Skip to main content

Homes: Affordability

Volume 815: debated on Thursday 28 October 2021

Motion to Take Note

Moved by

That this House takes note of the combined impact of (1) the end of the Coronavirus Job Retention Scheme, (2) the reduction in Universal Credit, and (3) the upcoming rise in fuel prices, on people’s ability to afford to stay in their homes.

My Lords, it seems very apposite to try to bring together the things that we see at this moment that seem to be causing a lot of anxiety among people with very little—these are people who are on the edge, just about managing and just about coping—around fuel, the cost of heating, and the cutting of the universal credit top-up which, noble Lords will remember, was the cut that Mr Osborne made to the universal credit. The £20, in fact, was only trying to go back to an earlier time and therefore was not a top-up; it was a reintroduction of something that had been cut in the days of austerity. When you look at that and at the end of furlough, you have— and I am sorry to use the cliché that everybody talks about—a “perfect storm”. It is a perfect storm for hundreds of thousands—millions—of people who are caught in this kind of trap where their costs are going up.

I am not really going to dwell on that this afternoon, because I know that the forensic evidence will come from what I would call my “forensic posse”—the other people who are going to talk about this—and they are much, much better informed on that. What I would really like to talk about is why it is that, every now and then, we seem to have these arguments about the very difficult circumstances that many people—the poorest among us—find themselves in. Why is it that, post Covid, we are still in an emergency but are trying to pretend that we are in a recovery?

On Monday of this week, I was on a TV programme that dealt with all of these issues, among other things. It was mainly lots of people complaining to the programme—I was on the panel—about the fact that they were just about managing. In one way, they could pay their rent, but it might mean that they could not feed their children; or they could feed their children but they could not turn on the heating. That was the kind of situation. Anyway, I was on this panel, but I did not particularly like it because it was a very rigid piece of television, and I thought, “Give me ‘Question Time’ any time”—because then you can overtalk and interrupt people and be a big mouth, which I obviously relish the opportunity to be.

I got home at about 11 pm and somebody had sent me a letter. I do not want to upset the House, but it was a “Dear f-off John” letter, if noble Lords will forgive me for using that phrase. It was one of those “John, who the hell are you?” letters. It was a long litany of complaints about the programme and our avoidance of the major issue. The major issue was that if we actually educated people; if we gave education to everybody in Britain from the first moment to the last moment; if we gave it free to everybody; then we could educate people out of poverty; we could raise people out of poverty; we could, in a sense, get rid of the whole idea of people just about managing. Anyway, at the end of the letter, I had to agree, because it is exactly what I believe.

I believe very strongly that we are always going round in a circle, dealing with the problems of people in need. The reason for that is that we never take our social money and spend it wisely. We always spend the social money to just about keep people in a kind of permanent state of emergency, where they are just about managing. We live in a low-wage economy; our banks are frightened of lending to businesses, so that is why our banks lend 80% of their money for the buying and selling of property. They lend only 20% for the creation of new businesses, new opportunities and new investments, which would lift a whole slew of people out of poverty and into opportunity, hope and a better world, where they would not have to keep worrying about whether they can feed their children or turn on the gas or turn on the light.

We live in an underinvested world, and it is about time we woke up to the fact that the only reason that there are people on the edge like this is that we did not invest in their social education; we did not invest in their early education. When we fail 35% of our children in school, where do we find them? We find them down among the lowest paid. You only have to have a £5 benefit change and those people are in great need. Twenty pounds means nothing to me and nothing to anybody else in this House, but it means a shedload if you are on universal credit. If you look at the people who are stuck on universal credit, they will be the people who have not been invested in to get them out of poverty. They have not been given the skills or opportunity; they have not been given the chance to move away from need and poverty. That is why £20 means so much to them.

Returning to the letter, I thought to myself, “The cheeky git, he’s stolen all my lines”—but he inspired me once again to return to the House and say that the real, important thing to me is how we can stop this cycle. How can we stop the fact that, in a year’s time, or two years’ time or five years’ time or 10 years’ time, we are always going to have to address the problems faced by the most impoverished and, often, the most uneducated people? These are the people who did not get the educational chances, the social chances, or the hope given to many people who pass through school and get the chance of moving on.

The problem with Governments—and every Government have done this; I have been at this now for 30 years, from the days of Margaret Thatcher and John Major to the days of Mr Boris and Mr Sunak—is that they all do exactly the same thing. They give you a small amount of money—a token—and say, “This goes towards solving the problem”. Every Minister has said this to me. I say, “What are you doing about that?” and they say, “Well, we’ve got an initiative going—we’ve got this brilliant initiative. We do know that this problem is really deep—but here’s a fraction of the money to solve the problem”.

I said on the television this morning, when I was asked what one of the problems was, “One of the problems is that we have hundreds of thousands of people—500,000 people—who haven’t paid their mortgage or rent and are likely to be the new homeless”. And what do the Government give us? God bless them, they give us £65 million—and it has to pass through local authorities, which probably want to spend it in a different way—to address another problem. The other problem is that there is £650 million of arrears in the country, and it is going up.

I love Governments—they are wonderful human beings who know how to throw a dog a bone. But they do not give the whole meal. It is a bit like arriving at a forest fire and getting out your little fire extinguisher. We need to move beyond that. We need to get Governments to be a bit more honest and stop saying, “I tell you what: we’ll put on some initiative and we’ll be able to say at the end of the debate that we are addressing that problem, even though we’re addressing only 5% of the problem”. That is one of the problems. There are many, many problems.

As I have said in this House before, I think we are very much like we were in 1940 when Winston Churchill had to borrow the future—an enormous amount of the future—to defeat the Nazis. Imagine what it would have been like if in 1940 the Government had said, “We can’t do that; we cannot cause future generations to carry our debts”. Every change that has taken place in the world in the time of our democracy has always been about people borrowing the future. We borrowed the future in 1940 and paid off the last bit in 2007. I was 61 when we stopped paying for a war that I was not in and that ended a year before I was born. And that goes for most of us. It was an enormous amount of money but, if we had not done it, we would have dismantled society and created enormous problems for ourselves. We would have created Nazis over here, with all their racist rubbish. But we decided that we would stand and fight, and with our Russian cousins and our American allies—cousins as well—we took them on and defeated Nazism.

Now we have to defeat poverty. We cannot poodle around with poverty. Poverty is coming our way in a way that is much bigger than it has ever been before. It will not just be the people I have been working for during the last 30 years: the people who have been socially engineered to fail; who had a bad beginning at school; who had poor parenting or, when they went to school, whose parents did not realise it was a great opportunity for them to move away from poverty and who ended up at the end of their school lives and you would not know they had been to school—people like me. The only job they could get was picking up a shovel and digging a hole or laying concrete—and then those jobs disappeared, and a lot of those people who failed in that welfare state experiment became the underclass, the poor, and then passed it on to another generation. That is where you normally get your homeless from.

I work with 17,000 people a year. My organisation is all over the country and the world. It works with hundreds of thousands of people. Very few of them are in homelessness just because they do not have a home; it is largely because all sorts of other things have gone wrong before they got there.

In my opinion, if we do not recognise that we are in a continuing emergency and are not yet in recovery, or are in only a partial recovery, and unless we invest in saving them, people will slip en masse into homelessness over the next year or two, as soon as the courts can process those half a million people who are behind in rent and will possibly be evicted. Perhaps I should not say it, but the Rowntree Trust thinks the number is not half a million but 1.5 million. So I am actually trying to be nice by saying that it is only half a million. I am trying to be nice to the Government and say, “Come on, lads, give us enough money to keep people in their homes, because if they slip into homelessness they will cost you twice or three times the amount of money it would cost to keep them in their homes”. That is the kind of stuff I am talking about.

Looking at these indications that, once again, we are dealing with those people, I would say that, if I were in the Government, the first thing I would do is step back and look at what works, do an audit of it and then step back and work out how we can spend our social intervention money not on keeping people in crisis for the whole of their lives but on getting them out. It cannot be done by simply slinging £64 million at a problem that needs £640 million. We have to get away from that tokenism, because that is one of the most dishonest things that every Government I have known have done. I will not tell your Lordships how many Prime Ministers I have spoken to who have thrown crumbs in the direction of the poor and not delivered.

My Lords, I thank the noble Lord, Lord Bird, for instigating this debate and for his very powerful introduction to so many vital issues, poverty being at the heart of it all. I will address my remarks to the affordability of housing. I hope the noble Lord thinks that will help the debate; I will just focus on that part, because it is so wide-reaching. I have long had very considerable concerns about the quality and cost of housing for many families who have come directly to my attention in my roles as a councillor in Kirklees in West Yorkshire and as a vice-president of the Local Government Association.

The noble Lord, Lord Bird, has focused the attention of this debate on the impact of the reduction in universal credit—which is still a reality for the majority of those who claim benefits, despite the changes announced in the Budget yesterday—the end of the furlough scheme and the rise in fuel prices. He is absolutely right to be very concerned about the impact that that triple combination of issues will have. There are other issues he mentioned only in passing, such as the rise in food prices and, for some folk whose housing is not affordable, the taxation increases through national insurance contributions. All those will make it so much harder for people who have only just enough to pay their housing costs, be that mortgage or rent.

The noble Lord, Lord Bird, gave us some assessment of the numbers of people already in rent arrears and under threat of becoming homeless as a result. This is a result of deep-seated problems that have been enhanced by the economic effects of the pandemic. This afternoon, I will draw the attention of the House to the challenges of affordability that exist now and existed before the pandemic.

The Government are very keen on promoting so-called “affordable housing”. In the Budget announcement yesterday, the Chancellor allocated £11.5 billion to provide affordable housing. In broad terms, affordable housing means housing that is provided at around 80% of the market level. But for many renters this remains unaffordable, even for those on middle incomes, let alone those on low incomes, as the Affordable Housing Commission reported last year.

The phrase “affordable housing”, as currently defined, is completely misleading and should be challenged—as I do at every opportunity. Worse still, so-called affordable homes are affordable only once. The Government could, and in my view should, require affordable housing to be affordable in perpetuity. Will the Minister agree to investigate that suggestion and let me know the outcome of any ideas that come forward?

The rented sector is so unaffordable that the Government expend considerable sums on housing benefit—the forecast is that £30.3 billion will be spent this year. The House of Commons report states that 25% of this will be for tenants in local authority housing, 38% for housing association tenants, and 37% for private sector tenants. According to a report by Shelter last year, there are 1.4 million tenants in the private rented sector who rely on housing benefit or have it as part of their universal credit.

As many Members will know, the rate of benefit is calculated according to the local housing allowance, which is referenced to local market rents. During the pandemic, the LHA level was reset at the 30th percentile. This is the maximum that can be claimed. In theory, it is enough to ensure that housing benefit covers the cost of renting a typical house large enough to meet the needs of the household. If all the rent is to be covered by housing benefit, this means that the only houses available in the private rented sector are those falling at 30%, or below, of local market rents. If there are more families and individuals requiring a property within that first 30% than there are rented properties available, then people reliant on housing benefit to help with their rent find that they have to pay above that rate in order to get somewhere to live.

I will illustrate this with examples from my own hometown, of Cleckheaton. Here, the local housing allowance for a two-bed property is £103.56 per week. I know that will be a surprise to many people who live in London, but that is what it is in my part of West Yorkshire. This is the maximum a family can receive in housing benefit. Yesterday, I did a search to find potential properties. I failed to find any at or below £103.56. There was a two-bed Victorian terrace in a row of back-to-backs—literally two up, two down—at £106 a week, the lowest rent I could find; this house was in a terrace, with no garden or frontage, giving straight on to the street. There were other two-bed Victorian terraced properties at £114 and £137 a week. The result is that families who are desperate for somewhere to live, and whose income means that they depend on housing benefit, end up renting a property costing more than the local housing allowance. The extra that has to be found—even if it is £3 a week, let alone £11 or £24—comes at the expense of their other living costs, such as food, heating and travel. It is one of the reasons why so many families have had to turn to food banks and why, as we heard, so many are in arrears and in danger of losing their homes.

The problem I have described is of course magnified in cities such as London, where housing costs are many times those in the example I have given. Here, the difference in the rate of local housing allowance and the rent that has to be paid is so high that families are in very difficult financial circumstances.

All that I have described predates the additional financial strain on household finances as a result of Covid. Earlier this year, housing charities called on the Government to tackle rising rent arrears. A report by Crisis, Shelter and, I think, Citizens Advice estimated that at least half a million households had rent arrears so large that they were in danger of being made homeless. Of these, 300,000 households have dependent children. If they are made homeless, the local authority has a duty to find accommodation.

The challenge for local authorities in rehousing those who have become homeless is an almost impossible one, as the stock of housing in the public sector has seriously diminished. In the Kirklees Council district, so-called council housing is around half of what it was 20 years ago; it has fallen from 46,000 houses to about 23,000, the last time I looked. Rents in that sector—social rents—are significantly lower, at an average of about £70 a week. These rent levels are covered in total by housing benefit where needed, at a significantly lower cost to the public purse. The question for the Government is this: why are they failing to fund the construction of significantly more houses at social rent? This would not only meet the needs of the million or more people currently on council house waiting lists but could be achieved at a much more reduced level of public funding —public subsidy for housing benefit and construction—than any other way. I just despair, really.

I have focused my remarks so far on those who rent their home, but there is a growing challenge for young people who want to buy a house, as for many it is totally unaffordable. The solution is not simply setting numbers of houses to be built as targets, as developers simply build the houses that give them the biggest profit. The Government need to move away from setting targets of numbers of units built and turn their attention to the type of unit and location, to enable young people to get on the housing ladder. There is a great challenge here for policymakers, in providing homes to rent that are genuinely within the means of renters who depend on housing benefit—or the universal credit part of that—and in enabling the construction of large numbers of homes that are within the financial means of first-time buyers.

I have asked a lot of questions, which I hope the Minister will respond to. I thank the noble Lord, Lord Bird, for this debate, which has enabled us to raise issues of housing affordability and poverty. We do not talk enough about these issues. With those remarks, I look forward to the rest of the debate and to the Minister’s response.

My Lords, I too welcome this debate, so forcefully introduced by the noble Lord, Lord Bird, whose work to help the homeless in the 30 years that I have known him I commend, in particular his work to help those sleeping rough to rebuild their lives. He referred to those speaking in this debate as his “posse”. A posse, I think, is a body of men—they are nearly always are men—summoned to enforce the law by the sheriff. I would be the first to pin the appropriate badge on the noble Lord, following his introduction to the debate this afternoon.

I confess that I am one of the Ministers who had a dialogue with the noble Lord, Lord Bird—I think some 30 years ago—and allocated what he described as “crumbs” to help the Big Issue. He may have thought they were crumbs, but they were quite difficult for a spending Minister to extract from the Government’s coffers. We now celebrate, I think, the 30th year of the Big Issue, and I commend all the work that it has done to help those sleeping rough.

I want to focus on the aspect of the noble Lord’s Motion that refers to people’s ability to stay in their homes. I agree that we should do all we can to avoid the disruption and trauma of people having to leave their home against their will. The Motion identifies three factors that are highly relevant, referred to by the noble Baroness, but I want to refer to others that have an equally important role to play in preventing homelessness.

In 1991, the year the Big Issue was founded, 75,500 home owners had their homes repossessed because they could not keep up with their repayments. In 2019, the figure was 4,580. The difference is principally accounted for by the historically low interest rates that we have enjoyed for some time, which have kept home ownership affordable and reduced repossessions and homelessness. That is why the section of the Budget yesterday which emphasised responsibility with public finances and the commitment to low and stable inflation was important, and highly relevant to our debate this afternoon. As the Chancellor said yesterday, higher borrowing today is just higher interest rates and even higher taxes tomorrow. This will help reduce homelessness if, as we hope, the Budget succeeds in the ambition of keeping interest rates low.

It is not just home owners who will benefit. The growing number of families renting from landlords who have bought to let have an interest in seeing low interest rates too, to avoid any upward pressure on rents. With low interest rates, registered social landlords are able to build more affordable homes at lower rents, as mentioned by the noble Baroness, thus enabling that movement to make a greater contribution to meeting housing needs. So, although it might not seem directly relevant, fiscal responsibility can take pressure off housing budgets and homelessness.

Moving from the macro to the micro, I am concerned, like both of the previous speakers, about the 7% of private renters, some 78,000, who are now in arrears, the majority of whom had no rent arrears before the pandemic began. We have had the six-month stay of eviction and extended notice periods and, while many landlords have done all they can to help their tenants, landlords themselves, many of them private, cannot provide such support indefinitely.

I understand the concern about the ending of the UC uplift, which one hopes will be softened by the taper reduction yesterday, but I wonder if more could be done to help those now in difficulty with their rent. Government figures show that more than 190,000 renters who are receiving universal credit are at least two or more months behind on their rent, a rise of 70% in six months. That figure includes social tenants. Should there not be wider publicity about the help available to those facing potential homelessness and, if possible, an assurance that the Government will consider topping up the funds if they prove inadequate?

There are a number of sources of help—possibly too many. We have the funding announced yesterday of £65 million for councils to support vulnerable tenants in arrears, and then there is the £310 million already available through the homelessness prevention grant—and then there are the household support fund and discretionary housing payments, as well as the welcome £640 million a year announced yesterday to address rough sleeping and homelessness. Is there a case for rationalising and simplifying these sources of funds and possibly trying to standardise them, rather than leaving them to the postcode lottery of local discretion, as well as publicising them all far more effectively and making them more accessible to those threatened with eviction, so they know help is available? As I have said, if necessary, might the Government also consider topping up the funds if local authorities are under pressure? There is a precedent for this, as the discretionary housing payments were topped up six years ago, after the bedroom tax, or spare room subsidy policy, came in.

I turn briefly to rough sleeping. The Everyone In scheme meant that by January 2021 a reported 37,000 people had been supported out of rough sleeping, or situations such as sofa surfing or staying in shelters, into emergency accommodation with their own room and facilities. In addition, thanks to the work of local authorities and voluntary organisations, 26,000 people helped by Everyone In have now moved into “move-on” accommodation, providing a step forward out of homelessness for good. But there still remain far too many at risk of going back on to the streets.

I hope the funds announced yesterday can expand the Housing First programme. Analysis by Crisis shows that the 9,400 people who were supported through Everyone In face multiple challenges, such as mental ill-health, alcohol or drug dependency. They are at high risk of returning to the streets if the only support available to them is spending time in hostels or other forms of temporary accommodation. Housing First meets the challenge posed by the noble Lord, Lord Bird, when he asked what works; it has proven to be successful in helping homeless people facing multiple challenges, as the Government’s pilot schemes have shown, and it now needs a boost from the funds announced yesterday, instead of facing a cliff edge next year.

More broadly, and finally, can my noble friend say when the Government will bring forward their White Paper on rental reform, saying how they will bring an end to no-fault evictions, including putting protections in place for renters in arrears due to delays in benefit payments? The Government are also committed to what are called open-ended tenancies, instead of the standard six-month assured tenancy agreement, with all the uncertainty that goes with that. So-called open tenancies will give people moving on from homelessness more control not just of their future housing but other aspects of their lives, making it easier to seek and retain work, plan for childcare and schooling, and end the cost of frequent unwanted moves.

I share much of the concern that has been expressed about homelessness in this debate and, while welcoming the steps the Government have already taken, I believe more can be done along the lines I have suggested, so I look forward to my noble friend’s reply.

My Lords, in May, I was privileged, as chairman of the CBI, to chair the B7 before the G7 in June. I remember very clearly one of our speakers, Dr Gita Gopinath, chief economist of the IMF, saying that Britain was one of the countries around the world that would have a V-shaped recovery, because we had invested huge amounts. The Government had invested £400 billion in saving the economy, saving jobs and saving businesses, which in absolute terms or per capita terms was one of the highest in the world. Also, we had an excellent vaccination programme that, even by May, was progressing at speed. That was in May. What has happened since then?

We have had labour shortages. We all hear about lorry drivers, something that I mentioned in a speech over here in June; we have had shortages of butchers, something I mentioned in a speech for the CBI to the Employers Federation in June. In hospitality, in financial services, across the board, in just about every sector, we have had shortages.

I thank the noble Lord, Lord Bird, for introducing this debate. We are one of the wealthiest countries in the world. We are still the sixth largest economy in the world, yet you see poverty in your face in this country. I was born and brought up in India, and I have seen things there, but to see it here, in a country that is so wealthy, is unacceptable. We have food banks in one of the wealthiest countries in the world. We have homeless people in one of the wealthiest countries in the world—and, of course, what the noble Lord, Lord Bird, has done with the Big Issue is an inspiration to the whole world.

We have had the fuel crisis. We have had queues at petrol pumps. I remember driving back from Birmingham at midnight, seeing these queues and saying, “Is this real?” I pinched myself: “Is this really happening, in this country, today?” We have had the energy crisis. We nearly run out of CO2. Thankfully, the Government stepped in and got one of the manufacturers to start again. With my own business, Cobra Beer, without CO2 we cannot make our product, and there are many others like us.

We have had inflation now across the board. I remember asking the Chancellor, Rishi Sunak, in a meeting that I was hosting for the CBI in March, which he spoke at, whether he was worried about inflation. Now we see that inflation went up to 3.3%, then down to 3.2% but is predicted to go to 4%. Many are saying it will go even higher and wage inflation is much higher than that—almost double it or more.

I said to the Chancellor in March: “Follow the example of India”. At the Indian Budget in February, they did not increase taxes because, as they said clearly to me in a meeting which I held with the chief civil servant in charge of that Budget, “We didn’t increase taxes because businesses have suffered enough in this pandemic and we don’t want to endanger or stifle the recovery”. I said to our Indian-origin Chancellor “Listen to India”; well, he listened to an extent, but he announced that corporation tax would be going up from 19% to 25% in two years’ time. He announced the freezing of allowances, but he also announced the super-deduction—a fantastic measure with a 130% deduction to encourage investment by businesses.

Then we fast forward: we have had the announcement of national insurance going up by not 1.25% but 1.25% multiplied by two, because it covers employers as well as employees. Our country now has a tax burden that is at its highest in 70 years. We have had £400 billion of spending for the pandemic and we now have the highest level of spending since the 1970s. High spending and high taxes is not a good place to be.

On top of this we have had the £20 uplift in universal credit, which has now stopped. There were 5.8 million people on that credit. To put it in context, before the pandemic and the lockdown in March 2020 there were 3 million, so almost 3 million more people were having to use this help.

Interest rates are now at their lowest since the Bank of England was founded in 1694, at 0.1%. If that interest rate goes up, just 1% extra in interest rates adds £26 billion to the Government’s bills, because 25% of government debt is linked to interest rates. That will hit mortgages, consumers and businesses.

Going back to March last year, we had just been hit from nowhere by the pandemic. Nobody predicted that a global pandemic would happen. We had the ambiguity and uncertainty staring us in the face. I was then the vice-president of the CBI. I remember that we had a board meeting where I was asked, “Karan, you have been through some tough times in your business. What do you think we will need to do now?” I had nearly lost my business three times and I said “If we go into lockdown, businesses will shut. There will be many businesses that cannot operate if their sales dry up. If your sales dry up, then your cash dries up. You need cash, but if you go to the bank it will not lend any money to you because of the uncertainty in the environment”. The banks were going to have to have a guarantee from the Government to lend. I said, “If they guarantee 80% or 85%, that is not going to work. The banks will not be willing to take that risk of 15% to 20% exposure”.

The Government did not listen initially and the bank lending did not flow through. The CBILS loans started and I kept saying “You’ve got to guarantee the loans 100%”. We used the examples of Switzerland and Germany, which had started to guarantee 100% loans and the money was flowing through. Eventually, the Government listened and we had the bounce-back loans. Over 1 million businesses have received those loans. I give full credit to the British Business Bank; it had an £8 billion loan book before the pandemic but it has an £80 billion loan book today, and a big chunk of that is bounce-back loans.

Yesterday, I was in Teesside and I met its dynamic young mayor, Ben Houchen, who has plans to energise and bring investment into his region. I went from there to visit the oldest warship afloat in the world, except for the USS “Constitution”, which I do not count as it has been 99% rebuilt. It is HMS “Trincomalee”, built 200 years ago in Bombay by the Wadias, who were Zoroastrian Parsees like me. My great-aunt Sheru was a Wadia, so I was proud to go on board this ship that was built barely 20 years after the Battle of Trafalgar.

From there I went on to Crathorne Hall—the ancestral home of the noble Lord, Lord Crathorne—and spoke to the CBI north-east. At the end of my speech, the organiser came up to me and said, “The sound engineers would just like to have a word with you”, because I spoke about bounce-back loans in my speech. They were almost in tears, and they said, “We just want to thank you. Our business was shut for 18 months. We took a bounce-back loan, and that’s what saved us. Now we’ve got our business back, so thank you”. I could give your Lordships example after example of how these loans have helped.

One of the biggest restaurant caterers in the country and a customer of Cobra Beer, Madhu’s, shut for 18 months as there were no weddings or events. Three million people did not receive any help during the pandemic; they call themselves the “excluded”. Then we had this fantastic job retention scheme from our brilliant young Chancellor, Rishi Sunak. The JR scheme was meant to end in May last year—remember that? We said that it could not end and asked for it to be extended it to June. We said, “Are we going to have rolling cliff edges? Are we going to have a more flexible job retention scheme?” The Chancellor and the Government listened, and the CBI, the TUC, and all the other business organisations worked with the Government. When did the job retention scheme end? It was in September this year. It was fantastic: almost 12 million jobs, employed and self-employed, were saved—at a huge cost, there is no running away from that, but they were saved.

The Government gave support to retail and hospitality with rates relief. However, many did not get rates relief, including manufacturers and airports, which suffered so much during the pandemic. The rates bill of Heathrow Airport is over £100 million a year. Eventually they got some relief, but nowhere near enough. Aviation came to a standstill; it was down by 98% at one stage.

Business associations did their best. We at the CBI put out a free hub and not just for our members. We put out free webinars to everybody. We gave out free membership, with no obligation to join. We tried, and other organisations did similar things to help. The Government gave rent protection, saying that tenants could not be booted out if they could not pay their landlords. The Government tried their best.

Then we had that glimmer of sunshine when the economy opened up last summer. The Government listened and reduced social distancing from two metres to one metre. The difference was not twice as many people but four times as many—the difference between a business being viable and not viable. VAT was reduced from 20% to 5%; the Government listened on that. Then there was the Eat Out to Help Out scheme. Cobra Beer sales in August this year could not match our sales last year because that scheme was so successful in helping consumers go to restaurants, helping the restaurants and helping everybody.

The Government would not listen initially on lateral flow tests. Eventually they listened, and now any business or citizen can have lateral flow tests delivered for free. Those tests have been shown by Oxford, UCL and Havard to be very effective if you test regularly. Mass testing is better than mass isolation. I would go so far as to say that if we had applied those tests properly we might have even been able to avoid the second and third lockdowns.

The noble Lord, Lord Bird, mentioned debt from World War II. Debt to GDP after World War II went up to 250%, and it took until the early 1960s— 15 years later—to go down from 250% to 100%. We are now at just under 100%. This is a time of crisis. This is a time when we needed to do this.

When it comes to looking ahead, in 1942—in the midst of the crisis of World War II, when people did not know when it was going to end—Beveridge came up with a plan. When the war did eventually end in 1945, the Government implemented the Beveridge report and established the National Health Service and the welfare state. Similarly, the CBI has just produced, in the midst of the pandemic, our Seize the Moment strategy, looking ahead for 10 years. We think that there is an opportunity of £700 billion for this economy if we do certain things, looking at areas such as decarbonisation, skills, diversity and innovation, education, regional levelling up, health, well-being and global trade. All these things have to be put in place.

The Government have done so much to help us. The analogy I would use is that they have taken a big swing and they have hit the tennis ball, but if they stop at that stage and do not follow through, the ball will go into the net, not over it. Now is the time for the Government to follow through. We have suggested that the Government should set up a COBRA-style task force, with business and government working together. They have listened to an extent: there is the supply chain task force and the hospitality task force. We believe they should go further. We should have a joint task force dealing with the crisis now.

With the virus, we have a settlement that we suggest for the Government. Vaccinations and boosters should carry on. Hats off to the Prime Minister for empowering Kate Bingham to do what she did. Hats off to Nadhim Zahawi; what a fabulous vaccination programme he implemented. Today, 68% of the total population and 80% of over-12s have been double vaccinated.

Now, we just need to focus on innovation. We invest 1.7% of GDP but we need to invest 2.7% or 2.8%, like Germany or America, let alone Israel, at 4%. To do that would require £20 billion more a year—just imagine how that would power our productivity. We want high wages, but you cannot have high wages without high innovation, high skills and high productivity. So what we need now is growth. We need to encourage investment and growth. We do not need cuts and we do not need high taxes. We need growth, because it will generate the jobs that will generate the taxes that will pay down the debt.

On skills and apprenticeships, there was great news in the Budget about skills bootcamps, apprenticeships being much more flexible, and the Kickstart scheme. This is all fantastic stuff.

Business rates reform needs to happen desperately. Our business rates are four times higher than those in Germany and three times higher than the OECD average.

Next week, we have COP 26. The road to net zero is not a zero-sum game. Growth is now predicted to be 6.5%. There is good news and optimism. As Tony Danker, commenting on our Budget, said:

“the Chancellor has shown a genuine willingness to listen to business with measures that will get firms innovating and help the economy to grow … but … This Budget alone won’t seize the moment and transform the UK economy for a post-Brexit post-Covid world. Businesses remain in a high tax, low productivity economy with concerns about inflation. But the Budget will have a positive impact across the economy and makes several changes that will be welcomed by UK businesses.”

My Lords, I thank the noble Lord, Lord Bird, for proposing this subject. We are having a discussion on the economy before we have a real discussion on the Budget next week, and that is always a good thing.

In a strange way, the economy is both the economy of the noble Lord, Lord Bilimoria, and that of the noble Lord, Lord Bird. On the one hand, the Chancellor told us yesterday that we have fantastic growth of 6.4%—we have not seen 6.4% growth for a long time—because of the V-shaped recovery from the pandemic, and we are in the up phase of the V. But a lot of things have not been fixed. That 6.4% figure is a blip and very soon it will go back to 1.3%, our normal rate of growth.

Of course we have borrowed—we have borrowed like there is no tomorrow—but we always borrow for the better-off, never for the poor. In 2008, when the markets collapsed, banks were queuing up for money, and we generously gave it to them. We bought banks, including bankrupt banks; they got into a lot of trouble and we spent money on them like there was no tomorrow. It is when it comes to spending for the poor that suddenly the Budget constraints bind.

I shall give your Lordships an interesting example. Yesterday, the Chancellor did something that was hailed as a progressive measure: he cut the universal credit taper from 63% to 55%. What is the taper? The taper means that if you are on universal credit and you get a part-time job, for every pound you earn, 63p is taken back. Suppose that income tax were 63% at the margin—you would hear howls of protest. The noble Lord, Lord Bilimoria, said that high taxes are back, but the highest taxes in this country are paid by the poor. They are not called taxes though; they are called nice things like tapers. So the taper has gone from 63% to 55% and we have to be grateful.

Now, there is all this money. Yesterday, everybody said that the Chancellor was spending money like there was no tomorrow, but he did not find money to restore the £20 which was taken away from universal credit holders. It would not cost very much—it would cost a fraction of the £37 billion that test and trace wasted, for which, so far, nobody has been fined and no money has been taken away from anybody. So we have £37 billion to be wasted on test and trace but we do not have any money for people on universal credit, who were given the £20 that had been suspended in George Osborne’s day. Even now, after many years, they gave it back for one year and the next year they took it away. Of course there is money—the Chancellor told us yesterday how much money there was. These are choices. It is not that we do not have money; we make choices about who gets the money. Decisions have been made. In every crisis that we have been through, regardless of whether it was a global or a local crisis—in 2008 or the pandemic—you can predict, without any analysis, who will suffer: women, the elderly, the homeless and children. It is not rocket science. That is the way we are.

It is very good of the noble Lord, Lord Bird, to focus on many of the crises, especially the housing crisis. I arrived here in 1965, having come from America, and I was renting. Everybody told me that renting was complete nonsense and that I should buy. Why? Because buying was subsidised; there was a tax concession for buying. So I bought, of course, and I benefited from that—I am not complaining. Mrs Thatcher sold the council estates, which is not a bad thing, because lots of poor people got property for the first time. But we stopped building new council houses and we have never restored that public building activity, which was a solid basis of post-war recovery. To the extent that the post-war welfare state was a success, it was because of not just the National Health Service and full employment but this solid base of building houses.

The Labour Party has not built houses throughout all the years of its existence—nobody has. People say that they want to build affordable houses, but why would anybody build unaffordable houses? Every house is affordable, depending on who is buying it. “Affordable housing” is a misnomer, because you know that nobody will be able to buy it.

The same thing applies to housing benefit, and the noble Baroness gave us a nice example of what is happening in her area. But housing benefit fixes the level about which all rents will be determined; not a single house will be rented at or below the level of housing benefit. There is an old law of economics: put in rent control and rented property disappears.

We have to say that, every year, we will build so many houses. The Government have said that they want to invest 3% of GDP every year, or whatever it is, which is a very nice thing. Yes, we want to have innovation, and research and development, but let us also have something in the social sector. Let us invest new money in housing, health or education, so that we make up for the rising demand, year after year. We do it now and then, but we do not do it with the sincerity with which we need to do it and given the demand.

I can tell your Lordships one thing: on tax levels, it is always economical to cut corporation tax. Why? Because we know who it benefits. But it is never beneficial to raise universal credit; it is a small amount of money. These are choices that we make. Whatever gloss we put on it, some of the problems are permanent.

The strange thing that happened during the pandemic —and I credit what the noble Baroness said—was that the whole economy suffered and got impoverished, which very rarely happens, through nobody’s fault. So the Government threw money at the whole economy through the furlough scheme, for example. The furlough scheme was for people who had good jobs; they were surprised to have no job and not used to being on universal credit, so they were told, “Don’t worry, we will cover you”. There was neither supply nor demand, so the Government had to spend money for both of them. It was very nicely done—but as soon as the pandemic has slowed down we are now back to the original stuff. We will again have homelessness and the distress of universal credit.

Think of the extra burden on national insurance, at 1.25%; it is not very much, but it is 25% above what it was. It is a 25% increase in the tax burden, but people do not put it like that. People do not say that a 63% taper rate is outrageous. We have tolerated a 67% or whatever taper rate all these years, despite people saying that universal credit aims to encourage people to work. How do you encourage people to work? With giving a 63% tax on every pound they make by getting employed. It is a strange world. It is a world for the top 10%, not for the bottom 10%. It has always been like that, and there is nothing we can do about it. I could go on like this for ever, but I think I have said enough.

Follow that. It really is a pleasure to contribute to this debate, initiated by the noble Lord, Lord Bird—the noble Sheriff Bird. I am a real admirer of his. His sense of compassion and commitment is legendary, and we saw that today. I agree with so much of what has been said. I could just say “#MeToo, I agree” and sit down—but I am a politician and, as a former elected mayor and a vice-president of the LGA, I want to make my contribution about the role that local authorities have played during the Covid crisis and their contribution towards the most vulnerable in our society.

As the noble Lord, Lord Bird, said, as we go about our daily lives it is probably quite difficult for us to imagine what a loss of £20 a week might mean to us—I suspect very little. After all, it is less than what I spend on a blow dry, or what we spend on our weekly coffees or a few drinks in the pub. Do we feel fearful when we hear that energy prices are to rise? Annoyed, maybe, but we will not have to make that oft-quoted choice between heating and eating. I was shocked to learn that more than 4 million people are on pre-paid meters. That means they unfairly have to pay the highest cost per unit for energy up front, before consumption, when those of us on our direct debits in effect get the cheapest rates in arrears. It is just wrong.

I learned the value of money from my bus driver father, who brought us up. Every Friday he would take from his back pocket his brown wage packet and physically count out the money for each of our household commitments. It was money for the mortgage—he was very proud that we were buying our little terraced house—and for gas, food et cetera. It would then go into a tin with slots for the appropriate payment. There were no slots for coffees, hairdos and the pub, nor for clothes or insurance—things that we would now call necessities. We managed but, looking back, I suspect it was only just. Our whole neighbourhood was like us, and many were worse. The local gossip was often about those at number such-and-such who had done a moonlight flit the night before because they were in rent arrears. The point is that it was a very real, constant weekly worry—a harsh reality of life on low wages.

Life is still like that for millions of people, and many of them are in work—insecure work and, as we have learned during the pandemic, often essential work. We know that life is precarious for many and the threat of homelessness is never far away for some. This has been exacerbated by the pandemic. We have had excellent briefings from Crisis, Shelter, Generation Rent and others, and the facts are crystal clear. The perfect storm—I am sorry to the noble Lord, Lord Bird, for using the cliché—of all the points in the title of our Motion today will tip many into arrears and those already in arrears into homelessness and the route of temporary accommodation, and the insecurity that that brings with it. You try living with the family in a Premier Inn hotel room. There are currently more than 95,000 households in temporary housing. The Government’s own figures show that the proportion of tenants in rent arrears has tripled and, now that the eviction ban has ended, it can only get worse.

The debt charity StepChange released some telling research last month which illustrated, among other things, that there were more than half a million universal credit claimants in Covid-related rent arrears who say that, with the cost of living increases and cuts to universal credit, they will struggle to pay off their rent debt within 12 months. More pertinently, 225,000 private renters say that they expect to lose their home as a result of unpayable rent arrears. That is more than the size of the population of Luton—our rival town—Swindon, Rochdale or Portsmouth. One in 10 in-work tenants expects to be evicted from their homes as a result of their arrears. That is a lot of people, and a huge amount of misery.

People’s first port of call will be their local council. The Covid-19 pandemic demonstrated that councils can move quickly to build effective services that deliver better outcomes for residents, if given the powers and resources to do so. During the pandemic, councils responded rapidly to support people experiencing street homelessness through the Everyone In initiative. Figures from the Department for Levelling-Up, Housing and Communities show that councils supported more than 37,000 individuals through that initiative, with more than 26,000 now moved on to longer term accommodation. I will credit the Government for that. Together, we did it: it worked.

My main point and underlying message today is about money and funding—no surprise there, Minister. My first plea is for consistency of funding. Please can the Government move away from a pattern of piecemeal and fragmented funding streams, as already mentioned? One of the key issues for councils is the need for longer term funding to aid the recruitment and retention of high-calibre staff and support long-term strategic planning around the issue of rough sleeping and homelessness. Councils have long called for more certainty when planning and commissioning local services. The administrative burden associated with multiple grant-funding applications sometimes appears disproportionate, with small operational teams needing to divert resources away from the front line to write multiple bids, with no guarantee of success. It is also known that multiple and unaligned pots of funding are generally inefficient, with the lead time necessary for effective recruitment not fitting well with truncated funding cycles.

Everyone working in this area knows that prevention is best. They are desperate to get upstream. Eventually, when a client gets a tenancy, they know that they need help to stay in their home. Those two things book end, but often, the funding is focused on what is in the middle—you could say, the meat of the sandwich, but try having a sandwich without the bread. I say that from my heartfelt experience with a charity I am involved in, New Hope, Watford, which is in precisely that situation year on year. It does amazing work, but with funding certainty, it could be so much better—if staff were not worrying about a round of job cuts and service cuts if their bid is unsuccessful.

I also bring to your Lordships’ attention the number of non-EU nationals who form part of the core of homeless people. The 2020 rough-sleeping count showed that 23% of rough sleepers had no recourse to public funds and fell outside councils’ existing statutory responsibilities. Government quite rightly asked councils to support these individuals and, quite rightly, they did—but with no additional funding to recognise this group or any change to the legislative powers and duties that remove access to benefits or council services. This, along with the additional call on councils to house the recently relocated and resettled arrivals from Afghanistan demonstrates the fluidity and unpredictability of this service and the need for long-term, joined-up solutions in housing.

This leads to my third area of concern, mentioned forcefully by my noble friend Lady Pinnock: the lamentable decline in homes for social rent. Social housing is a major tool used by councils to mitigate homelessness—yet, in real terms, provision has decreased over decades. The picture is often clouded by the use of terms such as “affordable rent” or “intermediate rent”, which is now the more usual tenancy. As the noble Lord, Lord Desai, eloquently amplified, they are often unaffordable. But, if a tenancy is to survive for an individual or family coming from homelessness to a stable home, that survival may well depend on social rented accommodation, which is becoming less available.

The number of council and housing association homes being let at social rent fell by 210,000 between 2012 and 2020. Added to their woes is the fact that councils cannot keep all the money from their right to buy sales—is there any movement on that issue, Minister? There is a time limit within which they have to spend the money, which is not always possible when you are trying to build social housing. Perhaps it is time to review that—or, better still, not have a limit at all, to allow the one-for-one replacement that was always promised.

I have some final thoughts. As several noble Lords have asked, is it not time to raise the local housing allowance to cover median local rents, to prevent the shortfalls that my noble friend mentioned in rents occurring and debts building up—or to scrap the household benefit cap to ensure that families are able to access the higher local housing allowance rates? Is there any sign, as the noble Lord, Lord Young, asked, of ending unfair evictions, as was pledged in April 2019?

I am certain that the Minister will tell us of the money that the Government are already providing and have promised to provide, but I am sure that he will expect the usual retort from me: “It is not enough”. It never is. The last thing any of us wants for those who are struggling to get out of debt is for them to resort to the services of loan sharks—another harsh reality from my past. They are still in business—and that in itself is a tragedy.

My Lords, I congratulate the noble Lord, Lord Bird, on securing this important and wide-ranging debate. That is the sort of formal thank-you that we normally have, but I think I join most noble Lords who heard his introduction in noting his powerful and emotional opening speech. I will return to the idea of the importance of emotion in decision-making.

The title of this debate is an indictment of the Government’s handling of our economy. It may be growing, but the nature of that growth is delivering increasing inequality, forcing more and more people into crippling, life-changing poverty. Yesterday, the Chancellor sought to paint an optimistic picture of the UK economy. That is his prerogative, but, for many, it has been a tough couple of years, and it is likely to be an even tougher winter.

While bankers and companies such as Amazon are handed new tax breaks, families face rising costs, high inflation and empty supermarket shelves. People are feeling the pinch and, despite their claims, the Government are not in their corner. We will have other opportunities to debate the Chancellor’s Autumn Budget, but there are a few key facts that are worth citing in the context of this discussion. GDP growth may have been revised upwards this year, but it has been downgraded for 2022, 2024 and 2025. Inflation is expected to peak at 4%, or a little more, over the next year, with this persisting for some time. The legacy of austerity is such that, despite increases in departmental budgets, around half will remain worse off than in 2010.

If growth is weak, inflation is high and public services are not properly funded, people will suffer. That is true in normal times, but even more so when one factors in the impacts of the three strands of the Motion tabled by the noble Lord, Lord Bird. Yesterday’s Autumn Budget was an opportunity to give those in need, in the words of the noble Lord’s publication, “a hand up”. Unfortunately, that opportunity was missed.

We welcome the announcement of certain initiatives, as well as the cut in the universal credit taper rate, which I will return to later, but they do not go nearly far enough. Millions of Britons are facing a lengthy cost of living crisis, and too many face the prospect of losing their home. This has been backed up today by the Institute for Fiscal Studies, which warned that low-income households will feel real pain in the months ahead.

Noble Lords may wonder why all this matters. We often discuss poverty as a concept, trading definitions and stats. Policy wonks compare relative and absolute poverty, while Ministers instruct officials to tweak the formulae. For those living in poverty, though, it is not an abstract concept; it is a hard slog, a cruel and daily reality.

Earlier this week, Channel 4’s “Dispatches” highlighted the plight of several families living in poverty and in poor-quality, overcrowded housing. It was hard hitting and made one wonder whether this is why Ministers are so desperate to privatise the broadcaster. The programme was a timely reminder of problems that have gone unresolved for too long: the sheer number of people trapped in emergency accommodation or on council house waiting lists, and the lack of quality and affordable properties in parts of the private rented sector.

We know these problems have been exacerbated by the pandemic, prompting the Government to step in with a range of Covid-19 economic support schemes. Many came with shortcomings, but at least they kept people in their homes. Now, the withdrawal of those schemes, as well as the removal of the £20 universal credit uplift, has come at the wrong time and is starting to bite.

But, again, I worry that we are falling into old habits and approaching this from the wrong angle. I want to read into the record the stories of two boys who featured in the Channel 4 broadcast earlier this week, to highlight the daily fear that young children are experiencing. Nine year-old Qasim lives in temporary accommodation with his dad and siblings. He is worried that his father does not have enough money when they go shopping and that if the family is made homeless, they will have to sleep in the car. Qasim struggles to sleep and fell behind with his schoolwork during lockdown. He is now attending catch-up classes but is worried about his future: “If I don’t learn, I may not be able to get a good job, and I might end up poor”.

Eight-year-old Kai doesn’t care that his mother, a care co-ordinator who has her income topped up by universal credit, has never been able to take him on holiday or to a restaurant to have macaroni cheese. He loves her dearly because she’s “trying to do her best” to provide for him.” He said, “I worry about my mum having less money because you can’t pay rent. It wouldn’t be fun living on the streets because you have to beg people for food, and they’ll say no”. These children are not asking to live a life of luxury. They just want the basic sense of security that so many of us take for granted, so they have room to grow as people and begin to get some enjoyment from life.

I was particularly struck by a tweet from Save the Children’s Kirsty McNeill, who said:

“Kids shouldn’t know where the family is on a housing waiting list, when pay day is, how much their school supplies cost. They should be dreaming about how they can cure cancer and be in the Olympics at the same time”.

The reality faced by Qasim and Kai, and many more besides, is the result of choices made by this Government. The Chancellor essentially confirmed this yesterday, when he said:

“do we want to live in a country where the response to every question is ‘What are the Government going to do about it?’, where every time prices rise, every time a company gets in trouble, every time some new challenge emerges, the answer is always that the taxpayer must pay? Or do we choose to recognise that Government has limits?”—[Official Report, Commons, 27/10/21; col. 286.]

Of course the Government do and should have limits. However, they also have duties, and I fear those duties are not being upheld. Too many people face a winter of great uncertainty. The Government are not wholly to blame, but their decisions have had, and will continue to have, a very real impact.

The decision to increase the national minimum wage to £9.50 an hour is welcome, as is the end of the public sector pay freeze. However, the IFS also warns that high inflation will cancel out much of the immediate benefit, meaning that millions will be worse off in the short term.

We also welcome the reduction in the universal credit taper rate, although it will not benefit all claimants, particularly the poorest, and its impact will very much depend on individual circumstances. Other fundamental issues remain with universal credit, and we hope that these will finally be addressed, sooner rather than later.

I am sure that the Minister will cite a variety of schemes and statistics in his response. However, I urge him and his ministerial colleagues to acknowledge the scale of the problem and the long-lasting impacts that poverty and homelessness—potential or actual—have on people across the country. The Government talk of improving life chances for all but, sadly, their record to date speaks for itself.

There is a fundamental problem about the issues that we are talking about. The problem to some extent is us. As the noble Lord, Lord Bird, said, the loss of £20 would be unnoticed in his life, and it would certainly be unnoticed in mine. We debate homelessness —this debate is about homelessness—but we think of it in terms of fears and as having to do with “them” or as so many per cent. As human beings, we often avoid thinking about unpleasant things.

Curiously, I have always been terrified of not having a roof, despite the fact that it has never been a real threat. I came from a poor household, but a poor household in the 1940s and 1950s was, in an important way, much richer: we were richer because we lived in a council house, with a secure tenancy and affordable rent. Despite being lowly paid, my father worked for the National Health Service as a porter and had a secure income. Throughout my life, I have always had a roof over my head and confidence; despite being fired a couple of times, even then I had sufficient reserves for it not to be a problem.

I invite people to think about how they would feel—I do not know why I think about this—if tonight was to be their first night on the streets; that they had done their best not to get into this situation, but somehow all their options have run out. Would it help to be told that it was their own fault? Somehow, we have this concept of the undeserving poor. When you are on the streets—it does not matter how you got there—it is an almost impossible position to climb back from.

Would it help being told that losing £20 a week would help, despite the cost of living shooting upwards, as though somehow making you poorer means you are more likely to get a job? I find that very difficult to believe. I draw no conclusions from this because I accept that this is complex, but we surely have to somehow feel the terror of homelessness and, as best we can, try to imagine what poverty is like to give this the weight it should have in our discussions.

It is crucial to recognise that these people exist. They may not vote, but they are citizens, and somehow, they cope—or do they? Google told me today, in my last dive into this area, that homeless men typically die aged 45. In the general population, the age for men is just over 79. So, these people do not cope, really, but they do cope night by night. I am not sure I could cope for a single night.

My Lords, I start by thanking the noble Lord, Lord Bird, for bringing this debate. I know that tackling the causes of poverty and homelessness has been his life’s work and we should all acknowledge his great impact. I also thank noble Lords who have spoken today; each has made their case with great conviction. For my part, I welcome the opportunity to speak out on behalf of the Government on this important subject, ensuring people have a secure home and a steady income is a matter of the utmost importance to us.

The action we have taken to shield people from the full economic force of coronavirus over the last 18 months is evidence of this. The noble Lord, Lord Bird, feels that the Government have been tinkering with problems, but I would respectfully disagree. Decisions taken by the Government mean that direct support for the economy has totalled around £400 billion over the last year. Much of this has protected the productive capacity of our economy, which in turn provides the ability to support the most vulnerable in our society.

It is perhaps important to remind the noble Lord, Lord Bilimoria, that we have handled this differently from the way India has. We have been one of the most generous countries in the world in our interventions. We have spent some £69 billion protecting nearly 12 million jobs across the UK through the furlough scheme. The self-employment income support scheme benefited 2.9 million people with assistance worth over £27 billion. We have safeguarded businesses, thanks to loan schemes worth £79 billion, in addition to cash grants, VAT cuts and business rate reliefs. Those most affected by the coronavirus economic shock have been supported by a temporary uplift to welfare payments.

These measures have been effective. Increasingly, the evidence shows that our economic recovery is under way. Our gross domestic product has bounced back to near pre-crisis levels. Forecasts have revised upwards their expectations for growth this year. In its latest forecast, the OBR expects growth of 6.5%, up from 4% in its previous forecast. That is a 50% increase compared with only a few months ago. GDP is expected to return to its pre-crisis level by the turn of the year.

Unemployment has fallen for eight consecutive months. It is now expected to peak at less than half the levels predicted at the start of the crisis, meaning over 2 million fewer people out of work than we originally feared. The number of employees on payrolls has risen to above pre-pandemic levels, while job vacancies are at a historic high. This increasingly positive economic picture shows we were right to counteract an unprecedented crisis with unprecedented intervention.

However, this has meant that in the last year our borrowing costs have risen to a peacetime high. Clearly, to continue to borrow on this level would not be sustainable. Now that the economy has reopened, we must shift our focus to supporting people into work. I will cover this in greater depth a little later.

While this change in approach means winding down the pandemic emergency support, it does not mean we are turning our back on those most in need of help—far from it. To reassure the noble Lord, Lord Tunnicliffe, we are spending more than £4.2 billion a year in targeted support to help households manage the cost of living.

I turn to housing, about which the noble Baroness, Lady Pinnock, is concerned, and I will address some of the measures that we have in process. The noble Baroness, Lady Thornhill, and the noble Lords, Lord Tunnicliffe and Lord Bird, spoke of the need to help people stay in their homes and for the stock of affordable housing to improve and increase. We agree. That is why this year we are maintaining the increase to the local housing allowance rates for private renters on universal credit and housing benefit. The support provided by this measure is substantial. Last year, more than 1.5 million households received extra sums averaging £600.

We will continue to provide discretionary housing payments to the most vulnerable households through £300 million of funding during the next three years. These payments assist individuals in a range of situations, including those experiencing shortfalls between welfare payments and their rent, and tenants who need deposits to secure a home in which to live. This is part of a wider package, including the household support fund, which provides £500 million to help vulnerable families with essentials such as food, energy and water costs. It can also be used for rent arrears at a local authority’s discretion. Some £100 million is also available for discretionary housing payments and uplift to local housing benefits.

We have announced £65 million in additional funding to support low-income renters at risk of eviction due to the impact of Covid. Some 70,000 vulnerable households will be supported. This measure follows our ban on evictions and the introduction of extended notice periods to protect renters during the pandemic.

The noble Baroness, Lady Thornhill, and the noble Lord, Lord Desai, raised the issue of affordable housing. Yesterday, we committed to an £11.5 billion investment for 180,000 new homes, of which 50% will be under shared ownership schemes.

The noble Baroness, Lady Pinnock, raised the question of the overall housing stock. Of course, new housing stock has to reflect the needs of society, but the overall number of new houses is important, too. In the year preceding the pandemic, more than 240,000 new housing units were built, compared with around 129,000 in 2009-10.

My noble friend Lord Young asked about the White Paper on renting. The Government are consulting stakeholders at the moment and a timetable will be announced shortly.

More broadly, we are continuing to invest in homelessness prevention activities through the homelessness prevention grant. We are providing support to those who find themselves homeless through multiple programmes such as the rough-sleeping initiative, which invests in locally led interventions. The noble Lord, Lord Tunnicliffe, and my noble friend Lord Young expressed interest in this. Our £28 million Housing First pilots have supported more than 1,000 of the most vulnerable rough sleepers across 23 councils. We have committed £1.9 billion in resource funding to homelessness and rough sleeping in the spending review, and £109 million in capital investment.

I turn to wider cost of living support. Beyond the assistance I have outlined, we are helping low-income households manage the cost of living with other support. To that end, we have given local authorities £670 million of additional grant funding this year to help those struggling with council tax bills. We are helping disadvantaged families with the higher food costs they may face outside school terms through the £200 million holiday activities and food programme. We have increased the value of Healthy Start vouchers, available to help pregnant women and parents with children under four with food costs.

On top of this, at the Budget the Government took action to make work pay for those on the lowest incomes. By 1 December, in just over four weeks’ time, we are reducing the universal credit taper rate from 63% to 55% and increasing universal credit work allowances by £500 a year. While the noble Lord, Lord Desai, may feel that this does not go far enough, it represents an effective tax cut worth £2.2 billion in 2022-23 and means that nearly 2 million households will keep, on average, an extra £1,000 a year. In April next year the minimum wage is rising by 6.6% to £9.50 an hour, which is more than £1,000 a year for a full-time employee. Since its introduction in 2016, the national living wage has increased the pre-tax earnings of a full-time worker by more than £5,000 a year.

The noble Lords, Lord Tunnicliffe and Lord Bird, and other Peers mentioned that £20 is a significant sum for these vulnerable people. I completely understand and accept that, but this figure alone shows that we have enabled some of the most vulnerable to see income earnings of around £100 a week. My noble friend Lord Young raises the point that these schemes are rather fragmented and he is probably right, but the Government’s overriding ambition is to get more people into decently paid work. The reduction of the universal credit taper announced yesterday is a major part of that. I will also address some of our training schemes in a moment.

I turn to energy. The Government recognise that the impact of rising energy costs is a significant issue for vulnerable households. The energy price cap has saved 15 million customers on default tariffs up to £100 a year on their bills since it was introduced in 2019. We continue to ensure that the most vulnerable receive help with their energy bills through a range of other measures, including extending the warm home discount to an extra 780,000 households and providing seasonal cold weather payments to eligible welfare recipients. State pensioners can benefit from the winter fuel payment worth up to £300. Since last year, we have invested £1.5 billion in helping low-income households to improve energy efficiency and cut their bills. We are expanding the energy company obligation scheme that focuses on tackling fuel poverty and carbon emissions. I also remind the House that in recognition of the fact that petrol and diesel is a major cost for households and businesses, we have frozen fuel duty for the 12th year in a row.

I turn to jobs. While government support is important, we believe that work is the best way of preventing poverty and improving living standards. Over a year ago we launched the plan for jobs to protect, support and create employment opportunities for people across the country. I am delighted to say that the plan is working. As the Government enter the next stage of our plan for jobs, we are committing a total of more than £6 billion to DWP over the next three years. This will help give everyone a chance to have a fresh start and develop the skills they need for the modern workforce. The Kickstart scheme is one example. It is creating and fully funding hundreds of thousands of jobs for young people at risk of long-term unemployment. Nearly 95,000 young people have started a Kickstart job so far. They encompass a wide range of opportunities, providing foundations for careers in such areas as IT, media and engineering.

The long-term unemployed will receive intensive, tailored support and be helped to find work through the three-year restart scheme. Last year, the Government doubled the number of work coaches to 27,000 in just over eight months. We have committed to an additional 170 job centres, of which around 100 are already open. We are continuing to invest more than £900 million for each year of this SR on work coaches to ensure that universal credit claimants receive the best support to find employment.

Getting people into jobs is one thing, but improving skills is equally important. We have heard today of the importance of skills, and we agree. The single most effective way to increase living standards is to enable wages to rise through gains in productivity, as the noble Lord, Lord Bilimoria, correctly pointed out. That is why we are giving people the opportunity to gain a level 3 qualification for free if they do not hold one already, through our lifetime skills guarantee. Adults who want to retrain in in-demand sectors such as digital, cybersecurity, construction and engineering can benefit from flexible skills bootcamps that last up to 16 weeks. We are tripling the number of traineeships for 16 to 24 year-olds and awarding employers £3,000 for every apprentice of any age they hire. These steps are all designed to address the key issue of productivity. Indeed, early data emanating from the skills bootcamp shows that around 50% of participants are going on to higher-paid jobs.

Yesterday, the Chancellor announced a new scheme to assist particularly with numeracy, which is a major problem among older people. Around 6 million adults in this country have a numeracy age of under 10 and it is holding back their earning capacity. We have announced a scheme to address this over the next three years. These measures are proof that this Government do not shy away from their responsibilities. We will continue to fight poverty, combat homelessness and focus on the most vulnerable. We are committed to giving people in every part of the country the right opportunities to build a better, more prosperous future for themselves and their families.

I thank the Minister for his response. He makes me feel a bit like the young woman who I encountered in Trafalgar Square recently. She asked me for some money and I opened my wallet and handed her a tenner. She saw I had another tenner and she took both of them and ran down the road. I did not manage to catch her. The Minister is making me feel very much like that today and I am sorry that I have to assume that posture.

I have just realised that all we really need to do is to invent a new ministry. I propose that I become the Minister. We will call it the ministry for those who fall through the safety net. If we had a ministry that addressed those people who fall through the safety net then we could see that whatever the Government do, however clever and astute they are with their money, an enormous amount of people fall through the safety net.

At the end of this year or when a suitable time comes, I really would like it if people pointed to me and said: “John Bird, you are an idiot because you cried wolf and you didn’t have to. The Government were going doing everything and everything was going to fall into place and Lord Bilimoria’s wonderful new Great Britain or—whatever we call ourselves now—the UK, was going to happen.” I would love that, but the indications are that the £64 million that the Government have given to support people in arrears has been given to local authorities. Local authorities will spend some of that on existing housing and on people who are having problems with housing. The £360 million—or in that area—which is going to be spent is once more going to be spent on people who are already homeless.

The problem we have is that we have two kinds of homelessness. We now have the carefully social-engineered homelessness—people living on the streets and in desperate need. The Government have shown, in the same way as the Administration that the noble Lord, Lord Young, was a member of did 30 years ago did, that they are beginning to seriously address that. I think there is evidence of that.

I am not talking about the people who have been socially engineered, like me, to fall homeless at some time in their life. I am saying: what do we do with the half a million who are behind with their mortgages and their rent? They are going to be presenting themselves at local authorities at some stage because they will have been through the courts, which will evict them because there is no impediment to them being made homeless even though they were made homeless by Covid-19. I will end there.

I should like to conclude on one point. You could accuse me of being a little snidey here, or a bit of a simpleton. In 2009, I was asked by Mr Cameron, by a circuitous route, to stand for the Mayor of London. I debated that: did I have to join the Conservative Party, because I have always been a Cross-Bencher? No—I decided I would not. When I did so, a particular gentleman who now runs the Cabinet and is the premier member of the Government, a Mr Boris Johnson, jumped in the air because I was the last person between him and becoming the Mayor of London—and you know that if it was not for him becoming the Mayor of London, he would not be in the position he is in now. We know that. When I saw Mr Johnson immediately after he was elected, he came and put his arms around me in the green room—unfortunately there were no witnesses—and said, “Thank you, John, for the job”.

It is my fault. Sorry about that. What did I say? I said, “Do me a favour then”. He said, “What’s that?”. I said, “Remember the homeless”. Now I want Mr Boris Johnson to remember the homeless —but not just those who have already manifested themselves on the streets and in the hostels already, who are suffering and having a horrible life, but the 300,000 children who are going to come down the road. That is what I want him to address. He owes me, and I am calling it in.

Motion agreed.

House adjourned at 5.06 pm.