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Housing Benefit (Amendment) Regulations 2012

My Lords, I declare an interest as chair of Broadland Housing Association, which spans Norfolk as a major traditional housing association. I also congratulate the Minister. We appreciate the reviews that he is seeing through and respect his respect for the evidence. It is welcome to be working with a Minister who is evidence-based. We appreciate that and it should be recorded.

Despite what the Minister said, these regulations are not about overcrowding. The people who are overcrowded and the people who are underoccupying are two different populations and in two different sets of places—they do not match. If the Minister were really serious about the issue of overcrowding, he would actually be looking, as some of us have tried to do, at the underoccupation among pensioners who, of course, are the biggest source of underoccupation. Although I am not suggesting that we should do that, if the Minister were serious about this, he would not confine his efforts to families, many of whom have children.

Secondly, the regulations are not about treating social housing in the same way as private rented housing. This is the second lie that the Minister has offered us. What we have learnt over the last six

months is that, far from the local housing allowance pressing down private sector rents, which was the mythology offered to us throughout the past year, the reverse is happening. Private rents have soared because, as my noble friend said, no new housing is being built. Private renting is not becoming a transitional tenure but a longer-term tenure. Demand is going up as a result, as are rents, as will the housing benefit bill. So, far from this exercise pressing down housing benefit, I am confident that we will see housing benefit in the private sector rise, because there are not three housing markets in this country, there is one. As new building has stopped in the owner-occupation sector and the social rented sector, the pressure on the private rented sector will increase, rents will go up and, as a result, the housing benefit bill will rise.

So neither of these two things are at issue. This is not about matching underoccupation and overcrowding— it does not fit. The Minister knows the statistics— they do not fit. It is not about following the example of the private rented sector, where rents are soaring and HB bills are likely to go up.

Like others, I do not want to repeat the arguments aired at great length in Committee. I have not been persuaded by anything since that the Minister was correct in his analysis. As a chair of a housing association whose tenants will lose the best part of £1 million in forfeited benefit, I have some questions for the Minister. What advice will he give me, given that his colleagues in DCLG have ensured that, instead of having £42,000 on average for a grant for a new house, it is now down to £16,000? As we cannot build without a grant of a minimum of £26,000, we cannot build. For the first time in 40 years my housing association is not building any new property. Given that, we have no possibility at all of “balancing our stock” to build the new single-bedroom properties that are pivotal to this scheme. As a result, our tenants know that they are faced with only our existing stock and occasional re-lets.

Occasional re-lets, when they come up, if they are attractive and in the right places, are for the most part pursued by pensioners. However, in future, pensioners who would like to leave a three-bedroom house and move into a one-bedroom flat or bungalow, will not be able to access any re-lets in our villages. This is because people currently in two-bedroom properties who are in the client group affected by the benefit cuts will now have to move to any available one-bedroom property against their will. I have yet to discover how that in any way adds to the sum of human happiness.

Many of our tenants have functional illiteracy and may therefore be re-classed as vulnerable, with the result that we will enjoy their housing benefit direct. However others, such as couples with children, will find it hard to manage; they will have debts, the banks will lean on them, and although I am trying to get them into credit unions, that may not be possible as they do not operate throughout Norfolk. They may well run into arrears. What would he have us do? If we let the arrears run, that will affect the estate, other people will stop paying their rent, we will go into the red, our books will not balance and we will go into special measures. The alternative is to evict, but the

local authority will hope that we do not, because those families will go into bed and breakfast accommodation. This may be 10 miles away, the children will have to leave their schools, the younger ones may be bed-wetting, they will all be crammed into one room, and the cost to the public purse will actually increase because the cost of a bed and breakfast will be something like £300 per week, as opposed to the rent for their current accommodation at about £70 or £80 per week. So we have made that family deeply unhappy, broken up the pattern of managing their lives and very fragile incomes, and put them into accommodation at greater cost to the public. However, as they are a family they are entitled to be rehoused, so the local authority will ask us whether we can help. We will reply that the only property we have available is the same three-bedroom accommodation from which they were evicted because they could not afford to pay for it.

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What would the Minister have us do? He will say, “Discretionary housing payments”. That is brilliant. I calculate that my local authority might get £200,000 in discretionary housing payments. It has something like 20,000 families in the area in social rented accommodation, half of whom may be pensioners and half of whom may be other tenants, and two-thirds of whom will be on HB, so we are talking about 6,000 tenants, of whom perhaps half—3,000—will be regarded as underoccupying. That money will stretch to one year’s worth of help for 250 people at £750 for the year— £15 on average—out of 3,000 or 4,000 people who are unable to manage their cuts because they cannot go anywhere else as there is no smaller stock for them to go to. What would the Minister have us do with that? What will he say to housing associations that do not handle the DHPs—they are handled by the local authorities—as regards the advice they should give to their local authorities? How will they prioritise who should be the lucky people manage to remain in their accommodation because they are being subsidised by the local authority’s DHPs, and which families will have to lose their homes because the DHPs have run out by November, December or January? What would the Minister have us do? How would he handle this problem on the ground because I am bloody well going to have to and I do not like it one little bit?

My third question to the Minister is the following. We are being encouraged by the Government to build only so-called affordable homes. Indeed, they are the only ones that will get subsidy in future. My housing association’s homes are at 62% of market rent; that is the target rent set down by the Minister’s DCLG colleagues. Affordable rents would be 80%, which means that if we are to apply to pension funds to be able to build we will have to let at affordable rents. Do we then let at affordable rents to families who will knowingly be underoccupying but are currently in work and therefore able to pay the rent, knowing that if they lose their job they face eviction because, above all, they will not be able to face the gap between their HB and their affordable rent? What advice can the Minister give us on that situation? How paternalistic should we be, knowing the fragile state of their economies in many cases? I want the Minister to tell me what we

do in these situations when we are dealing with families who may have to go into bed and breakfast accommodation, weeping children who have to leave their schools and mothers who do not know how to cope. What will we do about the pensioners who want to move but cannot and other families who are being forced to move when they do not want to do so because they can no longer manage on the sums of money? What will we do when the DHPs run out and, as a result, we send families round a circle of house, B and B and house, and still the problem remains because their HB does not cover the house into which they have been rehoused because there is no smaller accommodation for them to go to?

If the Minister were chairing my housing association, what advice would he give me? I can tell him that I have spent hours on this issue. I have set up a working party and had nine streams of sub-committees, including all the staff across Norfolk, trying to address the different issues associated with the provision of information to tenants, the financial inclusion of tenants, budget management for tenants, IT for tenants and all the rest of it to help them address these problems and, frankly, we are screwed. How would the Minister help us manage the problems of my tenants, some of whom are the most fragile and poorest in the community of Norfolk, and help them to cope with the changes that he will land on them as of next April?