On Wednesday, the House of Commons select committee for Work and Pensions released their report on the cost of living crisis. The committee is an influential group of 11 MPs – including six Conservatives – who monitor the impact of social security policy and hold the government to account. Shelter, along with more than 50 other organisations and individuals, submitted evidence to the committee’s inquiry into how the government can best support people at a time of soaring rent and bills.
Giving evidence to the inquiry, campaigner and food writer Jack Monroe talked powerfully about the impact the crisis will have on the millions of families living on low incomes across the country:
‘There are millions of children living in poverty in Britain today. Their home situations and their families’ financial situations are already untenable, and they have become increasingly untenable over the last decade. The impact of the cost of living crisis on those households will be fatal in some cases, and that is not a term that I use lightly.’
At Shelter, we know that the housing emergency has left millions struggling to afford their homes. Now the spiralling cost of living is pushing many over a cliff, with nothing left to cut back on to keep up with rising prices.
In our evidence to the committee, we highlighted that housing benefit is failing to support low-income private renters and leaving them at risk of homelessness. With the Local Housing Allowance (LHA), which determines the amount of housing benefit private renters can receive frozen since March 2020, record rent rises have left LHA trailing behind the real costs of a home. In 91% of England, housing benefit now fails to cover the cost of a modestly priced 2- or 3- bedroom home. The government urgently needs to raise LHA so that it at least covers the cheapest third of rents for the 1.8 million private renters who claim housing benefits.
We’re glad that the committee agreed with us, recommending ‘an increase to Local Housing Allowance to ensure that it supports people on low incomes to access secure, affordable housing in their local area.’
The benefit cap – which limits the total amount of benefits a household can receive – also came under scrutiny for pushing more than 120,000 households into hardship. The report quoted our evidence on the impact of the cap on lone parents, women escaping domestic abuse and people who have previously slept rough. The committee recommended that the cap, which was lowered to its present level in 2016, should urgently be reviewed before the end of 2022.
Another key recommendation was an immediate pause to deductions from benefits. This would provide very welcome breathing space for the millions of people who see their benefits income reduced every month to pay back debts, often for an advance to get them through the mandatory 5 week wait for a first Universal Credit payment. The committee also called for more frequent uprating of benefits so that they keep up with pressures households face in a period of rapid inflation.
The evidence that the housing emergency is fuelling the cost of living crisis is overwhelming. The government urgently needs to make housing benefit fit for purpose to protect private renters from homelessness this year.