Under-occupancy Penalty

Jo Stevens Excerpts

Tuesday 23rd February 2016 Westminster Hall

[Jo Stevens (Cardiff Central) (Lab)]

I beg to move,

That this House has considered the regional effects of the under-occupancy penalty.

It is a pleasure to serve under your chairship, Ms Dorries.

Our debate today on the regional impact of the bedroom tax is important and comes on the back of the Government’s recent judicial review defeat in the Court of Appeal, where it was determined that the bedroom tax discriminates against victims of domestic violence and the families of severely disabled children. I pay tribute to campaigners throughout the country who have put considerable energy and effort into challenging this iniquitous tax and raising public awareness of the Government’s continuing attempt to defend the indefensible. People such as Paul and Susan Rutherford have led the charge in one of the Court of Appeal cases on behalf of their severely disabled grandson, Warren, and Alan Lloyd of Cardiff Against the Bedroom Tax gives voluntary help to victims of the bedroom tax in my constituency of Cardiff Central and across south Wales by preparing and presenting appeals. I spoke to Alan Lloyd yesterday as he was on his way to appear at yet another tribunal to present an appeal on behalf of a woman whose long-time home is at risk because of the tax.

It is clear from the number of hon. Members present here today that the impact of the tax remains an important issue to many people and is not limited to those who pay the tax itself. The Opposition have opposed the bedroom tax since its introduction. Since this grossly unpopular Conservative and Liberal Democrat policy was forced on the public, exactly what we warned would happen has happened. The bedroom tax is not working; it is not achieving the aims that the Government set out to implement; and it is hurting some of the poorest and most vulnerable in our society and giving them a problem that is absolutely no fault of their own.

[Ian Lavery (Wansbeck) (Lab)]

I thank my hon. Friend, who has been a lawyer for many years, for bringing this important issue to the Floor of the House. Normally, people adhere to Court of Appeal judgments, but in the case of the bedroom tax, the Government are once again ignoring what the court said. In what way—the right, decent and honourable way—should the Government deal with the Court of Appeal judgment and listen to what is happening to the thousands of people out there who are suffering as a consequence of this now unlawful and illegal tax?

[Nadine Dorries (in the Chair)]

Can we keep interventions short and not make speeches, please?

[Jo Stevens]

I thank my hon. Friend for his intervention. The honourable thing would be to accept the decision of the Court of Appeal, but instead the Government are proceeding to the Supreme Court, where a decision is expected at the end of this month or early next month.

The bedroom tax and the tripling of tuition fees for students are two of the most painful scars left by five years of the Conservative and Liberal Democrat coalition, and I will take every opportunity to continue to remind the House that the bedroom tax would never have been introduced without the eager help of the Liberal Democrats, including my predecessor. Nearly 500,000 households and almost 750,000 people have been hit by this cruel policy. Two thirds of the households affected by the bedroom tax include a person with a disability. The tax impacts on 60,000 carers—people who undertake demanding and challenging responsibilities and are punished for doing so. Some 57% of those who have to pay the tax have had to cut back on household basics such as food and heating—things that we all take for granted. The bedroom tax has had a corrosive effect on many different households, including the single parent who needs a spare room for when their children visit as part of agreed contact visit arrangements following separation or divorce; grandparents who help with looking after their grandchildren, allowing parents to manage shift working and other working patterns, or following family breakdown; and people with severe disabilities who use their spare room for their medical equipment or care, such as kidney dialysis.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

This issue is big in my constituency of Hackney South and Shoreditch. There is an invidious part to this tax. If two children are of an age when they are supposed to share a bedroom, but one is within reach of their next birthday, when they would qualify for their own bedroom, the family are hit by the bedroom tax. So it is a fluctuating tax that hits people particularly hard.

[Jo Stevens]

My hon. Friend makes a very good point; the tax increases uncertainty. People cannot budget. Their circumstances change and the fluctuating nature of the tax impacts on them more heavily at different times. Then there are victims of domestic violence and rape whose lives are at risk and need the protection of a panic room.

The particular focus of this debate is the regional impact of the bedroom tax, and I want to outline its impact on my constituents in Cardiff Central and more broadly within the nation of Wales, where 31,217 people are affected by the tax. Across Wales, just under 500,000 people live in social rented accommodation. The tax has had a huge impact, affecting proportionally more housing benefit claimants than anywhere else in Great Britain. Some 46% of claimants in Wales pay the tax, compared with 31% for the UK as a whole. In Cardiff, 3,015 households currently pay the tax, and nearly 500 of those live in my constituency of Cardiff Central.

The cost of the bedroom tax to each household affected will be £3,500 during this Parliament. I am sure I do not need to explain to most hon. Members what £3,500 means to the families in our constituencies, especially the poorest families who visit our surgeries every week. That £3,500 would otherwise be spent on basic necessities such as food, heating, clothes and shoes. The Secretary of State for Work and Pensions claimed that the bedroom tax would encourage societal movement. However, when the bedroom tax was introduced, it affected about 3,500 households in Cardiff, and only just over 100 smaller properties were available for people to move into. I readily admit that maths is not my strong point, but even I can work out that that sum does not work.

[David Simpson (Upper Bann) (DUP)]

I congratulate the hon. Member on securing this debate. She knows that Northern Ireland did not implement the bedroom tax, although it has cost us financially not to do so. We looked at the issues that she has rightly highlighted, especially those affecting our older generation. In the first place, we did not have the housing stock, but, from a moral point of view, we felt that the hardship was simply too great to impose on older people.

[Jo Stevens]

I thank the hon. Gentleman for his intervention, which again shows the iniquitous nature of the bedroom tax.

Therein lies the truth about the bedroom tax and its impact and the number of properties that are available for people to move to. The Government knew before they introduced the policy that insufficient smaller properties were available for people to move to. That was the picture right across the country. Even if we gave the Government the benefit of the doubt about their motives before implementation, their own interim report on the bedroom tax after implementation revealed that the policy was not meeting its key aim of freeing up larger council properties. Only 4.5% of affected tenants have been able to move to smaller accommodation. At the same time, with just 4.5% of people able to move and be rehoused, 60% of people affected were in arrears within the first six months of the introduction of the tax. The policy is simply not working. People are not able to move to smaller accommodation because that accommodation simply does not exist, so long-standing, reliable tenants who were previously able to budget and pay their rent regularly now cannot pay it and have built up significant arrears.

[Meg Hillier]

In parts of London we are seeing people pushing to get two-bedroom properties because they are frightened they will be hit by the bedroom tax, but that also reduces, if there was availability, the stock for people to move down to, if they have the extra bedroom, so it causes a squeeze in both directions.

[Jo Stevens]

My hon. Friend makes a valid point.

The most vulnerable have been hit the hardest and, in the words of the Lord Chief Justice and his colleagues just a few weeks ago, the Government’s “admitted discrimination” in the judicial review cases to which I referred earlier

“has not been justified by the Secretary of State”.

We now have a farcical situation in which the Government have appealed that decision and the legal costs of pursuing the appeal are likely to be greater than the amount it would cost them to exempt all victims of rape and domestic violence with panic rooms who are paying the bedroom tax. I can conclude only that the Government would rather pay money to lawyers than to rape victims. I challenge the Minister to justify that action.

I think I can predict that, when he responds to the debate, the Minister will say that the Government have made additional funding available to local authorities in the regions and in Wales in the form of discretionary housing payments, but my local authority, City of Cardiff Council, has had its DHP funding cut by more than 26% between 2013-14 and 2015-16. The regional impact of Cardiff losing more than a quarter of its DHP funding has been hard, so it is disingenuous to argue that the DHP system justifies the bedroom tax.

At the same time as imposing the tax and relying on DHP as justification, the Government are cutting DHP funding. Their own report, which they sneaked out in a huge data dump on the very last day of the parliamentary term in December 2015—obviously in the hope that no one would notice—admitted that 75% of bedroom tax victims did not get DHP; that three quarters of those hit by bedroom tax were cutting back on food; that only 5% had been able to move; and that 80% regularly ran out of money.

The policy implementation of DHP has also been called into question. Evidence on its use has raised serious questions about local authorities adopting different practices, leading to allegations of a postcode lottery. There are references to disabled tenants—particularly those living in specially adapted properties—struggling to get DHP in some areas, and needing to submit repeated applications, with the consequential uncertainty and anxiety. That is not to mention the exclusion of people with lower levels of literacy.

This debate is not the first time that DHP and its impact on disabled people has been raised here. As long ago as 9 April 2014, five Welsh Government Ministers wrote to Lord Freud to call for an exemption from the bedroom tax for disabled tenants who had had adaptations made to their homes. They cited issues with DHP as one reason why such a broad exemption was necessary. They said:

“Disabled tenants cannot easily up sticks and move home. They should be exempt from these reforms and should not be left to rely on help from the discretionary housing benefit system…Our analysis of the discretionary housing payments system shows that demand far outweighs the number of applications being approved. In the first half of the financial year 2013/14 demand increased by around 260 per cent compared to the same period a year earlier in 15 Welsh local authorities.”

Cardiff’s 26%-plus cut in DHP funding, coupled with the increase in applications, presents another one of those stark sums that even I can work out. It simply does not add up to have households with disabled tenants having to pay the bedroom tax if that cannot be offset through DHP because DHP funding has been cut. It is another example of the Government’s policy hitting hardest those who can least afford it.

Tomorrow, we have an Opposition day debate on another of the policy responsibilities of the Secretary of State for Work and Pensions: the adverse impact on around 2.6 million women of the speeding up of the state pension age. I know from discussions with constituents that many of those being advised and represented in bedroom tax appeals in my constituency are those very same women who are adversely affected by the changes to the state pension age. They are also women who are disabled or carers, so there is a double, triple or quadruple whammy on women. As with so many of the Government’s policies, it seems that women are bearing the brunt yet again.

It is time for the Government finally to accept that the bedroom tax is a bad policy. In the words of David Orr, the chief executive of the National Housing Federation, it is:

“an unfair, ill-planned disaster that is hurting our poorest families”.

It does not work, it causes severe hardship and it hits the most vulnerable, so I say to the Minister: please, listen to the public. It is time for the bedroom tax to be binned.

--- Later in debate ---

[Jo Stevens]

On the point about the bedroom tax financially punishing people, does my hon. Friend think that it causes people to go to payday lenders such as Wonga and take out loans with extortionate interest rates to survive?

[Carolyn Harris]

I certainly do. I have casework involving people who have taken out payday loans from Wonga and other organisations and have been unable to repay them without not paying their bedroom tax. It is a Catch-22.

The bedroom tax financially punishes those forced to pay it. It discriminates against communities and individuals, and makes them unable to gel and enjoy stable, sustainable and adequate housing in a community where they can nurture and mutually support each other, and be part of a productive citizenship and community enterprise.

--- Later in debate ---

[Justin Tomlinson]

I will cover in detail some of those points, but I can tell the hon. Lady that a significant difference was that no additional discretionary housing payment was provided when the policy was implemented in the private sector. It was very much a case of, “Cross your fingers and hope for the best. You will not be getting any support.”

The legal case mentioned is ongoing, so I cannot dwell on it too much. The Court of Appeal previously said that discretionary housing payments were appropriate support. Crucially, it was not about the wider policy; it was about just these very specific categories. In that particular case, those people were in receipt of discretionary housing payments, but that is an ongoing legal dispute.

[Jo Stevens]

In relation to the receipt of discretionary housing payments, is it not the case that the Rutherfords had been denied DHP in the first instance?

[Justin Tomlinson]

My understanding is that that is right, but they then got the money on appeal. This comes down to whether we should have discretion in the powers of local authorities or an exhaustive list of those who should be exempted. My view is that if we try to set strict categories, we will not be able to ensure with 100% certainty that everyone will be covered, because people—particularly those with unique issues—do not neatly conform to tidy boxes. If an individual falls just below the line, they will miss out; that is a crucial point. If it is black and white, there will be winners and losers.

Discretionary housing payments allow for everybody’s individual circumstances to be considered and for a flexible multi-agency approach. For example, that approach could involve working with the police, social services and medical professionals. Underlying all those decisions is the public sector equality duty to ensure that the vulnerable in society are protected.

A number of speakers talked about support for the disabled, victims and those who are homeless. I will reel off some of the measures we have introduced to provide support in those areas: £400 million to deliver 8,000 specialist homes for the vulnerable, elderly and those with disabilities; a 79% increase, from £220 million to £394 million, in the disabled facilities grant, which helps about 40,000 people; £40 million for victims of domestic abuse, which triples the support previously in place, so that no one is turned away; £500 million to tackle homelessness since 2010; and £25 million a year to support disabled people living in significantly adapted accommodation.

--- Later in debate ---

[Jo Stevens]

I thank the Minister for his response and all my Opposition colleagues for their contributions to today’s debate. It is very disappointing that no Government Back Benchers were here to participate. Although I have listened to the Minister’s points, I do not recognise what he has said in the impact of the bedroom tax that I see every day in my constituency and which I am sure my hon. Friends do too. I ask him to take away the case studies, stories and points that we have made, and to review the policy again. It is iniquitous, unfair and discriminatory, and it really needs to go.

Question put and agreed to.

Resolved,

That this House has considered the regional effects of the under-occupancy penalty.