Housing Benefit

Anne McGuire Excerpts

Tuesday 12th November 2013 Commons Chamber

[Dr Alasdair McDonnell (Belfast South) (SDLP)]

I rise to support the motion, but before I do so, I would like to express my deep appreciation to all hon. Members who have expressed their condolences on the death of Eddie McGrady; their sympathy is deeply appreciated, and I thank them for it.

The bedroom tax is a pernicious and cruel tax that is causing untold hardship to the most vulnerable in our society. This crude and ill-thought-out levy is perhaps the least palatable part of the Government’s welfare reform programme. Only parties so detached from the lives and struggles of ordinary people could be so heartless as to inflict this tax, which is causing so much hurt to people whose only crime seems to be that they cannot afford to buy their own home. The fact that the Government—or, more correctly perhaps, the Deputy Prime Minister—have been dragged kicking and screaming into undertaking independent research into the impact of it all tells its own story; in his heart, he must know that this tax is wrong.

[Mrs Anne McGuire (Stirling) (Lab)]

While recognising that the Deputy Prime Minister has been dragged kicking and screaming into this, does the hon. Gentleman find it regrettable that the review of the bedroom tax will not come through until 2015?

[Dr McDonnell]

Yes, I do, and I am deeply concerned about that. However, we do not need any more research to tell us that this tax is wrong and that it will inflict an inordinate degree of hardship that shames us all, and the Government in particular. Those who are suffering from the impact of this tax—they are some of the very weakest in our society—do not want research on how it will affect them; they want these cruel deductions in housing benefit stopped, and stopped now.

I represent a constituency in Northern Ireland where the bedroom tax has not yet been introduced, and my colleagues in the Northern Ireland Assembly and I are fighting tooth and nail to prevent it from happening. That is because more than 32,500 households in Northern Ireland are bracing themselves for the pain and suffering this tax would cause. They look at what is happening on this side of the Irish sea and they are deeply fearful. A couple of aspects of this bedroom tax make it an even crazier proposition for us in Northern Ireland: we quite simply do not have the required housing stock for people to downsize, and the stock we do have is, sadly, segregated.

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[Mike Freer (Finchley and Golders Green) (Con)]

Having sat through 90 minutes of a Westminster Hall debate last week ostensibly on housing supply, where housing supply was barely mentioned, I am not surprised that housing benefit has barely been mentioned in today’s debate. We have had the same old stories as we heard last week and in previous weeks trotted out yet again. The Labour party is still fiscally incoherent and still policy incoherent.

Thirteen years of Labour created the problem. For 13 years, the Labour Government did nothing about it. They created the perfect storm of insufficient house building, record overcrowding and housing benefit out of control. This is a Labour problem and even a Labour solution, as we heard earlier today.

[Mrs McGuire]

Is it the Government’s case, then, that they inherited a bad situation and have set about making it worse?

[Mike Freer]

No. The crux of the matter is that we inherited a bad situation and we are setting about putting it right. That is what this is about. At least the Labour housing spokesman on the London assembly had the honesty to stand up and say that the Labour party got it wrong and that it should apologise, as my hon. Friend the Member for St Albans (Mrs Main) mentioned. He also pointed out that every Conservative Government have built more social housing than any Labour Government in recent history. Even in Mrs Thatcher’s last year, the then Government built more social housing than was built in all 13 years of the Labour Government, so we do not need lectures on housing supply and social housing from the Opposition.

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[Graham Evans]

There is an element of that in various communities. In my area, people like to live within their own communities. I accept that. The problem is not straightforward, but it is not insurmountable either. People can swap homes within local communities, but I agree with the hon. Gentleman that that is a problem. The problem is not insurmountable for good local housing trusts or local authorities. It might not happen overnight, but with a little bit of creative thinking, moves can be accommodated—people can downsize and upsize.

[Mrs McGuire]

The hon. Gentleman accepts that the situation cannot be changed overnight, but does he believe it is fair that people should be caught in the trap of having to pay the bedroom tax? He is contradicting his own argument.

[Graham Evans]

I am sorry I gave way to the right hon. Lady.

I want to make one final point. Opposition Members have had nothing to say about someone earning £140,000 a year who uses social housing, not least because the person in question is Bob Crow, the leader of the National Union of Rail, Maritime and Transport Workers.

Unless we reassess ongoing housing needs, we will be unable to support those who need it the most. The changes need to happen, and it is important that they happen now, to restore fairness to the social housing sector in line with the private sector.

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[Mr Ellwood]

The hon. Lady makes an important point. I cannot accept that a doubling of housing benefit to £21 billion is accounted for by the private sector alone. There are other aspects, such as the type of housing we are building. We were building the wrong type of houses—60% of new houses built needed to be for single occupancy, but only 30% were. That is Labour’s legacy. It raises the fundamental question of today’s debate: in these financially tough times, should those on housing benefit be allowed to stay in accommodation with more bedrooms than they really need? This Government say no and Labour says yes, even though it said no in 2008 when we had exactly the same debate on private sector housing, proving that a little inaccuracy sometimes saves a ton of explanation.

[Mrs McGuire]

Will the hon. Gentleman give way?

[Mr Ellwood]

Very briefly; we are eating into other Members’ time.

[Mrs McGuire]

I do not think that the hon. Gentleman was in the Chamber for the earlier clarification, given by my hon. Friend the Member for Westminster North (Ms Buck), that the local housing allowance was not retrospective. This tax is retrospective and it penalises people for not changing their circumstances.

[Mr Ellwood]

I welcome the hon. Lady to the debate. It is clear that Labour still has not learned from its mistakes. In the last eight years of government, Labour lived beyond its means. In 2002-03, it spent £26 billion beyond its means. Four years later that rose to £33 billion. In its final year of office, the deficit rose to £156 billion. That always accumulates, which means that by 2010 when Labour departed office we had a debt of more than three quarters of a trillion pounds. Where are these benefits that Opposition Members endorse? Where will that money come from? To date, Labour has refused to support a single reform to the benefit system put forward by the Government. Aside from failing to recognise, first, the need for reform of our complex system, and secondly, the consequences to society in promoting a something-for-nothing culture, Labour has voted against £83 billion-worth of welfare savings introduced by the Government, proving that it has yet to learn the lessons of the past.

Labour owes the taxpayer an explanation as to how it would afford to keep its complex, costly and broken benefit system in place. The challenge is simple. Thanks to the housing shortage, created under Labour, some 400,000 people are in overcrowded housing. Yet there are almost 1 million spare rooms throughout the UK paid for by the taxpayer at a cost of around £0.5 billion a year. This policy better matches our housing stock, but also protects the most vulnerable, such as pensioners, those in foster care, disabled children and those requiring overnight care. They are all exempt, as indeed are those who have served in the armed forces.

Those affected by the policy, as others have made clear, who are living in larger than necessary housing have four choices. First, they can participate in a house swap scheme, which has not really been embraced by all councils. Secondly, they can pay the reduction in housing benefit, which equates to about £14 a week for a room. Thirdly, they can sub-let that room. Finally, they could apply for the hardship scheme, and a couple examples have been given of that. I am pleased to hear the announcement today that if councils run out of that hardship funding, they can apply for more. That is a message that needs to be sent from both sides of the House, to ensure that councils do not run out of this important support.

The policy already exists in the private sector, introduced, as I say, by Labour in 2008. I welcome this policy and the debate, which I hope will help Labour Members to recognise how inaccurate and misleading some of their comments have been. I am pleased that the hon. Member for Aberdeen South (Dame Anne Begg) is in her place. I have a lot of respect for her, but she spoke eloquently about a council home being a home for life. I cannot agree with that analysis. A council home should be there as a method of support for those trying to get on in life and for those in a difficult period of their life. It should not just be given to somebody as a gift, early on in their lives, never to move away from. That is the distinct difference between the two sides of the House, on which we will have to agree to disagree.

I welcome the policy and the debate, and I look forward to the Minister clarifying some of the many points that have been made by Members on both sides of the Chamber.

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[John Hemming]

When I am down to two minutes, I will take interventions.

The Labour party in government recognised that there was a problem with pressure on housing. We cannot suddenly magic up 1 million more rooms overnight. The reason there was not a lot of pain when the local housing allowance was introduced is that it did not affect anyone who was already on housing benefit; it only affected new claims. The hon. Member for Westminster North (Ms Buck) was very good on that point. To be fair, if we applied the same approach now, or had done so back in April, so that this did not affect anyone until they got a new tenancy, nobody would really bother about it. The problem with that is that we have a deficit. [Interruption.] Labour Members seem to forget the deficit, but we need to deal with these issues. However, we have found £180 million of the £500 million savings, so for over a third of people this need have no effect. To get my support, the Government will have to deliver more on discretionary housing payments, because that is the area I am concerned about.

[Mrs McGuire]

Let me deal with the consultation document. I shall quote from Hansard:

“Yes, it was in the consultation document, but we listened to the consultation responses and recognised that it would be inappropriate to roll it into the social housing sector.”––[Official Report, Welfare Reform Public Bill Committee, 2 November 2006; c. 453.]

That was the response of the Minister in the debates on the Welfare Reform Bill to which the hon. Gentleman is referring. The reason I know it was said and can confirm it is that I said it.