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Housing Benefit

I have a feeling that it might have been the previous Government, in whom the hon. Lady was a Minister, who introduced the rent-a-room rate. The point about the rent-a-room scheme is to try to make better use of the housing stock. I will not dwell on the social housing overcrowding measures—they are in the Welfare Reform Bill and are not the subject of this report—but I will say that much of what the Government are trying to do is about recognising the limitations of the existing social housing, private rented and owner-occupied stock, and making better use of it. We have here a classic example. Rather than pay a 29-year-old single person the full housing benefit for a flat of their own, we could pay them housing benefit that enables them to live in a spare room in someone's house, which would be good news for the person who owned that house, would free up the one-bedroom flat and would save the taxpayer money. I have no idea why the hon. Lady opposes that idea, unless it is on the grounds that it is better value for money. [Interruption.] I am sorry, but I have not given way. I am trying to manage my time, because we have covered a very wide range of topics. I have covered the fact that accommodation does not need to involve HMOs, and I have raised the rent-a-room scheme. As soon as I talk about, ““living with family””, everyone will throw their hands up in horror and say, ““You can't possibly expect people to do that,”” but there are diverse circumstances. For example, there is a set of people in their late twenties who live at home with their parents—I think they are called the boomerang generation. For them, it is a rational thing to do, and it enables them perhaps to save up for a deposit on a house. There is also a set of people who live close to family and have a good relationship with them—there are lots of caveats to that—to whom we pay housing benefit for the full rent on a one-bedroom flat just for themselves, when they have family down the road who could accommodate them at no cost to the taxpayer. At a time when money is tight, asking them to consider that option seems entirely rational and a sensible way to use the existing housing stock. The hon. Member for Aberdeen South spoke about the housing market in her own constituency. I do not think that anyone is saying that all housing rent inflation is about the LHA. I do not think that I have ever said that, and I am not aware that any of my ministerial colleagues have either. I do not dispute for a second that in Aberdeen and other places local market factors drive up rents. However, it is clear that rising real rents are part of the story. In response to Professor Steve Wilcox, whom I know well because I have written papers with him, our breakdown of the growth in housing benefit between different factors suggests a significant role for rent growth. Let me just take Members through how we get to that. In the past decade, between 2000-01 and 2010-11, the cash increase in spending on housing benefit was £10.5 billion. It is worth reflecting on that £10.5 billion increase over 10 years, and there is no sign of that increase easing off. With another billion, another billion and another billion, doing something does not seem particularly deplorable. Out of that amount, £5 billion is straight inflation—what we would have expected on the strength of inflation—£2 billion is real terms social rent growth, £2 billion is real terms private rent growth, £2 billion, right at the end of the period, as the hon. Member for Westminster North said, is case load growth, and about £500 million is the child benefit disregard. Real rent growth, therefore, is not only about the LHA, but it is a significant contributor to the growth in spending. The challenge for us, as a Government, is whether to just sit back and take it, letting private landlords go on increasing rents above inflation year after year, and saying, ““Yep, that's fine, we'll pay that,”” without trying to put a break on it. That is where CPI comes in. I have seen the projections. If CPI is done for decades, it of course has the sorts of effects that were described in the Shelter research mentioned by the hon. Member for Stockton North and, I think, the hon. Member for Brighton, Pavilion, who has now left us. CPI is not for ever. We have said that CPI on the LHA rates will be introduced in 2013, and will be reviewed at the end of the comprehensive spending review period in 2014-15. At that point, we will look at the impact, but what CPI will do is put a break on the expenditure. Housing benefit expenditure is like a runaway train—nothing seems able to stop it—and we have to try to get the housing market to structure itself differently, rather than keep feeding the runaway train.