My Lords, I am grateful to all noble Lords who have joined in this debate. As has been the pattern in other parts of the Bill, we have started with a lengthy session which has looked at the full policy implications in this area. There are a lot of amendments yet to come on pay to stay, but I think we have already aired some of the broader policy issues.
The noble Lord, Lord Shipley, commented on the administrative costs of handling this scheme, to which many other noble Lords drew attention. We will come to Amendment 75A and have another go at that issue, which is clearly very important if the scheme will cost an awful lot of the money raised just to administer. That is money just going round in circles and achieving nothing at all.
6 pm
The noble Baroness, Lady Hollis, explained to us how the interaction with universal credit is likely to work. The Government would be well advised to take her advice on board. She is a great expert on these matters, and the descriptions of how monthly adjustments
would need to be made sound absolutely horrendous. The noble Baroness described it as an administrative nightmare. There is a very high likelihood that the computer would collapse as a result, so some more thinking is clearly needed.
The noble Baroness, Lady Lister, who is a great expert on benefits, talked about the work disincentives of which we have perhaps not spoken enough, and how second earners would be the most adversely affected. She told us—I did not know this—that the same system was tried in Germany and discontinued on the grounds that it was administratively too cumbersome and too expensive to continue, which was very interesting. She also expressed the view on behalf of many tenants that the insecurity that this measure breeds has been very disruptive. The noble Baroness, Lady Bakewell, echoed those thoughts and gave us a real life example.
We now have it on the record that the taper will be there, along with my hope—I am afraid that is all it is—that the Government will go for the lower of the two options, having now put them both on the table. In the case quoted by the noble Baroness, Lady Bakewell, the combined income of the two people living in the home in Camden came to £46,000, so they would be over the threshold by £6,000, leading to a £12 a week rent increase. An increase of £12 a week would be no fun for those two people. However, that is very different from worrying that the rent would be doubled or even trebled, which had been the fear at one time. We must bear that in mind.
The noble Duke, the Duke of Somerset, also drew attention to the administration costs involved and to the IT that would have to be brought in. The noble Lord, Lord Foster, asked what had happened to the 2012 voluntary scheme. Has there been any assessment of whether that has been worked? If it has been working well, why are we talking about this whole new scheme? The noble Lord, Lord Campbell-Savours, is extremely worried about the breach of privacy by private companies with all this means testing. An army of snoopers would be required to keep checking on everybody if this goes ahead, as it might.
The noble Lord, Lord Beecham, brought us back to the key point that these amendments are about council autonomy. He talked about naked centralism and the many unspecified requirements, and the noble Lord, Lord Shipley, rightly referred to more Henry VIII powers coming through in regulations. We are still mystified as to how all these things will work through.
The Minister responded with a bit more detail. She told us that local authorities will get their reasonable costs reimbursed for handling all of this. The Bill’s impact assessment estimates the kind of cost that local authorities might incur. If I have calculated correctly, it looks like about £15 per case; everybody on housing benefit is taken out of the equation and the remaining one-third of council tenants are kept in. So, the amount that might be regarded as reasonable by the Government looks like about £15 per case. However, it is clear from what we have heard today and from submissions we have received that the administrative costs will be far more than £15 per case. Bristol calculated it at £36, but that was because it still has a team doing housing
benefit and could tack that on. When universal credit comes in, Bristol will be in a different position and will have to have new staff. New computer programs will have to be written to handle all of this, and they are bound to go wrong. An appeals system will probably be needed to follow this through, which costs serious money. The phrase “reasonable costs” will need a little bit more work.
If the Government will not accept that councils should decide their rent policy for themselves and a compulsory increase is to be set for the whole country, to take the point made by the noble Lord, Lord Beecham, consistency in itself does not sound like a great virtue. There are huge differences around the country in the level of rent, and between the market rent and the council rent in particular areas, although in some areas they are very much the same. There are huge differences in local incomes and the incomes of council tenants in different parts of the country, so one would have thought it necessary to tailor such schemes to match local circumstances. A consistent approach across the country will therefore not really work, but if the Government are determined to press ahead, I hope the lower taper will be chosen. On that basis, I beg leave to withdraw the amendment.