HC Deb 04 July 1994 vol 246 c8
8. Mr. Alan Howarth

To ask the Secretary of State for Social Security if he will make a statement on his plans for housing benefit.

Mr. Lilley

My Department is conducting a fundamental review of all social security expenditure. No decisions have been taken affecting housing benefit since the changes announced in the social security uprating statement last year.

Mr. Howarth

Will my right hon. Friend ensure that housing benefit is paid in future at levels sufficient both to relieve the current poverty trap whereby families struggling to improve their incomes in work are penalised at rates of up to 97 per cent., and to induce investors to finance more accommodation for rent, which is badly needed to reduce homelessness and to improve the efficiency of the labour market?

Mr. Lilley

The growth in expenditure on housing benefit has been great. My hon. Friend knows that it covers 100 per cent. of the value of rents and the withdrawal is simply in relation to people's incomes. If the withdrawal rate were alleviated, the cost would be even greater still. A balance must always be struck between the overall cost of the benefit and its impact in terms of disincentives on those who receive it.

Mr. Raynsford

Does the Secretary of State recognise that the huge growth in expenditure on housing benefit is a direct result of the policies pursued by the Department of the Environment, which has withdrawn subsidy for rented accommodation and forced higher rent levels? Would not it be outrageous if people who were having the greatest difficulty in meeting high rents were to be penalised by cuts in housing benefit, when the Government pledged that housing benefit was there to take the strain of higher rents?

Mr. Lilley

That is one of the factors, but our policy has been to move from subsidising bricks and mortar to subsidising people. As I said, they receive 100 per cent. of the cost. The hon. Gentleman may prefer to subsidise things rather than help people but our priority is the other way round.

Mr. Thurnham

In view of the rising cost of housing benefit, will my right hon. Friend look at ways of administering and controlling housing benefit on an area basis rather than paying unlimited personal benefit, which the Opposition love?

Mr. Lilley

A modest change which I announced in the social security uprating means that, in future, rent officers will be asked to give the level of rents that are too great for housing benefit to be reimbursed if they are given in a particular area. That is to be done on an area-by-area basis and will provide guidance to local authorities on where they should direct housing benefit expenditure.