Housing Benefit (Under-occupancy Penalty)

Andy Slaughter Excerpts

Wednesday 27th February 2013 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

I want to begin by talking about the impact of the bedroom tax on Wales and my local area. I say “bedroom tax”, but I note that the Minister has renamed it during the course of this debate as the “spare room subsidy”. That sounds a lot better, and I am sure that that will be of great comfort to those facing it in April.

The hon. Member for Banff and Buchan (Dr Whiteford) described in her excellent contribution how this provision is just part of an accumulative effect that is hurting the vulnerable. I want to mention the case of a couple I met during the recess when I was knocking on doors in my constituency. They have been hit not only by the bedroom tax, but by other things as well. They had worked all their lives. The husband used to be a driver, but he was hit by rheumatoid arthritis and had his driving licence revoked. He has, therefore, been unable to work, not least because, as he showed me as I sat in his kitchen, he cannot hold a mug for any length of time. He was moved off incapacity benefit on to employment and support allowance, and was then incorrectly put in the work-related activity group on reduced benefit.

The husband’s benefit and that of his wife were reduced as he waited for his appeal, which took eight months to come through. He won it, then two days later he received another letter from Atos telling him to go back for a work capability assessment. In the meantime, because the couple’s income had dropped, they were forced to claim housing benefit and received a letter telling them that they would be liable to pay the bedroom tax in April. Luckily, the husband had won his appeal after an eight-month wait, so he thought that that might help but, on top of everything, his wife, who had worked in a manual job, was diagnosed with myelopathy. She had hoped to retire this year, but will now have to work another three years because of the Government’s changes to women’s pensions. To cap it all, this couple’s experiences with the work capability assessment mean that they are now absolutely terrified of the personal independence payment, particularly the mobility component, which may lead to them losing their mobility vehicle.

I hope that the Minister does not in any way underestimate the palpable fear and anxiety among the disabled community. This couple worked all their lives until illness hit them later in life and they now find themselves hit on all fronts when they need a safety net. The Government’s replies are doing nothing to allay their fears.

Advice services, which are themselves being hit hard and cut, are also experiencing anxiety, as are housing associations and local authorities, which in my experience locally are working extremely hard to try to mitigate the profound effects of the bedroom tax.

Nationally, as we have heard, 31% of housing benefit claimants of working age in the social rented sector will be affected. As the shadow Welsh Secretary, my hon. Friend the Member for Pontypridd (Owen Smith), has said, in Wales that figure is 46%, with the Department for Work and Pensions estimating that 40,000 tenants will be affected. Newport city council in my area has calculated that 2,455 households will be affected. Newport City Homes housing association says that 1,794 of its tenants will be affected and Monmouthshire Housing Association, which covers parts of my constituency, notes that it has 421 such tenants. What choices do those people face? They can move to a smaller social housing property, pay up or move into private rented accommodation.

Turning to smaller social housing—to give an idea of the real impact in my area—there are 4,220 people on the common housing register in Newport and 2,500 in Monmouthshire. There is not enough social housing available. For example, of those affected in Newport, 916 will be looking for one-bedroom houses or flats, and 823 for two-bedroom properties.

In total, Newport City Homes has only 1,264 one-bedroom properties and 2,600 two-bedroom properties. Today on the common housing register website—Newport housing options—only 32 properties are advertised. There are very few smaller properties. The point has been made that whole estates in Wales have very few one or two-bedroom properties. In the past we needed larger properties, so that is what councils built. The scarcity of larger properties may be a problem in big cities in England, but in Wales there is a scarcity of smaller properties. There is simply nowhere to move to. As Community Housing Cymru has said,

“the option of tenants downsizing would prove difficult in almost all cases”.

The other option is to pay more. As the excellent report by the Bron Afon housing association in Torfaen highlights—I hope that the Minister has looked at it—many of those affected consider themselves to be just surviving already. Many are like the man I met on an estate last week, who said that he left the heating off until tea time because the price of food was going up every week and he did not want to go into debt. A family in the Bron Afon study, which surveyed all its tenants, concluded that the only solution was to eat two fewer meals a week.

As the study showed, people want to stay in their own homes, not least because they are the homes in which they brought up their children, where they may have lost a partner and where they have memories and have lived for years. They may have had them adapted and they may also have family ties and help with child care. These are their homes. In Community Housing Cyrmu’s survey of people affected, 13% said that they would consider downsizing, 8% that they might consider a lodger and 79% that neither of those options was suitable and that they would apply for the discretionary housing payments, which is where the problems arise.

[Mr Andy Slaughter (Hammersmith) (Lab)]

My hon. Friend is making the case well that this is a tax on the poorest. It is not about freeing up housing or downsizing. In my local authority, 824 tenants are affected but just 48 may be rehoused. Despite that, the Government describe this decision as morally right. But it is about punishing the poor.

[Jessica Morden]

I agree with my hon. Friend’s excellent and powerful point.

According to the Trussell Trust, the huge increase in the use of food banks is due in no small part to the benefit changes. Some 42% of those who turn up for their three-day supply of food are not able to balance their budgets because of benefit delays, mistakes, sanctions or reviews. Front-line professionals have to give a reason for a referral to a food bank and problems with welfare are increasingly being cited.

With food inflation above 4% and increases in energy and petrol costs, it will be impossible for many people on low incomes to absorb the additional housing costs. Rent arrears will increase and housing associations might struggle to deal with that. The Welsh Tenants Federation estimates that 10% of tenants are already in debt to their social landlord and that a rent increase on top of those rent arrears could result in 4,000 people presenting themselves as homeless. Newport city council in my area estimates that there will be a 5% increase in homelessness next year.

The Government’s answer to those who cannot move is that the discretionary housing payment will deal with all the issues. Newport is getting £343,000 of discretionary housing payment and Monmouthshire £121,000.

--- Later in debate ---

[Jane Ellison]

I am glad the hon. Lady has given me an opportunity to respond on that point. It was always predicted that debt would rise for most of this Parliament. It is true that that period has had to be extended, but that is not a surprise. The structural deficit is being reduced. To return to an intervention I made on the right hon. Member for Birmingham, Hodge Hill, who spoke for Labour, if Labour had begun to address some of the structural deficit problems when the financial crash hit in 2008, the current Government might not have had to take some of the difficult decisions they are taking now. Housing benefit is a classic example.

[Mr Slaughter]

rose—

[Jane Ellison]

I will be delighted to give way to the hon. Gentleman if he can tell the House why the Labour Government did not introduce measures to bring the housing benefit bill down from 2008 onwards.

[Mr Slaughter]

I understand the hon. Lady’s point—she, like the Conservative party, believes that the poor should pay and the rich should get away with it. Like me, she represents an inner-London constituency. More than 2,000 families in my constituency will be unable to pay their rent because of the measure. At the same time, councils such as Wandsworth and Hammersmith are refusing to build social housing and are selling it off. What is that if not destroying communities? How does she defend it?

[Jane Ellison]

I do not know how the hon. Gentleman can begin to criticise Wandsworth council, which has just set the lowest council tax in the country—it has done so for many years in a row. The difference between Wandsworth council’s band E tax and that of many surrounding councils, and particularly that of many high-spending Labour councils, is enormous—it is the equivalent of a family holiday, a new car or a new three-piece suite. That illustrates the benefit of low tax and leaving people with more of their own money to spend on what they will. I am glad the hon. Gentleman gave me the opportunity to pay tribute to Wandsworth council’s low council tax policy.

Some of my constituents will be affected by the measure—[Interruption.] I realise that other hon. Members want to speak, but if Labour Members want to make every general economic point and make endless reference to tax cuts for millionaires and that sort of thing—[Interruption.] Well, I made the point earlier that the Labour Government had several years after the financial crash and after financial reality had dawned to do something about the upper rate of tax, but they did nothing. The higher rate was in effect for, I believe, 37 days before the election. A lot of nonsense is spoken about that.

As I have said, we could look at aspects of the measure. The Minister’s speech was helpful because he clarified concerns and misunderstandings. The measure draws attention to the fact that subsidised social housing is a scant and important public resource. The fact that subsidy is built in to the rent for social housing means that social housing is often not appreciated as a valuable resource, and we should aim to provide access to it for as many taxpayers as possible.

I would like to make a point on behalf of the many people who come to see me who are over-occupying. No one claims that this policy will free up all of the 1 million rooms, but it might well encourage people to look at being in appropriate-sized accommodation. Many housing directors tell me that if they could match people to the correct-sized accommodation, they could resolve much of their waiting lists—that is what I have been told by people with many years’ experience in this field. This is not a panacea, but there are people in wrong-sized accommodation. If this measure starts to get people thinking and encourages them to move into right-sized accommodation where it is available, that is a good thing.