Peter Dowd (Bootle) (Lab): It is becoming increasingly apparent that this Government are one of the most pusillanimous in living memory when it comes to tackling the powerful and vested interests in this country. This pusillanimous approach extends to the interests of the media, the utilities and any companies that replenish the coffers of the Tory party. In fact, it also extends to the international community as well. The obsequious kowtowing to foreign Governments, such as those of China and Saudi Arabia, is cringe-worthy, embarrassing and not worthy of a British Government. It comes to something when the Italian Government have managed to get more taxes out of big corporations than the Chancellor of the Exchequer, and that is saying something.

It does not matter whether a person is young, old, disabled—either physically or mentally—distressed, unemployed, on low pay, or on temporary or zero-hours contracts, they are fair game for this Government. This is a Government who challenge the weak, the vulnerable and the needy and dress it up as a virtue or something that is character building. The trend now is for the Government to discredit anyone who gets in their way, or who they think is getting in their way. The Government could teach the mafia a thing or two about extortion, but without the charm.

The House of Lords, the bastion of the Tory party for decades, challenges the Government, so the Government are now giving thought to how to clip its wings. It is strange that they have managed to do that only now when they no longer have a built-in majority in the Lords.

Let me turn now to the banks and the bankers. Today, we are seeing the continued fall-out from their reckless decisions that led to the crisis, with the Royal Bank of Scotland having to put aside a further £2 billion to cover its incompetence. Ministers sound like a stuck record, as they once again blame the previous Labour Government. Yet those are the people who, in the form of the shadow Cabinet in 2007, wanted to deregulate the banking and financial services sector lock stock and barrel through their “Freeing Britain to Compete” document. Following the banking crisis, which was caused by their friends in the City, they quietly buried that document much to the chagrin of the right hon. Member for Wokingham (John Redwood) who co-ordinated it. Although that document is as rare as rocking horse dung, I do suggest, none the less, that Government Members try acquaint themselves with it—that is if they can find a copy of it.

I noticed the Prime Minister patting himself on the back today when he talked about the Government’s record on tax collection. If that is the best this Government can do, it is no wonder they are having to penalise those who can least afford it. If they cannot get the money off the corporations, they will get it off the dispossessed.

Yet again we are hearing about another policy that has not been thought through. The fact that the Minister has announced some delay in the proposed cuts to supported housing is evidence of that. The long-term impact on the finances of local government and of the health service are potentially catastrophic. It is significantly cheaper to have elderly people living in supported accommodation than it is to have them in residential care. There is a danger that these proposals will bring forward that cost with the transfer to residential care. Not content with penalising older people for being old, the Government are now on a roll, as they tackle homeless people, those escaping domestic violence and people with disabilities. Around 440,000 homes are potentially affected. Discretionary support will not make up the difference. Charlotte Norman of Place Shapers and St Vincent’s Housing Association says that the proposals look like having a more detrimental effect than any other recent housing or welfare announcement. In my own constituency, Anchor Housing will struggle. The average rent in sheltered housing schemes is £123 a week, which will leave a shortfall of £32. There will be a significant detrimental effect on those organisations that support the most vulnerable.

When we talk about the most vulnerable, the Government accuse us of shroud waving. We are not shroud waving; we are telling the facts as they are, or possibly as they could be. Those on the Government Benches can wring their hands and accuse my right hon. Friend the Member for Wentworth and Dearne (John Healey) of being a scaremonger, but they are putting their heads in the sand. It is the responsibility of the Ministers on the Front Bench and this House to get a grip of the situation and get the Chancellor to change his mind for the umpteenth time.

Daniel Zeichner (Cambridge) (Lab): My city of Cambridge is a high-cost area in the grip of a housing crisis. The problem is multi-faceted and complicated, and every single thing that the Government are doing is making it worse. This policy is no exception. We have been asked by Government Members what we would do. Well, I can tell them that three-year tenancies without any unexpected rent rises would be a very good start, and I commend that idea to them.

I have spent the past few days talking to providers of supported housing in Cambridge. What struck me was that every single one of them warned about the dangers of this policy and the effect that it will have on our cities. I will relay a few of the things that I was told. Let me start at the YMCA, which has 80 residents—a mixture of students and people in work—70 of whom receive housing benefit. I was told that if housing benefit is cut, the residents will be turfed out on to the streets. The YMCA does not want to do that, but it will have no choice. That would, of course, completely undermine recovery programmes and cause yet more young people to end up living on not the Conservatives’ spin-happy road to recovery, but the street.

What of the local council? Cambridge City Council directly provides or manages more than 100 units of accommodation for homeless households, including three hostels, 22 units of move-on accommodation for adults recovering from mental health conditions, and 13 sheltered housing schemes for older people—more than 460 tenancies. This will be the same story for every Member across the House. The council rightly says that, if this policy goes ahead, it will inevitably result in their tenants facing a higher net weekly payable rent. There will be no more income to pay the rent, just a higher rent. These are vulnerable people who will struggle to prioritise paying that rent, so we know what will happen: they will either sink into a spiral of debt or lose their accommodation—or, most likely, both.

My council also tells me that its inevitable loss of income will force it to reduce the services that it provides, which means fewer wardens, less support and less preventive work to stop people needing to go to hospital. My local NHS already has severe well-documented problems, which have recently been rehearsed in the Chamber, but the changes will just make that situation worse. We hear about joined-up government—I do not think so—but the policy will cost more money. It will just pass the buck by putting the cost on our hospitals and homeless services, which are already overstretched and working flat out.

Housing associations will also be affected. CHS Group tells me that the overall impact of the LHA cap will be a loss of income of £537,000 a year and that four of its support schemes in Cambridge will be plunged into a significant operating loss. Those schemes house 47 people—vulnerable teenagers, people with learning difficulties, and vulnerable women and older people—yet that provision will be under immediate threat.

Let me be generous for a moment. Perhaps the Government will change their mind, as happened when they thought again on tax credit cuts, after being presented with the facts. We have heard powerful and persuasive arguments from Labour Members today. Maybe the Government did not really understand the consequences of their proposals, but if that is the case, they should listen carefully now.

I shall conclude by being slightly less generous, however. I think that the proposal is part of a deadly cocktail of housing reforms that will decimate the sector and make our country’s housing problems worse. There is constantly a gap between what the Government say and what they do. They talk about helping our country to live within its means, but in reality they are just mean. I urge the Government to think again. We all make mistakes, so there is no shame in their admitting that sometimes they get things wrong. It would be far better to change course now than to risk inflicting such harm on so many vulnerable people.