Author: Red Brick Blog

I’ve never been much of a fan of the House of Lords.  But you have to doff your cap occasionally when they have a debate of real interest based on a real knowledge of an issue.  So it was with the rather uninspiringly-titled debate Motion to Annul – Housing Benefit (Amendment) Regulations 2010 held on 24 January.  The debate, which resulted in government Minister Lord Freud promising to undertake a review of the housing benefit changes after a year or so, can be found in full here. 

There were exceptional speeches from Richard Best, Victor Adebowale and Patricia Hollis, amongst others.  It was notable that there were no speeches in favour of the government’s position, apart from the Minister – you could say there was a progressive majority.  It’s worth a read, but here is a selection of a few quotable quotes.

Lord Best (Crossbench):  The charities working in this field ……… all note the likelihood of several thousand tenants facing homelessness. Apart from this wrecking the life chances of the families concerned, the charities point out that the extra costs of homelessness could more than outweigh the housing benefit savings. Homeless Link notes that, on conservative estimates, if even one quarter of those identified as at severe risk were to become homeless, then all the gains from the housing benefit cuts would be lost. 

Lord Adebowale (Crossbench):  We have not thought through the impact on families and on the societies in which they live-on social services, on health, on mental health and on employment…..   we know that the poor will suffer. We know where they will suffer, we know how they will suffer and we know what the impact on public services will be, but we do not have a clear plan B.

Baroness Thomas of Winchester (Liberal Democrat):  The $64,000 question remains…….. will these housing benefit regulations mean that landlords will reduce their rents, thus bringing the huge housing benefit bill down, to general rejoicing by taxpayers and the Government, or will it mean that not enough landlords will, or can afford to, reduce their rents low enough for LHA claimants, that the discretionary housing payments will be spread too thin to make much difference and that therefore thousands of people will face eviction, child poverty will increase and local authorities will eventually have to pick up a very large bill?

Baroness Hollis of Heigham (Labour):  …… the DWP‘s own figures show that the increase in housing benefit has been caused not by increased rents but by increased demand for HB from more tenants in both the private and public sectors. Only 13 per cent of the increase in HB can be attributed to private sector rent increases. In other words, the increase in the HB bill has not come about because HB has driven up rents and, therefore, has sought to catch up with the rents that it has inflated. Instead, the HB bill has risen because more and poorer people are claiming HB, including those in low-paid work. That is a fact.

……. the Government do not control, as they believe they do, the rents of the private rented sector. It is a fallacy. Indeed, preliminary findings from current research suggest that, whether housing benefit claimants account for 20 per cent or 70 per cent of the private rental market, it makes no difference at all to local rent levels. HB levels, and therefore the Government, do not shape the market, full stop.

Why is that? It is because it is a landlords’ market and not a tenants’ market; it is, therefore, not a Government’s market and not a HB market. Surveyors, letting agents and estate agents are reporting gazumping, six to eight tenants after every property and sealed-bid rent offers. The British Property Federation tells us that 150,000 extra tenants will enter the private rental sector next year, pushing up rents even further. Even where landlords in the past might have accepted some limitation of their rents if they were gaining capital growth, this, too, is no longer the case. Those on current HB levels struggle to find a home. What will happen?

Lord Kirkwood of Kirkhope (Liberal Democrat):  The private rented sector is not a place for long-term, low-income households’ housing needs to be met. It is a device that should be for another segment of our society altogether. We have let it get out of control in a way that is difficult to justify.

Lord Freud (Parliamentary Under Secretary of State (Welfare Reform), Work and Pensions; Conservative):  I make a firm commitment to the House that we intend to commission independent, external research to help us evaluate the impact of the reforms ……. (It will cover) homelessness and moves; the shared room rate and houses in multiple occupation; what is happening in Greater London; what is happening in rural communities; what is happening in black and minority ethnic households; large families; older people; people with disabilities and working claimants.

Many housing benefit recipients will not be affected by the changes until well into 2012. We will therefore make the findings available in early 2013, with initial findings available in the spring of 2012 and an interim report in the summer of 2012.

When the government announced that it was inviting businesses to play a greater role in Britain’s health policy, it made the front page, because of the obvious clash of interests. Pepsi and McDonalds want to sell more of the products which cause obesity and poor health.

Last week the government did something similar in housing. It abolished the higher space and sustainability standards which were set to apply to new publicly funded homes. Instead, the Housing Minister is putting house builders ‘in charge of developing a new framework for local building standards.’

Now there is a fundamental clash of interest between house builders and people who want spacious, well designed and environmentally sustainable homes. These homes are more expensive for developers to build, no getting away from it. There is also a conflict within government; government (should) want good quality homes and all recent governments have wanted more homes. Higher standards hit your housing numbers.

The approach of the last government was to try to increase standards gradually, with public housing leading the way. That meant government shared in the increased cost of better homes and helped industry build capacity and expertise to build better homes elsewhere as cheaply as possible.

And to state the obvious, public cash is often on the line to mop-up the problems of poorly designed and built homes. Part of the problem of some of the ‘sink estates’ the Tories love to quote is that they were built poorly in the rush for numbers in the post-war period. Billions have gone into estate regeneration schemes in recent years, to demolish and rebuild the substandard and poorly built homes of the past,

So when the Housing Minister says: ‘There’s no good reason why homes built on public land should be built any differently to those of high quality on private land.’ The good reason is that private homes are often not very well built as the Royal Institute of British Architects  and the soon to be abolished CABE point out.

This move is simply a leveling down, which will help the Housing Minister meet his numbers in the short term, but will build in longer term problems, for which the tax payer is likely to have to pick up the bill. The public sector has abdicated its role in trying to provide better and bigger homes for its citizens.

It’s worth saying that I’m not unsympathetic to the Housing Minister’s bind. There is a housing crisis and a desperate need for new homes. All those homeless families, overcrowded families, those on waiting lists, in temporary accommodation or sleeping on the sofas of friends and family, don’t they just need any serviceable home and quickly? And following the advice of architects has not always led to untrammelled success: tower blocks were once the cutting edge of design.

Rather than peddle nonsense about red tape however, the Housing Minister could say that after weighing up the balance he’d decided to go for homes now and lifting housing standards would have to wait for less straightened times. That would be an honest response.

I was unsurprised to see that a large majority of people support the cap on housing benefit, including over half of Labour voters.

I’m not really surprised by that. The argument on ‘fairness’ is compelling; why should those out of work be able to afford more expensive housing than those on work?

The cap, reduction of benefit to the level of the 30th percentile and the move from pegging benefits to CPI rather than RPI (meaning benefit rise at a slower rate than rents) will cause many poorer people to lose their home and force people out of communities where they’ve lived for years and have roots and family support.

So when Ed Miliband and others make this argument they are rightly defending people who will really suffer as a result of these reforms. But I do worry that it makes us look like, beyond the housing and policy world, as if Labour is defending high benefit budgets and only defends those on the lowest incomes who claim benefit (nevermind that around 40% of benefit claimants are in work).

This is not a good strategy for winning back the marginal seats in the south and midlands that we need to return to government.

So how should we oppose these moves?

We need to argue back from a vision of what communities should be like and then use that as the yardstick to measure and oppose these policies. In doing so, we present an alternative vision of a Labour future and argue for something beyond opposing particular measures.

Central to any vision of a sustainable community is that they are mixed. People accept and strongly support the idea that communities and neighbourhoods should be mixed – with no one segregated by wealth and race. Such segregation as exists in the USA and France rightly draws disaaproval. In London, the fact that the rich and poor have always lived ‘cheak by jowl’ is part of the city’s identity. On a policy front, let’s use the Tory rhetoric against them: both Cameron and IDS have spoken about the problems of concentrated poverty. They are right.

These HB reforms are a fundamental attack on the notion that people should live together in mixed income communities. And it is on that ground that we should oppose government measures, in a way that has wider appeal to even those who will not be affected by these changes.

What we would do instead to reduce the HB bill and maintain mixed communities is another question. Building more affordable homes in wealthier areas is part of the answer, but not the whole answer.