Housing: Affordability and the Underoccupancy Charge

Baroness Quin Excerpts

Thursday 31st October 2013 Lords Chamber

Moved by

[Baroness Quin]

That this House takes note of the availability of affordable housing in the United Kingdom and the impact of the underoccupancy charge.

[Baroness Quin (Lab)]

My Lords, I am pleased to be introducing this debate and delighted that it has attracted a good number of speakers. I am delighted but not surprised because the crisis in housing and the effects of the bedroom tax in particular have been raised repeatedly in this House in recent weeks and months, showing the deep concern that your Lordships feel about these issues. I very much look forward to listening to the maiden speech of the noble Baroness, Lady Bakewell of Hardington Mandeville—I hope that I have got that right—and of course I wish her well in her new role as a Member of your Lordships’ House.

I also add my congratulations to the Minister on her recent well deserved promotion. I am only sorry that she will no doubt be put in the position today of defending an indefensible policy, the bedroom tax, which is a policy not of her making and, indeed, one which only partly falls within her departmental responsibilities, although I recognise that many of the wider housing issues raised today fall within her remit.

Although I am the opening speaker, the themes of the debate were suggested by both me and my noble friend Lord Whitty. We were both keen to use opposition time to highlight these issues, and I therefore very much look forward to his contribution later in the debate.

My remarks will focus mainly on the bedroom tax which I have raised through Oral and Written Questions previously but which, given its pernicious effects, needs to be aired at every opportunity until, hopefully, the Government see the error of their ways. However it is important to set the bedroom tax within the wider housing and economic context, and this debate gives us the opportunity to do so. For example, it needs to be set against the overall and desperate shortage of affordable homes, which was referred to in Oral Questions today. It also needs to be set against the problems in the private rented sector at a time when private rents are soaring and there is a crying need for the sector to be better regulated, something which I know my noble friend on the Front Bench has raised on a number of occasions.

That needs to be set against the fact, recently highlighted by Shelter, that the number of families who live in emergency bed-and-breakfast accommodation is now at its highest for nearly 10 years. We have all become aware of the huge increase in homelessness and rough sleeping in recent months. We also have to consider the overall context of welfare reform and, in particular, of the cuts to local authorities and council tax increases. Finally, perhaps this debate should also be seen in the wider context of issues such as the rise in fuel costs and the difficulty so many people find in simply making ends meet. That, of course, links in to the second debate today, on the cost of living and its impact on family budgets, which my noble friend Lady Prosser will lead.

The bedroom tax has now been in operation for more than six months. This is, therefore, a good opportunity to examine, as far as we can tell, what its effects have been. Some problems with the policy were apparent from the start, but others have emerged more clearly over time. For a start, we know that the Government’s thinking behind introducing the tax was the need, as they saw it, to free up housing to allow those in overcrowded accommodation to find suitable homes. The Government made much of the figure that overall a quarter of a million people lived in overcrowded accommodation, and contrasted this with the estimated million so-called spare bedrooms. However, the problem was that there was a complete mismatch between the areas of the country where there was overcrowding and those areas where there was underoccupancy, so that this often quoted overall figure was largely meaningless and misleading. For example, the National Housing Federation pointed out from the outset that in the north of England—in the regions of the north-east, Yorkshire and Humberside, and the north-west—families affected by the bedroom tax outnumbered overcrowded families by 3:1.

Examples have flooded in from around the country about the lack of smaller properties available to those who, designated as underoccupying, signified their willingness to move. In this House the right reverend Prelate the Bishop of Ripon and Leeds quoted the example of Hull, where 6,000 people were affected by the bedroom tax while only 70 properties were available to move into. I could quote many other examples from around the UK because this is a UK issue; the situation in Scotland and Wales has been repeatedly referred to in this House. Certainly the mismatch between types of accommodation is very clear, whether you are talking about Aberdeenshire, Swansea or Birmingham, Norfolk, North Tyneside or Cornwall. No part of the UK is exempt from this mismatch, although some areas are much worse affected than others.

The lack of alternative accommodation is therefore still a key issue after six months of the tax. Of course, there is the clear unjustness of a situation where people who are willing to downsize but cannot find alternative accommodation still have to pay the tax. It is interesting—perhaps one can make an ironic comparison—that if you are a jobseeker and you show that you are available and willing to work, you get benefit. However, if you are available and willing to downsize, your benefit gets cut all the same.

There is much distressing evidence of those in arrears for the first time as a result of the introduction of the bedroom tax. Many of those people, who have previously been able to meet their bills, are I think horrified and traumatised to find themselves in an upsetting and unfamiliar situation. The sum involved in the reduction in benefit can mean the difference between keeping your head above water and sinking below the poverty line.

One striking feature of the tax as it is operated is that many of those affected are in employment. That has once again highlighted the problem of low wages and such things as zero-hours contracts. Again, it is tragic that this tax hurts the very people the Government say they want to support: those people who want to get into and stay in work. However, as a result of this charge they cannot make up the income shortfall they face and again, end up sinking into debt.

I also believe that the disabled have not been adequately protected in this legislation. Considerable efforts were made in your Lordships’ House to amend the legislation when it was going through to provide better protection for disabled people and, indeed, even to consider exempting them from the tax in the way that pensioners are exempted. In the course of conducting research for this debate I have come across many examples of disabled people who have found themselves penalised considerably as a result of the tax. I hope that the Minister will look at some of these instances.

All benefit and welfare changes are complicated, as we know, simply because of the variety of individual circumstances involved, but in this case the complexity seems to have turned into a nightmare. There are myriad personal circumstances and many particularly difficult and heartbreaking situations have arisen since the imposition of this tax. For example, children who have grown up and moved out of home, having found employment and accommodation elsewhere, but who have subsequently lost that employment then need, and want, to move back home but find that they cannot because of the bedroom tax.

As we know, couples often split up and sometimes one parent will have custody of the children but the other parent may have partial custody and will understandably want the children to stay with him or her. Such families can easily fall foul of the bedroom tax rules. Another category I have come across is that of young grandparents who are not pensioners and therefore not exempt but who play a part in looking after the family and have the grandchildren to stay with them, although not all the time. These grandparents can fall foul of the bedroom tax and its rules.

All these situations can break up families and damage community cohesion. The complexity of this issue is also adding to the costs and burdens on local authorities which are struggling to cope with it. Crucially, I believe that the tax is not saving as much money as the Government claim. Recent evidence compiled as a result of research undertaken by the University of York and a number of housing associations seemed to suggest this. I also understand that the National Housing Federation is compiling statistics on this issue. What is the Government’s current estimate of savings as a result of this measure?

Will the Minister give more details of how the Government are monitoring this situation? I was concerned by the reply I received from the Minister’s predecessor to a Question for Written Answer that I tabled. I asked what information the Government had about those who had gone into arrears for the first time since April, and what proportion of those were subject to the bedroom tax. I received this not very reassuring reply:

“The Department does not collect official statistics on how many social housing tenants were in arrears for the first time nor on any notional sub-classification based on welfare reform”.—[Official Report, 23/9/13; col. WA 450.]

It is vital for the Government to get as much information as possible from local authorities and others to see what the evidence is regarding people who have gone into arrears for the first time as a result of this measure.

The noble Lord, Lord Freud, in replying to an Oral Question, spoke of the choices people could make as a result of being affected by the tax. However, these are very unenviable choices for many people, such as trading down or “pulling in lodgers”. I do not know whether the Government have any information about how many people have taken in lodgers following the introduction of this tax but I would imagine that, for someone living on their own in accommodation that they have occupied for a very long time, taking in a complete stranger to share that home could be a daunting and upsetting experience.

A lot of people have chosen to stay put following the introduction of the measure, but their ways of doing so have often involved simply getting financial support from family or friends or cutting back, in many cases to living on the poverty line. Not surprisingly, people do not want to move away from areas where they are part of a social network, where there are support systems and where there may be valued childcare facilities or reliable friends and neighbours. Even when people agree to move, transition can take a long time and transition costs for the tenants and the local authorities, such as in reletting costs, can be considerable. So downsizing is not a cost-free option.

Something that I hope will sway the Government is the fact that according to recent polls the underoccupancy charge or bedroom tax is deeply unpopular. Although the Government may hope that some of their welfare reform measures are popular, that certainly does not seem to be the case in this instance.

In preparing for this debate I was helped by a number of organisations: the National Housing Federation, Shelter and church charities, which make grants for those in dire need and are particularly aware of the hardship that is being caused in particular parishes and communities. I am also very grateful to the council with which I have had the honour of being associated throughout my time in both Houses of Parliament, Gateshead Council, which has told me of its findings after six months of the charge. It says that the amount of the penalty applied for underoccupation of one room in a council tenancy in Gateshead is almost double the additional housing benefit that would have been paid. The impact of this weekly penalty on many tenants has been immense and has contributed to a large increase in tenancy turnover, vacant property costs and rent arrears. The impact on the council’s housing revenue account is also considerable because of the additional rent arrears, additional expenditure on relet work and the loss of rent because of vacant property.

I am running out of time and would have liked to refer to many specific instances. Perhaps I may send some of these details to the Minister. In conclusion, I should say that of course the Government have to look at ways of saving money, but not by cruelly mistreating vulnerable people who were in no way the cause of the global financial crisis and should not be penalised as a result. Just last week we heard an entertaining spat between the former Prime Minister Sir John Major and the current Secretary of State for Work and Pensions. Sir John put it well and very tellingly when he referred to the plight of the “silent have-nots” and talked of the painful choice between heating and eating. Given this debate, he might have said heating, eating and keeping a roof over your head. I was delighted when my party’s leadership gave a firm commitment to repealing this tax. I call on the Government now to follow suit before even more hardship and misery are caused as a result.

--- Later in debate ---

[Baroness Quin]

My Lords, given the list of speakers, I expected that we would have a well informed debate and I certainly have not been disappointed. Many important contributions have been made during the past three hours.

I add my own congratulations to the noble Baroness, Lady Bakewell, on her excellent maiden speech. It was very good that she chose to make it in this debate, where her experience at local government level was highly relevant.

A great deal has been said about the bedroom tax and what we should call it. The noble Lord, Lord Greaves, reminded us of earlier debates on the subject in this House, including the amendments put forward by the noble Lord, Lord Best, who I think is credited with coining the expression “bedroom tax”, so perhaps we can see this as a Cross-Bench initiative.

The impact of the tax has been referred to by many people and, not surprisingly, there have been different experiences. The noble Lord, Lord True, spoke of his experience in Richmond upon Thames, which, I think, after the City of London is the wealthiest area in London in terms of average household income. My noble friend Lady Turner also spoke, in a very interesting and well informed speech, about the London situation. She made points that we should certainly consider. However, other areas around the country were also mentioned: Birmingham; the north-east, which is my area along with the noble Lord, Lord Shipley; the south-west; and, indeed, East Anglia.

I am glad that issues wider than the bedroom tax were also raised, particularly by my noble friend on the Front Bench.

We expected the Minister to give a robust speech and she did. She said that the policy will be better evaluated over time. Even so, I would ask her to look very seriously at all the current evidence about the people who are obviously losing out in a very distressing way. I think that there is a lot of evidence and I hope that she will carry our concerns about this very important issue to her ministerial colleagues across government.

Meanwhile, once again, I thank everyone who has participated in this debate.

Motion agreed.