Under-Occupancy Penalty

Iain McKenzie 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.

[Kate Green]

On the point about arrears, does my hon. Friend agree that it is nonsensical that many housing associations will not move people who are in arrears into new accommodation? They will not give them new tenancy agreements until their arrears are cleared. That is one more perverse—indeed, Kafkaesque—consequence of the policy.

[Mr McKenzie]

My hon. Friend makes a good point. Housing associations need flexibility to ensure that no one falls into arrears, or into the eviction bracket.

Housing associations warned also that there would not be the house building that would be required for people to avoid the penalty. That is certainly true not only in Scotland but across the country. People cannot move to smaller homes to avoid the bedroom tax because there are not enough smaller properties. In Inverclyde, I could count on one hand the streets, outwith the private sector, that offer single-bedroom accommodation.

I ask again what my constituents are to do about the policy. There are now rent arrears, evictions, financial distress, and difficulty in finding alternative or adapted accommodation. That all shows that there is a lack of appropriate housing and house building throughout the country while we have the dreadful bedroom tax.

[Several hon. Members]

rose—

--- Later in debate ---

[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—

[Mr McKenzie]

Will the Minister give way?

[Kris Hopkins]

No, I will not give way. In fact, I will give way in a second or two, but not just at the moment.

I reiterate that we recognise that this is about reducing the burden on the Government and the amount of debt that we have in place. It is important that we do that. We cannot continue to subsidise a million spare rooms. It is important that people out there—the taxpayers out there—understand that everybody is absolutely making a contribution to this process.

I feel extremely uncomfortable that people are turning around and saying that this is an uncaring and—[Interruption.] What I can say is that I know my commitment to addressing the number of houses that we have out there and to ensuring people out there have access to affordable housing.