PARLIAMENTARY DEBATES

HOUSE OF COMMONS

OFFICIAL REPORT

Third Standing Committee on Delegated Legislation

RENT OFFICERS (ADDITIONAL FUNCTIONS) (SCOTLAND) AMENDMENT ORDER 1996

Wednesday 12 June 1996

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1 Third Standing Committee on Delegated Legislation Wednesday 12 June 1996

[MRS. ANN WINTERTON in the Chair]

Rent Officers (Additional Functions) (Scotland) Amendment Order 1996 (S.I. 1996 No. 975)

4.30 pm

Mr. John McAllion (Dundee, East): I beg to move That the Committee has considered the Rent Officers (Additional Functions) (Scotland) Amendment Order 1996 (S.1. 1996 No. 975). I realise that the Committee is anxious to deal quickly with the order, but it is necessary to spend some time considering its background and the powers that it will give to rent officers. The order amends a 1995 order, which itself introduced local reference rents. I am glad to see that the hon. Member for Lancaster (Dame E. Kellett-Bowman) was so excited by this subject that she waited until I was half-way through my second sentence before leaving the Room. Never mind —it is nice to see some hon. Members taking an interest in Scottish affairs. The Government told us at the time that the purpose of local reference rents was better to target public expenditure. When Tory Ministers say that, they usually mean that they want to cut public expenditure—that is what the 1995 order was about, and I suspect that it is also what the 1996 order is about. The background to both orders is the spiralling increase in the cost of housing benefit that Government policies have brought about. According to the Government's figures, which use 1994–95 prices, the cost of housing benefit in 1988–89 was £5.1 billion, compared with an estimated cost for the current year of £10.6 billion. Thus, in a fairly short period the real cost of housing benefit has more than doubled. I understand from the Minister, who has responsibility for housing in Scotland, that the amount of housing benefit to be paid out this year in Scotland is £916 million. I would be grateful if he could give us the figures, if they are available, for the real terms increase in housing benefit costs in Scotland between 1988–89 and the current year. At least part of the reason for the upsurge in the cost of housing benefit is the Government's decision at the beginning of 1989 to deregulate rents in the private sector. They hoped to encourage the private sector to expand. In fact, rents increased alarmingly and with them the cost of housing benefit. A politically inspired and poorly considered decision by the Government has therefore led to a massive housing benefit bill for the country's taxpayers. That bill is now causing the Government to panic and consider ways of reducing it. That is why we are here today. 2 The explanatory note to the statutory instrument—[Interruption.] I did not realise that the order had a connection with Saudi Arabia. The explanatory note adds a requirement for rent officers "to make a single room rent determination" where the housing benefit claimant "is or may be a young individual." I am puzzled by the words "may be". I may be 28 or 128, although I am in fact 48. I do not see how a person may be under 25—one either is under 25 or is not. I would be grateful if the Minister could explain why that wording is used. If the person is under 25, the single room rent determined by the rent officer will be the maximum limit of housing benefit, which is then payable to that young person. The maximum limit will be decided by considering the average cost of shared accommodation in the locality where the young person makes the claim. Will the Minister verify that both local authority tenants and those of housing associations and housing co-operatives will be exempt from the order?

The Parliamentary Under-Secretary of State for Scotland (Mr. Raymond S. Robertson): I am happy to give the hon. Gentleman that assurance.

Mr. McAllion: I am grateful for that. The order will therefore apply only to young persons who seek accommodation in the private sector. I understand that it will also apply only to all new claims and change of address claims that are made after 7 October. The second category of people to whom it will apply is made up of those who have existing claims that were made under the arrangements in place since 2 January. When those claims are due for their benefit review after 7 October, will that be the only category to be affected by the changes introduced in the statutory instrument? Shelter, which probably knows more than any Committee member about the circumstances of young people who apply for housing benefit for housing in the private sector, is extremely concerned. It regards the measure as a form of age discrimination, because "young individual" is specified as anyone who has not yet attained the age of 25. Perhaps the Minister could explain why the relevant age is 25. What is it about that age? Is some rite of passage associated with it? Is it suggested that people have different needs on attaining the age of 25 from those that they had before? It is crazy. People have the same needs at 24 as at 26. Why one age group should suffer discrimination is beyond my reasoning. Pitt the Younger was Prime Minister at the age of 21. Would we have expected him to live in shared accommodation because of his age, despite the great responsibilities that he bore at the time? People are allowed to die fighting for this country in wars at the age of 19, 20 or 21, but they do not have the right to self-contained accommodation. Instead, they must be forced into shared accommodation. Such discrimination seems not to be based on sense. 3 As Shelter points out, the discrimination comes in a double dose. Under-25s are already penalised by the housing benefit regulations. The applicable amounts are lower for that aged group. Under-25s receive about £6.50 per week less housing benefit than people who are older than 25. Of two people who worked in the same factory earning the same, low income, and who went home to exactly the same kind of accommodation for which they paid exactly the same rent, one could receive £6.50 a week more housing benefit, because of being older than 25, than the other received. That is an unsustainable position for the Government to maintain. The introduction of single-room rent will mean that as well as receiving less money, people under 25 will be forced into shared accommodation. I cannot understand how any Government can suggest that there is nothing wrong with treating under-25s as if they have fewer civil rights than anyone else. Do the Government seriously suggest that being 24 is a reason for not having exclusive use of any room other than a bedroom, while people who are a wee bit older have such exclusive use? Are they seriously proposing that 24-year-olds must share the use of a toilet or kitchen—or, better still, as the regulations specify, that they should not have the use of a kitchen at all? People younger than 25 apply for housing benefit because they do not have the money for the rent. They are poor. They are driven into shared accommodation, which the Government are attempting to ensure will not, by definition, include a kitchen. They will not be able to cook food and will have to eat out. That will cost more, as the Minister will know from experience. Thus the people with the lowest incomes—genuinely poor people—will be forced to buy food prepared outside their homes, because the Government will not give them housing benefit for accommodation that includes a kitchen in which they could cook meals frugally. It is all very well for us, sitting in the Committee Room on a hot London afternoon, to decide to drive all housing benefit applicants under the age of 25 into shared accommodation, but where is that accommodation? How many Committee members know the conditions prevailing in every corner of Scotland? How does the Minister, for example, know that there is sufficient shared accommodation in his constituency of Aberdeen, South for all the people who would require it under the order? I am informed by Shelter that there is a lot of shared accommodation in Aberdeen, but that most of it is taken up by students, who have families that support them and help to pay the rent for their shared accommodation. That means that little is left for the poor kids, who have no families to support them and depend on housing benefit. Because of the order, they will be looking for shared accommodation that is not there. What do those young people do if they cannot find accommodation? The order says that they cannot receive housing benefit on the same terms as everyone 4 else—it must be for shared accommodation. Has the Minister or anyone in the Government thought the proposals through? I doubt it. There is virtually no private accommodation in the rural areas of Scotland and there is certainly none of the shared accommodation that people under 25 might need. Does the Minister want everyone to up and move away from rural areas and into the cities? The cities do not have enough shared accommodation for the people who already live there, so we shall have serious problems if young people move from the countryside. The order will result in people being driven into the cities and will swell the ranks of the hidden homeless—those who end up sleeping on other people's floors or in a friend's front room. Such people will eventually have to go to the council to ask to be declared statutorily homeless. I understand that the Minister hopes to save £65 million through the order, but the Government might end up spending more than that because of the cost of looking after people whom the regulations have driven into homelessness. Under the provisions of the Housing Bill, which recently went through the House, young single people whom a local authority has accepted as statutorily homeless because they are vulnerable and perhaps have a mental illness or history of abuse will not be exempt from the restriction in the statutory instrument. Such people might be declared statutorily homeless, but the local authority could direct them to shared accommodation in the private sector. Should people who perhaps suffer from mental illness be forced into shared accommodation? That would be entirely inappropriate, but it might result from the statutory instrument. Should someone who has been subject to abuse in their family or at the hands of a friend be forced into shared accommodation? Shelter gives an example from England. I do not know what the situation in England is, although people in England have probably gone further down this particular road than we have in Scotland. That usually happens, because we fight much harder in Scotland to stop the Tories getting away with things. In Shelter's example, a 17-year-old girl who had been abused at home was referred to shared accommodation because of similar regulations. When another woman left the shared accommodation, the landlord rented the spare bed to a 40-year-old man. He was thus sharing a room with a 17-year-old girl who had been abused by an older man. The girl was forced to go on to the streets and was made homeless. Is that the situation that the Minister wants to create in Scotland? Does he want vulnerable young people, who have been subjected to abuse, to be put at risk again because of regulations that have not been properly thought through? The Minister might argue that local authorities have discretion to pay more than the single-room rent, which they do. Their discretion is, however, cash limited—they have a budget and cannot spend more than that. A vulnerable person might get self-contained accommodation early in the year because the local authority has the money to pay for it. When the money runs out midway through the year, 5 however, other people will not be given the same consideration. The local authorities will not have the same discretion because there will be no money. The situation is therefore not as clear as the Minister suggests. I understand from Shelter—the Minister can confirm this or otherwise when he speaks—that the only people leaving care who will be exempt from the regulations will be those who are subject to care orders under the Children Act 1989. No such exemption applies to Scottish care leavers, however, because the Act applies only to England and Wales and the regulations exempt only care leavers who are subject to an order under the Act. Why are Scottish care leavers not exempted when those in England and Wales have been? Is there something wrong with Scottish care leavers? Why have no steps been taken to include Scottish care leavers in the exemption that has been available for those in England and Wales?

Mr. Raymond S. Robertson: We do not intend that there should be differences north and south of the border. By the time that the order comes into force in October, that will have been changed.

Mr. McAllion: I am grateful to the Minister for putting that on the record. I thank shelter again for the following information. The Government's Social Security Advisory Committee made several recommendations about the changes, the first being that they should not be introduced at all. Perhaps the Minister could explain why the Government chose to ignore that advice. The Committee went on to suggest groups that should be exempted from the regulations. I shall go through them one by one. People considered vulnerable and, therefore, in priority need under the homelessness legislation should be excluded. Are the Government prepared to exclude such people? People towards whom local authorities continue to exercise duties, including care leavers, young people entitled to advice and assistance under section 24 of the Children Act 1989 and young people resettled as part of community care policies should be excluded. Will that happen? People for whom shared accommodation would be unsuitable should be excluded. I have already referred to people who might be vulnerable because of mental illness or a history of abuse. Should they be excluded? People who are part of resettlement programmes such as the rough sleepers initiative, pregnant women, people who claimed housing benefit prior to 7 October 1996—the legislation should not be retroactive as that is not a good principle on which to legislate—and people entitled to receive a disability premium should be excluded from the effect of the legislation. People who are incapable of work and those who suffer from medical conditions such as HIV and AIDs should be excluded. People who live in mobile homes because they cannot get access to proper accommodation should also be excluded. Shelter makes it clear that it believes that the measure will lead to a massive increase in homelessness among young people in Scotland. It also believes that 6 it will lead to the further alienation of young people in Scotland—something that no Committee member would consider a desirable outcome. If one group of our fellow citizens have been discriminated against in recent years, it is the under 25-year-olds. Because the measure deals with the Government's problems of funding housing benefit rather than with the real problems of young people who are on low incomes and require safe accommodation, Shelter urges all hon Members to vote against the regulations. That is exactly what I intend to do this afternoon.

4.47pm

The Parliamentary Under-Secretary of State for Scotland Mr. Raymond S. Robertson: It is unfortunate that the hon. Member for Dundee, East (Mr. McAllion) made snide remarks about my hon. Friend Member for Lancaster (Dame E. Kellett-Bowman) and my right hon. Friend the Member for South Thanet (Mr. Aitken). Even if I wanted to reciprocate, I could not because the hon. Gentleman has no hon. Friends to support him in Committee today. The hon. Gentleman raised several specific points. On the report of the Social Security Advisory Committee and the basic exemptions, my hon. Friends at the Department of Social Security whose responsibility that is will give the report appropriate consideration. The hon. Gentleman asked why the explanatory note uses the words "may be" in relation to young people. In certain circumstances, local authorities might need to verify dates of birth. There is no need to delay referring claimants to the rent officer while verification is under way. The Order aims to give rent officers in Scotland the additional powers that they need to carry out their statutory functions under the new rules that will come into being on 7 October and which were approved by the House on 5 June. Housing benefit payable to single people under the age of 25, living in the private rented sector, will also be restricted to the cost of the generality of rents for a single non self-contained room. A separate but equivalent order relates to the functions of rent officers in England and Wales and the Opposition decided not to pray against that. The order does not introduce any new changes to the housing benefit system. Neither does it represent any change in Government policy. It simply requires the rent officer to make a single-room rent determination where the local authority requires one to determine a housing benefit claim. The housing benefit entitlement for single under-25s has already been agreed by the House. In setting that entitlement, we gave careful consideration to the impact on young people. Only tenants in the private rented sector are affected by the order. The position of people in local authority housing and accommodation provided by registered housing associations will be unchanged. We have also made a number of specific exemptions to ensure that the most vulnerable are not adversely affected. People needing care, support or supervision will not be affected, provided that their landlord is a 7 housing association, registered charity or voluntary organisation. Further, those who have been the subject of a care order are exempt from the change until age 22. Young people will not be forced to stay at home, but they will be encouraged to make responsible decisions about the accommodation that they occupy. That has to be welcome. The amendment order simply amends the functions of the rent officer to ensure that the rent officer's duties in Scotland reflect the changes to housing benefit legislation. The measures are intended to encourage young people to stop and think carefully about the sort of housing that they need and can reasonably afford. In doing so, they will also protect the interests of the taxpayer. I commend the order to the Committee.

Question put:

8

The Committee divided: Ayes 7, Noes 2.

Division No.1]
AYES
Aitken, Mr. Jonathan Jenkin, Mr. Bernard
Bates, Mr. Michael Lait, Mrs. Jacqui
Carlisle, Mr. John Robertson, Mr. Raymond S.
Fowler, Sir Norman
NOES
McAllion, Mr. John Michie, Mrs. Ray

Question accordingly agreed to.

Resolved, That the Committee has considered the Rent Officers (Additional Functions) (Scotland) Amendment Order 1996 (SI 1996 No 975).

Committee rose at seven minutes to Five o'clock.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Winterton, Mrs. Ann (Chairman)

Aitken, Mr.

Bates, Mr.

Carlisle, Mr. John

Fowler, Sir Norman

Jenkin, Mr.

Kellett-Bowman, Dame Elaine

Lait, Mrs.

McAllion, Mr.

Michie, Mrs. Ray

Monro, Sir Hector

Robertson, Mr. Raymond S.