Bedroom Tax (Scotland)

Graeme Morrice Excerpts

Thursday 8th May 2014 Westminster Hall

[Dr Whiteford]

I said that I would not take any more interventions, so I will not. [Interruption.] Well, I did say that earlier.

A defeat in the Commons would have forced the Government to rethink their approach, because it would have shown that even their own Back Benchers in the coalition recognised the manifest injustice of the bedroom tax, but that vote was lost by a margin of 26 votes, and 47 Labour MPs did not vote for their own motion. They included 10 Scottish Labour MPs, who apparently were in cosy pairing arrangements with their Tory counterparts. That was the best real chance we had at Westminster to sink the bedroom tax, and it was wasted.

I am well aware that there are often very legitimate reasons why Members of the House of Commons cannot attend votes. At times, all of us will have to deal with illness, bereavement, caring responsibilities or competing demands from our constituencies, but for matters of importance, most of us will move heaven and earth to be in the Lobby when we need to be. Those who missed that vote need to ask themselves whether what they were doing was really more important than voting down the bedroom tax.

[Graeme Morrice (Livingston) (Lab)]

Will the hon. Lady give way?

[Dr Whiteford]

I am winding up my speech, so I will not give way. The bedroom tax and the other changes to our tax and benefits system that are fuelling poverty and hardship in communities across Scotland are the price that we pay for being governed by people we did not vote for. Scottish MPs overwhelmingly opposed the bedroom tax, but we have it anyway, and even now we cannot get rid of it; we can only seek to limit the damage that it is causing. The bedroom tax illustrates perfectly why Scotland needs decision-making powers on these issues. I am looking forward to the day when the people of Scotland have a Parliament with the normal powers of a normal state, a Parliament that is elected by us, responsive to us and accountable to us and that can consign the bedroom tax to history once and for all.

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[Graeme Morrice (Livingston) (Lab)]

It is, as always, a pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend the Member for Glasgow South West (Mr Davidson), the Chair of the Select Committee on Scottish Affairs, of which I, too, am a member, on securing this debate on one of the most important but depressing subjects that I have had to consider since my election to the House.

The bedroom tax—I will refer to it as a tax, because our evidence has shown that the vast majority of those who are affected have absolutely no option but to pay it, and are totally unable to change their circumstances to avoid it—is one of the worst pieces of legislation that I have ever encountered. I therefore fully endorse the conclusions of the Committee’s report. As a member of the Committee, I have heard overwhelming evidence from every corner of Scotland that the policy is completely failing our constituents, our housing providers and even each of the Government’s stated outcomes. It does not make the social housing system fairer or more efficient, and it will not save the Government money in the long run. The bedroom tax succeeds only in punishing those with the smallest stake in society at a time when they are being assaulted from multiple directions by the Government, who refuse to prioritise their day-to-day struggle.

Ironically, the policy came into effect in the same month that the Prime Minister announced tax cuts for the privileged few who earn in excess of £150,000 a year. Nothing that I heard in evidence to the Committee came close to justifying why, although ripping off some of the poorest and most vulnerable citizens is an absolute necessity, somehow it is economically and morally proper to pay for tax breaks for the super-rich.

When we took evidence in West Lothian, where my constituency is located, we were told by the local authority that more than 50% of tenants are now in arrears, and that 500 households have tried to downsize to avoid the bedroom tax, but that because of pressures on the housing stock, only a small number have been successfully rehoused. To put the problem into perspective, West Lothian council estimates that at the present rate of transfer, it could take between 10 and 15 years to allow all the tenants who want to downsize to do so. That does not take into account new applicants who join the waiting list over that period. Alison Kerr, chair of the West Lothian council tenants’ panel, told the Committee of the urgency of acting now, saying that the longer the bedroom tax was allowed to exist unmitigated, the greater the number of West Lothian tenants who would have to make the impossible choice between eating and heating.

Of course, it is not only the UK Government who are to blame for the debacle. The Scottish Government could have acted much sooner to mitigate fully the effects of the bedroom tax in Scotland. I find it strange that the Scottish Government have not once approached the Committee to challenge statements made in evidence that they have had the powers necessary to mitigate those effects from the start.

[Pete Wishart]

We have just committed to mitigating fully the impact of the bedroom tax. While the hon. Gentleman is going on his tour of Governments throughout the UK, what does he make of his Welsh Labour colleagues in the Welsh Government, who have done absolutely nothing to mitigate the impact of the bedroom tax in their jurisdiction?

[Graeme Morrice]

I am not qualified to respond on the situation in Wales. Today’s debate is about Scotland, so if the hon. Gentleman does not mind, I will continue to focus on that.

The point that I was making before the hon. Gentleman intervened was confirmed by the Under-Secretary of State for Scotland in oral evidence to the Committee on Tuesday, and by the Chief Secretary to the Treasury in the past. After months of posturing, the Scottish Government this week ended their ridiculous game of brinkmanship with the UK Government when an agreement was finally reached to lift the spending cap, allowing the bedroom tax to be effectively ended in Scotland. I think I speak for many when I say that that should have happened much earlier. It is thanks to the Labour Members of the Scottish Parliament that a solution has finally been arrived at, after a year of attempts by Scottish Labour to drag the SNP into accepting that action could be taken in Scotland to bin this iniquitous tax. Late action is better than no action, and it will come as a relief to many Scots that the bedroom tax can and, I hope, will be fully mitigated.

I find it incredible that the Scottish Government did not even contact the UK Government until recently to try to find a way to end the bedroom tax in Scotland, just over a year before it was introduced and more than two years since the law was first enacted. People can draw their own conclusions about the reason why, but political posturing and blaming others hardly demonstrates responsibility or maturity; moreover, it lets down those who need our help the most.

To return to the report, witness after witness from London to the Western Isles told the Committee that they wanted the tax to be scrapped. Many felt abandoned by both Governments, who have had the power but not, until the eleventh hour, the political will or inclination to do something about it. However, although I welcome yesterday’s announcement on Scotland, more must be done throughout the rest of the UK. We have heard in several testimonies that the fail-safes to protect the most vulnerable are inadequate and largely do not reach those most in need, to the despair of housing providers. We heard from those on the front line that, despite repeated contact, a sizeable number of affected tenants do not engage, or are unable to engage sufficiently, with housing suppliers in order even to apply for a discretionary housing payment.

When the Select Committee visited my Livingston constituency, Donald Forrest, head of finance and estates at West Lothian council, told us that, despite considerable efforts since April last year to contact and engage with 2,195 tenants who are affected by the bedroom tax, between 500 and 600 tenants had still not applied. Craig Martin, leader of Falkirk council, told the Select Committee that 50% of tenants applying for DHPs in his locality had some form of recognised mental health problem. Such responses were not untypical of the evidence we heard from a range of witnesses from across Scotland and beyond. If DHPs are not reaching those most in need, then simply expanding the scheme’s eligibility to catch everyone is no guarantee of protecting anyone. The simplest way to protect all tenants is to either alter the scheme drastically or scrap it altogether, which is the Select Committee’s preferred option.

Simply put, at the heart of the bedroom tax debate is the worst kind of politics, with Scottish social tenants finding themselves stuck between two Governments: one distracted by a referendum on separation, who acted only when forced to do so by the Scottish Labour party and grass-roots campaigners; and another who want to look tough on welfare and spending, despite every indicator telling them that they are failing. The Scottish local authority body, the Convention of Scottish Local Authorities, has released figures showing that this year alone the bedroom tax will actually cost an additional £60 million to implement in Scotland.

Even after yesterday’s announcement, my message to the decision makers in both the Scottish and UK Governments is simple: they must stop the bickering, stop the finger-pointing, stop using some of the most vulnerable people in society as political pawns and stand behind the Select Committee to sort out the problem using the power that the Scottish people have granted them. The Labour party in Scotland has forced the SNP Scottish Government to this point, and has offered bipartisan support to help to find the money in the Scottish budget to sort things out. I sincerely hope that, now that we have a clear course of action and offers of help from almost every side, we will be able to get on with our day job of helping our constituents.

Of course, whatever happens, in May next year, Labour will repeal the bedroom tax as one of its first acts of national Government.

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

It is a pleasure to serve under your chairmanship, Mr Bone. I thank the Liaison Committee for securing this debate and I welcome the attention that the Scottish Affairs Committee is giving to welfare reform generally and to housing benefit reform specifically. I appreciate the opportunity to put the Government’s position in this debate. The Committee produced both this report and the subsequent report without seeking any input from the Department or its Ministers.

It may be helpful to discuss why this policy was introduced in the first place. The issue is difficult and complex. It has taken up a lot of time on all sides of the House, as well as the Government’s time. However, people have to understand what we are looking to solve, because we were delivered a huge problem by the Labour party, now in Opposition: a housing bill spiralling out of control, going up from £13 billion in 2002-03 to £24 billion in 2012-13—as it would have been—and increasing. What were we going to do? This was unaffordable. How was it going to be affordable, not just now but in the future, for future generations? Who was going to pick up that debt and solve this issue, and get as fair a solution as possible?

Of course, we are listening to what is said about people today who will end up having to pay a certain amount of money for extra rooms in their houses, but what about the people in the private rented sector who are still getting paid housing benefit? They do not have the luxury of a spare room in their houses. The Labour party introduced this very same change in housing benefit—

[Graeme Morrice]

Will the Minister give way?

[Esther McVey]

I will not give way at the moment.

The Labour party introduced this same change in 2008 and, at the same time, it was talking about its implementation. So I am afraid it does not wash, now, when Labour are in Opposition—

--- Later in debate ---

[Graeme Morrice]

rose—

[Lindsay Roy]

rose—

--- Later in debate ---

[Esther McVey]

I am not just talking numbers; I am talking lives of people right across the country who are affected by this. We are looking to save £500 million per year. That is what is being rolled out and what is being saved, because at the moment people are moving into other homes. At the moment, that is the amount being saved.

[Graeme Morrice]

rose—

[Dr Whiteford]

Will the Minister give way?

--- Later in debate ---

[Esther McVey]

Thank you, Mr Bone.

As we look at the question, it comes into sharper focus. I need to remind all hon. Members, particularly those on the Opposition Benches, that Labour Members fully supported and voted for an overall welfare cap—[Interruption.] Some Scottish National party Members did not vote for it. My question for the Opposition and Committee members is this: if savings are not to come from housing benefit, which aspects of welfare spending and the welfare bill—potentially £500 million a year—are they going to cut? Will it be disability benefits or support to children, or will pensioners be affected? All this is rather complex, because I am afraid that the Opposition voted for an overall welfare cap.

[Graeme Morrice]

The right hon. Lady talks about the cost. Does she not accept that the evidence provided to the Committee by various witnesses from Scotland and beyond—all the housing providers, welfare rights organisations, tenants, local authorities and even the Convention of Scottish Local Authorities—says that the cap is costing everybody more money than it is saving? How does the Minister respond to that, and particularly to the COSLA figure, supported by all political parties in Scotland, that in Scotland it is costing an additional £60 million to administer?

[Esther McVey]

I do not agree with that. We are seeing people moving round. The debate never considers the people in overcrowded accommodation. There is an issue in Scotland in that regard, too, although the problem is not as big there as in the rest of Britain. What about people living in overcrowded accommodation? What are we to do with people who do not have the right-sized room for their children, whether disabled or otherwise? What about people on housing waiting lists? We are forgetting about all these other people who have issues, too.

[Graeme Morrice]

We have not.

[Esther McVey]

I am afraid that, in opposition, the Labour party has forgotten about those people. We are dealing with those people. I should like to state some facts about arrears, which were mentioned by the hon. Members for Glasgow South West (Mr Davidson), and for East Lothian (Fiona O'Donnell). The regular Scottish household survey found that arrears in December 2013 were lower than at the same point in both 2012 and 2011, and 55% of Scottish social landlords reported a fall in the percentage of their rent arrears between March and December 2013. These are the figures that we are looking at. The Chair of the Committee asked about support for disabled people. I have talked about that and the extra money in that regard.

The right hon. Member for East Ham (Stephen Timms) talked about the difference between a tax and a subsidy. He is a mathematician—he went to university with a friend of mine—so I know that he knows the difference between a subsidy and a tax. However, I wonder whether it is because the Opposition do not know the difference between the two that we are in incredible debt at the moment. They do not understand the ins and outs of money and how it is best spent; that is why they left us with a £150-billion-a-year deficit.