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15:16 - The House divided: - Ayes: 253 / Noes: 304 - Question accordingly negatived.
Mr Deputy Speaker (Mr Lindsay Hoyle)
We now come to the Opposition business, beginning with the prayer against the housing benefit regulations of 2014 in the name of the Leader of the official Opposition. The debate is limited to 90 minutes under Standing Order No. 16(1). I remind Back Benchers that there will be a six-minute time limit on their speeches.
Rachel Reeves (Leeds West) (Lab)
I beg to move,
That an humble Address be presented to Her Majesty, praying that the Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014 (S.I., 2014, No. 212), dated 4 February 2014, a copy of which was laid before this House on 5 February, be annulled.
The motion also stands in the names of my right hon. Friend the Member for Doncaster North (Edward Miliband), the hon. Members for Brighton, Pavilion (Caroline Lucas) and for Carmarthen East and Dinefwr (Jonathan Edwards) and others.
Let me set out our reasons for calling this debate and forcing this vote today, and the circumstances that have brought us to this position. The matter before us takes us to the heart of this Government’s shabby and shameful record. By statutory instrument, the Government are trying to close a loophole in the bedroom tax legislation without even understanding how many people are affected by these changes. Instead of trying to close this loophole, the Government should finally try to do the right thing and scrap the bedroom tax altogether. This Government promised that they would not balance the books on the backs of the poorest and most vulnerable, but that is exactly what they are doing, and in such a careless, clumsy and cack-handed way that we see chaos, confusion and uncounted costs piling up around us as they compound the injustice of their policies with utter incompetence in their delivery.
This Government’s bedroom tax has been a fiasco from the very beginning. More than half a million households have been hit by this mean-minded measure. Two thirds of those affected are disabled and 60,000 are carers. More than 200,000 families with children are affected, many of whom are already below the poverty line and forced, as a result of this tax, to find an average £728 a year extra in rent—equivalent to losing all the child benefit for a second child. So much for the Prime Minister’s moral crusade.
John Hemming (Birmingham, Yardley) (LD)
In January, the hon. Lady said that she would place a cap on structural social security spending, so what other cuts in welfare would she make to cover this exemption?
Rachel Reeves
Specifically on the bedroom tax, we have said that we would cancel it by closing the loophole in the shares-for-rights scheme, the bogus self-employment in the construction sector, and the tax credit that the Chancellor gave to hedge funds in the Budget earlier this year. We have been very clear about how we would pay for this. In the hon. Gentleman’s local authority of Birmingham, 2,100 households are being affected; I wonder whether he might speak for them and their concerns.
The implementation of the bedroom tax has been a shambles. Ministers have been unable to explain whether the policy is supposed to reduce overcrowding or whether, as their costings assume, people are expected to remain in their properties. There has been uncertainty and inconsistency, with mixed messages about who is exempt, whether it be parents with children serving in the armed forces, disabled people or carers. The truth is that none of them is exempt. Courts and tribunals have had to devote days to debating the definition of a bedroom, and as the unintended consequences become clear, the uncalculated costs are mounting.
Philip Davies (Shipley) (Con)
If this is causing so many problems—the Labour party in Bradford seems to think it is, too—perhaps the hon. Lady could explain why the Labour-dominated social housing provider has continued to build three-bedroom house after three-bedroom house despite claiming that it is not able to rent them out, and why Bradford council, which received £1.2 million in discretionary housing payments, has spent only £350,000 of it in the first six months and has not even bid for any of the extra funding the Government made available. If this is causing so many problems, why has the Labour council abandoned all these people?
Rachel Reeves
Let us see where Bradford is by the end of the financial year, not just six months into it.
Many of those who are moving because of the bedroom tax are ending up in private rented accommodation which, though smaller, is more expensive. Analysis by the university of York suggests that this could mean the Government paying out £160 million more in housing benefit than had been budgeted for.
Ministers have also been forced to admit that 35,000 of the disabled people affected have had their homes specially adapted for them with, for example, wheelchair ramps, wider doors, stair lifts and accessible bathrooms. If they are forced to move, it has been estimated that the costs of repeating those adaptations in new properties could be as much as £234 million.
According to the latest numbers from the National Housing Federation, two thirds of the households hit by the bedroom tax have already fallen into arrears, hitting the finances of the very housing providers we need to be building more homes to deal with overcrowding, and a staggering one in seven of the tenants affected have already received eviction warning letters.
Lilian Greenwood (Nottingham South) (Lab)
Does my hon. Friend share my concern that in Nottingham more than 2,000 City Homes tenants are falling into arrears totalling more than £286,000—money that should be spent on refurbishing existing homes and building new ones? The fact that they are in arrears means that even if there were somewhere for them to downsize to, tenancy restrictions would prevent them from doing so.
Rachel Reeves
In my hon. Friend’s local authority area—Nottingham city council—200 people have been wrongly paying the bedroom tax because of this Government’s mistakes. She is absolutely right to mention the number of people in her area who are in arrears and the difficulties they will have in moving.
The eviction warning letters that have gone to so many people raise the threat of millions more being wasted in eviction proceedings and the emergency accommodation that will be needed for those who are made homeless. What a shambles.
Andrea Leadsom (South Northamptonshire) (Con)
I have great regard for the hon. Lady, but as somebody who used to work at the Bank of England, she will know that this is not a bedroom tax. How does she calculate that saying in effect that people who have a spare bedroom should no longer have it paid for by taxpayers is somehow a tax?
Rachel Reeves
But as the hon. Lady well knows, the reality is that for many of these people it is not a spare bedroom. It is the bedroom that their sons and daughters who serve in the armed forces stay in when they come home; it is the bedroom that their sons and daughters stay in when they are home from university; it is the bedroom that is used to store the dialysis equipment; and it is the bedroom that the carer comes to stay in. These are not spare bedrooms; these are rooms that are needed by many people with disabilities or with children. We can debate whether it is a spare room subsidy or a bedroom tax, but what we do not have to debate is the impact it is having on people. In the hon. Lady’s constituency and mine, and in places across the country, people are suffering because of the decisions this Government are making. The Government should instead do the right thing and cancel the bedroom tax.
Mr Clive Betts (Sheffield South East) (Lab)
I was talking the other day to Tony Stacey, the chief executive of South Yorkshire housing association, which is a very well run local association in Sheffield and the surrounding areas. He pointed out not only that its arrears are going up, but that it is spending £200,000 more on helping to advise its tenants and on collection. The National Housing Federation says that when those extra costs of arrears and collection are added up nationally, £1.5 billion of development opportunities will be lost as a result of this Government’s welfare reforms.
Rachel Reeves
All that money could have been spent on building the houses we need to deal with the overcrowding crisis and other crises of which the Government speak; instead, house building is at its lowest level since the 1920s.
Let me turn to the loophole. Just when we thought that things could not get any worse, the latest shocking turn in this sad and sorry story was the revelation last month that because the Government could not even draft their own legislation and regulations correctly, many of the households that they had told local authorities should be made to pay the bedroom tax—those who had been in continual receipt of housing benefit for the same residence since 1996—were in fact not covered by the legislation.
The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
The hon. Lady referred to the National Housing Federation report and claimed that it said there was cause and effect with regard to the implementation of this policy and arrears. May I quote something to her and then hear what she has to say about it? The report actually said that it is
“difficult…to attribute any observed rise in outstanding arrears since 31st March 2013 to the introduction”
of the spare room subsidy “alone” and that the situation needs to be monitored. Secondly, it said that the vast majority of housing associations reported no rise in evictions. Would the hon. Lady like to withdraw her previous comments?
Rachel Reeves
The facts speak for themselves: two thirds of the households hit by the bedroom tax have fallen into arrears and councils up and down the country are trying hard not to evict people, because they know it is the wrong thing to do. They are trying to help people and we should welcome that and applaud them for doing the right thing, unlike this Government, who are failing to do the right thing.
Mr John Redwood (Wokingham) (Con)
Could the hon. Lady explain why Labour in office supported a scheme just like this for private rented sector tenants?
Rachel Reeves
The right hon. Gentleman knows full well that this scheme is retrospective in a way that the scheme for the private sector was not. The people affected by this loophole have been living in their properties since 1996. They thought they had a secure and permanent tenancy, but it turns out that they do not, because they cannot afford to live in the home they have lived in for, in some cases, their whole lives.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. You are both up at the same time. Is the hon. Lady giving way?
Mr Deputy Speaker
Order. There can be only one person on their feet at a time. It is up to Rachel Reeves whether she wants to give way to the Secretary of State. She has given way to him once already and it is for her to judge whether she will do so again.
Rachel Reeves
I shall not give way to the Secretary of State, because he will have a chance to respond in a few minutes and I look forward to hearing what he has to say.
Let us take a moment to reflect on what this means. The Government have been telling local authorities to take housing benefit away from people who were in fact legally entitled to it all along. Most of these people were already in vulnerable positions and will have been pushed even further into severe hardship as a result of this Government’s errors.
Let us look at a few examples. A widower in Staffordshire suffering from mental health problems told of the sacrifices he had to make to find the extra £14 a week he needed to stay in his home. A 56-year-old woman from Rotherham, who receives support for health-related problems, has had to pay more than £700 in extra rent, which we now know was unlawful. In Greater Manchester, a grandmother who looks after her granddaughter, has been diagnosed with depression and anxiety and who paid £200 in additional rent as a result of the bedroom tax fell into arrears and was threatened with eviction from the home she has lived in for 26 years. These people and many like them are now due a rebate, but nothing will compensate for the distress they have been caused or the time and money that the council will have to spend sorting out the mess this Government have caused. And now the Government want to apply the bedroom tax again to these people and thousands of others like them.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
How does my hon. Friend think people will feel when they have the relief of finding out that they are exempt from the bedroom tax, only to then be told that the Government are breaking their necks to close the loophole?
Rachel Reeves
Today is our only opportunity to stop the Government closing the loophole, and to urge them to cancel the bedroom tax altogether. We have a chance this afternoon to walk through the Lobbies and either to stand up for our constituents or to stand against them, as this Government have done repeatedly.
Many of the people who have wrongly paid the bedroom tax have already been forced to move and have fallen into arrears with their rent. Because many local authorities do not have electronic records back to 1996 to allow them easily to identify cases that meet the relevant criteria, they have been forced to spend time and money on manual trawls through paper files to begin to sort out this huge mess. What a waste of time and money, and what a mess caused by this Government’s incompetence. Councils up and down this country have been put in an impossible position, and people in need have been put through needless anxiety and uncertainty. As I have said, money that could have been spent on building houses has been spent on having to sort out this mess. It beggars belief that like universal credit—another of the Government’s flagship welfare reforms—this policy has become mired in chaos, confusion and spiralling costs.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
My hon. Friend is making a magnificent opening speech. Does she agree that we will find that the bedroom tax is costing rather than saving the Exchequer money?
Rachel Reeves
Closing the loophole will indeed cost a huge amount of money—borne by local authorities that will have to do the work to sort out this mess.
Even as they seek to close this loophole, the Government do not have any understanding of the number of people affected by it. We asked Ministers on the Floor of the House to tell us how many people have been unlawfully charged the bedroom tax as a result of the loophole. On 13 January, the Minister of State, Department for Work and Pensions, the hon. Member for Wirral West (Esther McVey), who has responsibility for employment, told us in a written answer:
“This information is not available.”—[Official Report, 13 January 2014; Vol. 573, c. 449W.]
On the very same day, the Secretary of State told us in this House that
“the number is likely to be between 3,000 and 5,000”.—[Official Report, 13 January 2014; Vol. 573, c. 577.]
The next day, Lord Freud, the Minister for welfare reform, said in another place that
“the numbers involved in this anomaly are small and the amounts are modest.”—[Official Report, House of Lords, 14 January 2014; Vol. 751, c. 106.]
At oral questions this week, the Secretary of State told me that
“some 5,000 people may be affected.”—[Official Report, 24 February 2014; Vol. 576, c. 19.]
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
If 5,000 people were affected across the UK, I would expect about 50 people to be affected in Edinburgh. So far, the council has identified at least 113, and others in housing associations may be affected as well. I am sure that the situation is even worse in other places. Does my hon. Friend accept that as well as the extra cost and waste of money caused by the bureaucratic chaos, many people will apply for and get discretionary housing payments, so the savings to the Government, if there are any, are ultimately likely to be minimal? Why do they not just drop the entire tax completely?
Rachel Reeves
That is what we are calling on the Government to do today—to scrap the bedroom tax altogether.
We had no idea of the numbers affected and the Government clearly did not have a clue, so we asked the question that they should have asked: we asked local authorities how many people have been affected. Of 378 local authorities, 197 have now responded, including Birmingham city council, where 2,100 households are affected, Cardiff with 220 and Glasgow with 913, as well as Tory local authorities, such as Cheshire West and Chester council, where 275 households are affected, Tory Peterborough with 200 and Tory Wandsworth with 234—the list goes on. In total, our replies so far suggest that 21,655 households have been affected. That is on the basis of responses from barely half the councils, while many of them have said that they cannot give complete answers that include housing association tenants. It is therefore already clear that not only have this Government made a complete mess of their own policy, but they do not even have a clue how many people are affected by the loophole.
The Government have responded to this fiasco by scrambling to cover up their own mistake. They introduced a statutory instrument to close a loophole in their own legislation, without even giving this House an opportunity to scrutinise and debate it; it is only through this Opposition day that we can have a vote, which is why we called this debate today.
The bedroom tax was misconceived from the start, and it has been incompetently executed every step of the way. The chaos, confusion and extra costs are mounting, with the heaviest price being paid by the poorest and most vulnerable. The Government should scrap the bedroom tax today, but instead they are making it apply to an extra 40,000 households. If this Government will not scrap the bedroom tax, the next Labour Government will do so.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I call Mr Peter Lilley to make a six-minute speech.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
As the Secretary of State responsible for introducing the regulations in 1996, which interacted in an unforeseen way with the regulations last year, I must seek the House’s indulgence at not having recalled the detail of their text and drawn any possible problem to the attention of my successor. However, I assure the House that there was no intention of granting any long-term relief from a change of policy that I envisaged introducing if we had been re-elected and I had remained Secretary of State.
Mr Lilley
I will give way not at the moment.
The problem that we face is a huge shortage of housing. We have 1.85 million people on council waiting lists, up 800,000 since 1997. That should be no surprise, given that the previous Government allowed the population to increase by 3 million during that period, with virtually no addition to the housing stock.
The symptom of such a shortage is overcrowding—a word which did not pass the lips of the Opposition spokesman in her speech. During my period as a Member of Parliament, many people have come to my surgery to seek help about a change in social housing. Overwhelmingly, they have been people living in overcrowded accommodation who want a bigger property and seek to move out of a one or two-bedroom property. I have therefore been surprised by the general approach of Opposition Members and by some of the media in saying that no one wants to move out of small properties into big ones and that there are therefore no small properties to be moved into by those affected by the removal of the spare room subsidy.
By chance, I bumped into an old friend who is now the chairman of an organisation called HomeSwapper. Some 80% of local authorities belong to it, and hundreds of thousands of tenants have registered on it that they want to swap.
Sheila Gilmore (Edinburgh East) (Lab)
With all due respect to the right hon. Gentleman, the problem with his presentation is that the Government expect to make a fairly substantial saving of some £500,000—they will not actually make it—from people not being able to move. What is the real aim of the policy: is it about people moving, or about trying to extract money from them?
Mr Lilley
The policy is about making better use of a housing stock that is in very short supply.
My friend pointed out that hundreds of thousands of people are registered: last year, about 40,000 swaps were arranged; this year, the number arranged on the site has increased by 23%. I went to my local authority to find out its figures. Some 500 or more people registered as council tenants in St Albans are seeking to move, of whom 260 are seeking larger properties, while only 62 are seeking to downsize. I therefore ask Opposition Members to go to their local authorities and find out the actual figures.
Mr Lilley
Then the hon. Gentleman will know that nationwide, on HomeSwapper alone, 50,000 people with one-room properties are trying to move to larger properties that are available. It is simply untrue to pretend that such properties are not available.
I do not want to use up time unnecessarily in this important debate, so I will just draw the attention of the House again to the fact that we are dealing with a massive overcrowding problem resulting from a shortage of property. The Opposition are pretending that the reverse is the case and that we have a large surplus of rooms that we can allow people to have—it would be wonderful if we had an excess of cheaply available property, so that everyone who wanted an extra room could have it, subsidised and free, from the taxpayer—but we are not in that position. When will they wake up to reality, look at the facts and deal with the real social problem that most of us face, which is overcrowding in council and social properties?
Rosie Cooper (West Lancashire) (Lab)
I congratulate my hon. Friend the Member for Leeds West (Rachel Reeves) and the shadow team for giving hon. Members the opportunity to highlight what a farcical, ill-thought-through and shambolically implemented piece of legislation the bedroom tax has turned out to be. The identification of the technical error, to use the polite phrase, is another example of the fundamental failings of the legislation and of why the policy has been an abject failure from the beginning.
A year ago, I spoke in a Westminster Hall debate on this issue. In the past year, we have found out that the reforms do not encourage mobility in the social rented sector, that they have not strengthened work incentives and that we are not making better use of social housing. In February 2012, the impact assessment exposed the real motivation for the Government’s actions, stating that
“savings in Housing Benefit expenditure will only be realised in full if social tenants do not seek to move from the homes they are under-occupying”.
Fundamentally, the legislation has always been about the rhetoric of being tough on welfare spending. The Government want it to appear as though they are getting welfare spending under control. Sadly, it is just empty rhetoric.
In West Lancashire, only 33 working-age households have transferred to smaller properties and just three tenants have downsized through mutual exchanges, yet more than 1,000 tenants have the under-occupation indicator. Of those, 625 are in arrears, even though 401 of them were in credit or had a nil balance at the beginning of the financial year. In 81 cases, there has been a notice seeking possession against those who had been in credit or had a nil balance on their rents. Those figures are just for the first six months. That shows the speed with which families have been forced into financial turmoil and uncertainty by the bedroom tax.
West Lancashire borough council has identified 150 council tenants who have been affected by the technical error. That is 150 families who have been pushed to the financial edge unfairly and unnecessarily. We know that that is the case because, in trying to resolve the mess, the council has stated that the situation is complicated by those who have claimed discretionary housing payments. In avoiding duplication, the council will have to recover the payments and reconcile them against the tenants’ overpayments. That is what I call a bureaucratic mess, and a very costly one.
Philip Davies
Will the hon. Lady explain why she thinks that a single person on housing benefit, who perhaps does not go to work, should be able to live freely in a three-bedroom property, when a couple who are hard at work and cannot afford such a large property have to pay for that property for them? How can she say that it is fair that people who are working hard and who cannot afford such a large property are paying the costs of single people who do not work at all?
Rosie Cooper
Only a Government Member could begin to pose that question. The Government need to provide the means to make the change. Single people do not necessarily want to sit in a three-bedroom house. They need a property to go to. The Government need to provide the means to enable them to make that change. I will not be taught any lessons by the hon. Gentleman.
Yvonne Fovargue (Makerfield) (Lab)
Does my hon. Friend agree that housing benefit is an in-work benefit, not an out-of-work benefit? To talk about people sitting at home, out of work, on housing benefit is completely out of context.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I know that you are enthused by the debate, Mr Davies, but it does not help if we have a separate debate going on while a Member is speaking. It would be helpful if we could get through all the speakers. I hope to get everyone in.
Rosie Cooper
I agree with my hon. Friend the Member for Makerfield (Yvonne Fovargue). I did not hear the hon. Member for Shipley (Philip Davies) say that those people were out of work.
The idea that welfare spending is coming under control is a myth. West Lancashire borough council has stated that its intention is to raise rents by 4.6% from April. That will increase housing benefit payments by £630,000 a year. We are seeing a significant and rapid increase in the council’s arrears. From being in the region of £375,000, they have shot up to nearly £500,000. How is that keeping welfare spending under control? Arrears are increasing across the sector. Social landlords have had to take on additional staff to collect rent and give budgeting advice.
Let us not forget that the Government have acknowledged that they have made a complete mess by rushing to prop up the housing benefit system using discretionary housing payments. Disabled people and people who need their own bedroom for medical reasons are going cap in hand to prove that they are poor, to get a discretionary housing payment handout. I understand that a large amount of discretionary housing payment is going unspent because the council’s means test is too stringent.
Some councils, believe it or not, are taking disability living allowance into account when determining whether someone should receive discretionary housing payment, even though the guidance from the Department for Work and Pensions states that councils should not do so because it inflates a disabled person’s income unfairly. Disability living allowance is meant to fund additional costs that are due to the claimant’s disability or health issue. It is not meant to fund the additional housing costs resulting from the spare bedroom tax.
Discretionary housing payments should be awarded for 26 weeks or 52 weeks, but some councils, including West Lancashire borough council, are offering them for only 13 weeks, which leads to more form-filling and bureaucracy.
There is no escaping the fact that welfare spending has to be addressed. However, the snapshot that I have given of West Lancashire—just one community—shows that the bedroom tax is not the way to do it. The abject failure of this policy is costing taxpayers more and more. Although Ministers are talking tough, they are, as ever, failing to deliver. In their case, talk is not cheap. The only transitional arrangement that we need to discuss is the transitioning of this legislation off the statute book.
John Hemming (Birmingham, Yardley) (LD)
This morning, I received an e-mail that says:
“Hi can you help me, I am in a council flat 1 bed room, I have 2 kids and a partner so that is 4 of us in a 1 bed room flat”.
I actually received two e-mails, but I have left the other one in my office. We must not forget the people who are in overcrowded accommodation.
The shadow Secretary of State said a couple of weeks ago that Labour would cap the structural social security budget. She used the word “structural” on the basis that, as unemployment goes up and down, it does not affect the structural deficit, and Labour has said that it will cut the deficit. We have to find the money from somewhere.
This policy encourages people to make better use of rooms. To give an example from my constituency, a lady who is in a three-bedroom house has arranged for her relatives to join her and give up their private rented accommodation, which was costing the taxpayer £5,000 a year through the welfare budget. Therefore, there is a saving of £5,000 a year and better use is being made of the property. They now have only one TV licence, one water bill, one gas bill and one electricity bill. Financially, it is a far better situation for everyone. We are not having to attack or cut any other benefits. We are able to maintain the value of benefits.
The shadow Secretary of State said—not in this debate but at the Institute for Public Policy Research—that the Opposition would cap the welfare budget. The difficulty with their position is that they would give an exemption just to those who have been out of work since 1996 and not to people with disabilities. There is no question but that there are people with disabilities who need a spare room. I have managed to get discretionary housing payments for such people. I am pleased that, due to the announcement on DHP for the next two financial years, we should be able to provide it for a longer period. Furthermore, I want the rules to be changed to provide an automatic exemption. I accept that it is difficult to do that. That is why the Department won the case in the Court of Appeal. The Department is working on the detailed regulations.
This policy encourages better use to be made of accommodation, saves money for the public purse and reduces overcrowding. It also means that we do not have to cut other parts of the welfare budget. The real challenge is how we manage the overall budget.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
In Oldham, 2,048 households are affected by the bedroom tax, with 500 properties suitable for them to move into. Where does the hon. Gentleman suggest they go?
John Hemming
I can talk about Birmingham better than I can about Oldham. In Birmingham, by mid-January roughly a quarter of people in council properties had ceased paying extra rent for a spare room due to changed circumstances—they might have found family members to join them or have downsized. Some 521 households wanted to transfer, but sadly, 380 had arrears, and for some reason the council was blocking them from transferring. I think that that is appalling. Let us suppose somebody is happy to downsize to a flat such as the one I mentioned a moment ago. There may be a four-person family in a one-bedroom flat, and 380 people who want to downsize because of having to pay for the spare room, but the council is blocking that because of arrears. I am told that it is sorting that out, but I still see loads of people in overcrowded situations. I am sure that the situation is similar in Oldham, although I obviously do not have the same figures. I do, however, have figures for discretionary housing payments.
Mrs Anne McGuire (Stirling) (Lab)
Following the advice of the right hon. Member for Hitchin and Harpenden (Mr Lilley), I have checked HomeSwapper in the Birmingham area. I have got to page 20 and I found only five one-bedroom houses. Where are the places for people to downsize to in the hon. Gentleman’s constituency?
John Hemming
I got another one today. They may not be on that website, but they do exist—[Interruption.] They do exist; I have them in my casework files. I have three people living in a council bedsit, and quite a few cases of four people living in a one-bedroom flat. I have written about those cases to the council. I accept that they may not be on a website—I do not deny that—but they do exist. People really do have problems. They have shown me photographs of how they live in overcrowded situations.
Ian Lavery (Wansbeck) (Lab)
There is not enough smaller, one-bedroom accommodation for people to move into—that is a fact. The bedroom tax will increase housing benefit—that is a fact. Why does the hon. Gentleman not just admit that this is a merciless attack on the vulnerable, the disabled and those least able to speak up for themselves?
John Hemming
Because none of those things is a fact. Lots of people are living in overcrowded situations. I see them at my Saturday advice bureau, and two people wrote to me today. Those people are looking for accommodation.
The Opposition have said that they want to cap the structural welfare budget, but if they are going to spend more money on providing free rooms for people who do not need them, where will they get the money from? Will they cut disability benefits? Today, the Opposition propose to give a special exemption to people who have been on housing benefit since 1996. If they proposed a special exemption, with valid rules, for people with disabilities who needed a spare room and to transfer that money out of the DHP, that would be worth looking at. They are picking the wrong analysis for this.
I have always managed to succeed for my constituents who needed DHP because they have disabilities and need a spare room. I have never had a problem getting DHP. As of last week, having got extra money from the Government, Birmingham’s DHP budget still contained just over £600,000. Birmingham is managing to spend that money, look after people and protect those with disabilities, and not to exhaust the budget.
Sheila Gilmore
Did the hon. Gentleman—he may have done—support an amendment tabled in the House of Lords and in this place that would have meant at the very least that no one should have their housing benefit cut unless they had refused a reasonable offer of a house?
John Hemming
With the charges for a spare room, it has taken some time to identify those people who are willing to transfer. Discretionary housing payments have been made available to people. I have seen payments for DHP go through. People come and talk to me about their personal problems, and I work to get them resolved. I do not think I voted for that amendment, but I have not checked the records so I do not know. It is important to remember that the quantum of DHP is critical. The Government have recently announced DHP for the next two financial years, and that is how we protect people with disabilities who need a spare room for one reason or another. However, it is not possible to achieve that and give this exemption or that exemption.
Dame Anne Begg (Aberdeen South) (Lab)
The hon. Gentleman makes great play of saving money, but if it were a perfect world and there were properties to move into, according to the Government’s impact assessment that would not save any money. If people cannot move and they get DHP, that does not save money either. How will all the money be saved unless it is taken from those who have no choice?
John Hemming
I did explain that point, looking at examples of those who take in family members. Cases in Redcar have been cited where, because of the interplay between the non-dependent deduction in housing benefit and the spare room rent, it is now in parents’ financial interests to keep their adult children in the property, which it was not previously. That is a way to reduce the overall cost to the housing benefit budget without reducing quality of life.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
I do not know quite how to follow the hon. Member for Birmingham, Yardley (John Hemming), but I will do my best. I will try to be brief because others wish to speak.
Apparently the bedroom tax is officially known as the social sector size criterion. That says it all about this Government’s attitude to tenants in socially rented housing: they do not have the same right to a stable home environment as everyone else. I do not know whether the hon. Gentleman has, or has ever had, a spare room in his home, or stayed in one place for a length of time, regarded it as home, and then felt that he was being forced to move. It is not a pleasant feeling.
John Hemming
I have had spare rooms, and I have taken in refugees from Croatia and a refugee from Jersey.
Sandra Osborne
I am sure that is very kind. However, I am a mother and a grandmother. I love my family dearly, but I do not want them to live with me all the time.
As if by magic, the plan was that thousands of tenants throughout the land would move to mythical smaller properties—they do not exist—freeing up larger properties for overcrowded families, or find an average of £720 a year, which they do not possess. Not a cunning plan, but a cruel, uncaring and illusory plan that has seen more than 4,500 of my constituents suffer. Within months of the bedroom tax being introduced, 62% of my constituents in East Ayrshire council were in arrears, and the figures continue to rise.
Bill Esterson (Sefton Central) (Lab)
I wonder whether social landlords in my hon. Friend’s constituency are trying to help people in the same way as One Vision Housing does in Sefton. It states that
“we are helping tenants to downsize in order to avoid the bedroom tax, however with limited availability of one-bedroom properties it is becoming simply unavoidable.”
As of November, 4,963 people wanted a one-bedroom property, but just 10 were available. Does my hon. Friend have a similar situation in her constituency, which shows just how unworkable the policy is?
Sandra Osborne
I do indeed, and the policy is putting more pressure on the housing service, not taking it away. I also fear for those who have struggled to pay the bedroom tax, because I know fine well they cannot afford it. I worry about where they are getting the money from, and whether it is pushing them in other directions such as food banks or very high-interest loans. It is not possible for me to over emphasise the fear, concern and anger that the bedroom tax has caused, together with the Atos debacle and the fact that people are being suspended from benefits at the drop of a hat.
Katy Clark (North Ayrshire and Arran) (Lab)
My hon. Friend’s constituency is similar to mine. Is it her experience that the people who come to see her about the bedroom tax are disproportionately the disabled and carers, and does she agree that it is particularly distressing for those groups?
Sandra Osborne
That is one thing that causes a great deal of anger among those affected, and also among the general public in my constituency, who happen to be very caring people. When she sums up the debate, will the Minister confirm whether the Government intend to retain the Scottish welfare fund?
We are here to talk about the sheer ineffectiveness and shambolic implementation of the bedroom tax. What kind of policy requires mitigation for more than half the people affected? Some 70% of applications have been approved for discretionary payment, with more applications all the time in one of my areas. The revised budget will be fully spent by the end of the year—there is no big surplus, as was inferred earlier.
Mel Stride (Central Devon) (Con)
What I am not clear about is this: what does the hon. Lady say to the 1.5 million people on the housing waiting list or to the 250,000 people living in overcrowded accommodation—perhaps having to sleep on the floor or on sofas—when her party is advocating a policy that uses taxpayers’ money to provide a surplus room for others?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Long interventions will not help us to get through this debate. There are too many interventions. People should not just come in and intervene; they should enter the debate.
Sandra Osborne
It is of course acceptable that where people wish to downsize they should be helped and incentivised to do so, but they should not be forced to do so. In any case, it is clear that the housing is not available, and that this policy is not working and is not practical.
It is of course very welcome that we in Scotland have benefited from the decision of the Scottish Government fully to mitigate the bedroom tax, in recognition that it is fundamentally unfair and that people, who are already finding it difficult to make ends meet, are struggling because of it. It will be important for Scottish Members to monitor the detail of how assistance will be given as the proposals in the Scottish Government’s budget are implemented. It is just a pity that it took so long to achieve, because many people have struggled and still are struggling. Some have already moved into private accommodation at exorbitant cost and have lost their long-term home. It is a good example of what devolution can achieve and I commend it to our friends in England.
Now that we have discovered this loophole, it has emerged that a number of people—those who had been in the same local authority house since January 1996 and been continuously entitled to housing benefit—should not have had their benefit reduced as a result of the bedroom tax. How could this have been allowed to happen with such a sensitive and controversial measure? I am currently in contact with the local authorities that cover my constituency to ensure that the people who qualify for this exemption from the bedroom tax are fully reimbursed. Sixty-eight cases have been identified so far in one council area, so that figure can be at least doubled when taking into account the whole of my constituency. The exemption will be backdated to 1 April 2013, but the Government will be taking steps to remedy the loophole “shortly”. The measure will be reinstated as soon as that happens—talk about raising hopes and then dashing them.
The whole policy is an absolute mess and a disgrace. It will do nothing to solve the housing problem and it should be abolished immediately.
Heather Wheeler (South Derbyshire) (Con)
I want to remind Opposition Members that the ethos behind the spare-room subsidy has been around for a very long time. I repeat what I said in an earlier debate: what have Opposition Members been doing to ensure that their councils talk to the Homes and Communities Agency and housing associations about the number of properties they need in their areas? My council, South Derbyshire district council, which I am very proud of, sorted out what the numbers would be; how many units we needed to swap; and what was going to be needed with the discretionary housing payments. We also opened up an early dialogue with all our tenants.
Bill Esterson
Perhaps the hon. Lady can tell me how, overnight, she could expect Sefton council, working with its social landlords, to provide 5,000 one-bedroom properties? That was the number of properties needed. How was that supposed to happen?
Heather Wheeler
That is the whole point: it was not overnight; there was at least two years’ notice. [Laughter.] Opposition Members may laugh, but in two years more than 140 one and two-bedroom units have been built in South Derbyshire. What, my friends, were Opposition Members doing to look after their so-called vulnerable people?
Chris Bryant
I presume that the hon. Lady is going to vote with the Government to close the loophole. I presume she will only do that—or else she would think herself to be cruel—if she knows how many people she will be adding to the list of those affected by the bedroom tax. Does she know that number for her own constituency? Does she know the number for the country? [Interruption.] I do know the number.
Heather Wheeler
I am very glad the hon. Gentleman knows the number for both; I am sure he is going to tell everybody. However, the most important thing today is that there is an anachronism. Opposition Members are living in the old days. When will Opposition Members wake up to see that there is massive overcrowding and that we need a massive new building programme? As ever, they are living in the old days and are doing nothing about looking after the most vulnerable people. The Opposition are living in fantasy land and that will not look after the most vulnerable people. They do not deal with the real problems in society: overcrowding; people who have been waiting and waiting to get decent housing; and people who have been on housing benefit for goodness knows how long because they have been brought up to stay in that sort of society. That is not good enough. That is not the society we want to have in the future. I see those on the Opposition Front Bench hanging their heads in shame. I hope the cameras can get that, because that is the truth of where we are.
Katy Clark
Does the hon. Lady agree that the real problem is that we do not have enough social housing?
Heather Wheeler
In the last two and a half years what conversations has the hon. Lady had with her council? My district council is now building council houses. My Conservative council is building one, two, three and four-bedroom council properties. What have Labour Members been doing?
Mr Duncan Smith
My hon. Friend is in full flow and I think she is magnificent. May I remind her that the answer to that question is that under the previous Government the building of social housing fell to its lowest level since the 1920s? Opposition Members talk a lot about it, but they did absolutely nothing for those living in overcrowded accommodation.
Heather Wheeler
That says it all. I know that this is meant to be a 90-minute debate, but I wonder whether the Opposition want to give up now because we are having the most ludicrous conversation. I feel so sorry for the voters and residents who are looked after by people who scream and shout and say that they look after the most vulnerable people in society, but physically do nothing about it.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am just going to help a little bit. I am sure that the hon. Gentleman wants to catch my eye, in which case he will not get in at the moment because of how many interventions we have already had. That is how bad it is: we are cutting each other’s speaking times down. That will have to go down to four minutes shortly and some people will drop off the end.
Heather Wheeler
I thank the hon. Member for Sheffield South East (Mr Betts) for staying seated. I am sure he will make a magnificent speech in a while.
I finish by saying that can Opposition Members please have serious conversations with their local housing associations, the Homes and Communities Agency and the big providers—the Legal & Generals, the big insurance companies and the other people who want to invest in big infrastructure? If there is an absolute need for one and two-bedroom rented properties in their constituencies, they should open up those conversations. Legal & General, among other insurance companies, wants to take on long-term rented properties. Please do not have a whinge and a moan in this Chamber. Opposition Members should get out there, do their jobs and see what they are meant to be sorting out for the vulnerable people in their constituencies.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
The speeches we have heard from the Government Benches demonstrate very clearly that there is a Liberal Democrat-Tory world and there is the real world. The issue we are debating is the most blatant example of this Government’s total inability to understand how people live. To them, a spare bedroom is simply an unused sleeping space that must not receive housing benefit, but the many constituency cases that I have needed to deal with show that it is by no means so simple.
One reason why this cruel tax does disproportionate damage to the disabled is that the so-called spare bedroom is very often used by a non-resident carer. They might not sleep in it every night, but its use is indispensible to the welfare of the disabled person. Arrangements of this and related kinds cannot be categorised by the over-simplistic language of parliamentary draftsmen, let alone the policies of this Government. There are all kinds of other reasons for those rooms, depending on individual, family-by-family arrangements, that outsiders cannot begin to understand and that this Government do not wish to try to understand.
The Government’s simple cure is: “Move to a smaller house.” They must be living in a dream world. Have they never heard of the housing shortage, made much worse by their policies? My constituency has 75,000 electors. In the three or four years that this lot have held office, there have been 340 housing starts in my constituency, which is only 60% of the low national average. In Manchester, under a Labour Government, the council used to build 3,000 new houses a year. Because of Tory cuts—Manchester has been hit harder by this Government’s cuts than any other local authority—Manchester city council can now build none. There is no new social housing at all in my constituency, and private landlords are too often predatory.
I had a woman come to see me on Saturday who was totally frantic. She lives in a shorthold tenancy, but has been given notice to move at the beginning of April. Not only can she not find any accommodation for herself and her two children, but the freehold owners have sent her the ground rent bill, which is the liability of the landlord, who is evicting her. That is real life in the Gorton constituency. When somebody does manage to get rehoused—such as a constituent who was a victim of the bedroom tax who came to see me the week before—the consequences are so confusing or even catastrophic that they lead to potential eviction from the new home.
This is real life, not the theorising of the Liberal Democrats—we remember them in Manchester, which is why this year there will be no Liberal Democrats left on the city council—or the Tories. What they are doing—and they are doing it with great calculation, because of its political implications—is transferring tax liability from the better-off, who they hope will vote for them, to the disabled, who will not vote for them. This Government build castles in the air. They do not build houses and they make life hell by causing tragic difficulties for people who are in houses. The Government create misery wherever they go, and the sooner they go, the better.
Caroline Lucas (Brighton, Pavilion) (Green)
I am pleased to be able to speak relatively soon after the hon. Member for South Derbyshire (Heather Wheeler), because there was a sense of breathlessness when we were listening to the complacency and, frankly, arrogance of her comments about the kinds of people I see in my surgeries day in, day out. Those people are suffering partly because there is not enough affordable housing. Nobody is saying that there is enough affordable housing, and all Governments in recent years should have done a lot more. However, the idea that pushing people out of their homes into properties that do not exist is in any way helpful, either in economic terms or for the housing crisis, is deeply misguided.
At the start of this month I tabled early-day motion 1057 to pray against the statutory instrument that we are opposing in today’s debate. When the Leader of the Opposition came and asked whether he could put his name at the top of the prayer to push the debate forward, I was of course happy to agree. I welcome his support and the continued strong opposition to the bedroom tax from colleagues across the smaller parties and, indeed, some senior Liberal Democrats. Many Members of the House are joined in opposition to the Government’s bedroom tax and their attempt to undo a drafting mistake they made when they pushed through this nasty legislation. We know that the legislation is cruel and counter-productive.
As others have said, the Government’s drafting mistake means that some people are exempt from the charge and should not be made to pay it, but now the Government want to ensure that from March all those people will finally be trapped by the bedroom tax. I hope that Ministers will listen today, because it is not just rhetoric. The strong cross-party opposition to the policy comes from our listening to the people we see in our surgeries. We are not talking about a “spare room subsidy”, or about the taxpayer subsidising the unnecessary luxury of an extra room. In case after case, we see that the rooms are not spare, but essential. As we have heard many times, DWP statistics show that more than two thirds of those affected are likely to be people with disabilities. The tax is pushing disabled people from adapted properties. It is sending people to alien places, away from the support networks they have relied on all their lives.
The effect of the policy is to turf out the person with severe mental health problems who has been settled for years and is deeply distressed by change, but who perhaps has a tiny box room in their home. They cannot take a lodger because of their unpredictable episodes and they cannot afford the rent because the box room means that their rent has gone up, yet there is no smaller property available locally. I asked Ministers a year ago what was supposed to happen to those people. They did not answer then and they are not answering now.
This is a policy that springs from a reactionary, anti-benefits narrative that takes no account of people’s real circumstances. In Brighton and Hove, the minority Green administration is doing everything it can with the tiny amount of money given to it to protect people from this Government’s pernicious policy but, as predicted, people are massively struggling. Without even counting housing association tenants, there are 286 council tenants newly in arrears because of the bedroom tax, 199 of whom have a disability.
As well as being callous and cruel, the bedroom tax is counter-productive. There are simply insufficient smaller properties for people to move to, as the Government have repeatedly been told. People are faced with poverty and debt or with moving into the expensive clutches of the private rented sector, where their housing benefit bills will be even higher. Pushing people from their homes is not saving money and it is not solving the housing crisis either.
The bottom line is that we have nowhere near enough affordable homes—I would certainly agree with the Government about that. Successive Governments have caused the housing crisis, not the poor people who are now struggling to cope with it. It is not the fault of people who cannot get a job, or of disabled people or people who need overnight care. The crucial problem—this is where the fault lies—is the epic failure of both this coalition and the previous new Labour Administration to build sufficient council housing. The Tories pushed the decimation of the stock with the right to buy, ignoring the right to rent; new Labour tweaked the enormous discounts but did not grasp the nettle and build council housing. In 2007-08, for example, only 350 new council homes were built across the country. However, it is deeply unjust to penalise people who are struggling at the bottom of a deeply distorted housing market, over which they have little or no control, for the omissions of previous Governments.
What do the Government say? Lord Freud called the exemption that we are trying to preserve today an “anomaly” and says that the number of people affected is “small”. That detached language shows how out of touch the Government are. We have heard already from the Opposition Front Bench that the figures are vastly higher than that—at least 20,000 and probably much more, because that figure is based on only council returns so far. What precisely will Ministers do to rectify the injustice done to individuals who have been denied their full benefit entitlement? What about the people who, as a result of the error, have newly fallen into rent arrears, which have negatively affected their credit rating, for example? What about those who have left their homes in response to the tax and given up their security of tenure, when they did not have to pay the tax in the first place? How will they be compensated? The mess made by this mistake is surely yet another reason to scrap this contemptible tax entirely.
In conclusion, the tax comes from an aloof Government, some of whose members are detached from reality, who simply do not know what is going on and moreover do not care. I hope the regulations are stopped today, because any hon. Member who walks through the Lobby to extend the reach of the bedroom tax will be harming even more people with disabilities, with even more people pushed into debt, forcing more people away from their communities. The only way to clean up this mess is to scrap the entire bedroom tax once and for all.
Lilian Greenwood (Nottingham South) (Lab)
Today we are hearing Government Members defend a bad policy that just gets worse: a policy that is hitting thousands of disabled people, causing arrears and debt, and leaving vulnerable families in despair.
Nearly 5,000 households in Nottingham are affected by the bedroom tax, and the vast majority are tenants of the city’s arm’s length management organisation, Nottingham City Homes. Since the introduction of the tax in April 2013, over 2,000 of those tenants have fallen into arrears totalling more than £250,000, and our ALMO has been forced to spend an additional £300,000 on staff and resources to deal with the extra demands on rent arrears teams. That adds up to more than £500,000 that could and should have been spent on refurbishing or building new homes.
As we have heard, two thirds of the households affected by the bedroom tax simply cannot find the money to pay their rent, and are accumulating ever-increasing arrears. We have heard heartbreaking stories about how the policy is wrecking lives, contributing to a growing affordable housing crisis, and wasting millions. It must be scrapped.
The Government pretend that people can downsize, but in reality that is nonsense. People who are in arrears often face tenancy restrictions that bar them from applying for new, smaller properties, and in any case there simply are not the homes for them to move to. In my constituency there are just 16 one-bedroom social homes available, and not a single two-bedroom home—in a city where 1,161 tenants are waiting to move to one-bedroom properties, and 1,083 are waiting for two-bedroom properties.
Most tenants are loth to give up secure social tenancies and downsize to smaller properties in the private sector, and the Government’s projected savings rely on their not doing so. The average social rent for a two-bedroom property in Nottingham is £64.02, but the average private rent for a one-bedroom property is £88.85. Do the maths! If tenants did move, the housing benefit bill would rise substantially.
The truth is that the Government know that most people cannot afford to pay the bedroom tax. Trapped with nowhere to go and facing an increasing cost of living, more and more poor and vulnerable families in Nottingham are turning to food banks and payday lenders simply to pay for basic essentials such as food, children’s clothing and fuel bills.
My local homelessness charity, Framework, has been recording the experiences of some of its service users who are affected by the Government’s policy. One of them, who lives in a two-bedroom property, has become disabled and cannot use the stairs, but she cannot move to a one-bedroom, single-floor property because she has rent arrears as a result of the bedroom tax. Another is a 60-year-old man who suffers from agoraphobia and panic attacks and finds new places and changes stressful. He is lucky enough to have a support network of family and friends in his neighbourhood, and, understandably, he does not want to move. Now he has arrears of hundreds of pounds, and could not move even if he wanted to.
Do Ministers really think that this is the way to treat vulnerable people with complex needs? It is clearly not the best way to tackle the shortage of larger council homes, or the problem of overcrowding. The latest loophole will add to the burden borne by hard-pressed local authorities, and it could affect as many as 40,000 households, but Ministers continue to claim that it will affect only a few. Ministers ignored social housing providers when they warned that the bedroom tax would be a disaster. How bad do things have to become before they actually start to listen?
The Government are in utter denial about the impact of their cruel and iniquitous policy. Tory and Liberal Democrat Members arrogantly dismiss those who dare to highlight the damage that it is doing to the lives of our constituents. Well, if they will not do the right thing and scrap it, the next Labour Government will.
Andrea Leadsom (South Northamptonshire) (Con)
I despair of Opposition Members who first insist on calling the spare room subsidy a tax, and secondly insist that it is utterly unfair to everyone. What they fail to accept is that the previous arrangements were totally unfair to taxpayers and to those in the private rented sector. Opposition Members wish to preserve an old system under which the maximum paid by the taxpayer for housing benefit reached £104,000 a year. They need to understand that that was completely untenable.
Between 2003 and 2012, overcrowding increased from 5% to 7%, leaving hundreds of thousands of people in overcrowded housing and 1.5 million on the housing list. How fair is it to allow people who have more bedrooms than they need to stay in that accommodation, leaving others facing bed-and-breakfast accommodation, homelessness or severe overcrowding?
Most of the constituents who talk to me about the spare room subsidy talk about their absolute need for more space, not less, for their families. The only person who has ever complained to me about having to move out of his or her home was a lady who said that she had raised three children there. It was a four-bedroom home, and she did not see why she should move out of it now that she was on her own in case they ever wanted to come home for the holidays. Can Opposition Members honestly, in all conscience, support someone remaining in those circumstances, against the 1.5 million people who are on the housing registers? They talk of fairness and of what is right and just, but they are talking nonsense to the people who are footing the bill and to those who have nothing.
In the 13 years of the last Labour Government, housing benefit rose from £11 billion to £21 billion a year. That is £900 for every household in the country. Is it fair on working families that they should be supporting housing benefit to the tune of £900 per household?
Let me end by asking Ministers some questions. What more can we, as a Government, do to make constituents aware of the enormous amount in generous discretionary payments that is widely available, and can we do more to promote house swap schemes? Many people talk about the unavailability of smaller properties, but they are talking about empty smaller properties rather than about house swaps. I think that swaps have huge potential, and a great deal of work is being done to promote them in my constituency.
Can Ministers confirm that discretionary payments will continue throughout 2014 and into 2015? Can they also confirm that the Government have made huge efforts to ensure that new houses are built? Are they still on target for the building of 170,000 new affordable homes by 2015? Finally, can Ministers explain why there was such a big underspend of discretionary payments last year, and what they can do to ensure that councils provide as much help as possible for those who need it?
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I am pleased to be able to contribute to the debate. I pay tribute to the hon. Member for Brighton, Pavilion (Caroline Lucas) for all that she has done to bring this issue to public attention.
The loophole in the regulations that we are discussing exposes just how poorly thought through the bedroom tax legislation has been from the start, and affords us a timely opportunity to take stock of how the legislation has been working in practice since its introduction last year. Today’s debate has revealed that the policy was, from the start, nothing more than a cash grab from those on the lowest incomes who were already living in the cheapest houses.
In Scotland, 80% of the homes affected by the bedroom tax are the homes of people with recognised disabilities, who already have the least choice about where and how they live. There is a broad political consensus in Scotland that the tax is proving to be unworkable, and that it is only harming disadvantaged tenants but damaging councils and local housing associations, undermining social cohesion in our communities, and harming the social fabric as a whole. Under the terms of the Scotland Act 1998 this area of policy is reserved to Westminster, so we have been stuck with Ministers whom we did not elect, imposing a policy for which we did not vote. Nevertheless, Scottish local authorities, the Scottish Government, and our housing associations and advice bureaux have had to mop up the mess over the last 10 months.
There is now clear evidence that the bedroom tax is costing taxpayers more than it is saving. The Convention of Scottish Local Authorities has analysed the cost of implementing the policy in relation to its projected savings, and concluded that a policy that was supposed to save about £50 million a year in Scotland is actually costing about £60 million a year to implement. Detailed research undertaken by COSLA with six councils also revealed disturbing trends in the patterns of arrears accruing in the social rented sector. In the first six months of the policy, an additional 31% of tenants affected by the tax were in rent arrears, and many of them had never been in debt before. Squeezing the bedroom tax from people on very low incomes who just cannot afford it is causing huge distress and worry to tenants, including those who are managing to pay, but it also has serious implications for social landlords and for the solvency of housing associations in particular.
Caroline Lucas
The hon. Lady is making a powerful case but does she agree that this is about a lack of affordable housing and, until we address that, the things that we are talking about will not get solved?
Dr Whiteford
I agree that the lack of affordable housing is a core issue, but there is also a chronic mismatch between the needs of prospective social tenants and the available housing stock. I have made the point many times in the House that, across Scotland, over 60% of tenants need a one-bedroom property, yet only 23% of the housing stock is one-bedroom size. Even if everyone were to be allocated a home of the requisite size, there are just not enough smaller houses to go around.
There has been a lot of talk today about the shortage of housing. The Scottish Government have managed to deliver more social housing than any other Administration in the UK, even on a fixed budget—a diminishing budget. It is a matter of political priority. If we understand there is a housing shortage, we need to fix it. There is no excuse.
Local authorities, housing associations and the Scottish Government have all had to take action to minimise the unwanted side effects of the bedroom tax, not least by topping up the budgets for discretionary housing payments by £20 million in the last year, which is the maximum amount allowed under section 70 of the Child Support, Pensions and Social Security Act 2000, and by this year making available £35 million for discretionary housing payments, which would, in effect, enable councils to mitigate the entire impact of the bedroom tax for everyone affected. However, as I have said, this remains a reserved matter, and the Scottish Government have had to request permission from UK Ministers to increase the DHP budget. As far as I am aware, the Deputy First Minister is still awaiting a reply to her letter of January to Lord Freud making that request, so can I press Ministers today to listen to the Scottish Parliament’s view on this matter—a view supported by four parties, including their own coalition partners, the Liberal Democrats—and impress upon their ministerial colleague in the other place to crack on and signal his consent? Frankly, it is a travesty in the 21st century that a democratically elected Parliament has to ask permission from an unelected peer to spend its own people’s money. I hope that that is one anachronism that we can put right this September.
The money we are having to find to do that in Scotland must be found from budgets for other devolved policy areas, but given the substantial knock-on costs the policy is having for devolved institutions and housing associations, the democratic consensus around the issue and the distress it is causing to disadvantaged people, I do not think standing aside is an option. Although today we are debating a technicality, it is a technicality that exposes deeper flaws in the housing benefit legislation and exposes the warped values and misconceptions that have informed it.
From the start, the bedroom tax was unfair and ill conceived. Now, nearly a year on, it is not only failing to meet its own policy objectives, but creating needless bureaucracy and displacing large costs on to other parts of the public sector. A policy that costs the public purse more than it saves is a bad policy. A policy that harms our most disadvantaged citizens is a bad policy. A policy with big technical loopholes is a bad policy. I urge the Government to do the right thing and abandon the policy today.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I call Sheila Gilmore. If you could end your speech at five minutes past 3 so the Minister may begin her response then, that will be helpful.
Sheila Gilmore (Edinburgh East) (Lab)
There is a fundamental incoherence at the heart of this whole policy. We have heard impassioned pleas from some members on the Government Benches about how much they care for people in overcrowded housing and that this is a policy to help with that situation, but at the same time it is clear from the Government’s own financial projections that they expected to make savings from people not being able to move and having to pay the extra. That is the fundamental inconsistency. The savings are going to be outweighed not just by discretionary housing payments but by the cost of administering them, of giving people additional advice and support and of employing more staff to do so. All that is being shouldered by local authorities and housing associations, and it has to be taken into account when looking at overall public spending.
DHPs do not make up for the fact that many people are suffering. These are real people. A constituent of mine was a cancer sufferer; he is in recovery. He has three children whom he wants to have with him at weekends. One is autistic—where is he supposed to put that child in a one-bedroom property? Is he not allowed to have a life? He did not qualify for DHPs first time around because his DLA was taken into account, so it is not a straightforward case of saying “People will be all right, even those who are disabled.” Why should people be made to make repeated applications instead of being exempted? The Prime Minister at times seems to think that those people are already exempted, but he is clearly wrong.
I am sorry to tell the hon. Member for South Derbyshire (Heather Wheeler) that many of us are deeply concerned about housing in our areas. New houses have been built in my city, but this week only 23 one-bedroom properties are available, of which five are sheltered accommodation. They are not suitable for people in this position. The houses just are not there at the moment, so why should people pay a tax, which is what it is, until that is sorted out?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I think the hon. Lady has finished her speech, which is helpful because I am sure Members would like to hear from the Minister as well.
The Minister of State, Department for Work and Pensions (Esther McVey)
Thank you, Mr Deputy Speaker.
It may be helpful if I explain what the Opposition are seeking to annul. The instrument amends paragraph 4 of schedule 3 to the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006, which provides for transitional protection for certain housing benefit claimants. The amendment removes the transitional protection from social sector tenants such that their housing benefit will be determined using regulation A13 of the Housing Benefit Regulations 2006, which sets out the maximum rent in the social sector.
The amendment is required to close a loophole that derives from a very narrow set of regulations that date back to 1996. Changes at that time introduced the local reference rent rules and those regulations were intended to provide transitional protection for existing claimants as the new rules came into force.
The local reference rent rules only applied to those renting in the private rented sector, so the transitional protection was only ever intended to support them—the vast majority of them pensioners—not social sector tenants who were unaffected. With hindsight, this protection could have been time limited. Because it was not, 17 years later the protection is now being applied in a way that was never intended but is possible, which is resulting in claimants being exempted from the spare room subsidy. Thankfully, my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), who was the Secretary of State at the time, said earlier that that was never meant to be the case.
If the motion’s supporters have their way, they will maintain transitional protection that was put in place for something that no longer applies, in order to exempt a group of benefit claimants from a completely different policy 17 years later. At best that is misguided. When we were looking to exempt a set of people, why would we have chosen that set of people?
Esther McVey
Not just yet. I will finish what I am saying.
Why would that group have been exempted? Why would preferential treatment have been given to a set of people who had been on benefits for 17 years? When we have put protection in place, we have sought easement for four sets of people. Foster carers are eligible for an additional bedroom. Parents who have adult children in the armed forces who usually live with them and who could be away deployed on operations but come back to their room would be exempted. Disabled claimants or their partners who require a visiting overnight carer are eligible for an extra room. Severely disabled children who would ordinarily be expected to share a room but who could not would be exempted. We have therefore set out who would require easement. That should not be provided, through some loophole, for people who were never meant to be exempted. It was never intended that people who had been on benefits for 17 years should be exempted.
John Healey
The Minister has used the words “misguided” and “loophole”. She told me in answer to a parliamentary question in January that
“we estimate the numbers affected are likely to be fewer than 5,000”.—[Official Report, 14 January 2014; Vol. 573, c. 522W.]
In Rotherham and Barnsley, however, one in 14 of all housing benefit claimants has been wrongly hit by the bedroom tax. That suggests that there are nearly 50,000 such claimants across the country. Will she now admit that Ministers have massively underestimated the numbers who have been hit and massively underplayed the difficulties and distress that have been caused?
Esther McVey
I thank the right hon. Gentleman for giving me the opportunity to answer that question. I looked into the freedom of information request and the numbers that had been obtained, and I was assured categorically that there was no way the Opposition’s figures could add up regarding claimants who were continuously on benefits while remaining in the same accommodation. When I spoke to various housing associations and local authorities, they were somewhat surprised, because they had given the numbers of people who might be affected and the numbers of cases they were still investigating, but the Opposition had added them together to try to multiply the numbers. When we answered the question on the numbers, the figure we gave at that time—5,000—was the best we could do. It is incorrect to say that the Opposition have those numbers; that is not the case.
Esther McVey
I will indeed give way, to hear some more information sprung from nowhere. Go on!
Chris Bryant
No, this is not information sprung from nowhere; it is direct questions to local authorities under the freedom of information legislation. A classic instance of this is to be found in the Minister’s own backyard: there are 600 cases in the Wirral. If she does not know the numbers—which is effectively what she is saying—is she not simply seeking to change the law on the basis of cruelty?
Esther McVey
I shall let that last comment pass, because it is completely inaccurate and should not be responded to. Let me give the House some of the answers to the FOI request. Local authorities did have some cases, but the number that they were still investigating was nearly double that amount. Those two amounts have been added together for the purpose of this argument, however, and that is not correct. It is factually misleading—[Interruption.] That example was from St Helens.
Local authorities said that the numbers had not yet been verified. Some of the figures given by the Opposition were 130% higher than the number already affected, and some of the people involved might be pensioners, who would not be affected by the measure. Such cases have not been thoroughly investigated because there had been a computer system change and those numbers were not available straight away; they would have had to be manually checked throughout the country.
Esther McVey
I will carry on. More information has been handed out by the Opposition and, as always, they are not very good with their numbers—hence the problem that we now find ourselves with
. Why are we bringing forward this policy? We are looking at how to make the best use of social housing. We know that more than 400,000 people are living in overcrowded accommodation, and that 2 million people are on waiting lists. At the same time, there is overcapacity equating to approximately 1 million spare rooms in other houses. How do we deal with this? It is not an easy issue that we have been left with, and we are having to make difficult decisions in order to get it right. We know what we cannot do: we cannot have a housing bill that doubles over 10 years, and we cannot have more and more people on waiting lists and living in overcrowded accommodation.
I was intrigued by the fact that it was only Members on the Government Benches who talked about people in overcrowded accommodation. They included my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) and my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley). Only those on this side of the House seemed to care about the people who are struggling and are on a housing waiting list. The reason that we are putting these measures in place is that we want to ensure we make the best use of our social housing. At the same time, we are building more affordable housing: there will be 177,000 more affordable homes by 2015, with £4.5 billion being spent.
My right hon. Friend the Member for Hitchin and Harpenden talked about home exchanges. He said that there were 56,000 one-bedroom homes and 147,000 two-bedroom homes available on HomeSwapper, and that 66% of the 233,000 homes available for home exchange were one and two-bedroom properties. Of course we are not expecting homes to be vacant at the moment, waiting for people to move in We need to find out who wants to move, how they are going to move, and how we do the swaps.
What is most unfortunate is that when we knew this policy was coming into being—that was four years ago and it has been in place for a year—the Opposition did absolutely nothing. In the year between 2012 and 2013, £11 million was handed back to the Government. The Opposition should have been asking, “How can we help people to move? How can we use that money to reduce rent arrears? How can we use that money to help people move into other accommodation?” They did absolutely nothing, digging their heels in; they were not helping those who most needed their support and were ignoring what was coming through. That is shameful, but this is the Opposition who led this country into serious debt and made sure that private debt for individuals went up to £1.5 trillion. Rather than help people out of debt, and help them move to homes they could afford and live within their means, the Labour party allowed them—
Mr Jamie Reed (Copeland) (Lab)
On a point of order, Mr Deputy Speaker. The details of a written ministerial statement regarding a decision made by the Secretary of State for Health on the Mid Staffordshire NHS Foundation Trust was released to the media before that statement was laid before the House today. Will you tell us whether that grotesque discourtesy to the people of that area and to Members and colleagues in this House was in fact in order?
Mr Deputy Speaker (Mr Lindsay Hoyle)
As the hon. Gentleman knows, Mr Speaker deprecates the premature release of press and Government statements due to be made in this House. The Vote Office received the text of the written ministerial statement at 1.34 today. It was made available to Members as soon as possible. You have made your point, and I am sure that Mr Speaker will look into it.