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Prevention of Homelessness Bill
1.28 pm
Mr. Mohammad Sarwar (Glasgow, Govan) (Lab): I beg to move,
That leave be given to bring in a Bill to make provision about homelessness.
We have come a long way since the first comprehensive legislation on homelessness in the United Kingdom was introduced in this House. The Housing (Homeless Persons) Act 1977 imposed substantial duties on all local authorities towards homeless people. There have been considerable developments in that area of law since 1977.
Part VII of the Housing Act 1996, introduced by the Tories, significantly reduced the rights of homeless persons in England and Wales. It was a Labour Government who reversed the negative effects of the 1996 Act by introducing a Homelessness Bill, enacted as the Homelessness Act 2002. In Scotland, where housing is generally a devolved issue, the Labour-Liberal Executive introduced their own Homelessness Bill, which was enacted in 2003. The Scottish 2003 Act seeks to abolish homelessness by 2012. It will do that by abolishing the "priority need" test. There can be no doubt that the Labour Government and the Labour-led Scottish Executive have done more to eradicate homelessness in the past two years than the Conservative Government did in 18 years of power, but there is more that we can and must do to prevent homelessness in the United Kingdom.
My Bill is relatively modest in its aims, but I sincerely believe that through these small and simple reforms we can prevent thousands of needless cases of homelessness. I hope that all hon. Members will agree that it is always better and less costly to prevent a problem from happening than to spend public money trying to pick up the pieces afterwards.
In the case of homelessness, we are talking about broken lives. I believe that we can prevent a very large number of homelessness cases with the enactment of some very minor changes. At present, tenants and owner-occupiers can resist repossession proceedings, but clause 1 would introduce a general right for any residential occupier to apply to the court for a short suspended possession order. That would include members of the tenant's or owner-occupier's family or lodgers. The intention is to provide residential occupiers with the right to ask the court for a brief period to find reasonable alternative accommodation. By providing that brief period, we could avoid families having to sleep rough or in conditions unfit for human habitation.
A recent trend in the UK has been for home owners to refinance their personal debt as consolidation loans secured on the value of their home. Such loans generally come with a much higher rate of interest than a principal mortgage. When family income drops, whether though illness or some other crisis, it is often the inability to meet consolidation loan payments that results in repossession and homelessness.
Clause 2 would enable the courts to vary interest to no lower than the average rate for a United Kingdom mortgage. The power could be used to provide a period of respite and enable families to get back on their feet
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and meet their financial obligations. Importantly, that could enable people to retain their homes. The local law centre in my constituency reports that families facing repossession are often told that they have mortgage arrears of £1,000 or £2,000, when in fact up to a third of the arrears are administrative charges applied by the bank. Most mortgages contain indemnity clauses that force the debtor to pay the bank's legal expenses. Govan law centre reports many cases of people being told that they must pay £1,000 or more to the bank for the cost of being taking to court, even if they win the case. Clause 3 would enable the courts to waive some of those charges when it could mean the difference between someone being able to pay the arrears or facing homelessness.
The final part of the Bill is aimed at some of the most vulnerable members of our society who are likely to face repossession and homelessness. When someone, for whatever reason, is in receipt of income support or jobseeker's allowance, they must wait 26 or 39 weeks before the Department for Work and Pensions will help to pay their mortgage interest. The fact that many families have to wait up to nine months often means that they will face repossession in the courts long before they get any help.
Of course, if such families had not purchased their home and were still renting from a social landlord, they would not face eviction and would get immediate help from the local authority. Some have argued that the position is discriminatory against low-income home owners, and I am aware of one legal challenge to the relevant social security regulation in my constituency, under articles 8 and 14 of the European convention on human rights. I understand that the case is currently before the social security commissioners.
Help with housing costs for home owners was substantially reduced by the Conservative Government in 1995. Since then, housing tenure has continued to shift generally towards home ownership. The Office of the Deputy Prime Minister reported in 2002 that only 19 per cent. of people in the United Kingdom rented their home from a social landlord, while 10 per cent. rented from a private landlord, and a massive 70 per cent. of all households were owner-occupiers, with 29 per cent. of those owning their home outright while 42 per cent. had a mortgage.
Mortgage protection insurance is important, but it has not been the answer in practice. The simple fact is that many low and modestly paid families cannot afford it, and many policies are ineffective because of exclusion provisions.
Clause 4 would enable the Secretary of State for Work and Pensions to intervene in appropriate cases in order to prevent homelessness. The stark reality is that the failure to intervene and provide additional help will cost the state more money in the long run—more money to accommodate a family in expensive temporary
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accommodation under the Homelessness Act 2002; more than it costs to accommodate a family in social rented housing in receipt of full housing benefit.
It is important to remember that many of the people facing repossession purchased their house because it cost less each month than renting it. That is why their eviction will be more costly to the state, which ends up paying a more expensive rent through housing benefit but does not provide any help for a cheaper mortgage. There is no policy logic in the current arrangements. I call on hon. Members to support the Bill and, by introducing some small legal reforms, help to make homelessness a thing of the past in the United Kingdom.
Question put and agreed to.
Bill ordered to be brought in by Mr. Mohammed Sarwar, Mr. Khalid Mahmood, Mrs. Alice Mahon, Angus Robertson, Jim Dobbin, Mr. Frank Roy, Sandra Osborne and Mrs. Helen Liddell.