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MPs warned that 1% benefits cap will lead to 'increase in homelessness' as vote looms

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MPs warned that 1% benefits cap will lead to 'increase in homelessness' as vote looms

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Published by Max Salsbury for 24dash.com in Central Government and also in Communities, Finance

MPs warned that 1% benefits cap will lead to 'increase in homelessness' as vote looms MPs warned that 1% benefits cap will lead to 'increase in homelessness' as vote looms

MPs will vote today on the Government's plans to place a 1% cap on working-age benefit rises - but have been warned that the changes are "likely to lead to increased homelessness".

The Residential Landlords Association (RLA) has argued that such a cap would be "unsustainable" and will lead to many tenants facing eviction as they find themselves unable to pay their rents.

The cap would lock annual benefit rises below the rate of inflation, currently at 2.2%, until 2016.

Labour has said that the cap will lead to cuts in support for millions of working people, and will vote against the proposal.

However, the work and pensions secretary, Iain Duncan Smith, defended the proposals. Speaking on Radio 4's Today programme this morning, Mr Smith claimed that reform was needed to sort out the former Labour government's "outrageously messy system".

Alan Ward, chairman of the RLA, said: "Almost a quarter of tenants in the private rented sector are in receipt of housing benefits, including some that are in work. Whilst landlords have kept rent increases well below inflation this still wouldn’t be sufficient for benefit claimants facing a 1% cap on the increase in their benefits.

"Already before this measure is introduced, Shelter has reported that 1.4 million people are falling behind with payments on their rents or mortgages. The Government’s reforms will serve only to increase the number of families struggling to cope.

"With homeless charity Crisis also pointing to young, single people on benefits being able to access just 1.5% of rental properties available, it is clear that the housing benefit changes are having a severe impact on those in desperate need of housing."

The Coalition has argued that benefits should not be rising above public sector pay increases, which are also currently capped at 1%.

The RLA says that, based on figures from the Government’s Valuation Office Agency, the average rent in England for the 12 months to September 2012 was 1.29% higher than in the preceding 12 months, and below the 2.2% Consumer Price Index increase over the same period.

The organisation, which represents 16,000 private sector landlords in England and Wales, claims that "even with rents increasing by just 1.29%, those on benefits facing a 1% cap on the rise in their benefits will face added difficulties in affording their rent".

Amongst other forms of welfare, the proposed cap would apply to some aspects of housing benefit, JSA, Sick and Maternity pay and Income Support.

Meanwhile, the Chartered Institute Of Housing's chief executive, Grainia Long, said: "We have serious concerns about limiting benefit uprating to 1% per annum.  Inflation on household essentials has been high throughout the recession, further eroding the living standards of those on the lowest incomes – including those in work, the ‘strivers’ government says it wants to support.  Capping benefit rises at 1% will hit families who are already struggling to pay for basics like housing, food and fuel, and who are turning to food banks in increasing numbers.

"The government needs to act now to address these concerns.  Last week’s news that 1.4 million people are struggling to keep up with their rent or mortgage underlines the importance of a simple, robust welfare safety net that helps people with housing costs when they face financial pressure. The cuts that have been implemented and the complexity introduced in the last 18 months create added problems for households struggling to cope."

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