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Housing Benefit (Amendment) Regulations 2009

Volume 710: debated on Monday 11 May 2009

Motion to Regret

Moved By

To move to resolve that this House regrets that, in drawing up the Housing Benefit (Amendment) Regulations 2009 (SI 2009/614), alternative proposals to deal with the problem of paying Local Housing Allowance for large families put forward by the Social Security Advisory Committee were not properly considered. 13th Report from the Merits Committee

My Lords, this Motion is not fatal but it does reflect the frustration that I and others such as Shelter and Citizens Advice feel that the Department for Work and Pensions has not heeded the wise advice of its advisory body, the Social Security Advisory Committee, over the question of how to manage housing benefit for large families. I remind the House that all I am expressing is regret that, in drawing up the Housing Benefit (Amendment) Regulations, alternative proposals to deal with the problem of paying local housing allowance for large families put forward by the SSAC were not properly considered.

The regulations in question introduce a cap on local housing allowance rates at the five-bedroom rate for all new customers and to those moving house, regardless of the size of their families, with effect from last month, and for existing customers who live in properties with more than five bedrooms at the anniversary point of their claim. The one point that the Government have taken on board from the advice is to increase the transitional period from 13 weeks to 26 weeks for existing customers, and for that we are grateful.

Why have the Government decided to take action at all? The SSAC, Shelter and others reckon that it is as a result of sensationalist media coverage of perhaps only two exceptional cases in London where homeless families were rehoused in expensive private accommodation. Citizens Advice thinks that at least part of the problem lay with the way in which local authority staff made decisions regarding the appropriate rent that should be paid for temporary accommodation. However, the Government will certainly not accept that it was only sensational headlines in the tabloid press which have driven this policy, stating in the Explanatory Memorandum that the national rent services in England, Scotland and Wales have reported difficulties in determining LHA rates for larger properties because there are so few of these properties in any one broad rental market area. But the Explanatory Memorandum—in my perhaps jaundiced view—then gives the game away by explaining that it is deemed to be very unfair for certain customers of housing benefit with large families to be able to live in large properties in the private rented sector at the taxpayer’s expense when these properties would not be able to be afforded by those in even well paid jobs.

The equality impact assessment takes a different line, stating that one of the benefits of capping will be to help ease the transition into work by keeping rents at a more realistic and affordable level. However, that particular argument is certainly not agreed by Shelter, which says that reducing the choice of properties available to claimants through capping risks endangering the Government’s wider welfare-to-work strategy as claimants are forced to live in lower-cost areas which reduce their access to centres of employment.

While on the subject of the equality impact assessment, I should mention that it has been recognised that these changes will impact disproportionately on some ethnic minority groups and almost certainly on large Catholic families, although it should be pointed out that this particular instrument does not apply to Northern Ireland. However, if the policy were to be implemented in Northern Ireland, it would almost certainly be found to be contrary to equality legislation there. However, coming back to this instrument, does the Minister agree that the new policy does have a disproportionate and adverse affect on BME and certain religious groups, and if so, what is the objective and proportionate justification? Does he further agree that nothing in the parent Act is intended to authorise or require racial or religious discrimination, whether direct or indirect? It seems quite clear to me that the change of policy is arbitrary and discriminatory.

So how many people are likely to be affected by the change? The Government think that less than 1 per cent of householders receiving housing benefit and living in the private rented sector are entitled to benefit for properties with more than five bedrooms. This works out at about 5,000 households or around 50,000 people, the majority of whom will be children. The Government seem to think that because only a very small number of people will be thus affected, this means that the policy is acceptable. However, in those households the impact could be considerable and very undesirable. The impacts that I am talking about concern the possibility of overcrowding, of children living below the poverty line, of disabled people not being able to live with their families, of families being forced into substandard properties or facing large shortfalls in rent. The worst-case scenario is of course that some families could eventually face homelessness, which will mean that the local authority will have to step in to rehouse them.

One of the reasons that I felt impelled to raise this whole issue is that there could be many more families who fall foul of these new housing benefit rules with the steep rise in unemployment. The report of the Social Security Advisory Committee was stark. It says that the regulations will have a direct impact on homelessness. Nor will they do anything to reduce child poverty. Is this really the time to introduce such measures?

Figures published last week show that the Government’s attempt to reduce child poverty has stalled and they are not likely to meet their objective of halving by 2010 the number of youngsters living in households where the income was less than 60 per cent of the national median. It is not as though there are no alternatives to what the Government are doing. The SSAC has suggested various courses of action, as has Shelter. Shelter says that rent officers should omit exceptionally high rents from the list of six or more bedroom properties used to calculate the midpoint which would determine the LHA rate and would prevent distorted rents being used. This is the method used under the local reference rent system before LHA was rolled out in April last year. This is Shelter’s preferred option and it is also the option favoured by Citizens Advice.

Other sensible suggestions have also been put forward. Rent officers, for example, could assess rents on an individual basis; or an upper limit could be placed on the rates for six bedrooms or more in each BRMA based on regional averages; or apply this last policy in London only. Shelter also urges greater joint working between local authorities, private landlords, the DWP and the Rent Service so that potential solutions can be found in sustaining appropriate rent levels.

The Social Security Advisory Committee offered two options. If the customer is able to find a property with six or more bedrooms, a reasonable market rent will be determined by an individual referral to a rent officer. This was rejected as lacking transparency, but it is unclear to the committee why that is the case. The second option was for a percentage increase to be added to the rental amount for properties with more than five bedrooms. A proposed derived rate could be used for calculating rents for larger properties, using existing LHA rates from smaller properties. That would provide visible proof of value for money and would use mid range data free from variations introduced by the luxury end of the market. That approach was suggested by the Convention of Scottish Local Authorities—CoSLA—and is considered by the SSAC to be transparent and credible. The SSAC’s final suggestion is that housing benefit could be capped at the local housing allowance rate for a five-bedroom property, with the addition of the equivalent of the LHA shared room rate for each additional member of the household, who would be entitled to occupy a room.

The Government are obviously determined to go ahead with these regulations, despite all the warnings that they have been given. If they cannot be persuaded to change their mind, I implore them to monitor and assess the impact of the new rules on homelessness and, if necessary, to introduce changes along the lines suggested. In the mean time, I look forward to the contributions from what I was going to call the faithful few in the Chamber—there seem to be a few more than usual here this evening—and to the Minister’s reply.

My Lords, I shall make a very brief contribution to offer my support to the Motion proposed by the noble Baroness, Lady Thomas, and to raise one or two questions for the Minister.

I am very conscious of the numbers of ethnic minority communities in east London that are likely to be dramatically affected by these regulations. I wonder whether the Minister has legal advice about the potential for judicial review on a possible breach of our own equalities legislation. I was impressed by the idea put forward by Shelter and by the noble Baroness that there are alternative ways in which to deal with this. I take on board the Minister’s intention to reduce the barriers to employment by trying to cap in some way the levels of rent, because there is no doubt that parents of large families find it extremely difficult to get back into work and to feel that there is any point in doing so. Nevertheless, it would be reassuring to feel that the Government could find other ways in which to deal with the problem without such a blunt instrument, which I should have thought could be open to challenge.

My Lords, it is a pleasure to follow the noble Baroness, Lady Meacher, and my noble friend Lady Thomas of Winchester. We owe my noble friend a tribute and acknowledgment for raising this important point on a set of regulations, which herald some significant changes. I also pay tribute to the SSAC, whose work informs our debates time after time in a very positive way.

I agree with my noble friend that these regulations have not been properly considered by the Government, and I think that it is safe for the House to vote on the Motion. If it occurred to my noble friend to press the Motion to Division, I would be right behind her in the Division Lobbies. Consideration was given to a consultation that was very extensive and very consensual. That is contained in the committee’s report at Chapter 5. There were 25 very detailed responses, and the score was 24 against and one in favour of the Government proceeding as they have. That is an unusual score, even for the SSAC, and that is something that the House should consider very carefully.

Personally, I am deeply disappointed by these regulations. They are short term and superficial and may be counterproductive. I have not said much as sternly as that since the new Secretary of State, Mr Purnell, took office. This is the first set of regulations under his stewardship of the department which I think are flatly wrong. That is important to recognise.

The argument in the SSAC report about the motive for the policy changes is well founded. The two cases that caused so much controversy in west London some months ago are the provenance of these policy changes, and nothing else. The pathfinder pilots preceding the introduction of the local housing allowance were planned for years and ran for two years in each of the extensive periods throughout the United Kingdom and, to my knowledge—although I stand to be corrected—not one of those pathfinder projects pointed to this as something that needed attention. I cannot believe, if this was the significant problem that it is now argued to be by the Government, that it would not have been picked up in that rigorous process of pathfinding. The pathfinder in Edinburgh was the closest one to me and I spent some time monitoring it. The responses were very positive, but they did not at any stage point to capping regulations, the like of which we are seeing now.

If I were the Minister and was confronted by these difficult headlines—although I believe nothing that I read in the newspapers any more about social security; they never get it right, if they ever get anything right—I would have brought in the local authorities, the Rent Service people, even the health service and the department, and sat down and worked out exactly what long-term alternatives were available to the housing benefit local authority officers who took these decisions. My noble friend may be right: maybe they took the wrong decisions; maybe the expertise available and the level at which these decisions were taken leading to these reports were not right. If that is true, there are some very obvious lessons to learn from this. Even more fundamental than that, however, is that if we are not careful as a House we will end up with unintended consequences, which will result in family breakdown and households being split, two sets of accommodation having to be provided in some cases and overcrowding, with substandard environmental housing conditions.

As my noble friend Lady Thomas said, these regulations would also result in child poverty. If Lisa Harker has made anything clear in her important contribution to the child poverty debate that has been going on—and positively, it must be said, until the recent past, at the hands of the Government—it is that families predisposed to poverty and hardship contiguously over periods of time are large families with workless households in the ethnic communities. In all three categories, children are subjected to not just low income but hardship and poverty on a longitudinal basis. I do not believe that the department knows how many children will be affected. The figures are 3,000, but they are tentative; this is nothing more firm than survey data. I do not think that that is a safe basis on which this House should allow the department to bring in these regulations if the figures are so flimsy. I do not think that it is safe to make these changes on the basis of survey data.

I have three questions for the Minister. First, we know that there is to be a review of the local housing allowance regulations after a two-year period from the date of their introduction. Can we have an assurance from the Minister that these regulations will form the basis of a special chapter in that review and that a free-standing integral part of the review in two years’ time will be about how this has worked out, how many families it has affected and how many children within those families? After a two-year period, those figures should be nailed down and known. Secondly, we have assurances that the DWP and the Treasury are looking at work incentives as they affect these rents and the local housing allowances in future. I would want to be very careful about work incentives in relation to this client group and these regulations. I would certainly be very nervous about sanctioning people if they were the heads of households of the kinds of family groups that we are talking about here. I would like some assurance that there will be some open and transparent consultations on any DWP/Treasury review of work incentives for this client group in departmental coverage of the subject.

Thirdly and finally, the SSAC itself asks, at paragraph 6.9 of its report—this is on page 19 of Command Paper 7571—for “further work” to be done on this area. That is the least that we can do and the least that I would accept if I were, like my noble friend, deciding whether to press this. The paucity of evidence and the scarcity of hard facts and stats on which this policy is based need to be further pursued. Further and better particulars need to be obtained before anybody can have confidence that this is no more than a London problem, which the Government have handled badly with a knee-jerk reaction that might, in the long run, be entirely counterproductive. This House should feel able to resist tabloid pressure from time to time. This is no rational response to the problem that the Government have identified, and this policy should be resisted.

My Lords, after the words that we have just heard from all around your Lordships’ House, the Minister cannot be particularly grateful to the noble Baroness, Lady Thomas of Winchester, for raising this issue today—even though I note that these regulations are up for debate and that, if he plays his cards well, there is no likelihood of a vote. I shall not, however, go through the Social Security Advisory Committee’s report blow by blow. However, like the noble Baroness, Lady Meacher, I accept its comment, noted in paragraph 18, that,

“there is a problem with setting rates for larger properties”,

although I cannot see that that necessarily means that these regulations make the system neither transparent nor open.

Local housing allowance, which replaced traditional housing benefit, featured in the last Welfare Reform Bill and was supported from these Benches. However, as with so much recent government legislation, the devil was and clearly remains in the detail. The Minister will, doubtless, remember that I wrote to him on behalf of one of my correspondents a few weeks ago, although it was not on an aspect covered by these regulations, which respond to a particular problem: namely, state-aiding the residence of large families. I can tell the noble Lord, Lord Kirkwood, that it elicited the fact that area reviews are already taking place.

The subject of the regulations was, as we have heard, highlighted fairly recently in the press when there were reports of an Afghan family claiming a massive £12,455 per month—met by housing benefit—for a seven-bedroom property in Ealing. The value of the property in question was claimed by the Mail on Sunday to be a massive £1.2 million, as we have heard. Three housing benefit officers supervising the case were apparently sacked, for, as one said, “just doing our job”. A spokesman for Ealing Council even said that it was appropriate to put the family in a seven-bedroom property because of the age of the children. If that is correct, why were the officers sacked? How does that make the situation any better?

Surely to goodness there are two things wrong with the system. Although I do not know the details of the children’s age and sex, I know that in the private sector, where no housing benefit is paid or claimed, it is not uncommon for children of the same sex to share a bedroom until one or more moves out of the family home. The fact that this is not tolerated in the supported housing sector means that those who get state support are sometimes treated more generously than those who are not—and that is not correct.

Secondly, was a £1.2 million house the only one available in the district? I find that difficult to believe; further, there must be a limit that the state should be prepared to subsidise in housing costs. None the less, I agree with the Government that it is a great improvement in the system that claimants should know in advance what the state is prepared to pay in terms of housing benefit. For both those reasons, these Benches support the regulations—even though the local housing allowance and the rules governing it are one of many facets of the DWP that we will be combing through, if and when we get the chance.

Ministers seem to love two things: targets and pilots. In this case, targets are not in question but pilots most certainly are. Local housing allowance was extensively piloted before it went live across the whole country. I find it hard to stomach the claim that the pilots were properly evaluated before it went live; that is why we will attempt to change the current welfare Bill where pilots are involved.

However, revenons à nos moutons. Was the size of the dwellings ever raised as a problem during the piloting stage, or are the regulations the result of media pressure, as has been suggested from the Liberal Democrat Benches? No doubt the Minister will deny this, as his fellow Ministers have done, but he must answer the question that was put to him by the noble Lord, Lord Kirkwood. Why do we have the regulations so soon after rollout? It is particularly relevant because, in answer to the SSAC report on the regulations, I note that the Government have responded, in paragraph 29:

“The Impact Assessment used the best available data to estimate the number of customers that may be affected by the change and what the composition of this group may be. The Government has had to rely on survey data rather than more up-to-date and complete administrative data. The Department for Work and Pensions did not begin to receive administrative data returns on Local Housing Allowance until it became available in September 2008, and then for an incomplete set of local authorities. The Department is still in the process of quality assuring this data particularly the fields that relate to Local Housing Allowance and that are new to the dataset. It is likely that the Department’s administrative data on Housing Benefit will be publishable at a national level later in 2009. However, it cannot be guaranteed that completion of all variables would be sufficient to inform a robust impact assessment of this issue. The only option for now is to use survey data to estimate the possible impacts”.

In another part of the SSAC consultation response of 8 February, the Government claimed that the problem of high subsidy occurs only in inner London. How do they know? They got an incomplete set of data. How will they know until all the data are in and evaluated?

Finally, the 2009 Budget announced that claimants will no longer be able to keep the surplus if their fixed local housing allowance rate is higher than their actual rent. Yet giving incentives to tenants to be more flexible in their choice of accommodation was the whole basis of the local housing allowance: promoting personal responsibility. Does this not now raise broader questions about the viability of the whole scheme, given the concerns about landlords turning away LHA tenants and vulnerable people being unable to cope, which is a subject that I have mentioned more than once in your Lordships’ House?

I am grateful to the noble Baroness, Lady Thomas, for giving me the opportunity to make these points.

My Lords, despite suggestions from the noble Lord, Lord Skelmersdale, to the contrary, I thank the noble Baroness, Lady Thomas, for bringing forward the Motion, which has given noble Lords a chance to talk about these issues. I have listened with great interest to the points that have been made.

I do not want to dwell on the background to this issue, except to say that the Government have introduced these regulations which cap the local housing allowance at the five-bedroom rate from this April to move towards housing benefit paying housing costs that are on a par with those that the majority of working families can afford. There was some agreement that, clearly, we do not want to burden the taxpayer by meeting excessively high rents through housing benefit; rents that most working families would not even contemplate committing to. I also believe that most people would agree that benefit expenditure at those levels should not go on unchecked, even if the number of households involved is very small. Our estimates suggest that fewer than 1 per cent of cases assessed under the local housing allowance arrangements would be entitled to properties with more than five bedrooms.

I turn now to the issues raised by the Social Security Advisory Committee in response to the Government’s consultation on the changes and which were reflected in the report of the Merits of Statutory Instruments Committee. The noble Baroness, Lady Thomas, and the noble Lord, Lord Kirkwood, raised the criticism that the regulations were over-hasty and disproportionate. The regulations were not over-hasty; it became apparent fairly early after the local housing allowance was rolled out from April 2008 that rent officers were encountering problems in finding sufficient rental evidence to determine an appropriate rent for larger properties. This lack of evidence made it very difficult for them to arrive at a median rate for the local housing allowance. In addition, local housing allowance rates for larger properties had reached unacceptably high levels in some areas. For example, local housing allowance rates for larger properties in some inner London areas exceeded £3,000 per calendar month, and rates in excess of £2,000 per calendar month were not uncommon, particularly in greater London and the south. The need for change was apparent, and we spent some time during the course of last year considering how best to address this concern.

The noble Lords, Lord Skelmersdale and Lord Kirkwood, asked why these issues were not apparent earlier in the pathfinders pilot. The national scheme was slightly different to the pathfinders scheme. We did not measure entitlement on bedroom size in the pathfinders scheme, but on room size. The number of cases affected is very small indeed.

Our considerations included looking at a number of options, including the cap at the five-bedroom rate, and I will go through these, as the Social Security Committee has identified some of them as being a better way of dealing with excessively high rents for larger properties. The noble Baronesses, Lady Thomas and Lady Meacher, have referred to the options this evening.

One option was for the local authority to make a referral to the rent officer requesting a property-specific determination of a reasonable market rent if an individual claimed housing benefit for a property with more than five bedrooms. This would replace the arrangement whereby the rent officer calculates generic local housing allowance rates for properties with six or more bedrooms if and when requested to do so by a local authority in any month. We decided against the property-specific determination in these cases for a number of reasons. First, a key principle of the local housing allowance was to move away from burdensome property-specific determinations by rent officers to local rates for the area, so that people would know in advance of taking a tenancy the maximum support they could get through housing benefit. More than that, the property-specific determination route would not have dealt with the more fundamental issue of people on benefit potentially accessing properties that they could not afford, even if employed, without recourse to benefit. This creates a powerful disincentive to work. It is also expensive to administer.

Another option was to use the five-bedroom rate as a starting point and to add an additional amount for each bedroom entitlement above five bedrooms. We looked at various ways of deriving additional amounts of benefit for each extra bedroom by analysing the local housing allowance rates for smaller properties. Again, we rejected this option. It is complex and lacks transparency for customers. The derived rates, including the single shared room local housing allowance rate suggested by the Social Security Advisory Committee, would not reflect real market rents, so that larger families still might not be able to access suitably large accommodation.

Conversely, in some cases the derived rate could be higher than the existing local housing allowance rate for properties with six bedrooms or more. The nature of the property market for larger properties is such that rents often do not increase proportionately in line with the number of bedrooms—floor area and location may be more important factors to consider. Again, an overriding concern would be that, by routinely giving people who are dependant on benefit access to larger properties with rental values that they could not possibly meet, even when working, removes any incentive for them to return to work.

We considered the alternatives suggested by the Social Security Advisory Committee as part of our decision-making process before announcing that we would cap the local housing allowance at the rate for properties with five bedrooms. We believe that the cap is more transparent; it retains the simplicity of the local housing allowance system as there are no separate arrangements for larger properties; and it more accurately reflects the circumstances of low income workers who could not routinely afford rents for properties with six or more bedrooms.

Another comment by the Social Security Advisory Committee was that,

“the potential impacts of the proposed change did not seem to have been properly thought through”.

We have fulfilled our obligation to carry out an equality impact assessment for these regulations. In response to the noble Baroness, Lady Meacher, the Government acknowledge that there may be a disproportionate impact on some groups—for example, multi-generational households—but we believe that there are sufficient mitigating factors to justify our course of action.

First, these changes do not mean that customers with larger families will be unable to rent properties with more than five bedrooms if they rely on housing benefit. The evidence shows that a proportion of properties with six or more bedrooms will still be available at the five-bedroom rate. The customer will know in advance the local housing allowance rate and can shop around for cheaper larger properties or renegotiate the rent.

Next, there is a scarcity of larger properties and our analysis of the present property size of all households, regardless of benefit entitlement, suggests that, of those who would be entitled to six or more bedroom properties under the existing local housing allowance rules, around 70 per cent may actually be living in properties with fewer than six bedrooms. Again, larger properties tend to have more than one living room so there is scope for these to be used as bedrooms.

The Government recognise that, as a result of this change, a small number of families will have to seek alternative accommodation because housing benefit will no longer meet their rent. So that these families have plenty of time to find their next property, the regulations give them six months’ transitional protection—increased from 13 weeks, as the noble Baroness said. We believe that this is wholly reasonable and that it takes into account that a lot of private tenancy agreements are of at least six months’ duration.

The noble Lord, Lord Kirkwood, asked about the review. The local housing allowance is subject to a review over the first two years of its operation and we intend to include the impact of this change within the scope of that review. The noble Lord asked whether we could give assurances about a special chapter on this issue. We will be collecting a wide range of data as part of the two-year review and this issue will form part of the evaluation.

My Lords, that assurance is welcome, but will it include families made homeless as a direct result of this change?

My Lords, it should encompass the whole range of consequences from these policies, particularly issues around work incentives, to which noble Lords have referred, and homelessness. It will be a proper evaluation.

Other specific points were made. On overcrowding, the local housing allowance bedroom allocation criteria are more generous than the “room standard” definition of the statutory overcrowding criteria. Our evidence suggests that the vast majority of six or more bedroom entitlements would have five or fewer rooms allocated under statutory overcrowding criteria. The noble Baronesses, Lady Thomas and Lady Meacher, asked about ethnic minorities. We have recognised that there is a disproportionate impact on some groups. However, we stand by the mitigation presented in the equality impact assessment. For the small numbers of cases involved, there are still properties with six bedrooms or more available at the five-bedroom rate. I mentioned the general scarcity of larger properties which suggests that around 70 per cent of larger families, regardless of benefit entitlement, may live in properties with fewer than six bedrooms. An analysis of the rent service database of market rents shows that nearly 60 per cent of five-bedroom properties have more than one living room, which could be used as a bedroom and still leave adequate living room space.

The noble Lord, Lord Skelmersdale, referred to Ealing Council, which was involved in a case of spectacularly high rents. Obviously, how the council determines employee policy is a matter for the council. He referred to the sacking of officers, and that was also a matter for the local authority involved. There are various options open to a local authority for housing homeless families, but much depends on local policy and the availability of property in the area.

The noble Lord, Lord Skelmersdale, asked about the fairness of the benefit rate. The housing benefit review is looking at the entire structure of housing benefit, with a focus on fairness, work incentives, and value for money for the taxpayer, and these aims are consistent with the policy change.

My Lords, is this replacing the area reviews, about which the Minister wrote to me the other day, or is it happening in parallel?

My Lords, the noble Lord is referring to the broad market rental areas, which are the areas in which the various rent levels are determined. There is a rolling review of these by the rent service. Some of them are reviewed each year. This is a proper opportunity, particularly for local authorities, to engage in the determination of those reviews and to input into the assessment that is being undertaken, which is a separate review from the two-year review. We are talking about a review of the broad thrust of the policy.

The noble Lord made an earlier point about overcrowding. Under the local housing allowance, the criteria are one bedroom for every adult couple, any other adult aged 16 or over, any two children of the same sex, and any two children, regardless of sex, under the age of 10. I think those criteria are more generous than those used to determine overcrowding generally.

My Lords, does the Minister accept that they are also more generous than happens in some unsubsidised dwellings?

My Lords, is the noble Lord making the point that, if you do not access benefits, different criteria apply? Perhaps he might try again.

No, my Lords, I was not making that point at all. What I said in my speech was that it would be unfair if those with publicly subsidised housing had a better standard of accommodation than those without such public subsidy. That was what I was trying to draw out of the Minister.

My Lords, that point is very much behind this change that we are introducing. It is a difficult line to tread. Looking at work incentives, if through the benefits system you are able routinely to access better, larger properties than you might be able to afford if you were in employment, then there is an issue that needs to be addressed. Everyone would accept that there has to be some limit on the size of the property. I do not think there would be great disagreement about that. There is clearly some disagreement about how to set the parameters of that, but the review which we will undertake will, I hope, provide broader evidence on how the current policy is working and how we might move forward on housing benefit issues.

To conclude, I hope that the noble Baroness, Lady Thomas, will not press her Motion to a vote. We considered the alternatives to and the impact of this cap very carefully. We believe that capping the local authority housing allowance at the five-bedroom rate is a fair response to the excessive payments of benefit that larger properties can attract. We must ensure that housing benefit rules do not allow people to take on rents that would leave them without any incentive to work, that the rules are fair to hardworking families who are not claiming benefit, and that housing benefit is affordable and represents value for money for the taxpayer.

My Lords, I am grateful to all noble Lords who have spoken and particularly to the noble Baroness, Lady Meacher, who was persuaded after a hurried conversation with me at the last minute. She has put her finger on the very real possibility of judicial review. If I was a betting person I would not put money on the Government to win any case.

My noble friend Lord Kirkwood reminded us of the consultation with 24 against the policy and one in favour. He called the policy short-term, superficial and counterproductive, and said that the pathway pilots did not point to this capping scheme.

On the comments of the noble Lord, Lord Skelmersdale, I am sure that the Government already have a detailed policy on the sharing of rooms by siblings. I do not suggest that every child must have its own bedroom. If that were the case, the Social Security Advisory Committee would have had its own comments if it thought that the policy was currently too generous.

This is a significant tightening of the screw of the Government’s welfare-to-work policy. That is where this comes from. I am just not convinced by the Minister’s reply. I agree wholeheartedly with the Social Security Advisory Committee’s concluding paragraph, in which it expresses strong concern about the reactive nature of these proposals, attributing them to,

“media coverage of a small number of cases … to a problem that is not widespread”.

Perhaps media coverage of some of the consequences of this policy might redress the balance. However, it is an unsatisfactory way to legislate, particularly when good alternative and practical solutions have been put forward. For this reason, I am persuaded to press my Motion to a Division.

Sitting suspended.