Housing Benefit (Hansard, 28 March 1994)

The Parliamentary Under-Secretary of State, Department of Society Security (Viscount Astor)
My Lords, my right honourable friend the Secretary of State announced last year a fundamental review of social security. The review includes housing benefit.

§ Lord Dean of Beswick
My Lords, will the Minister confirm that the amount of money paid in housing benefit across the board this year now totals £8.8 billion? If any changes are to take place, instead of diminishing resources for such a purpose would it not be sensible to transfer some of that huge sum of money into a house-building programme to provide low-cost housing for people at the bottom of the social scale so 835 that they will have a home for the foreseeable future? Once the £8.8 billion is paid out there is nothing left. It just disappears.

Viscount Astor
My Lords, I can confirm the figures quoted by the noble Lord. As I said, we are carrying out a fundamental review of social security because spending is growing rapidly. It is important that resources go to those most in need while at the same time ensuring value for money. We are looking carefully at housing benefit and will consult widely prior to making any decision. The Government's policies are designed to focus resources on the most needy. That has been achieved by shifting resources away from direct subsidies in the form of lower rents, which help everyone regardless of need, in favour of personal subsidies in the form of housing benefit, an income-related benefit, which is targeted at those tenants who need help to pay their rent.

§ Lord Dean of Beswick
My Lords, will the Minister answer the specific point that I made in relation to transferring some of this huge sum of money into a house-building programme for houses for rent?

Viscount Astor
My Lords, housing associations are now the main providers of new low-cost housing for rent and sale. Public resources of more than £1.5 billion will be available to them in 1994-95, resulting in some 58,000 new homes. The noble Lord makes an interesting point. As I said, we are considering all the issues and will consult widely before taking any decision.

§ Earl Russell
My Lords, can the noble Viscount tell us what the Housing Act 1988 has added to the cost of housing benefit?

Viscount Astor
No, my Lords, I cannot do so easily.

§ Baroness Hollis of Heigham
My Lords, will the Minister accept that the Government's homelessness review proposes that homeless families should in future go into private rented accommodation rather than council housing? Does he also accept that it costs £14 more a week to place a family in private rented accommodation than in council housing, given the additional cost of housing benefit? That being so, will the social security Minister tell us how he hopes to cut the cost of housing benefit when his honourable friend in the other place, the Minister for housing, is pushing it upwards?

Viscount Astor
My Lords, the Government's proposals in relation to homelessness set out in the Department of the Environment's consultation paper offer a new approach to the allocation of local authority and housing association tenancies based on real need, not on whether somebody happens to fall within a rather broad definition of homelessness. The Government's proposals envisage a continued safety net for families and vulnerable individuals who find themselves without anywhere suitable to live through no fault of their own. Of course we consult closely with the Department of the Environment on these matters.

§ Baroness Hollis of Heigham
My Lords, will the Minister now be kind enough to answer my question? What will be the additional cost in housing benefit following the homelessness review? How does the Minister for Social Security hope to cut it?

Viscount Astor
My Lords, the noble Baroness will have to wait until the end of the review to see what the figures are.

§ Lord Stoddart of Swindon
My Lords, does not the Government's housing policy consist of a double whammy against homeless people and people who require houses? Does the noble Viscount agree that, first, the number of publicly owned houses has been reduced and they are not being replaced as they should be; and, secondly, as a result, rents in the private sector are being pushed up, making it difficult for people to pay rents in the private sector and also placing an additional burden on the social security budget?

Viscount Astor
My Lords, the independent rent officer service determines reasonable market rents for housing benefit subsidy purposes. We believe that public funds should not subsidise people who choose to live in unreasonably large or expensive accommodation We have encouraged local authorities to raise their rents closer to market levels. We believe that to be a better system because subsidies should go to those who need them and not to everybody.