Housing Benefit (Hansard, 22 November 1994)

§ The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish)
My Lords, expenditure on housing benefit has almost doubled since 1988. The main reasons for this are increases in rents in all sectors and a rise in the number of people claiming housing benefit.

§ Earl Russell
My Lords, the Minister is doubtless aware that it has been government policy for some while to reduce wage rates. Can he tell us what percentage of housing benefit recipients are in employment above 16 hours a week, and what has been the change in that percentage since 1988? If he cannot give us that information, does he really know what is going on?

§ Lord Mackay of Ardbrecknish
My Lords, as regards the first part of the noble Earl's question, the government's policy is that wage rates in this country should be competitive with our main competitors in the world so that we can sell our goods and services and have more of our people in employment, as we have in fact seen happening in the past two years. As regards the second part of his question, I am sure that the noble Earl will understand that for such detail he should table a specific Question. I shall be happy to answer him then.

§ Lord Stallard
My Lords, perhaps I may commend the Minister on his honesty in replying that the increase in expenditure is due to an increase in rents and a rise in the number of people claiming benefit. Why does not the Minister claim benefit for both those evils? The fact is that the Government have prevented councils from building affordable rented housing for many years. By pushing people into the private sector, rents have gone through the roof. Is the Minister also aware that that has caused many people hardship and a great many more people to claim the benefit? The noble Lord was quite right in what he said; but he should have also accepted the blame as well for both disasters as part of the Government's policy.

§ Lord Mackay of Ardbrecknish
My Lords, as regards the local authority sector, I am happy to accept what the noble Lord calls the "blame" for our policy. That has been to shift the subsidy given by the taxpayer from a bricks and mortar subsidy to a subsidy on the 142 individuals so that those who need help get it, and that those who can afford to pay proper rents do not receive a subsidy from the rest of the taxpayers.

§ Baroness Hollis of Heigham
My Lords, will the Minister be kind enough to disown one proposal put forward by his right honourable friend the Chief Secretary to the Treasury, Mr. Jonathan Aitken, that the way to cap housing benefit is to try to move council tenants from accommodation which is too large for them? Is the Minister aware that nearly 80 per cent. of those in houses which are too large for them are pensioners who have lived in those homes all their lives? Is he also aware that the average rent this year for a three-bedroomed council house is £36.99; but for a two-bedroomed flat, to which they might move, the rent is £36.95—4p a week less? Would the Minister like to tell us how much housing benefit his right honourable friend believes will be saved by moving people and saving rents of 4p a week?

§ Lord Mackay of Ardbrecknish
My Lords, I should always like to be kind to the noble Baroness; but on this occasion, I shall simply say to her that I shall not respond to press speculation on the subject, because one half of it is unfounded and the other half is usually untrue. As regards council house rents, I cannot confirm her exact figure; but the average council house rent is about £34 a week. I fully accept—as does anyone who knows anything about the world—that there are many elderly people living in houses which were allocated to them when they had a family. Therefore, they are living in houses which, on the face of it, appear to be too large for them. The noble Baroness also knows that over many years we have encouraged the provision of specialised accommodation, like sheltered housing, so that a single person, a widow or widower or elderly people, are accommodated in reasonable and decent accommodation which is designed for their needs. I hope that that is a policy with which the noble Baroness agrees.

§ Baroness Hollis of Heigham
My Lords, perhaps I may come back on this matter. I am not referring to press speculation. I have a transcript from the BBC Radio 4 interview in which Mr. Aitken said that quite a lot of people on housing benefit are living in houses which are too big for them, and to get them to move is a way to cut housing benefit. I repeat that 80 per cent. of those people are pensioners. Is the Minister really going to require elderly people who have lived in their homes all their lives to move in order to save pennies on the rent?

§ Lord Mackay of Ardbrecknish
My Lords, I am not sure what policy the noble Baroness wishes to pursue in this regard. I suggest to her that what my right 143 honourable friend said is the true situation, and that the noble Baroness said that in her original question; namely, there are many elderly people living in family houses which are now too large for them. I believe it is common sense that, if we can possibly do so, we should ensure that there are suitable houses, properly designed, for elderly people in order to encourage them to move out of a house which is too large, often with stairs and with a garden, into accommodation which is more suitable.

§ Lord Richard
My Lords, the issue is not whether it is desirable that they should move; the issue is whether the Government are going to make them move. Can the Minister deny that intention or not?

§ Lord Mackay of Ardbrecknish
My Lords, I am deeply honoured that the Front Bench opposite are taking three bites at this particular cherry. I advise the noble Lord that the situation regarding elderly people is as I explained it to his noble friend. As to what the Government's intentions may or may not be as regards housing benefit, the noble Lord will have to wait and see.

§ The Countess of Mar
My Lords, does the Minister have any indication that private landlords are exploiting the housing benefit system by charging rents that are too high? If they are doing so, what are the Government going to do about it?

§ Lord Mackay of Ardbrecknish
My Lords, there is of course the danger to which the noble Countess referred. However, where a landlord appears to be charging an excessive rent, the independent rent officer service can come in and fix a reasonable rent for that property. It is on that reasonable rent that housing benefit will be paid.

§ Earl Russell
My Lords, is the Minister aware that in a report published last week the Royal College of Physicians estimated that the cost of homelessness to the National Health Service was between £800 million and £2 billion? In the light of that information, will the Government consider whether cutting housing benefit might be as expensive as letting it increase?

§ Lord Mackay of Ardbrecknish
My Lords, I cannot see why cutting housing benefit would be more expensive or less expensive than letting it increase. The noble Earl is trying to ask me far too clever a question. The situation as regards the homeless is simply that over the past few years we have encouraged housing associations, which we believe are a good resource in the community for directing houses at special needs groups, by giving them considerable sums of money. That £9 billion over the past four or five years (added to the £3.5 billion that housing associations have collected from the private sector) has helped them to increase their stock by over 200,000 in that four to five-year period. I am sure that the noble Earl will welcome that.