Contribution
My Lords, good laws should consider unexpected negative consequences and eliminate them before any legislation is implemented. One consequence of the Bill could be that it might increase homelessness and financial exclusion. This arises because DWP’s powers of surveillance apply to bank accounts to which benefits are paid even though the account is not wholly under the control of the benefit claimant. These include bank accounts in the name of landlords and others. I am sure the Minister will be able to give us more information about how that will be dealt with.
A perennial problem is that some landlords and letting agents might refuse to let property to individuals receiving housing benefit or housing costs payments through universal credit, as they fear that rent might not be paid in full or on a timely basis. Housing benefit is usually paid directly to the tenant but, under certain circumstances, it can be paid directly to the landlord. Examples include circumstances where the tenant is unable to manage his or her finances, and may be considered to be vulnerable because of addictions, medical conditions, learning disabilities or physical disabilities. There may be evidence that the claimant consistently does not pay the rent and uses rent money to fund other aspects of his or her lifestyle. The claimant may well have fallen eight weeks behind in rent payments. Under these circumstances, benefits can be paid directly to the landlord. Of course, if the benefits are overpaid, the DWP already has powers to recover the overpayment from landlords without extended surveillance of the bank accounts. It is not clear, therefore, why the Government are taking on additional powers.
Under this Bill, the landlord’s bank account receiving the benefit will become subject to an information notice and related surveillance. It is not clear what the information notice sent to the landlord’s bank account would want to know. It cannot be whether the landlord has excessive savings or income above some ceiling, as the balance of that account and transactions leading to that balance have no influence on the claim of the tenant for any benefit. The money is paid to the landlord on behalf of the claimant whose circumstances are nothing to do with the financial position of the landlord. The landlord’s bank account, or accounts, may contain transactions about the letting business, rental payments from other tenants, tax payments, savings, investments, dividends, capital transactions and more. Such transactions are nothing to do with the benefit claimant whose rent is paid into the landlord’s bank account. Can the Minister explain what the DWP would want to know about the landlord’s bank account?
Faced with erosion of financial privacy, a landlord might refuse to have benefits paid directly into his bank account and refuse to let property to anyone receiving benefits, as that would be the only way of retaining financial privacy. The result could be increased homelessness. This is the fear that many disabled people have already expressed to me at various meetings, especially as their accommodation is adapted to their needs. They fear that other landlords would not incur the expenditure to provide them with suitable accommodation. It would be helpful if the Minister would explain whether landlords can refuse to have benefits paid directly into their bank accounts, and what would prevent them refusing to let property to people on benefits.
Of course, it is not just landlords who face this surveillance. For a variety of reasons, benefit claimants may be unable to open or manage a bank account. Many banks refuse to open a bank account for individuals sectioned under the Mental Health Act. Indeed, I have experienced that problem directly because, in my family, we have a person who has recently passed away who was sectioned, but no bank would give him a bank account. Every bank that we visited on the high street said, “Sorry, he cannot have a bank account”. Under these circumstances, the only option is to have a joint account into which some money or the benefits are paid. However, that person, the other bank account holder, then comes under surveillance. As I understand it, the third party whose name is on the joint bank account would definitely be subject to an information notice or surveillance. This will persuade many to refuse to be a joint bank account holder. In the case of a joint bank account, the money attributable to the benefit claimants may not easily be determined without detailed investigation. It is not quite clear what the bank would tell the DWP, because the bank can only look at a bank account; it cannot tell which money belongs to the claimant and which money to somebody else.
Can the Minister explain how the joint account holder’s money would be separated from that of the benefit claimant’s? Faced with loss of privacy, joint account holders may terminate their involvement, causing hardship and financial exclusion. Of course, the Government can insist that no benefit claimant is denied their bank account; that would go some way towards alleviating this problem—but no other Bill actually insists on that. What assessment has been made of the unexpected negative consequences, and what steps are the Government taking to eradicate them?