Welfare Reform Bill

It is a pleasure to follow the hon. Member for Edmonton (Mr. Love), who has rightly stated the strong case in principle for the change that he proposes. In Committee, I moved an amendment similar to amendment No. 5, which is on the amendment paper today. It goes a little further than his amendment in that it proposes the abolition of the shared room rate altogether. I do not know yet whether he intends to press his amendment to a Division. If he does not, may I indicate at this stage, Madam Deputy Speaker, that I intend to divide on amendment No. 5, if that is in order? The hon. Gentleman and the hon. Member for Bridgend (Mrs. Moon) have shown a degree of consistency with their party’s position. When the single room rent was introduced in 1996, it was opposed fully by the then Labour Opposition. The Prime Minister, the Chancellor of the Exchequer, the Deputy Prime Minister and the Secretary of State for Work and Pensions all went through the Division Lobby to vote against the introduction of the single room rent. They were right to do so and we would be right either to ameliorate the impact of the single room rent on young people or to get rid of it altogether. The statistics that some of the lobbying groups have presented show that 87 per cent. of all claimants who are currently in receipt of the shared room rate face a shortfall between what they receive in housing benefits and what they pay in rent. That shortfall averages out at £35.14 a week. As the hon. Gentleman rightly said, there is a shortage of accommodation that satisfactorily meets the SRR available to under-25s. The point was made about YMCAs. Charities working with young homeless people report that they are often unable to move those young people on to appropriate accommodation after they have, for example, spent time in a hostel. That is because of the impact on affordability of the shared room rate for young people who seek to move on from those circumstances and to take responsibility. Taking responsibility is part of the principle that the Government seek to develop behind the local housing allowance. However, the current system of a shared room rate militates against young people taking responsibility for themselves, finding their own accommodation and getting the support that they need to do so. The shared room rate can be a real disincentive for young people when it comes to leaving supported accommodation, because they know that they will face a shortfall. Indeed, the YMCA reports that 35 per cent. of young people in YMCA accommodation are ready to move on, but are unable to find anything that they can possibly afford to rent. Affordability is not the only barrier. As the hon. Gentleman rightly said, there is substantial evidence that landlords are more unwilling to let to under-25s who are on benefits. With his amendment, that unwillingness would at least be reduced, but it would still apply to under-21s. According to Shelter, although 46 per cent. of one-bedroom properties were affordable to those entitled to the one-bedroom rate—in other words, over-25s entitled to the one-bedroom rate—only 26 per cent. of the properties matching the shared room rate definition were available at or below the shared room rate. I can give a local example that may help to illustrate that. In Sutherland and Easter Ross in the Highlands, the shared room rate is set at £35 a week. I know that to Members who represent urban constituencies that might seem very low. In that part of the world, only one landlord provides accommodation matching the shared room rate definition—£95 a week. Any young person under 25 in that part of the world, on benefits and looking to rent accommodation, faces a shortfall of £60 a week. Since we debated the matter in Committee—I know that the Minister made her response then—there has been further evidence from the Department for Work and Pensions that helps to support the case that is being made in the amendments. Recent evidence indicates that landlords are becoming increasingly reluctant to let properties as houses in multiple occupancy and that they are reluctant to let at all to housing benefit—or local housing allowance, as it will be—claimants. There is often—this comes through from, for example, research that Shelter has been doing—increased competition for rooms in shared accommodation. That competition comes not only from students and professionals, as was mentioned in an intervention, but from migrant workers. That is a relevant point for consideration in terms of the effect on rents and supply. That phenomenon has been reported by Shelter. The pressure and the competition faced by young people who are entitled to only the shared room rate is getting worse, not better. That competitive pressure will mean that the shortfalls that those young people face will become more dramatic and the consequences of those shortfalls for those young people, in terms of debt, hardship, eviction and having to go into supported accommodation, will all become more severe. In a sense, I will close on the same point that the hon. Gentleman closed on. He quite rightly referred to incentives to work. Incentives to work are really the whole thrust of a large part of the Bill. However, this is one area where, for some reason, the Government seem unwilling to embrace a suggestion that, as he said, could be delivered relatively cheaply. I did not necessarily like the way in which the figure got inflated in a matter of seconds. None the less, in the context of the overall Bill, the proposal is relatively cheap. Even complete abolition of the single room rent has been costed at £20 million, in ministerial answers. Even taking into account behavioural consequences, the cost would still be relatively low. However, the impact on work incentives for young people can often be dramatic. Those of us who attended a briefing session held on the issue by Shelter, the YMCA and other organisations involved in the coalition campaigning against the situation, heard directly from some young people who had been living in supported accommodation about the impact that the situation can have on their ability to find a job. Earlier, we discussed the importance of the fact that many of the people we are talking about want to work and just need assistance to do so. For no group is that more true than the young people addressed by amendment No. 48. However, the problems of having no fixed address, building up debt problems and being unable to afford rent all represent substantial disincentives to work. If for no other reason than to address that situation, which would be consistent with the Government’s thinking on welfare reform, I urge the Minister to reconsider the position that she took in Committee and to endorse amendment No. 48.