on the "Today" programme-that hard-working families trying to get a new job would not be penalised. The Minister has dropped many hints that something will be done. I am hopeful, therefore, that the Minister will be able to accept Amendment 60. Colleagues from different parts of your Lordships' House have told me that in today's job market, 26 weeks is not a long enough period of grace. They have urged me to press for 52 weeks before the total benefit cap takes effect. I have, however, stuck with 26 weeks in the hope that it will give the Minister less trouble. But, a shorter stay of execution would not seem either humane or sensible.

Amendment 61 also seeks to take the edge off one of the most extreme aspects of the total benefit cap. This amendment would exclude from the cap families placed by their local authority in temporary accommodation-normally a private rented flat when the council has struck a deal with the landlord. Rents for temporary accommodation, even though many local authorities send the homeless family some distance to the cheapest neighbourhoods they can find, are high and the housing benefit has to encompass an extra charge to cover the administration of the arrangements. A total bill for a family of three children could be £440 a week in London, even though a central London borough has despatched the family to the lowest-priced accommodation it can locate. If £440 goes on rent, a total benefit cap of £500 obviously leaves practically nothing for all the family's other costs, as the noble Lord, Lord Greaves, noted earlier. There is no prospect of them surviving on the remaining income within the cap, but the family concerned cannot do anything to rectify the situation. They have not chosen the accommodation but have been sent there by the council because nowhere else can be found for them. Yet, if they stay there, and pay the rent, they face destitution. We could bring back the bed-and-breakfast hotels that are becoming extinct, not least because they are so much more expensive than keeping people in rented homes, or we could revert to building hostels for these households, separating women and children from the men in the true "Cathy Come Home" style once again, but I know the Government are not thinking in such draconian terms, and anyway the problem would hit us long before we could recreate such hostels.

By definition, temporary accommodation is a short-term solution to a crisis and has always been treated separately from payment for other accommodation. The restrictions of the cap should surely not be imposed in these circumstances, hence Amendment 61. In Committee, the Minister gave us some encouragement on both these issues. He told us that he would be looking at transitional arrangements and at ways of dealing with hard cases. He told us that he was exploring options for the treatment of housing benefit-help with housing costs within universal credit-for people sent to live in temporary accommodation. I was reassured by those remarks, and I am very hopeful that today he will be able to make an announcement, perhaps two announcements about the idea of a period of grace of 26 weeks and about the exclusion from the cap of those placed in temporary accommodation. The noble Lord, Lord Newton, of whom I am a great admirer, thinks such matters should be dealt with through secondary legislation. If the Minister can be clear that such secondary legislation will be brought forward covering the points, as in these amendments, we would all be very much encouraged. I beg to move.