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Housing in London

June 29, 2010

Housing in London

Mr. Mark Field (Cities of London and Westminster) (Con): Many of us present are old hands at speaking in Westminster Hall on the continued complexities and persistent demands of providing affordable, decent and plentiful homes in the capital. I fear that I have joined the hon. Member for Islington North (Jeremy Corbyn) as one of the usual suspects in that regard, and perhaps in many other ways as well. The frequency of our presence in this Chamber testifies to the difficulty of striking the right balance when dealing with housing need in London.

As those who have heard me speak on this subject before will know, an ostensibly wealthy inner-city constituency such as mine is not in any way immune from these problems-quite the opposite. Housing has been, and continues to be, the single most important issue in my postbag, along with immigration. No doubt, the two things go hand in hand for Westminster, and for any of us with London seats, because this global capital city is a magnet for those seeking to make their fortunes-not only from across the world but from all corners of the British isles.

The pressure that the vast flow of people into and out of my constituency places on our housing stock is enormous. Rental values have shot up in recent years, and so too has the huge cost of providing for those in need, although the amount of money that landlords get from tenants on housing benefit has similarly driven up prices. It is, I fear, for that reason that some of the most shocking and high profile stories about housing benefit have come from my constituency; the £104,000 a year home was in Mayfair in the west end. There are individual families whose accommodation costs the taxpayer thousands of pounds each and every month.

I have a lot of sympathy with what the hon. Member for Islington North said on this subject. There is a risk that some of the proposed changes will drive some of the most vulnerable people out of London, and that will need to happen to a large extent.

Emily Thornberry (Islington South and Finsbury) (Lab): I heard the hon. Gentleman say that some of the most vulnerable families will be driven out of central London, and I believe that he said that was necessarily so. Where does he think they should go?

Mr Field: I hope that the hon. Lady will allow me to continue with what I have to say; these issues affect all of us in the capital. In his Budget statement, the Chancellor said that we could no longer have a state of affairs where people who do not work are living in homes that ordinary working people simply could not afford for themselves. Putting aside that principle, housing benefit has also become an enormous trap, as the hon. Member for Islington North rightly said, for its recipients in London, and I agree. In the past few weeks, I have canvassed people in the Churchill Gardens estate, where the precise situation that the hon. Gentleman described is prevalent. In other words, people are living next door to one another, one in a council property paying rent that is very low by the standards of the vicinity, and another in a property that has been sold two or three times and is now in the hands of a housing association, effectively being passed on to nominations from the local authority at three or four times the rent of the property next door.

Ms Karen Buck (Westminster North) (Lab): Has the hon. Gentleman spotted a potential inconsistency in the argument of the Secretary of State for Work and Pensions, who says that the unemployed in the north of England, for example, should give up their homes and move to London, while those on benefits in London should give up their homes and move to the north of England?

Mr Field: I fear that there are many inconsistencies going back not only over the past six or seven weeks but, I suspect, over the past six or seven decades. One inconsistency is that we had a Labour Mayor of London for eight of the past 10 years, and housing development was almost at its lowest. In many ways, having overly stringent rules prevented many developers from deciding to develop; they sat on their hands and waited for property prices to increase. The situation has made unemployment a logical option for many people living in London, because it has been forced on them, due to the huge poverty trap. That has meant that unemployment in the capital, even in the boom years, was the highest of any region in the UK.

The announcement in the emergency Budget of a cap to limit the cost of a four-bedroom property to £400 per week has caused incredible concern among my constituents. I suspect much of that concern is caused by the uncertainty of how such a cap will be applied in individual cases, and I want to highlight a couple of typical cases that have come to light in the past week or so. Most of the concerns raised with me so far have come from elderly or disabled constituents, many of whom have been unable to get on to Westminster city council’s list for a council property, so instead they live in the private rented sector and have their rent paid by housing benefit. One such constituent is Mr Roger Aves, a disabled resident who requires a live-in carer. He wrote to me:

“You cannot get a broom cupboard in central London for the amount being proposed yet central London is my home and has been since 2001. My medical input is large and being close to my health providers and social care was paramount to my choice of living here.”

Another constituent, William Richards, is an 80-year-old pensioner from Pimlico. He said: “‘I agree with a cap on total amounts although it may well affect me in the future. What is a bit mystifying is reference to ‘percentile’- referred to earlier- “which appears to be another way of reducing the benefit but is not made clear at the moment. I have lived in the same private rented accommodation for 25 years. My rent is increased by 10% per annum. How will my flat be evaluated compared to the rent of a social housing flat? Will it be based on the market rent of a privately rented flat in Pimlico or on a council flat?”

As many of us know, some of the most illustrious and sought-after areas in central and outer London are often cheek by jowl with council estates. Mr Richards says:

“The two do not bear comparison. Even now my pension does not cover my rent and I have been living on my savings for many years now in order to pay for the basic necessities. I may well be forced to leave my home.”

It is vital that the likely impact of any changes is made clear to people such as Mr Aves and Mr Richards, and we need certainty at the earliest opportunity.

My local authority, Westminster city council, supports the cap, and lobbied for some time on reform of housing benefit, as it is essential to reducing the welfare bill, particularly with rates of £2,000 per week claimed for larger properties in Westminster-rare, but none the less real cases.

Ms Buck rose

Mr Field: I am sure that the hon. Lady wishes to defend the honour of Westminster city council.

Ms Buck: Does the hon. Gentleman share my sense of irony that Westminster is supporting the cap now after making almost £6 million for the council tax payer in recent years through housing benefit being above the rents paid for temporary accommodation? Is he not aware that to be politically in line with the Government, Westminster is cutting its throat and the throat of its council tax payers to the tune of nearly £6 million?

Mr Field: The hon. Lady makes a very valid point; one of the main absurdities of the housing benefit system is that there is so little incentive for local authorities, whether in London or across the country, because they can get the money back from central Government. That situation has to change.

Westminster council estimated the worst-case costs at £8.1 million, reflecting the expense of the long-term temporary accommodation contracts that the council was encouraged to enter into under the previous cap regime. Many would welcome the Government’s implementing the new caps, and mitigating the associated risks. In particular, places such as Westminster need the guidelines around local connection to be changed. Under the existing guidelines, local authorities affected by the caps are required to try to house people in their vicinity. I think that Westminster city council is particularly concerned that the courts will find against it if it tries to house families out of the borough, leading to additional costs, and more uncertainty and family disruption.

The guidelines need greater flexibility, and the Minister must recognise that there are specific issues in London, for boroughs of all political complexions, that need to be thought through. We need to ensure that local authorities can, to an extent, house out of borough when it has not proven possible to find temporary accommodation in the area at the new capped rates.

There is much more that I would like to say, but I appreciate that other Members wish to contribute so I shall end my comments with these thoughts. Given that the proposals are due to come in over the next few months, in the run-up to the next financial year, I wish to say only that many Members on the Government Benches welcome the review of the housing benefit system, the flaws of which have been glaringly obvious to all of us who deal frequently with housing cases. I accept that there will be differences across the House as to how the changes should take place.

If the case for change is successfully made, we will require a much closer working relationship with the boroughs, and clear and frequent communication with London Members, who will be receiving ever more letters from anxious constituents in the months ahead, so I hope the Minister will pledge to ensure that there is proper communication, which will be essential. It is also vital that the most vulnerable in our communities are properly reassured. If they are not, we risk undermining the most compelling aspect of the case for reform, which is that the measures should primarily be about fairness, with the hard-working being rewarded and the truly vulnerable being properly and fully protected.