Housing Benefit

Esther McVey Excerpts

Wednesday 26th February 2014 Commons Chamber

[The Minister of State, Department for Work and Pensions (Esther McVey)]

Thank you, Mr Deputy Speaker.

It may be helpful if I explain what the Opposition are seeking to annul. The instrument amends paragraph 4 of schedule 3 to the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006, which provides for transitional protection for certain housing benefit claimants. The amendment removes the transitional protection from social sector tenants such that their housing benefit will be determined using regulation A13 of the Housing Benefit Regulations 2006, which sets out the maximum rent in the social sector.

The amendment is required to close a loophole that derives from a very narrow set of regulations that date back to 1996. Changes at that time introduced the local reference rent rules and those regulations were intended to provide transitional protection for existing claimants as the new rules came into force.

The local reference rent rules only applied to those renting in the private rented sector, so the transitional protection was only ever intended to support them—the vast majority of them pensioners—not social sector tenants who were unaffected. With hindsight, this protection could have been time limited. Because it was not, 17 years later the protection is now being applied in a way that was never intended but is possible, which is resulting in claimants being exempted from the spare room subsidy. Thankfully, my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), who was the Secretary of State at the time, said earlier that that was never meant to be the case.

If the motion’s supporters have their way, they will maintain transitional protection that was put in place for something that no longer applies, in order to exempt a group of benefit claimants from a completely different policy 17 years later. At best that is misguided. When we were looking to exempt a set of people, why would we have chosen that set of people?

[John Healey (Wentworth and Dearne) (Lab)]

Will the Minister give way?

[Esther McVey]

Not just yet. I will finish what I am saying.

Why would that group have been exempted? Why would preferential treatment have been given to a set of people who had been on benefits for 17 years? When we have put protection in place, we have sought easement for four sets of people. Foster carers are eligible for an additional bedroom. Parents who have adult children in the armed forces who usually live with them and who could be away deployed on operations but come back to their room would be exempted. Disabled claimants or their partners who require a visiting overnight carer are eligible for an extra room. Severely disabled children who would ordinarily be expected to share a room but who could not would be exempted. We have therefore set out who would require easement. That should not be provided, through some loophole, for people who were never meant to be exempted. It was never intended that people who had been on benefits for 17 years should be exempted.

[John Healey]

The Minister has used the words “misguided” and “loophole”. She told me in answer to a parliamentary question in January that

“we estimate the numbers affected are likely to be fewer than 5,000”.—[Official Report, 14 January 2014; Vol. 573, c. 522W.]

In Rotherham and Barnsley, however, one in 14 of all housing benefit claimants has been wrongly hit by the bedroom tax. That suggests that there are nearly 50,000 such claimants across the country. Will she now admit that Ministers have massively underestimated the numbers who have been hit and massively underplayed the difficulties and distress that have been caused?

[Esther McVey]

I thank the right hon. Gentleman for giving me the opportunity to answer that question. I looked into the freedom of information request and the numbers that had been obtained, and I was assured categorically that there was no way the Opposition’s figures could add up regarding claimants who were continuously on benefits while remaining in the same accommodation. When I spoke to various housing associations and local authorities, they were somewhat surprised, because they had given the numbers of people who might be affected and the numbers of cases they were still investigating, but the Opposition had added them together to try to multiply the numbers. When we answered the question on the numbers, the figure we gave at that time—5,000—was the best we could do. It is incorrect to say that the Opposition have those numbers; that is not the case.

[Chris Bryant]

Will the Minister give way?

[Esther McVey]

I will indeed give way, to hear some more information sprung from nowhere. Go on!

[Chris Bryant]

No, this is not information sprung from nowhere; it is direct questions to local authorities under the freedom of information legislation. A classic instance of this is to be found in the Minister’s own backyard: there are 600 cases in the Wirral. If she does not know the numbers—which is effectively what she is saying—is she not simply seeking to change the law on the basis of cruelty?

--- Later in debate ---

[Esther McVey]

I shall let that last comment pass, because it is completely inaccurate and should not be responded to. Let me give the House some of the answers to the FOI request. Local authorities did have some cases, but the number that they were still investigating was nearly double that amount. Those two amounts have been added together for the purpose of this argument, however, and that is not correct. It is factually misleading—[Interruption.] That example was from St Helens.

Local authorities said that the numbers had not yet been verified. Some of the figures given by the Opposition were 130% higher than the number already affected, and some of the people involved might be pensioners, who would not be affected by the measure. Such cases have not been thoroughly investigated because there had been a computer system change and those numbers were not available straight away; they would have had to be manually checked throughout the country.

[Several hon. Members]

rose—

[Esther McVey]

I will carry on. More information has been handed out by the Opposition and, as always, they are not very good with their numbers—hence the problem that we now find ourselves with

. Why are we bringing forward this policy? We are looking at how to make the best use of social housing. We know that more than 400,000 people are living in overcrowded accommodation, and that 2 million people are on waiting lists. At the same time, there is overcapacity equating to approximately 1 million spare rooms in other houses. How do we deal with this? It is not an easy issue that we have been left with, and we are having to make difficult decisions in order to get it right. We know what we cannot do: we cannot have a housing bill that doubles over 10 years, and we cannot have more and more people on waiting lists and living in overcrowded accommodation.

I was intrigued by the fact that it was only Members on the Government Benches who talked about people in overcrowded accommodation. They included my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) and my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley). Only those on this side of the House seemed to care about the people who are struggling and are on a housing waiting list. The reason that we are putting these measures in place is that we want to ensure we make the best use of our social housing. At the same time, we are building more affordable housing: there will be 177,000 more affordable homes by 2015, with £4.5 billion being spent.

My right hon. Friend the Member for Hitchin and Harpenden talked about home exchanges. He said that there were 56,000 one-bedroom homes and 147,000 two-bedroom homes available on HomeSwapper, and that 66% of the 233,000 homes available for home exchange were one and two-bedroom properties. Of course we are not expecting homes to be vacant at the moment, waiting for people to move in We need to find out who wants to move, how they are going to move, and how we do the swaps.

What is most unfortunate is that when we knew this policy was coming into being—that was four years ago and it has been in place for a year—the Opposition did absolutely nothing. In the year between 2012 and 2013, £11 million was handed back to the Government. The Opposition should have been asking, “How can we help people to move? How can we use that money to reduce rent arrears? How can we use that money to help people move into other accommodation?” They did absolutely nothing, digging their heels in; they were not helping those who most needed their support and were ignoring what was coming through. That is shameful, but this is the Opposition who led this country into serious debt and made sure that private debt for individuals went up to £1.5 trillion. Rather than help people out of debt, and help them move to homes they could afford and live within their means, the Labour party allowed them—