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Housing Benefit

It is important to remember that we are discussing a change that will not be introduced for more than two years. The fact that local authorities and housing associations know that the change is coming two years down the track will affect tenancy decisions and allocations now, so it will be part of the mix. Putting someone into a property that they are under-occupying, knowing that in a few years' time they will not be covered by housing benefit, would raise issues. The situation will be ameliorated partly by forward planning. However, these are issues in the Welfare Reform Bill rather than the report. I fully accept that they are important issues and will need to be managed. I propose to allow the Chair of the Select Committee to respond at the end of the debate, if she would like to do so, so I will leave some time for that, but first I will consider some of the main themes that have emerged during the course of this debate. The dropping of the 10% cut after a year was an important theme of the report, and we have heard several hon. Members discuss their quite proper concerns about that. We took the view that the measure was not necessary after 12 months on benefit, given the introduction of the Work programme, which will support people, and the universal credit. We took account, obviously, of what the Select Committee and others who made representations had to say. Naturally, I was pleased that the proposal was withdrawn. It is another example of how we have responded to the proper concerns raised by the Select Committee. Since the proposals were first published, they have been considerably improved. On the nine-month transition, the changes will start to have an impact from April, but rather than a cluster of people chasing after the same properties, we will see the rental market start to adjust. Landlords will adjust their rent-setting behaviour; we will see whether the mechanism that we have implemented—direct payment, where that enables a tenancy to happen—is working; and we will be able to refine it over the next nine months before almost nobody with an existing claim starts to be affected. I stress that people will not be affected until the anniversary of their claim. For some people, that will be 18 months or more. The process will be gradual, giving us a chance to monitor what is going on and to consider the allocation of discretionary housing payments as we go, which improves the proposition considerably. To draw the threads together, one thing that strikes me about this debate is that it is clear that whoever was running the country at this point would have done a number of the things that we have done and are now being criticised for. We have heard figures quoted on the losers: 500,000 people will lose an average of more than a tenner a week from the abolition of the £15 excess. The previous Government decided to delay that change by a year, because there was an election coming, but we are going to do it, yet the figures for losses have all included that. It would be unfortunate if anyone gained the impression that we are making new policy and new decisions. This would have happened anyway and was part of what was planned. As my hon. Friend the Member for Cardiff Central said, the previous Government applied bedroom caps. They drew the line at five, and we draw the line at four, but the principle is identical. The outgoing Administration stood on a platform of restricting housing benefit to what somebody in work could afford. What does that imply? The 30th percentile. Using the 30th percentile, getting rid of the excess and applying bedroom caps is virtually there. I hesitate to say this, but almost everything that we are doing is Labour party policy, yet the Opposition suggest that this is some sort of evil right-wing plot to attack the poor. The idea is that the housing market is not static. It is influenced by what the Government do. We cannot spend £21 billion a year subsidising rents without influencing the housing market. Does anyone think that if we abolished housing benefit tomorrow, it would not have a massive effect on the rental market? It would have a huge effect. We are players in the market, and we have a huge effect. Our challenge is to ensure that the system is fair. In most rental market areas, 30% of properties will be affordable. There will be a transition to the new system of at least nine months for existing tenants and up to a year after that to ensure that in difficult local situations treble the amount of discretionary housing payment will be forthcoming. The fact that the budget is £20 million this year and will be £60 million in two years' time, repeated over a three-year period, indicates that we accept that there will be difficult individual cases in which adjustments must be made, which is why we have provided the money. I do not apologise for tackling something that has gone untackled for too long. The budget was growing remorselessly by billions year after year. We must ensure that taxpayers' hard-earned money is well spent, and we believe that the housing benefit changes will make that difference.