Poverty (London)

Part of the debate – in Westminster Hall at 11:00 am on 12th February 2002.

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Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North 11:00 am, 12th February 2002

I am coming to that matter, which I feel passionately about.

Families in London on income support mortgage interest relief generally face higher mortgage costs than those in the rest of the country, so they face a higher risk of getting into debt if they get a job. The Government have extended the linking rule to mortgage interest relief, which is a positive step. I doubt whether the Minister can answer immediately, but I would like to know whether the extension of the linking rule has helped low-income homeowners to move into work. We must do more to help such people to return to work.

Considerable evidence suggests that good area-based partnerships between local authorities, the private sector, the Employment Service and community organisations have been effective in underpinning welfare-to-work strategies. Employment zones in London have been particularly successful, but there are too few of them. The level of deprivation and poverty in London strongly justifies a further extension of area-based initiatives, including employment zones. It is unfortunate that the Government's index of deprivation—a formula for distributing resources for area-based regeneration initiatives—has recently disadvantaged London. The Association of London Government calculated that under the old formula, we would have been £140 million better off. My hon. Friends and I will continue to press the Government to redress the inadequacies of the index of multiple deprivation.

I am aware that other colleagues want to speak, but I want to finish by emphasising two policy issues that hurt Londoners disproportionately, rather than focusing on the failure to make full use of the welfare-to-work programme. First, council tax benefit restrictions are impacting on households in high-value areas. People did not move there through choice, so they are suffering an unfair penalty. I hope that the Minister will deal with that in more detail later.

Secondly, housing benefit restrictions in London are particularly difficult for families on low incomes. They have to find £15, £20 or £25 a week out of their own pockets to sustain a tenancy on which a housing benefit restriction has been placed, as has been demonstrated by research in Brent. Housing benefit restrictions are also fuelling the flow into temporary accommodation and homelessness. It is false economics to impose housing benefit restrictions to prevent people in high-value accommodation from being funded by the public purse. Some such provision needs to be made—we cannot afford to subsidise people in penthouses in Marble Arch—but the principle has gone too far, particularly as the supply of private rented accommodation for families on low income has halved in the past five years, causing hardship and fuelling the housing crisis. It is time for action on both those fronts to relieve poverty.

I love London, its buzz and its dynamism. It has been an exciting place to live recently. Population growth and an exciting young multi-ethnic population have driven its success, but we cannot continue to tolerate the scale and intensity of poverty and deprivation in London. It causes hardship, and there is a danger that it will act as a drag on economic success. Getting more people into work is the best means of tackling poverty. There must be targeting of welfare-to-work strategies to ensure that they deliver in the capital.