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Housing Benefit (Amendment) Regulations 2011

There will be quite a lot of flexing around, and people do accommodate to systems. According to the figures that I have, regarding shared rates, in 60 per cent of localities the two-bedroom LHA rate is less than twice the shared rate. In 90 per cent of localities the shared rate would cover the relevant share of the three or four-bedroom rate. The point is that, when you are looking at pressure on the market, which noble Lords and the SSAC have been concerned about, fundamentally we are taking pressure off the market by looking for more sharing. Clearly, there are local adjustments but, as I have said, this has proven to be a very flexible market in the past, and we have no reason to expect it not to continue to be. The question raised by my noble friend Lord Stoneham about the shortfalls in London—the difference between the one-bedroom rate and the shared accommodation rate—reflects the generally higher rents in London. The ability of those not on benefits to live in self-contained accommodation in these areas is also very limited, and many, therefore, already choose to share. Indeed, as my noble friend Lady Thomas pointed out, it is for exactly that reason that such decisions have been taken for very many years in London. I think I can join her in that experience. It has been suggested that the Government are doing little to encourage the development of houses in multiple occupation. Landlords make commercial decisions about whether to provide such accommodation, and government’s influence on those decisions is limited. We do, however, have a role in setting the planning framework and licensing requirements. Communities and Local Government Ministers have considered whether the licensing regime, which places added burdens on landlords to comply with various health and safety measures, should be relaxed. However, with more people likely to require this kind of accommodation, they do not think it appropriate to remove or reduce this protection. We also have the rent-a-room scheme, which is an income tax relief introduced in 1992 intended to boost the private rented sector. It encourages individuals to offer spare accommodation in their own homes at affordable rents to low-income groups. Homeowners and tenants who let furnished accommodation in their own homes are exempt from income tax on rental income of up to £4,250 a year. As I said earlier, it is too soon to know how claimants might react to these changes. Those who will be affected by this change will have to consider their alternatives and make decisions about where and how they live. Some may decide to share with others, move back or stay with their family, or they may manage to find employment that allows them to stay in self-contained accommodation. These are the decisions that people in lower-paid work but not on benefits have to make, and those on benefit should not be sheltered by the state from this sort of responsibility. Picking up the point made by the noble Lord, Lord McAvoy, on work incentives, there is clearly no incentive to work if someone is in a property that is unaffordable for those who are in work. We have at the same time the issue of fairness if someone who is not on benefits is able to afford a house that someone on benefits can afford. The Merits Committee expressed concern that those in low-paid work may be forced to move, which might affect their ability to remain in work. While we acknowledge that the availability of shared accommodation is likely to vary across the country, it is uncertain what the impact of these changes will be, but there is no evidence to suggest such an effect. However those in employment are placed, they should be able to meet any shortfall in rent and remain in self-contained property if they wish. They are also better placed to improve their prospects by moving up the career ladder or increasing their working hours. The Merits Committee also expressed concern about the knock-on effect of this measure and the overall costs to the Government in, for example, the cost of providing emergency re-housing. That point has also been made by several noble Lords today. However, there is no evidence to suggest that the change will result in an increase in homelessness, and most people in this age group are unlikely to come under the local authority statutory homeless duty. As I have already said, many in the new age group— 41 per cent of non-housing benefit private renters and 36 per cent of those who are on housing benefit—already share accommodation. The reasons for homelessness are varied and complex, and the benefits system plays only a small part in that. Local authorities have an excellent track record in preventing homelessness. They helped 165,000 households avoid homelessness last year. We are confident that they will continue to deliver that service effectively. We have commissioned an independent review and monitoring of the April 2011 changes to local housing allowances. I assure my noble friend Lord Kirkwood that the review will include the early impacts of the extension of the shared accommodation rate. It will look at the availability and access to shared accommodation across different regions and rural areas, including houses in multiple occupation. We aim to publish interim findings next spring and the final report a year later. As with all new policy areas, we shall also be listening to the feedback that both I and my officials receive on how the changes work in practice. I hope that this debate has helped to inform your Lordships of our thinking behind this measure, and I thank all noble Lords for their contributions and views. I commend the regulations to the House.