§ 12.32 p.m.
§ The Earl of Arran rose to move, That the draft order laid before the House on 23rd February be approved [12th Report from the Joint Committee].
§ The noble Earl said: My Lords, I beg to move that the draft Rent Officers (Additional Functions) Order 1989, which was laid before your Lordships' House on 23rd February, and the draft Rent Officers (Additional Functions) (Scotland) Order, which was laid on 1st March, be approved.
§ These orders represent a crucial follow-up to the measures in the Housing Act 1988 and the Housing (Scotland) Act 1988 deregulating new private lettings. Those provisions have beer. in force since 2nd January in Scotland and since 15th January in England and Wales.
§ The key feature of deregulation is of course the freedom for landlords to charge a market rent. The Government have never disguised that in many areas of the country market rents will be well above existing fair rent levels. We have further accepted that many tenants will need help from housing benefit to pay the higher rents. We have therefore given an unequivocal commitment that housing benefit will be available on rents up to the level determined by the free market. That undertaking is absolutely fundamental to our approach to the private rented sector and I am happy to restate it in your Lordships' House today.
§ However, a tenant who has all or most of his rent met by housing benefit obviously don not have the 847 same incentive to strike a reasonable bargain with his landlord as would apply if he were paying the rent from his own resources. Noble Lords will, I hope, agree that it would not be right for taxpayers' money—which provides up to 97 per cent. subsidy on housing benefit— to be used to underwrite a rent which bears no relationship to the level of rents being paid by tenants who are not dependent on benefit. It is therefore vital to have a system for checking that rents being paid from the public purse are not significantly in excess of market level. The Housing Acts provide for rent officers to take on the task of operating such a check. These orders set out how they will discharge that task.
§ As well as looking at claimants' rents, rent officers will consider the size of the accommodation they are occupying. The Government very firmly believe that full Exchequer subsidy ought not in general to be paid where a claimant is occupying accommodation that is too large for his reasonable needs. Local authorities have long had powers to limit benefit in such circumstances. However, we believe that, given the prospect of higher rents in a deregulated market, it is right to apply control directly on subsidy.
§ Accordingly, from 1st April local authorities will refer to the rent officer most cases where a claim for housing benefit is made by a tenant or licensee of a private landlord with an agreement beginning on or after the date on which deregulation came into effect. The only major exceptions to this rule will be assured tenancies where the rent has already been fixed by a rent assessment commmittee and—in normal circumstances—lettings by registered housing associations.
§ Where a case is referred to the rent officer, his first task will be to decide whether the claimant's rent is at or below market level. If the rent satisfies this test, the rent officer will notify the local authority accordingly. If, on the other hand, the rent officer judges the rent to be above market level, he will determine what a market rent would be for the property and inform the local authority of that rent.
§ The rent officer's second task will be to assess the size of the claimant's acommodation against the size criteria set out in Schedule 3 to each order. If the size exceeds the criteria, the rent officer will determine a market rent for a notional property which does not exceed the criteria, but which otherwise corresponds as closely as possible to the claimant's actual accommodation.
§ Let me emphasise that the decisions made by the rent officer will in all cases bite on Exchequer subsidy, and not directly on benefit. So long as the rent officer is satisfied that the claimant's rent is not above market level and that his accommodation meets the size criteria, the local authority will be able to pay benefit in the knowledge that susidy will be available on the basis of the existing rent.
§ In a case where the claimant's rent is above market level or his accommodation exceeds the size criteria—and the rent officer accordingly determines a lower rent than that which the claimant is actually paying—it will still be a matter for the local authority to decide on what basis benefit should be awarded.848
§ Authorities will continue to be precluded under the housing benefit regulations from limiting benefit in cases where the claimant comes within a specified vulnerable group—the elderly, the sick and disabled and those with children—unless the authority itself is satisfied that cheaper, suitable alternative accommodation is available and that it is reasonable to expect the claimant to move. If an authority concludes that it cannot restrict benefit in the case of a vulnerable claimant, Exchequer subsidy will be available above the level set by the rent officer in that case, at a rate of 50 per cent.
§ We further accept the need for a special safeguard in respect of recently bereaved claimants. We therefore propose to introduce new provisions to peclude the restriction of benefit for a full 12 months following a bereavement. The 50 per cent. subsidy concession will also apply in such cases.
§ In all other cases local authorities will retain their discretion to pay benefit up to the level they judge reasonable. The rent officer's determinations set a ceiling on the rent on which full subsidy is payable, not on the level of benefit itself.
§ We have always accepted the need for a right of appeal against a rent officer's decision. Accordingly, we have provided for a local authority to request that a case already dealt with by a rent officer be redetermined by an experienced rent officer from outside the registration area in which the original decision was taken. The redetermining officer will be required to have regard to advice from one or—more usually—two other rent officers, one of whom will be from the original area, though not the officer who previously dealt with the case.
§ The purpose of these procedures is simply to safeguard the taxpayer against having to underwrite unreasonable housing benefit claims. It in no way detracts from our undertaking that housing benefit will keep pace with open market rents—quite the reverse: it provides the most effective possible means of delivering that promise. I comend the order to the House.
§ Moved, That the draft order laid before the House on 23rd February be approved [12th Report from the Joint Committee].—(The Earl of Arran.)
§ Lord Graham of Edmonton
My Lords, we are grateful to the Minister for the care and clarity with which he has explained the order. However, he cannot possibly expect those of us on this side of the House to welcome the thrust of what he and his colleagues are doing. I imagine that every single person who will be the subject of this order is already living a miserable life. He is already living in circumstances and conditions at which Members of your Lordships' House would be appalled were they to visit him and discuss matters with him. The Minister has informed the House that this is to safeguard taxpayers' money. We shall have other opportunities to consider how this Government safeguard taxpayers' money in other respects on other occasions. However, the Government have brought forward what I consider to be a miserable measure which will do nothing to make housing available, more affordable, or more enjoyable.
849 The Minister talked about a need to ensure that taxpayers' money is safeguarded. Can he give us some illustrations, not generalities? We do not want to hear, "We are lead to believe", or "We have been told". Can we be given some hard facts upon which this measure has been conceived? I hope it is not in anticipation of what the Minister's advisers believe could happen.
The Minister speaks in terms of market rents and market levels. Has he any idea of the grotesque way in which the market level of rented property has increased, especially in London? I should like to know whether his advisers have visited some of the miserable places, such as those in Westminster, Bayswater and Paddington, which are used for bed and breakfast accommodation. I wonder if the Minister and his advisers understand that both the national taxpayer and the local ratepayer are being held to ransom, not by the individuals who use that kind of accommodation, but by the sharks, the rogues and the villains who are making a good living out of it.
I do not see anything in the order which is likely to ease the lot of the person who, by dint of circumstances, is forced either to rent or to have to accept state largesse through bed and breakfast subventions. I see nothing that will make it easier for that person. We are speaking here about additional functions for the rent officers. How many additional rent officers will be required as a result of the order? Are we to be told that they are already very busy people, but they will have to take on the additional function of policing this tiny bit of legislation?
The Minister has spoken of exclusions for certain vulnerable groups. He mentioned the sick, the elderly and those who have children. Does not the Minister understand that if there are not hundreds of thousands there are certainly many thousands of people who are vulnerable not because of a sickness, because they are parents or looking after children, or because they are unemployed, but because they are not in the housing market?
The Minister and his colleagues have told us what a great boon the recent housing legislation will be. It will free much allegedly free rented accommodation which the private landlord has kept to himself. He will now put it on the market because he is able to enjoy a fairer return for his investment in housing. Will the Minister tell us what is happening there? Have the housing lists for those who need housing been reduced as a result of that? I am not arguing about the Government wanting an effective use of money, but the measure fails as so many measures do because it fails to take into account the human element at the bottom end—the people who will suffer.
We are told in Schedule 3 of the size criteria that will be taken into account in determining whether a person seeking assistance is either enjoying or using accommodation greater than that which is held by the State to be adequate. We read:One bedroom shall be allowed for each of the following categories of occupiers".I am a bit surprised that the order has not stated the size of the bedrooms, because in this respect already depressed people are being hemmed in and 850 their lives made even more miserable. The schedule refers to two children of the same sex. What are the age parameters in paragraph 1(c)? We are told of the number of rooms:excluding any allowed as a bedroom … suitable for living in … if there are less than four occupiers, one … if there are more than three and less than seven occupiers, two … in any other case, three".Will the Minister tell the House who has advised that that is a satisfactory yardstick to determine the basis upon which individuals will be directed by the state to live? The Minister must be under no illusion that where there is a shortfall in money which is left to the individual to pay, in 999 cases out of a 1,000 it will be a question not of the individual having to find the money from some other source but of him having to find some other accommodation because the money will not be available in his pocket. I do not exaggerate. The people I have met in Bayswater and Finsbury Park are among the most hapless groups of individuals in this so-called affluent Britain of 1989. The Minister has some questions to answer, but more importantly he has to convince the House. So far he has not convinced me that he understands the agony of people who will be affected by this measure.
§ 12.46 p.m.
§ Lord Tordoff
My Lords, first, I want to apologise to all those people waiting for the Unstarred Question, because I believe this order will take a little longer than they might have supposed. It is unfortunate that the order is brought on at this time on the eve of the public holiday. Here we are on Maundy Thursday with Her Gracious Majesty giving away Maundy money, with various clerics washing peoples' feet and the general feeling of support for the poor, whereas the Government with their order are succeeding in increasing homelessness in this country.
It is an appalling order and frankly in other circumstances I should have done my best to persuade colleagues and other members of your Lordships' House to break the convention and to vote against this order. I feel so strongly about it. It has been badly handled and various organisations have written complaining about the lack of consultation that there has been and the lack of time in which they have been able to consult. The National Federation of Housing Associations tells me that it was consulted by way of a copy of a letter from the Department of the Environment and the Housing Corporation dated 8th February. The DoE required comments on the proposed draft order returned by 15th February, just a week later. That is no way to pass sensible legislation.
What is the logic behind the order? I understand, and I have sympathy for the Government's view, that people should not be allowed to fiddle taxpayers' money. There may be cases which can be demonstrated where landlords and tenants have colluded in putting up the rent of property to obtain increased housing benefit and to share the proceeds between them. I suspect that those cases are very few and far between. But if that is happening perhaps orders are necessary to prevent it, but this is not the 851 way to go about it. In the first place I do not believe that the order will save money. If it will not save money, why are we bothering with it? However, it will add bureaucracy with minimal savings.
The Association of District Councils which is a Conservative-controlled body, in its response to the consultation paper said:Whilst it appears that the proposals will result in a very thorough examination of individual rents, the Association seriously doubts whether it will represent value for money. The DHSS is reminded that the new subsidy incentive to control unreasonable private sector rents in 1988/89 is by its own estimates only likely to result in a 0.5 per cent. reduction in total subsidy expenditure".That is what we are talking about and that is a Conservative view. Thus that organisation is far from convinced that there will be any significant saving.
We have a Government who cherish the idea of a family unit. However, it appears that in this matter their idea of a family unit is that it should be compressed into as small a space as possible and that every member of the family should live, sleep and eat as close as possible to each other. As the noble Lord, Lord Graham, has indicated, it is the criteria for the size of accommodation which fails totally to reflect the ordinary living patterns of ordinary people. It will prohibit those in receipt of housing benefit from having what every Member of this House will see as reasonable living criteria.
The result will be that parents whose children have grown up and left home will be penalised financially if they remain in the family home keeping a spare room for their children when they visit. Elderly people will be penalised financially if they stay in their home and keep a spare bedroom for relatives to stay when visiting or if a couple needs two bedrooms for health reasons. Parents will be penalised financially if their teenage son or daughter does not share a bedroom with a child of the same sex under 10 years of age. Can your Lordships imagine someone in their late teens being forced to share a bedroom with a much younger child? It is a great inhibition on children in relation to their education, apart from anything else, to force them into such a situation.
The criteria set out for the size of accommodation also fall well below the standards set by housing associations and many private landlords letting in the private sector. They fall even further below the standards set by local authorities when allocating council homes. The Association of District Councils' Housing Committee has expressed concern that accommodation standards are too severe. Its housing officer said:It means an elderly couple would have to share the same bedroom and that is not always appropriate".The size of the rooms is not specified, so two children may have to share a box-rooom.
While, through the order, the Govenrment places restrictions on the maximum size of a living room for those in receipt of housing benefit, they have totally failed to specify a minimum size. In the words of a representative of the Institute of Housing:This means that draconian and regressive new standards of housing have been introduced".852 The result is that claimants will be penalised for having too much but will not be protected from having too little.
What will happen to the families affected? It is the fear of many local authority associations, from the AMA to the ADC and the housing associations, that there will be a greater burden by increasing the number of homeless people. According to the statutory instrument, the housing associations can be referred to the rent officer if the local authority considers that there is unreasonable rent or the accommodation is too large for a claimant's reasonable needs. If they are found to be guilty of over-accommodating, they do not have the powers to compulsorily re-house their tenants. There is great concern about their future tenancies, and the intrusive nature of the investigations by the rent officer could amount to harassment of private tenants. As has been said, some people will be forced to leave their homes because they no longer receive sufficient benefit to remain.
Your Lordships have heard about the appeal procedure. However, an appeal procedure which simply goes to another rent officer in an adjoining area does not appear to me to be an appeal procedure at all. If we are not careful about this, there will be a great deal of, "You scratch my back and I'll scratch yours". Those who are subject to the restrictions will not consider that they are getting a fair deal out of such an appeal procedure.
The rent officer's decision on unreasonably high rents will be based on the assumption that the claimant is able to find cheaper, suitable alternative accommodation. That is not always possible and the order contains no provision for similar accommodation in the same area. It provides for similar accommodation in a similar area. That may be far from what is needed by the family. The order takes no account of many of the difficulties in the rented sector as a result of the Housing Act. Namely, it makes no reference to key money. The Government allowed key money to be included in the Act but there is no guarantee that people who are thrown out of accommodation because the rent officer considers it to be too big will be able to find smaller accommodation at anything like a reasonable price if issues such as key money are not taken into consideration.
In assessing these matters, full access costs should be taken into account. The local authorities are put in a difficult position. As the AMA has said, the inevitable choice for a local authority in this situation is to pay unsubsidised benefit and pass on the cost to the community charge—which the Government have so carefully introduced to stop local authorities spending the ratepayers' money—or to restrict benefit to the claimant, who may then have to give up the accommodation. The local authorities are being put in an impossible position. In the end, more and more people will be forced into bed and breakfast accommodation, which is the most expensive and inefficient way of housing people.
The second order deals with Scotland, where approximately 80 per cent. of the housing stock consists of three-room apartments or larger. Fifty 853 per cent. of the people on the waiting lists are single. I believe that the situation in Scotland will be even worse than it is in England, particularly in London.
The Government have set out to avoid collusion between landlord and tenant. I am certain that the result of the order will be to ensure that more and more people go onto the streets, into cardboard boxes or into bed and breakfast accommodation at best. If the rent officer must set the level, we on these Benches believe that the Government ought to oblige the landlords by statute to lower their rents to the level assessed by the rent officer. That is the key to the matter.
As I said at the beginning, I am not against the Government trying to stop a waste of taxpayers' money by collusion between landlord and tenant, although that happens only rarely. However, this not the way to tackle this problem. I am sure that the alternative which is offered to us will be a massive increase in homeless people.
§ Lord Kilmarnock
My Lords, I had not intended to intervene in the debate on the order and I shall not do so at length. However, I am impelled to make two or three comments as a result of a letter received today from the Association of District Councils, of which I have the honour to be vice-president. Practically all the points of substance have been made by the noble Lords, Lord Graham of Edmonton and Lord Tordoff. One objection that has leapt to my eye is the case of a couple with two children under the age of 10. They would be penalised if they had a third bedroom. As a result of the order, a school child studying for A-levels would be expected to share a room with a toddler. Can your Lordships imagine that, with the complexities which now face students studying for A-levels and GCSEs? There would be inadequate study space in the home, and from the educational point of view that is a strong objection.
I believe that it is reasonable for households in rural areas to have a spare room in order that relatives can visit. It is ridiculous that that should be prohibited under the order. The ADC also makes the point that the proposed criteria are not much above the antiquated overcrowding standards of the Housing Act 1985, which dates back to the Housing Act 1935. We appear to be putting the clock back a long way.
The final point, as the association points out, is that it was only given five working days by the Department of the Environment to comment on the proposals. It says that that reinforces its view that the size criteria was hastily devised with little thought given to the consequences. The association goes on to say:We do hope you share our concerns and will press the Government to produce a more reasonable standard".In view of everything which has been said on this order, I believe that it is reasonable to ask the noble Earl whether the Government will, on this occasion, take back the order and rediscuss it with the various bodies concerned. The association says:We recognise that for the swift processing of referrals a broad brush approach is necessary and that it would not be appropriate for the rent officer to be involved in measuring claimants 854 accommodation. But a broad brush approach must be tempered by reasonableness and provide for a reasonable standard of accommodation and in this respect the size criteria falls considerably short".Taking that as a starting point, is it not possible to rediscuss this problem and to see whether or not an order along more reasonable lines could be produced?
§ 1 p.m.
§ Baroness Gardner of Parkes
My Lords, I have been asked to speak on this matter by the London Boroughs Association which is very concerned about some implications. When I came to speak this morning I thought I should be 100 per cent. opposed to this order but having listened to noble Lords opposite, perhaps they have turned me into a devil's advocate because I can see many flaws in the points they have made.
For example, the noble Lord, Lord Graham, implied that these were terrible criteria which had never existed before. As far as I know, the GLC lettings were always based on those criteria and many local authorities in this country base their lettings on those criteria; for example, two children of one sex sharing a room. Therefore, I do not find those criteria surprising.
The noble Lord, Lord Kilmarnock, said that he would like this order taken back. There is no question of that because it has been voted on and passed in another place and will clearly be passed here today. Therefore, I believe that it is important to appeal for a more practical and humane implementation of the criteria, which are not so extraordinary. In particular, I believe that the issue of the size of the room should attract flexibility. If, for example, the room is half the size of this Chamber, then that is rather different from the box room which has just been described. Many older buildings have large rooms. In fact, when I came from Australia, those huge rooms were divided into three small bed-sits for Australians coming here. However, they were huge rooms, large enough to accommodate people without any problem at all. However, if the room is very tiny, there is no doubt that that can create claustrophobia, all the problems of the different age groups and so may other problems. I believe that in implementing this order, there should be the possibility of looking flexibly at the particular unit involved.
I believe that it is essential that a system exists whereby a rent officer assesses the value of private housing accommodation. For too long it has been the case that anything was payable because anything was claimable. Some units of accommodation for which people have received benefit have been bad value for the persons concerned as well as for the taxpayers.
The noble Lord, Lord Tordoff, made the point about the large units in Scotland. Perhaps I may say that that was also a problem in England. The GLC found that there was a need for more and more smaller units. Demographic changes in London mean that we need more and more small units, perhaps due to more single-parent families and so on. Therefore, there are many reasons why we need 855 small units of accommodation. I believe it is wrong--and again I have has this problem when I have sat on housing committees both at County Hall and at Westminister—for one person to live in a flat which has three or four bedrooms which could be used by a family which desperately needs a three or four-bedroomed flat. Perhaps these regulations will help to make available larger accommodation for those people who require it and then I believe there will be the creation of smaller units.
§ Lord Graham of Edmonton
My Lords, I am grateful to the noble Baroness for giving way. She says that we are really concerned about practicalities and I accept that completely. However, let us consider the practicality of a family occupying rented accommodation which merits them being in receipt of the subventions of which we are speaking, whereby they are occupying a room in excess of the criteria applied for the maximum that they should have. The rent officer will say that the rent that he can charge or that he is prepared to allow for that is not £100, which is now being claimed, but, (shall we say?), £60 a week. Can the noble Baroness take us through the impact of that on the family? It either finds the extra £40, which is ridiculous, or it has to find other accommodation? That may very well satisfy the criteria of the noble Baroness that another family will be able to come in, but what about the family which, in effect, is being evicted?
§ Baroness Gardner of Parkes
My Lords, had I continued to the end of my comments, I should have covered that. The practicality of the situation is that it is not the family which will be disadvantaged but the local authority. The noble Lord gave the example of a family. If that family became homeless, it would become the responsibility of the local authority and would become a much greater and more expensive responsibility. Therefore, I believe that the local authority will suffer because it will pay the additional subsidy. That is the point that I think is unfair in this scheme. I do not believe that people will be put out of what is almost suitable accommodation of the type described by the noble Lord. Again, I make the point that the size of the room should be looked at.
I believe that the local authority is being put into a very unfortunate position whereby it has to look at the family and say, "Now, who is going to find the extra money? If we say that they must find it themselves and they have no means to do that, then they will be homeless. If they are homeless, they will be back on our doorstep". Therefore, it will be far cheaper to pay the extra £40 per week, apart from the obvious desirability of that.
Everyone in this Chamber knows that I am greatly opposed to bed and breakfast accommodation for the homeless. I believe it is a tragedy that people are living in Bayswater in bed and breakfast accommodation. My daughter is a doctor in Lambeth and people trek every day to Lambeth from Bayswater for social services because Lambeth does not have available bed and breakfast accommodation. That is a terrible situation of which I have only recently become aware. I have known of the Bayswater problem but I did not know of the problem whereby 856 people have to go back to the area which put them into that accommodation. Therefore, there is a problem.
I do not agree with the point made by one noble Lord that if the rent officer determines a rent, the rent should be reduced down to that. I do not agree with that because that would take us back to the old system which I believe did nothing to help to create a pool of rented accommodation. I firmly believe that the Housing Act—although I do not think it is perfect because it has many flaws—will go a long way towards creating a pool of private rented accommodation. If instead we have a rent officer who says that it is only worth so much and it is reduced down to that, then that would create the same freeze which we had for so long. It would be all right for the person in that accommodation but it would not create more accommodation for other people.
I should like the Minister to be aware that the London Boroughs Association is very concerned about the implementation and how this will work. It believes that although it appears to create difficulties for the tenants, and in some cases it may, it is even more concerned about the knock-on effect for the local authorities because the money used to top up units of accommodation must come from community charge payers. Therefore it means that it must come off something else because the community charge payers cannot accept unlimited loading on to them. That is really the great worry. We all wish to avoid any more homelessness. If these regulations are implemented with care and concern they may work very well. I hope that they will and that our fears are unfounded.
§ Lord Pitt of Hampstead
My Lords, I hope that it is not too late for the Government to look at this matter again and to have further consultations with the local authorities. We are dealing with a very serious matter. I am glad that at the end the noble Baroness made the point that the choice will be between the local authority bearing the difference between the rent officer's assessment and the actual rent or making the person homeless. That is the stark choice. Some of the authorities will act in the way she suggested and some will not. The Government must look at the problem seriously because the chances are that unless this order is handled with great sensitivity and flexibility we are going to have a great number of homeless people as a consequence. I invite the Government to look at the problem realistically in that way.
One understands the reasons behind it. After all, the Government do not want a subsidy-led increase in rent which can happen if there is not some kind of control over housing benefit. That is quite straightforward. However, what is required is that the rent officer should not only look at the possibility of alternative accommodation of a smaller and cheaper kind that the person or family can have, but he should also weigh the actual cost of that alternative against the cost of the accommodation which the family is in at the time. In that I include not only the key money to which the noble Lord, Lord Tordoff, referred, but also the cost of moving and living in accommodation in a new area with the 857 different situation for schooling and travel. There are all kinds of additional problems that will arise if people have to move from one area to another.
The rent officer does not have to decide merely whether there is cheaper accommodation in the same area that may make the situation a little less problematical; he has to consider whether there is accommodation in a similar area. A similar area may not be the one in which the family is at the time and it may mean a complete change. That should be borne in mind.
I accept what the noble Baroness said.—that the Government will probably not take the matter away for reconsideration and that it will become law. At this stage I am trying to get from the Government an undertaking that the way in which the order is implemented will not cause the worries that some of us have. There is no doubt that the criteria are too low. The noble Baroness mentioned the GLC, of which we were both members. I am quite certain that in that organisation there was never any compulsion to have one room for children of the same sex if the ages were significantly different. That is one area where there is a definite retrograde step. The idea that you cannot allow a spare room in a house is also a retrograde step. There are all kinds of reasons why it will be valuable to have a spare room. That can be borne in mind by the rent officer making his assessment.
I wish the Government to undertake to instruct the rent officer to bear in mind the balance between the assessed rent and what in fact it will cost the family to move to the cheaper accommodation that the rent officer has in mind. That kind of adjudication by the rent officer should be in writing and it should state where the accommodation is and name it. The consequences of moving to it should also be stated, as should whether making the rent £60 in this area as opposed to £80 in another is good value for money. That is what we are asking the Government to do at this moment because I am quite certain that as the regulations are drafted they will cause a great number of homeless people unnecessarily.
§ 1.15 p.m.
§ Lord McIntosh of Haringey
My Lords, I apologise for having arrived after this debate started. I can only say in mitigation that my faith in the health service is undiminished though it has been slightly dented temporarily by spending three-and-a-half hours this morning in a casualty waiting room. I only intervene in the knowledge that my noble friends Lord Graham and Lord Pitt, and the noble Lord, Lord Tordoff, besides the noble Baroness, Lady Gardner, have made the most substantive points that need to be made against these orders. I wish to add the point of view of one who took part in the passage of the Housing Bill which is now the Housing Act 1988.
I really wish to say, "We told you so". All the time that the Bill was going through we said that the safeguards against additional homelessness provided in the Bill and those that were to be provided in these orders—I remind the House that they only come before us because of the partial acceptance of 858 opposition amendments to ensure that they would and would not be taken as negative resolutions—would not do the job of keeping people out of accommodation for the homeless and bed and breakfast places.
We said right from the beginning, that the scope given to rent officers for the payment of realistic rents was not enough and that the pressure on local authorities to make up the rents for the purpose of housing benefit when rent officers had determined rents was also not enough. We are now being proved right. It is quite clear from these orders that the Government have no intention of insisting that rent officers assess rents at a realistic level bearing in mind similar and suitable accommodation in the locality in which the people live. I am not referring to some other locality to which they would have to move and pay removal expenses. They would have to return to their own locality for work and school. These orders do not take account of the abominable legalisation of key money that is made in the Housing Act 1988. These orders refer to comparable rents and they do not speak of the access cost for accommodation that includes key money.
All the matters that we raised at the time and in answer to which the Government gave assurances that we considered to be inadequate at the time have now come true. It is clear from the evidence taken from around the country and from the London Boroughs Association that there will be an increase in homelessness, injustice, pain and poverty as a result of these orders. I make one last appeal to the Government to take them back for reconsideration in view of the very well-informed criticism that has been made by noble Lords on this side of the House.
§ The Earl of Arran
My Lords, I am grateful to the noble Lord, Lord McIntosh of Haringey, for his apology and I am delighted that, like all of us, he is a great believer in the National Health Service. Even if the only thing for which the noble Lord, Lord Graham, is grateful is the fact that I explained the order with some clarity, that is a small crumb for which I thank him.
Many noble Lords have spoken on the order. I am aware, as the noble Lord, Lord Tordoff, pointed out, that an Unstarred Question is to follow this debate. I hope to be brief in answering questions. Perhaps noble Lords will allow me to write to them in detail if I do not cover their points this afternoon. I fully accept that many of your Lordships have considerably greater experience than I on this order.
The noble Lord, Lord Graham, pointed out that landlords may charge excessive rents which tenants cannot afford to pay. With deregulation of private accommodation rents are likely to rise. Housing benefit will be available up to market rent levels. However, we cannot accept that the Exchequer and the taxpayer should generally subsidise rents above market levels. The new arrangements will ensure that landlords cannot be subsidised for excessive rents through the housing benefit scheme.
The noble Lord asked about the age parameters for children. People are considered to be adults at 18 and children from nought to 17. The noble Lord asked about the number of additional rent officers 859 we consider to be necessary. We have provided some initial strengthening of officers who will be hardest pressed. Further strengthening will be provided in the light of actual workload. Their role in relation to fair rents will decline as their new work increases. We are satisfied that they will have the necessary capacity.
The noble Lord, Lord Tordoff, raised several points. He asked whether the rent officer arrangements are necessary and whether they are too bureaucratic. With the removal of the old system of statutory controls following deregulation of the private rented sector, there is a danger that the housing benefit scheme will be abused and that unreasonably high rents will be charged by landlords and paid by tenants in the knowledge that they will be met by housing benefit. We need to be sure that housing benefit follows the market and does not lead it and that the Exchequer does not subsidise unreasonable rents. That is why we are introducing the rent officer arrangements. In drawing up the procedural arrangements every effort has been made to minimise the work involved for local authorities and rent officers and to avoid delays for claimants. The noble Lord asked about houses in Scotland being larger than space limits. The larger rented houses in Scotland are mostly local authority or housing association houses for which a lower than market rent will be charged. As rent officers are determining market rents, a referral in these circumstances by a housing association should have no effect.
The noble Lord, Lord Kilmarnock, was concerned about the lack of consultation. The local authority associations were first informed of the proposed rent officer referral arrangements in October 1987, when a consultation paper was issued. In January 1988 a sub-group of the housing benefit standing committee was set up to consider the implications of the proposals for housing benefit administration of regulations. The Government's proposal had been amended in a number of areas following representations made by the local authority associations. The fact that they had only a week to comment on the draft order itself must be put into that context.
§ Lord Tordoff
My Lords, does the noble Earl accept that it was not a consultation process? They were simply being informed of changes. They were told that they had to reply by 15th February and that the document was going to print on 17th February. There was no chance of changing the document. It was not consultation. It was merely informing people of the changes the Government had made.
§ The Earl of Arran
My Lords, my advice is otherwise, but the noble Lord would expect me to say that. I shall take up the point and I shall write to him on it.
§ Lord Kilmarnock
My Lords, if the noble Earl is to write to the noble Lord, Lord Tordoff, on that point, will he send a copy of the letter to me?
§ The Earl of Arran
Naturally, my Lords, I shall do so.
860 My noble friend Lady Gardner said that costs to local authorities would have to be paid out of the community charge. Housing benefit spending not covered by direct subsidy is reflected in the rate support grant arrangements, so additional support is available to local authorities.
The main aspect mentioned by many noble Lords, and the one on which we seemed to differ, concerned what constitutes a reasonable size of acommodation. It has been suggested that the criteria laid down in Schedule 3 represented the absolute minimum that we could have allowed and that their effect would be to force two children to share a box room or to force small families living in homes with two living rooms to move to smaller accommodation. As noble Lords will recognise, one of our aims in drawing up the criteria was to avoid imposing over-bureaucratic controls. Rent officers will have to deal quickly with hundreds of thousands of rent allowances claimed each year, so we have to keep things simple. If we had to decided to specify room sizes, someone would have had to visit each claimant's home to measure the rooms. That would have added massively to the task.
We accept that the criteria are less generous than those used by some housing associations. But many people not receiving housing benefit live in accommodation that is no larger than the criteria specify. The Government do not agree that as a general rule taxpayers should subsidise accommodation so that people on benefit can live in larger homes than some people who have to pay for their housing from their own pockets. We see no reason why, if three adults share a standard two-up, two-down house, one of the living rooms—
§ Lord McIntosh of Haringey
My Lords, surely taxpayers subsidise owner occupiers who have tax-subsidised mortgages however large the house is in relation to the size of the family? The Government are being inconsistent in this matter.
§ The Earl of Arran
My Lords, the Government are not normally in the habit of being inconsistent, and I do not believe that it is the case on this point.
We see no reason why, if three adults share a standard two-up, two-down house, one of the living rooms should not be used as a bedroom. We do not agree that as a general rule housing benefit claimants should be entitled to a spare room for guests. However, we must emphasise that the protection for vulnerable groups, such as I described in my opening speech, means that application of these criteria will not mean, as some have suggested, that elderly people or young families will be made homeless or forced to move to unsuitable accommodation.
The housing benefit regulations provide a wide measure of protection for such people. No benefit restriction can be placed on the elderly, the sick and disabled or people with children unless the local authority is satisfied that cheaper, suitable alternative accommodation is available and the local authority considers it reasonable to expect a peson to move. If an authority decides that, in these cases, because there is no suitable alternative accommodation, it cannot restrict benefit to the level 861 appropriate for accommodation which meets the size criteria, it will receive 50 per cent. Exchequer subsidy on the benefit awarded above the rent officer's determination. That represents a significant concession by the Government since our original proposal was that no subsidy would be payable above the rent officer's figure. In all cases local authorities will retain their discretion to pay the benefit up to the level they judge reasonable. The rent officer's determination sets a ceiling on the rent on which full subsidy is payable, not on the level of benefit itself.
I am conscious that I have not answered some of the points that were raised. In the meantime, I commend the order to the House.
§ On Question, Motion agreed to.