Housing Benefit Entitlement

Eilidh Whiteford Excerpts

Wednesday 23rd January 2013 Westminster Hall

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I congratulate the hon. Member for Sedgefield (Phil Wilson) on bringing such an important issue before us. It will have huge unintended and unpredictable consequences for at least 80,000 people in Scotland, some of whom are among the most economically impoverished in our community.

The problem with the way in which the Government have sought to frame the debate on changes to the occupancy rules is that it fails to acknowledge that that debate takes place against the backdrop of changing population demographics and underlying problems in the supply of affordable housing. It is also being implemented against the backdrop of a labour market in which jobseekers far outnumber vacancies, and increasing numbers of jobs are seasonal, temporary or based on zero-hours contracts. All this talk about subsidised spare bedrooms is yet another attempt to vilify people on low incomes in a vain effort to justify their having to pay the price for the financial crisis and the double-dip recession.

To debate this issue properly, we need to acknowledge that there is a fundamental mismatch between the social housing stock available and the needs of tenants and prospective tenants. Most of our social housing stock was built at a time when families were much larger and the population was less mobile. Across Scotland, about 44% of social tenants require a one-bedroom home, but only 24% of the homes available are that size. In other words, many tenants have no choice but to live in a home that is larger than they need. An estimated 69,000 tenants in Scotland cannot currently be accommodated in a suitably sized house in the social rented sector.

In Aberdeenshire—my own patch—we have a growing population and a depleted stock of public sector housing, and there is a chronic shortage of affordable property to rent. There are more than 7,000 people on the waiting list. Many of them have little prospect of being offered a house any time soon. Although Aberdeenshire has a much higher percentage of one-bedroom properties than most local authorities, it still does not meet demand. People desperate for a house will take any house offered, whether or not it is the appropriate size.

The main issue I want to talk about is the unintended consequences of the bedroom tax on individuals, social landlords and the wider economy. It is hard to predict how tenants in receipt of housing benefit will respond to the cuts, bearing in mind that the real-terms cut in working-age benefits will also put the finances of most of them under considerable strain. We can probably assume that some of those who can move, will move. Some might seek to absorb the cuts within their existing finances, while some might take out loans to cover the gap between their rent and their income, which is a risky short-term strategy. It is highly unlikely that housing association tenants will mitigate the impact by taking in lodgers, because many are explicitly prevented from doing so by the terms of their tenancy agreements. We have to face the fact that some tenants will fall into arrears. When we consider the bedroom tax in tandem with the move away from direct payments to landlords and other benefit cuts, we have a recipe for significant problems with rent arrears, and a possible rise in evictions in the social and private rented sectors.

Housing associations fear that financial instability and cash-flow problems could affect their credit ratings, and I echo the point made by the Chair of the Select Committee on Work and Pensions, the hon. Member for Aberdeen South (Dame Anne Begg). Social landlords need to be able to borrow to invest in new properties and maintain their existing properties. If lenders start to see them as a higher risk, their borrowing costs will rise, which will inevitably put inflationary pressures on the rents of existing tenants and thwart the investment that is so badly needed.

The bedroom tax threatens to undermine the progress that has been made in Scotland over recent years in introducing new, affordable social housing to deal with rising demand. It is a mean and miserable measure that will cause real financial hardship to people on low incomes. It will drive people into rent arrears and into debts they will struggle to repay. It will also drive people from their homes and uproot them from their communities. Too many of the people affected by the measure are moving in and out of low-paid, insecure, temporary short-term work. Because of the bedroom tax, not only will they have no job security; they will lose housing stability as well. Coming hard on the heels of real-terms cuts in financial support for low-income households, the changes will exacerbate our existing economic malaise, by taking money out of the very communities that need it most. They will make it more difficult for non-governmental actors to invest in quality, affordable housing.

I urge Ministers to think again and to look at the Benches that are empty of people prepared to defend the policy. If Ministers are devoid of empathy, I encourage them to take a hard-headed look at the unintended economic impact of the bedroom tax, and to consider the unacceptable social costs.

--- Later in debate ---

[Steve Webb]

Again, the hon. Lady is talking from a sedentary position. She cannot control herself. On the day that we have published yet another set of figures showing another fall in unemployment and record growth in employment, she asks, “Where is the work?” The myth that there are no jobs available when we have more people in employment than ever before needs to be countered.

For some people, taking a job or working extra hours is an important part of the solution. It has been mentioned that taking in a lodger or a sub-tenant is not an option for some people, but for many it will be. The hon. Member for Banff and Buchan (Dr Whiteford) said that that might be an issue. In general, housing associations and social landlords should allow orderly sub-tenancies—a person cannot just take someone in and tell the landlord after the event. There has to be a strong reason to refuse such an option. The presumption is that it can be done, so it is part of the mix.

I had a constituent who was a single person living in a three-bedroom social housing accommodation. She had a letter about under-occupation, so she phoned me up. She said that she had a brother and sister-in-law who could live with her. That is a better use of the housing stock; it meets their housing need and covers the shortfall. Such improved use of the housing stock benefits us all.

I want to address discretionary housing payments, which were raised by the hon. Member for Stockport (Ann Coffey) in her thoughtful contribution. The hon. Member for Wrexham (Ian Lucas) also mentioned discretion. We are being asked to do contradictory things here. Where people have identified groups such as foster carers or people with major disability adaptations to their property, rather than central Government defining exactly what that means in every case, we have allocated the money that we think is needed to deal with the problem and given it to local authorities to respond on a case-by-case basis.

We think that such local discretion is right, but we have been asked to give local discretion, except in every such case also to have an absolute right to make a discretionary housing payment or to exempt people. That is the tension. There are all sorts of individuals whom we might think should be exempt. Trying to sit down and write a regulation or a statutory instrument to define exactly who all those people are does not work, which is why we have allocated discretionary housing payments—this year of £60 million and next year of £155 million—to local authorities. Let me take as an example Durham’s local authority. Last year, it had £177,000 of DHPs. Next year, it will be £880,000 of DHPs to respond to the sorts of people whom hon. Members have mentioned.

I want to respond to the issue about service personnel. I assume that the things that have been said are based on ignorance, rather than on an intent to mislead. Let us take the example of a married serviceman or woman. If one goes away, it does not matter, because there is still a one-bedroom need, so married service personnel are not an issue. Service personnel who live in service accommodation are also not an issue, because they are not social tenants on housing benefit.

We are talking here about service personnel who live in social rented accommodation with their parents and who are on housing benefit, so we are getting to narrower and narrower groups. If a member of the armed forces who is on a wage is living at home with his mum and dad, the benefit system says, “Ah, there is somebody in the house on a wage.” We expect that person to pay up to £70 a week towards the rent—it is called a non-dependant reduction. When the serviceman or woman goes to the front line, and if they are away for a long period, we no longer treat them as a non-dependant in the household, so we no longer deduct £70 from the housing benefit. When a young person goes away to fight for a long period, the parents’ housing benefit will in general go up. That is not the story that the Labour party has been putting out today.

We have been asked about foster carers. We think that the discretionary housing money that we have made available will assist around 5,000 foster carers. Let us bear in mind, though, that this is not all foster carers. I am talking about foster carers who might be in social rented accommodation, on housing benefit and in need of a spare bedroom, so a subset of all fosterers. Of course the fostering organisations would prefer a total exemption; I accept that. Failing that, their estimate is that these are about the right numbers of people, and we have had meetings and discussions with the fostering organisations.

The important issue of children was raised. The majority of people who are affected by this measure do not have dependent children. We are generally talking about older people. None the less, the position of families with children is important. It was suggested that two teenagers of the same gender should not be expected to share a bedroom. I do not follow that argument. I shared a bedroom with my brother until we were 18, and I do not think that it did us any harm. At a time when we have a great shortage of affordable accommodation, I cannot see what the problem is with older teenagers of the same gender sharing a bedroom.

An important question has been asked about whether DHPs are temporary or permanent. In the past, DHPs were a temporary fix. If someone had a short-term problem, they needed a bit of DHP to bail them out and then they moved or did something about it. Under the new system, DHPs can be for the long term, because some situations will not change. If someone lives in a house that has been substantially adapted, that will not change. Local authorities are getting revised guidance and will have to think about DHPs differently, because some people need longer-term certainty, as has been properly said.

The hon. Member for Banff and Buchan said that we had a size mismatch, and indeed we do. When a council is doing something about it—building houses to match the housing need—the hon. Lady asks how I can possibly think that that is a good thing.

[Dr Whiteford]

Will the Minister give way?

[Steve Webb]

I have just 60 seconds to go. When councils build houses of the right size to match housing need, they should be applauded and not condemned.

The hon. Member for Dudley North (Ian Austin) said that we need to manage over-occupation and under-occupation. We have had decades to do something about that, but nothing has happened. Some housing associations have welcomed the opportunity to look at the housing allocations to make better use of the precious resource of social housing. I fully accept that there will be disruption as a result of this measure, which is why we have a two-year programme looking at all this work, evaluating the impact and publishing the research. If we need to make changes to the system as we go because there are perhaps groups or impacts that we have not thought of, we will be in a position to do that. The matter will be thoroughly researched, and we will publish the results. At a time when we need to save money, being fairer to people in the social sector and the private sector and tackling overcrowding as well as under-occupation is a fair way to reduce the spending deficit that we were handed by the Opposition.