Labour calls on government to scrap benefits cap to stop “evictions crisis”

Labour’s Seema Malhotra has called on the government to scrap the benefits cap to avoid an “evictions crisis” after the latest extension of the evictions ban comes to an end next month.

In a letter sent this morning, the shadow employment minister warned that while the last-minute decision from the government to extend the suspension of evictions during Covid was welcome, “the evictions crisis is only being postponed”.

The Labour MP highlighted official figures published this month showing that there had been a 93% rise in the number of households hit by the benefits cap between February and March this year.

Malhotra emphasised that the cap – which limits a household’s annual benefits to £20,000 a year or £23,000 in London – means many families are missing out on the changes to Universal Credit and the local housing allowance introduced in Covid.

Commenting on the evictions ban, Malhotra said: “Labour has repeatedly called on the government to scrap the benefit cap and extend the ban on evictions to avoid a wave of homelessness. This policy pushes families and children into poverty.

“With the extension of the ban on evictions the government must scrap the benefit cap to prevent further rent arrears and evictions at a time when families need support the most.”

The government confirmed last week that the ban on evictions, which was due to end on August 23rd, would be extended by four weeks to September 20th after plans were urgently worked up to protect tenants still affected by Covid.

Keir Starmer slammed this latest U-turn from the government, describing it as “necessary” but too brief. He added that “such a brief extension means there is a real risk that this will simply give renters a few more weeks to pack their bags”.

Think tank IPPR has called on the UK government to extend the ban for another six months, rather than just four weeks, and to offer more financial help to those in the private rented sector.

The research organisation has advised that local housing allowance should be increased to cover 50% of market rates, as the current 30% of market rate level means there are too few properties if people need to move.

The leading housing charity Shelter has warned that 227,000 private renters will be at risk of eviction when the ban is lifted, and campaigners are urging the government to put further measures in place

Below is the full text of the letter sent by Malhotra today.

Re: Increased risk of evictions for families subject to the Benefit Cap

I am writing to you to express my concern about the impact the benefit cap is having on rent arrears and the likely increased risk of eviction for families subject to the cap.

While the government’s U-turn to extend the ban on evictions by a month is welcome, the evictions crisis is only being postponed. Rent arrears will grow further unless the extension is used effectively to scrap the benefit cap.

The work and pensions committee last year cautioned that many affected by the cap faced an “intolerable” financial position, with households falling into rent arrears and consequently losing their homes. Evidence submitted to the Committee from Plymouth Community Homes found that 55% of tenants affected by the cap fell into rent arrears.

Earlier in August, official figures showed that there had been an astonishing 93% rise in households hit by the benefit cap from February to May this year. More households are now caught by the cap than ever before. The overwhelming majority of households that have lost an average of £248 a month through the cap are those with children. Households with children form 86% of those currently capped, two thirds of them being single parent households.

The benefit cap has prevented a large number of families from benefiting from the restoration of the Local Housing Allowance to the 30th percentile and the temporary uplift of Universal Credit.

I would be grateful if you could provide me with details regarding your department’s assessment of the number of households caught by the benefit cap that have fallen into rent arrears and who are at risk of eviction, as well as what steps you are taking to address this issue.

Labour has repeatedly called on the government to scrap the benefit cap and extend the ban on evictions to avoid a wave of homelessness. This is a policy that is pushing families and children into poverty. With the extension of the ban on evictions, I hope you will use this time to reconsider your policy and scrap the benefit cap to prevent further rent arrears and evictions at a time when families need support the most.

I look forward to your response.

Yours sincerely,

Seema Malhotra MP
Member of Parliament for Feltham and Heston