Housing Benefit (Wales)

Lord Murphy of Torfaen Excerpts

Thursday 1st May 2014 Westminster Hall

[Glyn Davies]

I think that it is. It might not be the same in all local authorities—I can speak only for my own—but I must say that, on this issue, Powys county council has been brilliant. It knew that things would be difficult for some tenants—it is not an easy situation—but it employed three specialist officers to help everyone affected to deal with their situation by giving them the best advice, and they have done that. I pay continuous tribute to the work that Powys county council has done with a policy that it may well not have agreed with. It has delivered coalition Government policy and done a magnificent job.

[Paul Murphy (Torfaen) (Lab)]

Does the hon. Gentleman accept that there is a world of difference between local authorities in Wales, particularly between a large rural area such as the one he represents and a constituency such as mine that has a vast amount of former social housing? For example, there were 3,500 applications for discretionary payments in Torfaen in 2013-14, compared with only 700 the previous year.

[Glyn Davies]

The right hon. Gentleman makes a good point in that there are great differences between constituencies. He may well speak later in the debate and describe what has happened in his constituency, but when the policy was debated early on, a number of people said that it was going to hit rural areas harder—that was going to be the real problem. No area is more rural than my constituency, and the reality is that the commitment of the local authority and Mid-Wales Housing Association has made the policy work. I am not pretending that it has been easy, but they have made it work as well as possible.

The final issue I want to discuss is new housing, which is clearly needed for the policy to work well in the longer term. Housing deliverers did not respond to what they could have anticipated, perfectly reasonably, to be Government policy. To say that the policy was suddenly dropped on them, out of the blue, and that they need two years to deliver is, I think, a bit of an excuse. They could have anticipated that the policy would be introduced, but we are where we are.

We need the Welsh Government, as well as housing and planning authorities in Wales, to recognise that we need new properties. They should not be piling on extra costs. The Welsh Government have not delivered on new housing. We only need look at the figures to see that they have gone down. They have put on new costs. The planning authorities demand planning gain for this, that and the other, and make it almost impossible to build housing. The Welsh Government have put on the extra cost of sprinklers, which in themselves are fine—

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[Paul Murphy (Torfaen) (Lab)]

I congratulate the Chair of the Select Committee on his Committee’s work. I thought that the impartial way in which he spoke was exemplary; I expect nothing less of my neighbour. I do not agree, of course, with what is the worst development in benefits in my 50 years of holding elected positions. There is no question but that we can rightly call the bedroom tax a wicked tax. Like many of my colleagues, I absolutely oppose it.

The report states:

“Under-occupation arises where a household lives in a property that is assessed to be too large for its needs. It is usually defined in terms of excess bedrooms.”

That definition is totally at odds with what public rented accommodation has traditionally and historically been about. Whether a person’s home is rented or owned makes no difference to where that home is. Until right to buy came about, my constituency, which has been much cited today, had the highest proportion of so-called social rented accommodation in the whole of Wales. That was mainly because it was a new town. A lot of that accommodation has been sold off, but the proportion is still very high.

The philosophy of the new towns, which has been totally ignored by the Government, was that people could live in rented accommodation, whether public or private—the latter is a small proportion in our areas—or in owner-occupied housing, without distinction. People would not know by looking at the door of a house whether the people living there had bought it or were renting it. The bedroom tax has dug a deep division between those who rent and those who own their homes.

The distinction in much of Wales between private and public rented accommodation is very different from elsewhere in the UK. Often in Wales, people see private rented accommodation as more temporary, and council housing, as it used to be called, as their home and much more permanent. In my constituency, the bedroom tax has been an unmitigated disaster and a failure. It has hit 18.3% of housing benefit claimants in Torfaen. Bron Afon, the social housing provider, estimates that more than £62,000 of arrears are attributable to the bedroom tax, with 268 tenants in arrears who have never before in their lives been in that situation. They see their dignity as being attacked by this appalling policy that is forcing them into arrears.

The reduction of income due to the bedroom tax in Torfaen is almost £1 million, the highest in the whole of Wales. People have £1 million less in their pockets because of the wretched policy. As everyone knows, the availability of smaller houses is very limited in Wales. In Blaenavon in my constituency, it would take 17 years to re-house the tenants suffering from the bedroom tax in smaller accommodation.

The Government say that the situation can be helped by discretionary housing payments, but that is a fudge. Yes, the money to local authorities has been increased to help them out, but most people do not know that the bulk of money that local authorities use for discretionary housing payments is their own. My authority spends to the maximum, with a bit more as well, of all local authorities in Wales. It is complete nonsense and deceptive to say that the payments are there by virtue of a benign Government. It is nothing of the sort; the councils have to take it out of their coffers.

The increase in demand for discretionary payments has been alarming. In 2012-13, there were 700 applications for payments, and in 2013-14 there were 3,500. The main reason given for the tax being brought in was that it would save money on the housing benefit bill, but it is doing nothing of the sort.

The cost of discretionary housing payments and top-up subsidies from local authorities, the increased cost of rent recovery by social landlords, the rent loss and turnaround cost of increased void properties, and the cost of additional health services through additional stress and depression are costing more than the so-called savings from the bedroom tax. Those facts alone justify Labour’s view that as soon as we are in government, out it will go—and with that, one of the worst taxes we have seen in a generation will finally disappear.

Food Banks

Lord Murphy of Torfaen Excerpts

Wednesday 18th December 2013 Commons Chamber

[Paul Murphy (Torfaen) (Lab)]

Perhaps I can bring the House back to the issue of food banks. I decided to take part in this debate only last Friday, when I visited the Eastern Valley food bank in Pontypool in my constituency and saw its excellent work with my own eyes. It distributes more than a tonne of food per week and feeds more than 120 local families, and demand is so great it has opened three distribution centres in Blaenavon and Cwmbran. Like many food banks in this country, it is linked to the Trussell Trust, to whose Welsh representative, Tony Graham, I pay tribute.

That situation is replicated throughout Wales, which now has 33 food banks and 74 distribution centres. In the UK, three open every week.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

I have visited most of my food banks, but there are so many of them that it is very difficult. Has my right hon. Friend noticed, like me, the type of person turning up at these food banks? I saw a woman who was a skilled worker—a draughtswoman—who could not get a job and had not had one for four years as a result of the Government’s policies. Did he see anybody like that?

[Paul Murphy]

Indeed, I did. I also saw that many people using the food bank were working people who simply did not have sufficient money to feed their families.

The Minister spent some time trying to decide who caused the recession, but in 2010—the year the Government came to power—more than 4,000 people in Wales got food from a food bank. In 2011, it went up to 16,000; to 36,000 in 2012; and in this year, it is estimated that 60,000 people in Wales will have to rely on food banks. That is the population of my town, Cwmbran, the fifth largest town in Wales. That is a disgraceful indictment of society and of what the Government have—or have not—done.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Some people have to go to food banks because of the problems they have with their benefits. On one occasion, a constituent came to see me, having been assessed for their personal independence payment by Capita six months previously, yet had still not had that assessment passed on to the Department for Work and Pensions because of Capita’s failures. Other constituents have waited more than four months. There are serious failures in the benefit system.

[Paul Murphy]

We know that in 2010, in Wales alone, 13% of those who went to food banks did so because of problems with the welfare and benefits system—and that has gone up to 20% today. That is the reality, but there are other reasons, too. It is, of course, also a matter of electricity, gas and water prices, and the price of food has gone up dramatically over recent years. What is to be done about it? The first thing we should do is properly tackle the issue of the cost of living.

[Alun Cairns]

When it comes to increases in the cost of living, what contribution does the right hon. Gentleman think is due to the increases in council tax in Wales? There has been a 9% increase over recent years in Wales, yet it has been broadly flat in England.

[Paul Murphy]

It is nothing like the effect of the cost of electricity and gas on people’s incomes, that is for sure. We have to abolish the bedroom tax, which is a huge issue affecting the need for food banks, and in the meantime I hope people will continue to donate and volunteer.

The truth is that food banks show the best and the worst in our society. Local people in my valley have stepped up to help—Jen Taylor and her excellent team of volunteers have offered their time to help feed people and to give them hope. Churches, charities, offices, shops and individuals have donated huge amounts of food to supply the food bank.

[Chris Ruane (Vale of Clwyd) (Lab)]

Does my right hon. Friend agree that the churches in Wales have played a fantastic role in collecting food? In my constituency, the Deva church, the Calgary church, the Catholic churches in Rhyl and Prestatyn and the Wellspring Christian centre in Rhyl are all contributing.

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[Paul Murphy]

I think the churches in Wales have done a tremendous job, often taking the lead right across the United Kingdom in dealing with food banks. The people involved are occasionally rewarded. I was told the story of a little girl in Pontypool in my constituency, who excitedly told a lady that she would have chocolate fingers for Christmas because the food bank was there and had given them to her. That is a very moving story.

The key issue is what an indictment this is. I have been a public representative in my constituency for 40 years, and I have never seen anything like this, other than during the time of the 1985 miners’ strike, when the people of my valley got together as a community to help each other. This is happening again now in a big way, but I never thought that this would happen again in my lifetime. It is an indictment of our society and an indictment of our Government.

Under-occupancy Penalty (Wales)

Lord Murphy of Torfaen Excerpts

Tuesday 22nd January 2013 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

Thank you, Mr Robertson, for the opportunity to have the debate.

Before Christmas, social tenants in my constituency were sent a letter telling them that under Government changes in April they will have to pay more rent or move on, because the Government have deemed that they are under-occupying their home. They are victims of what is now called the bedroom tax. As all hon. Members know, such letters have gone out throughout Wales and the rest of the United Kingdom, and they have caused huge fear in my constituency.

I asked for this debate because I am horrified by some of the stories that constituents are telling me about what this policy will mean to them, their family, their future and their home. For decades, many people in communities in my constituency have cared for and cherished their homes, where they have brought up their children and cared for their grandchildren. Their homes are full of memories of lost loved ones. The fear is palpable, as the reality of what these changes will mean sinks in. One woman said when I knocked her door during the week that she received the letter from Newport City Homes, “Why did I get this? I thought it was about the scroungers, not about me.”

In April, those tenants face the stark choice of paying £40 to £80 a month more for having one or more spare bedrooms, or moving to a smaller property. There is evidence that many cannot pay as the cost of living and benefits cuts hit them. In a Welsh study, one tenant said that they are already “not living, but surviving”. What is more, there is a chronic shortage of smaller houses, particularly in Wales.

[Paul Murphy (Torfaen) (Lab)]

Will my hon. Friend pay tribute, as I do, to Duncan Forbes of Bron Afon who has highlighted some of the nonsense of this tax, particularly people going into one-bedroom houses? In Blaenavon in my constituency, 85 tenants will have to go into one-bedroom houses to avoid the tax. It will take 17 years to rehouse them.

[Jessica Morden]

I thank my right hon. Friend for his intervention. He is right. Will the Minister look carefully at the report from Bron Afon in Torfaen, because it highlights specific examples of why the policy will hit Wales particularly hard?

There will be two levels of reduction. Those who are under-occupying by one bedroom will lose 14% of their housing benefit, which is equivalent to a loss of £12 a week. For those under-occupying by two or more bedrooms, there will be a 25% reduction, equivalent to a loss of £22 per week. In Wales, 46% of all housing benefit claimants of working age in the social rented sector will be hit, compared with a UK average of 31%.

The Department for Work and Pensions says in its own impact assessment that 40,000 tenants in Wales will be affected by the bedroom tax with an average loss of income of £12 per week. Like many of the Government’s benefit changes, this is hitting Wales disproportionately hard. With tax and benefit changes to be implemented by 2014-15, households in Wales can expect to lose 4.1% of their income on average or about £1,110 per year on top of rising food and heating costs.

Some 1,794 Newport City Homes tenants have received letters telling them that they will be affected, and a further 421 who rent from Monmouthshire Housing Association have received letters in communities like Caldicot, which is in my constituency. With 4,220 on the Newport common housing register and 2,536 on the Monmouthshire common housing register, it is not rocket science to realise that there is not enough social housing for people to move to. Of the Newport City Homes tenants who are affected, 359 have two bedrooms too many and 1,435 have one bedroom too many, 916 of them will be looking for one-bedroom houses or flats and 823 will be looking for two-bedroom properties.

Newport City Homes has only 1,264 one-bedroom properties in total and 2,680 two-bedroom properties. This week, just 36 properties are advertised on the Newport housing options website, so people have very few choices. Whole estates in Wales have very few one or two-bedroom houses.

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[Jessica Morden]

I agree with my hon. Friend’s important point, which we have to bear in mind. Those who have had disabled adaptations to their property would, if forced to move, need another set of disabled adaptations, and it is not clear what will happen with discretionary payments in such circumstances.

[Paul Murphy]

I am grateful to my hon. Friend for giving way for a second time. She has referred to the report by Bron Afon, which states that the total budget for discretionary housing payments in Torfaen is just under £53,000, or £6.62 per housing benefit claimant.

[Jessica Morden]

My right hon. Friend makes a telling point. When that money has gone, it has gone, and it is a small amount of money; it is a drop in the ocean compared with what is needed.

With no money to spare and no chance of social housing, tenants might look to the private rented sector. If the stated aim is to save money, the policy has no logic. In many areas of Wales, the policy encourages tenants to move to more expensive accommodation in the private rented sector, which will increase expenditure, even with a reduced local housing allowance. In Torfaen, for instance, every private rented property is more expensive than the Bron Afon rented properties. The situation is clearly ridiculous, and a cursory look on the websites for private rented accommodation in my constituency tells that tale.

Those arguments are well rehearsed, but they are becoming more pressing as the policy becomes more real for many people in Wales. I visited a constituent before Christmas who lives in a small two-bedroom house in the community in which he grew up and his family still lives. He was made redundant last April from his manufacturing job of 20 years, and he now finds himself on housing benefit. He is a proud man who has lost his job and now faces losing his immaculate home of many years. He currently pays £321 a month, and there is only one one-bedroom property in Newport on the housing options list for which he could possibly be eligible to rent this week, and that would cost him £350 a calendar month. If he is still unemployed, that increased rent would still be covered by housing benefit at a cost to the public purse of an extra £341 a year.

One Bron Afon tenant is a former serviceman with post-traumatic stress disorder, and his benefit has been cut because he is deemed fit to work, even though he has serious depression. His daughter hopes to go to university, but her decision will be heavily influenced by what happens to her father’s benefit. The spare rooms of those in our services are not out of the policy’s scope, which will have a huge impact in south Wales.

I have met a divorced father who has his kids to stay at the weekend. One of the hardest-hit groups will be parents who live in two-bedroom houses and who have access to their children. If they are under 35, they will be expected to share accommodation, which may be the only housing left to them, with all the child protection issues that raises. That is a whole other subject.

In Wales, registered social landlords expect a large loss of revenue, and those running large arrears will be under pressure to make people homeless. That in turn will put pressure on local authorities to house people presenting themselves as homeless. The Welsh Assembly has made money available under the homelessness grant programme to assist financial inclusion work and projects with Shelter, but that will not be able to mitigate the very real impact of the reforms in Wales.

There are so many unintended consequences for individuals such as foster carers, people with disabled adaptations and parents of disabled children. I am sorry that there is not time to do them justice.

A constituent from Alway specifically asked me to say that he considers the Prime Minister to be Dick Turpin without the mask. Many in the Government think that paying an extra £20 a week towards rent will be the difference between going out for dinner and staying at home, but for many on low incomes, it will be a case of heating or eating. People will have to pay up when they cannot afford it and then get into debt or move out and away from their community. This is a policy that in the long run cannot cost less in Wales and will do nothing to help local housing pressures, as the pressure is on the smaller properties already.

Regardless of the rhetoric, the fact is that the people worst affected are parents who share access to their children; grandparents who provide essential child care for their grandchildren, allowing parents to go to work; and even the brave men and women serving in our armed forces. The Government simply do not understand how this policy will affect people, and what is worse, they do not seem to care. We used to talk about the poverty trap; we are now talking about the property trap.

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[Jessica Morden]

Will the Minister accept that it is possible to be creative without being cruel? It would be possible to work far more closely with housing associations in relation to asking them to do more about under-occupancy, but the broad-brush approach that will be taken in April will hurt many people.

[Paul Murphy]

It is about saving money.

[Steve Webb]

The right hon. Gentleman says that it is about saving money. I do not apologise for the fact that we have had to save money, because otherwise we would just pile up debts for our children, and that is not progressive, wherever someone is on the political spectrum.

On the hon. Lady’s specific point, yes of course, in theory, successive Governments have tried to work with housing associations and social landlords, and it has not worked, because we have the best part of 1 million empty bedrooms paid for by housing benefit at the same time as we have thousands of people in overcrowded accommodation. The challenge is therefore to use the need to save money to create fairness between private and social tenants and to create fairness between people who are living in overcrowded accommodation and those who have spare bedrooms.