Skip to main content

Social Landlords (Direct Rent Payments)

Volume 597: debated on Monday 22 June 2015

11. What consultation his Department has undertaken with social landlords on the potential effects of the introduction of universal credit and the benefit cap on direct rent payments to landlords. (900450)

I instituted a phased roll-out of universal credit, so we would have time to consider any issues that arose and to deal with them. Jobcentre Plus and local authorities are working together with “Universal Support—delivered locally”. We will continue to develop this important partnership to ensure the most vulnerable get the support they need to lead independent lives. We have done a huge number of reviews. We regularly engage with more than 50 landlords across all sectors, which includes meeting social landlords in key areas where universal credit is live.

This issue was raised by Tony Stacey, the chief executive of South Yorkshire Housing Association. Currently, if a household is in rent arrears and gets housing benefit, the benefit can be paid directly to the social landlord. When universal credit is introduced, if the family also gets a welfare cap, it is the housing cost element that is squeezed by the cap. No longer will the universal credit be paid directly to the social landlord to cover the rent. Can the Secretary of State not see that that could lead to a rise in evictions? Is he aware of the problem, and what will he do about it?

Let me be absolutely clear about the importance of universal credit. In the past, housing providers would get the money paid directly to them while the individuals in difficulties sorted themselves out. Under universal credit, they can apply for an extra payment, and that will be done direct. The key point about this is that the housing provider works with the individual family to help them turn around their circumstances, rather than just leaving them as they are and not doing anything about them. All that is being tested under universal credit. People on universal credit will be better off directly as a result of the changes that we are making.

Section 96 of the Welfare Reform Act 2012 stipulates that the level at which the total benefit cap is set will be determined by reference to estimated average earnings. How do the Government justify breaking the link between the cap and average earnings by reducing the rate to £23,000?

The hon. Gentleman should address his question to his Front-Bench team, as they apparently support our move.

21. With respect to the benefits cap, does the Secretary of State agree that the big picture is about getting people off benefits and into work? The people of South Suffolk feel that the fact that anyone can ever earn more out of work than in work is one of the great social injustices of our day. (900460)

As I have said, the problem that we inherited was a tax credit system that rewarded people for doing the wrong things, and parked people who wanted to do better on benefits that allowed them not to do any more hours of work. Universal credit changes that: every hour of work pays. Labour has opposed that root and branch, but then it has opposed every other welfare reform that we have introduced, and all the extra jobs that have come about directly as a result.

Will the Secretary of State take the opportunity to congratulate with me people working in Jobcentre Plus in Rossendale and Darwen who have been involved in the roll-out of universal credit? Having spoken to them and to some of their clients, I can say that universal credit seems to be universally popular.

I thank my hon. Friend for that difficult question. I will, absolutely. Jobcentre Plus staff do fantastic work, do a huge amount to get people back into work, and work with people with difficult conditions, and they welcome universal credit. I will pass on his congratulations to them, and I thank him for asking me to.