Report (2nd Day) (Continued)

Part of Welfare Reform and Work Bill – in the House of Lords at 10:30 pm on 27th January 2016.

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Photo of Baroness Meacher Baroness Meacher Crossbench 10:30 pm, 27th January 2016

My Lords, in moving Amendment 82A I hope not to take up much of the House’s time. The amendment requires the Secretary of State to make regulations that would enable tenants receiving universal credit to choose to have the housing element of universal credit paid directly to their landlord.

We debated this matter in relation to an earlier welfare reform Bill and I am aware of the Government’s resistance to the measure. As benefit levels fall drastically under successive rounds of cuts, the need for this provision has grown over time. Until the introduction of local housing allowances, private tenants were able to choose to have rent payments paid direct to their landlord. Currently, social tenants can still request that housing benefit be paid direct to their landlord. However, under universal credit, tenants, whether social or private, will lose this flexibility and thus the opportunity to ensure that their rent is paid regularly so that they can at least be guaranteed a roof over their heads even if they cannot feed their children.

The Government argue that to include housing benefit payments within the universal credit payment promotes financial responsibility and helps prepare claimants for the world of work, when they will need to manage their entire budget without help from the state. Of course, in a perfect world this a reasonable argument. However, it fails to take account of government policy to ensure that work pays. But this is being done by reducing out-of-work benefits substantially. The result is that it is highly doubtful that any of us in this House could manage to live on out-of-work benefits—pay the bills, feed the family and pay the rent. If we could not do it, why should we expect others far less privileged to be able to do so?

The Government’s attitude to this matter suggests to me, I fear, little understanding of the incredible challenges faced by out-of-work claimants under the regime which has been unfolding since 2010.

I wish to put on record in your Lordships’ House that tenant choice, as set out in the amendment, was supported by the Work and Pensions Select Committee in its report Support for Housing Costs in the Reformed Welfare System published in April 2014. The Select Committee suggests that such arrangements could be available at least for the first few years of a UC claim as a transitional measure. I hope the Minister will be able to respond to that proposal.

There is considerable support for direct rent payments to landlords if claimants request it. In February 2015, for example, the Northern Ireland Executive confirmed that landlords will be paid benefit directly to cover tenants’ rent. The Scottish Government have also indicated their wish to introduce such a provision. Both Shelter and Crisis support it, for obvious reasons.

An important point raised by the Residential Landlords Association is that direct payments will prevent an abusive partner using the rent money for their own purposes, an issue I had not thought of. Partners with a gambling or drink problem too often reduce their families to destitution. In fact, I was very familiar with such problems years ago, although they had rather gone out of my mind. This amendment would provide some protection for such families.

Finally, the Minister will be well aware that this is a big issue for landlords and hence for the adequacy of housing supply for benefit claimants. It seems that this is as powerful an argument for the amendment as the concerns about tenants. Quite simply, if landlords cannot be sure that the claimant will be able to pay the rent on time every time, they would be sensible not to rent their properties out to universal credit claimants. We already have an excess of demand for housing over supply. Does the Minister have an estimate of the expected fall in the supply of properties for rent for claimants in the coming years? Is the Minister concerned that research by the RLA earlier this year showed that 63% of private landlords with tenants on universal credit said that their tenants were in arrears with the rent? How many of those landlords will be willing to risk renting to benefit claimants again? In my opinion, only very few.

I very much hope that the Minister will be able to persuade the Secretary of State to take this amendment seriously in order to avoid a likely catastrophe in housing provision for universal credit claimants, and serious consequences for the children of the many parents who will be unable to cope. I beg to move.