Housing Benefit Entitlement

Lord Austin of Dudley Excerpts

Wednesday 23rd January 2013 Westminster Hall

[Ian Austin (Dudley North) (Lab)]

I not only congratulate but thank my hon. Friend the Member for Sedgefield (Phil Wilson) for calling this debate. The number of my hon. Friends who have taken part and the brilliant, passionate and well informed speeches that they have made show how important this issue is for so many of their constituents.

We agree with the Government in wanting less overcrowded and less under-occupied social housing. We want to see sensible, practical welfare reform. We also agree that the housing benefit bill needs to be reduced. The problem with the Government’s plan is that it is unlikely to ease housing supply or to save money. In fact, it could end up costing more. It could also mean, as so many of my hon. Friends have said, that disabled people, war widows, foster carers and the families of members of the armed forces all lose out. As we have heard, some could even be made homeless.

However, despite all the criticisms, defeats in the House of Lords and warnings from housing associations, local authorities and experts at charities such as Shelter and Crisis and organisations such as the National Housing Federation, Ministers are determined to press ahead. As a result, in a few months, about 660,000 tenants will be charged up to £20 a week for bedrooms that Ministers say they should not have or they will be forced to move. Ministers claim that living in a council flat with a spare bedroom is

“a luxury the country can no longer afford”.

I will set aside the nauseating spectacle of a millionaire Minister telling poor people that they are living in luxury and will instead consider whether the policy will work. It is supposed to make under-occupiers move into smaller accommodation, but the Government’s own impact assessment makes it clear that all the savings that it is estimated the policy could make are based on the assumption that no one will actually move at all. Instead, all the savings come from reductions in people’s benefits. This policy is literally based on making some of the poorest people in Britain poorer, and it is being implemented, as we have heard, at precisely the moment when millionaires and the super-rich are getting a tax cut.

Let us consider a practical example. Someone with terminal cancer who is receiving employment and support allowance and is in the support group, which is for people who are not expected to work again, has a spare bedroom in a two-bedroom council house because their child moved out recently. They would be happy to move into a smaller home, but the council does not have one available. According to the National Housing Federation, although 180,000 social tenants in England are under-occupying two-bedroom homes, only 68,000 one-bedroom social homes became available for letting in 2009-10.

Usually, there simply will not be a one-bedroom social home for the cancer patient to move into, and more one-bedroom homes will not become available as a result of the policy because, after all, it is not possible to under-occupy a one-bedroom flat. Therefore, they would lose £14 a week, on average, which they would need to make up to their landlord from their benefit income. That is £60 a month straight out of the pocket of someone with terminal cancer. How are they supposed to cope with that loss of income? The Government suggest that they work to make up the difference, or take in a lodger. For people with terminal cancer or the most genuinely disabled people, work is often not much of an option, and it certainly should not be forced on them. Taking in a lodger simply is not an option for many vulnerable households either.

Therefore, one of three things could happen, not just to the family I am talking about, but to hundreds of thousands of others, too. First, they could lose income and be pushed into poverty. Secondly, they could move out to a smaller home in the private sector, but that means higher rent and higher housing benefit bills, and a policy that is supposed to be saving money will end up costing much more. Thirdly, they could end up in rent arrears, be evicted and even end up homeless.

Let us be honest: homelessness is a real possibility. Even the office of the Secretary of State for Communities and Local Government—a man not known as a bleeding-heart liberal—warned that the Government’s housing benefit reforms could make 40,000 people homeless and that the policy could cost more than it saves. The Government claim that discretionary housing payments will help to make up the shortfall between housing benefit and rent, but both the National Audit Office and the Child Poverty Action Group find that the funding available is likely to be woefully inadequate.

I would therefore like to ask the Minister a few questions—first, about the cost of this policy. We have heard already that the policy will make savings only if it does not work, and it is set to push people into private rented accommodation, making supporting them all the more expensive. Will he tell us why the Government have estimated the costs of the policy on the basis that no one moves, but loses benefit instead? Will he tell us what estimates they have made of the number of people likely to move into expensive private rented accommodation? Given the serious concerns about the cost of the policy, can he give us an assurance that under-occupancy deductions will not be increased if the Government do not make the expected savings?

The Government seem to have casually accepted that as many as 40,000 people could be made homeless by the policy. What does the Minister say to the housing association that has told us that it expects to have to evict one third of its tenants? How many children does the Minister think will have to move school as a result of the policy? Have the Government put any measures in place to ensure that local authorities can cope with the increase in the number of homeless people? What estimate has been made of the cost of supporting homeless people and getting them back into housing?

I would also like to ask some questions about the people who will be forced to rely on discretionary housing payments after the changes. The Government have indicated that they expect disabled people with adapted housing and foster carers to apply for the funding. Why should they face the prospect of being moved out of adapted homes on the basis of whether their local authority has enough money left in the DHP pot? Surely, that is a monumental waste when significant time and money has already been invested in their homes. Discretionary housing payments are short term, and new applications must be made every few months, so how are disabled people and foster carers supposed to plan their lives when they cannot be sure that they will be able to afford their house in a few months’ time? Local authorities desperately need to know how much funding they will have, to plan their responses to the changes, so why did the Minister tell the House at the end of October that the Government still have no idea how much money will be allocated to local authorities for the next two years?

It has also emerged that not just disabled people and carers might be forced to rely on short-term discretionary housing payments, but soldiers. The Daily Telegraph recently reported, as we heard earlier, that the families of service personnel will face deductions if they keep a room for a family member away on duty. Why should brave men and women serving their country in the armed forces have no room to come home to, because under-occupancy deductions have caused their family to move? What assessment have the Government made of whether the policy contravenes section C.4 of the armed forces covenant, which states:

“Members of the Armed Forces Community should have the same access to social housing and other housing schemes as any other citizen, and not be disadvantaged in that respect by the requirement for mobility whilst in Service.”

Can the Minister tell us what discussions he has had with the Ministry of Defence on this issue?

As I said, there is no dispute about wanting to tackle overcrowding and under-occupancy or the need to get the housing benefit bill under control, but as Labour Members have shown, the current plans are unlikely to ease housing supply or to save money and could end up costing more. Worse still, they will put people in debt and risk making them homeless. Labour’s alternative where under-occupiers would face deductions if they had been offered a smaller property and refused it would have worked and would have saved money. The fundamental truth is that the best way to get the benefits bill down is not to attack the families of disabled people, soldiers or poor tenants, but to get everyone back to work. That is what Labour’s jobs guarantee would do. Britain needs reform that is tough, fair and, most of all, works.