HC Deb 05 December 1994 vol 251 cc8-10
6. Mr. Cox

To ask the Secretary of State for Social Security what plans he has to review the present payments that can be claimed under housing benefit.

The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans)

My right hon. Friend the Secretary of State announced in his uprating statement a wide-ranging package of measures which will stem the growth of public spending on housing benefit while at the same time improving work incentives.

Mr. Cox

Has the Minister yet read Shelter's observations about last week's Budget? Are not the problems of housing benefit a direct result of the Government's policy of increasing rents in both the private and public sectors? That is what has caused the escalation of housing benefit.

In the light of oft-made comments about tenants and landlords negotiating a rent, can the Minister give any concrete examples of that?

Mr. Evans

The Government believe—and this has been the policy—in shifting the burden of public support from bricks and mortar, which means a very open-ended and unfair system, to a much more targeted system related to the individual and his individual housing needs. My right hon. Friend has announced a limitation of above-average rents in certain circumstances for new tenancies in the private sector after October 1995. The effect of that will be to curb the excessive expenditure and target it better.

Mr. Jenkin

Is not the important feature of the reforms in housing benefit, and of announcements about other benefits, the fact that we are responsible enough to point out that social security cannot continue to grow at a faster rate than the economy can sustain? Is it not clear that Labour would just spend, spend and spend, to a point that we cannot afford?

Mr. Evans

The answers to my hon. Friend's last two points are yes and yes. The figures for housing benefit are startling. It has doubled since 1988, and will amount to £10 billion in 1994–95–12 per cent. of all social security spending, half of which goes to the private sector.

Mr. Dewar

I refer to the Minister's closing cadenza, and ask him: whose fault is that? As my hon. Friend the Member for Tooting (Mr. Cox) pointed out, it is directly related to the Government's policy on rents.

If rent ceilings are to reflect rent levels for different types of property in an area, will the Minister explain how "an area" is defined? Is it coterminous with the boundaries of housing authorities? Is there not a danger that, once the ceiling levels are defined and established, they will drag rent levels up and the ceiling will become the minimum, to everyone's disadvantage?

Finally, may I ask the Minister about the other side of the package—mortgage interest payments? Is there not a danger that the restrictions that have been announced will set back any prospect of real recovery in the housing market? Will the Minister comment on the Building Societies Association's view that the Government are baling out, that their proposals are offensive and that they remove a safety net, as a result of which many vulnerable groups will suffer?

Mr. Evans

Let me take that omnibus series of questions one by one.

Yes, of course the shift from bricks and mortar to individual housing needs means a shift where public expenditure takes place. The question that has arisen is—is that targeting suitable and appropriate? As for the definition of average rents for areas, the Government will consult the Institute of Rent Officers on how the areas should be drawn.

The purpose of, and the justification for, the scheme is that there must be some form of cap to prevent matters getting out of control. For example, even in the Greater London area, 95 per cent. of private sector rents are under £85 a week. Some of the larger figures that have been quoted in the press have rightly given rise to public concern. The hon. Gentleman asked about income support.

Mr. Bradley

Speech.

Mr. Evans

I am attempting to reply.

Madam Speaker

Order. The Opposition spokesman's questions would have been more suitable during a statement than at Question Time. However, as he asked them, the Minister must be given an opportunity to respond.

Mr. Evans

I am grateful for that ruling, Madam Speaker.

The last topic raised by the hon. Gentleman was income support mortgage payments. Again, I suggest to the hon. Gentleman that the amount of public finance being spent in that sector, in a fashion that was increasingly seen as indiscriminate, had to be brought under reasonable control. Therefore, the Government first introduced a cap of £125,000, and we have now reduced it. I suggest that no one can seriously argue against that. Theoretically, the hon. Gentleman is right that, at first blush, its impact on the housing market may give rise to some concern, but at the end of it all, we are confident that the private sector will come up with insurance arrangements to protect people.

Madam Speaker

Perhaps we can get back to Question Time. Hon. Members should ask just one question each. I call Mr. Marshall and ask him to set an example, please.

Mr. John Marshall

Does my hon. Friend agree that insurable risks should be insured by the individual rather than fall into the lap of the taxpayer?

Mr. Evans

Yes.