Under-Occupancy Penalty

Eilidh Whiteford Excerpts

Tuesday 5th November 2013 Westminster Hall

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is a pleasure to serve under your chairmanship again, Mrs Riordan. I congratulate my hon. Friend the Member for South Shields (Mrs Lewell-Buck) on securing this important debate.

The stated aim of the under-occupancy penalty, to give it the Government’s preferred name, was to free up larger accommodation, and to cut the housing benefit bill by moving people into smaller properties. Well, the policy has not released larger accommodation; nor will it save the housing benefit it set out to save. Instead it will, as we have heard, drive people into the private rented sector and add to costs. Just where are local authorities and housing associations to find the smaller accommodation? The truth is that it could take years to place people in smaller homes, and that is assuming that no one’s circumstances change.

In Scotland, the UK Government’s changes to housing benefit have had a significant impact on claimants. The people affected by the changes are those with specially adapted homes to reflect their health conditions; separated parents, who potentially face losing access to their children; and tenants who are struggling to find alternative smaller accommodation, despite being willing to move.

All the under-occupancy charge has done in my constituency is bring people to the verge of crisis. Many are building up arrears, trying somehow to cope using discretionary housing payments, while others are desperately trying to find smaller accommodation. All that worry and panic is despite the best efforts of the housing associations and the council in Inverclyde. Advice agencies are also working together to reassure and help people. I recognise the assistance given by the Scottish Government to alleviate the cost of this penalty, although more could always be done.

The panic and fear instilled in our most vulnerable people is evidenced by Citizens Advice Scotland, which advised on almost 20,000 new housing benefit issues in 2012-13. That is about 75 per working day—an 11% increase on the previous year. However, there was a 40% increase in April 2013 compared with April 2012. Those increases can all be explained by the introduction of the new under-occupancy rules. In the first week after the start of the bedroom tax, 700 affected tenants approached Citizens Advice Scotland for advice. That is not to mention the numbers of worried, concerned and frightened people who visited my surgeries—and yes, I concede that many were exempt.

Another concern about the housing supply relates to adapted homes. If people who have adapted their homes to cater for their disability by installing step-in showers or wet rooms decide to move rather than incur the penalty, they will need to reinstall these adaptations in their new home, at significant cost. Surely it cannot be seen as an effective way of spending time and resources to move people out of homes that meet their needs into new homes that do not, and that must subsequently be adapted. It is a crazy situation, and the cost is getting out of control. It is short-sighted, and an unbelievable waste, as it costs the taxpayer more money, never mind the upheaval for the individuals concerned.

The vast majority of those affected in my constituency will be moving from two-bedroom to one-bedroom accommodation, if they can. That is being replicated throughout Scotland and the rest of the UK. Of the 105,000 households in Scotland affected by the under-occupancy penalty, an estimated 83,000 include an adult with a recognised disability. The proposed changes will therefore have a disproportionate impact on people with disabilities. Many of those tenants have severe health conditions and face reductions in income that could affect their health. Adapted housing will be affected. Estimates show that some 16,000 households have some form of aid or adaptation already in place. I acknowledge that the UK Government have increased the fund for discretionary housing payments, but the funding is still far below the level of payments that will be lost by claimants.

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

The hon. Gentleman makes a powerful point about the eight out of 10 households in which a disabled person lives that are affected by the bedroom tax in Scotland. Does he accept that if people are to move to one-bedroom properties, those will almost certainly be in the private sector, where it will be even harder to get the kind of adaptations that disabled people often need in their homes?

[Mr McKenzie]

Absolutely. I fully accept that. I noted earlier in my speech that the changes are pushing people to find accommodation in the private sector, with all the additional costs involved.

Research by the National Housing Federation found that if the additional funding were to be distributed equally among every affected claimant of disability living allowance, they would each receive just £2.51 per week, compared with the average £11-a-week loss in housing benefit in Scotland. The pressure to find smaller homes and flats has become immense. In Inverclyde, there is a huge lack of one-bedroom accommodation. I ask the Minister: what are my constituents to do? Many will fall into arrears. Housing associations warned the Government from the start that the under-occupancy penalty would not work, and that families would face financial hardship and struggle to make ends meet.

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[Hywel Williams]

That is a good point, to which I intended to refer later. I recently tabled several questions to the Government about the use of discretionary payments, what planning had gone into them, and what amounts were to be available this year and next year. The answers were clearly wanting.

The aim of the charges—freeing up the logjam in the availability of three-bedroom houses for younger people—is laudable in the long term. However, one of my fundamental objections is that the Government are using tenants as a battering ram to free up that logjam. Tenants are carrying the burden of the charge and will have to find alternative accommodation, when there is none available. That is pernicious, and destructive of communities. That is one reason, indeed, for my opposition to the charge.

[Dr Whiteford]

My hon. Friend makes a good point about the allocation of houses, and the need for housing for families; does he agree that social housing, which is always the cheapest available, should be allocated on the basis of need, not household size?

[Hywel Williams]

That is an excellent point. The need has in some ways been artificially generated, and that is not a sensible basis for housing policy, even if people are able to move. However, some hon. Members will have read in The Independent today that 96% of people are unable to move home.

I tabled a question to the Secretary of State, asking

“what estimate he has made of the number of people in Wales who will move house as a result of the social housing under-occupancy penalty.”

The answer was quite revealing:

“The Department is not able to reliably estimate the number of people in Wales who will move house as a result of the Removal of the Spare Room Subsidy due to the small sample sizes involved.”—[Official Report, 4 November 2013; Vol. 570, c. 95W.]

That reveals a great deal, including the fact that the Government do not expect huge numbers of people to move. They expect, I understand, to make substantial savings on housing benefit. That is the reality, and the answer is something of a give-away.

Earlier in the year, I asked the Government what research they had undertaken into the private sector, and private market elasticity—the sector’s ability to respond to an increased demand for one-bedroom places. I was told that no such research had been undertaken before the measures were brought in. There would apparently be research in 2015, and reports would be published in 2016. That will be, of course, more than two and a half years after the charge was brought in—two and a half years of suffering by people who can scarcely afford to lose 12% or 25% of their benefit.

We have heard that particular groups are affected, such as disabled people, who have a legitimate need for extra space. I have constituents who have been charged extra. One such gentleman said, “I shall certainly move from my house, which has been adapted—there is a new bathroom at the back, and a stair lift—and move to a smaller place. The council can then put in a new stair lift, and a new bathroom at the back; and then I will move again.” It is folly. There are single parents without care who will take children for a day or so at the weekend, who will lose out.

More fundamentally, there is an effect on estates. We talk a lot about social life degenerating, and about things not being as good as they used to be. By the way, I was brought up on a council house estate. It was a stable area, with a mix of people from working-class and upper working-class backgrounds and those who were almost middle class, who had been there for a long time. They were the sort of people who had seen their children move on, but still lived in three-bedroom houses, and who provide for such estates the anchor and stability that we think are so important; yet the Government want them to move on. I understand that the technical term is “forced decanting”, which is very bad.

In the short time available to me, I want to point out that we might be left with a further supply of houses that are hard to let, not because they are in difficult areas or do not have basic facilities, but because they have three bedrooms. If the policy actually succeeds, that will be a potential waste of resources.

I end by referring briefly to funding for hardship. My local authority has a group—it brings in people from Shelter, the Department for Work and Pensions and Members of Parliament—to administer such funding. It has added substantially to that fund, with the result that the number of people in arrears is fairly small, and I hope that we will have no evictions. I would like to hear the hon. Member for Wolverhampton North East (Emma Reynolds), who will speak for the Labour party, pledge that the Labour Government in Wales will have a “no evictions” policy. Local authorities and housing associations are doing their best; it is time for other people to step up to the plate.

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[Kris Hopkins]

I have great passion for those two areas of our wonderful country, but I cannot bring myself to congratulate those two Governments.

[Dr Whiteford]

The Minister may not be aware that the Scottish Government have taken on a very ambitious programme of house building in Scotland that far exceeds anything that went before in the devolution era. However, the private sector housing that is coming on stream is significantly more expensive than the housing that people are currently living in, so I do not believe that the policy that we are discussing today is saving any money. I hope that he will be able to say categorically today that it is saving housing benefit costs.

[Kris Hopkins]

What I will say is that, in my early days in this post, I assure the hon. Lady that if I can learn anything about building more houses, because that is really important to the economy of our country, I shall inquire—