Under-Occupancy Penalty

Julie Hilling Excerpts

Tuesday 5th November 2013 Westminster Hall

[Sheila Gilmore]

The reality is that people are not taking on lodgers. The rhetoric on lodgers has quietened down, presumably because the impracticality of that idea has revealed itself. If the measure was about making better use of property, it was not the best way of going about that. It would be far better to encourage people to move in some circumstances, but that is neither a quick nor an easy process. It has to be planned for, and that comes back to looking at the nature of the local housing market and how those moves can be dealt with.

Older tenants in larger homes might want to downsize—if they are over retirement age, they will not be affected by the bedroom tax—but the bedroom tax will not whip them into wanting to move. Over the years, I have had many constituents say to me, “Yes, I would move. The stairs are getting too much for me. The garden is getting too much for me”, but they want control over where they go, and want to keep some of the things they like about their present home. Often that means the area, and that does not necessarily only go for those who live in what is perceived as a “good area”. Their area is where they have their social circle, and their family might not be too far away. There will be many reciprocal family arrangements, whether that is daughters helping mothers, or mothers helping their grown-up children with child care and picking kids up from school. All those sorts of things cannot be done if they are moved to the other end of town. Okay, they are fussy, but they are fussy because they want the move to be one that will last them the rest of their lives. They do not want to rush into something that is unsuitable.

All authorities might want to build new build housing that is geared to older people. If authorities do their homework properly, they will know in advance that that will release larger houses. The homework, however, has to be done, and investment is needed. If the investment is not there, it becomes very difficult. New build numbers are dropping, not only in England and Wales, which the Minister is concerned with, but in Scotland, too. In the whole of Scotland, new starts have dropped from the high point in 2007-08 of 6,214 to just 2,781 in 2012-13. That is a substantial drop. We want to have new build available to help people move around, but it is just not there.

There are many things that we should be looking at. We should be considering building new homes. Councils might want to consider—I have suggested this to my local council—buying some properties at comparable prices. They should not pay more for a property than it would cost to build, but that would help deal with some of the biggest chronic housing shortages. When homeless families, even those with children, are waiting in temporary accommodation for up to a year to get anything, we have a crisis, not just a slight shortage.

There is a further win-win in all this, which perhaps brings us back to the stated purpose of the bedroom tax. If more affordable housing is built, we can reduce the total housing benefit spend. It is true that the spend has gone up in recent years—the Government are not wrong to point that out—but their predictions and forecasts for the next few years are that the spend will continue to rise until at least 2016-17, when it will reach £23.38 billion.

[Julie Hilling (Bolton West) (Lab)]

Does my hon. Friend agree that the major increase in housing benefit has come from the increase in benefit paid to people in private accommodation, not to those in social housing?

[Sheila Gilmore]

Indeed. I have some figures, although they take us only to 2010-11. In 2000-01, the spend on private rented sector housing benefit was £3.6 billion. By 2010-11, that had risen to £8.9 billion, and it has risen again since then. The number of recipients of housing benefit rose under this Government by 326,597 people or households between May 2010 and February 2013. More than twice as many of those—some 218,209—were in the private rented sector than were in council and housing association housing. All the time that the Government have been in power, wringing their hands about the rising housing benefit bill and saying that measures such as the bedroom tax are the way to tackle it, the number of recipients has gone up, and the amount of money we are spending has gone up.

We are not tackling the issue from the right end. If we had a proper housing investment programme for affordable housing, that would bring down the housing benefit bill. That is what we should be aiming to do. It would give many individuals a real incentive and help in getting back to work, because having people in expensive private sector rented accommodation, whether it is temporary, permanent or semi-permanent, is a disincentive to employment.

I have a constituent who has been living in a private sector property that was provided to him when he was homeless, because we do not have enough council and housing association homes. His rent payments are £815 a month, which probably does not sound much in London terms, although it is high in Edinburgh terms. When he was working, he still had to pay half of that rent from his earnings. In the end, he gave up his job, partly because of the financial pressures that he was then under. If he had a council or housing association rented property, he could have afforded much more easily to get back into work. There are all sorts of reasons why housing investment is a win-win-win. It is a win because we would get the houses; because we would begin to reduce the total housing benefit bill; and because we would be doing something serious—not just haranguing people about getting back to work, but putting in place practical measures—to help people get back to work.

We need to look at the fact that the bedroom tax has done the opposite of that. It has created a situation where both councils and housing associations are anxious about the loss of income. It matters to all tenants, because all tenants are being impacted on, not just those affected by the bedroom tax. I made that point to a Government Minister recently, and pointed out that even pensioners and tenants who are not on housing benefit are being affected by the bedroom tax. The response I got—they had half-heard the question—was, “But pensioners are not affected.” That was not my point. My point was that if the landlord, be it the council or the housing association, has less income coming in, that will affect all the other tenants, because that organisation will have only a few choices. It could cut back on its modernisation programme, and that would affect pensioners who have been waiting for many years, as many of my constituents have, for their kitchens and bathrooms to be modernised. They would have to wait even more years.

--- Later in debate ---

[Julie Hilling (Bolton West) (Lab)]

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

A senior officer from one of my social housing providers has said:

“It is as if the Government was following a blueprint of how to ruin social housing within 5 short years.”

Let me give the background to why she said that. Since April, Bolton at Home has had arrears of £200,000. Many people are only partially paying their rent, and 9% of those in debt have arrears of more than £600. Bolton at Home is about to take 25 cases to court because of arrears due solely to the bedroom tax. Wigan and Leigh Housing has arrears of £650,000 and the number of people in debt has nearly doubled to 11,500, so it has revised its income rate to 96% of the amount it should get.

There are knock-on effects on costs. Providers now have to deal with an increased number of calls to the call centre and to employ more people to collect rents. There are increasing court costs, and many other costs besides. All providers are finding it harder to let three-bedroom houses, and have had to increase the number of void days on which they do not collect rent, which again costs them dear.

The Minister of State, Department for Work and Pensions, the hon. Member for Wirral West (Esther McVey), has told social housing providers to knock down three-bedroom houses and build something suitable. I would question her reasoning in the first place, but where are they supposed to find the money to alter houses or to build new ones when they are losing so much money because of the policy?

If the policy is so successful, why have the Government recently increased the discretionary housing payment pot by millions? Welcome though that is, it demonstrates how the policy is just not working. It is ill thought out, and in areas such as mine the majority of the housing stock is three-bedroom, so it will do nothing to alleviate overcrowding. It hinders the building of new homes and simply places people in abject poverty.

Behind housing providers’ problems are real-life difficulties for real people. Most of us would think that people with two children would be suitably housed in a three-bedroom house, but sadly not this Government. Indeed, the Secretary of State for Education clearly agrees with me, because he thinks that every pupil should have a bedroom in which to do their homework. He should speak to colleagues in other Departments who think it entirely appropriate for a 15-year-old studying for their GCSEs to share their bedroom with a crying toddler, or for children to have their education disrupted when their parents are forced to move home—not once, but several times—when they or their siblings reach a milestone age at which the family’s accommodation is deemed unsuitable.

[Stephen Doughty]

My hon. Friend is describing a common circumstance, certainly from the stories I hear from my constituents. Does she agree that the cumulative impact—the stresses caused by high energy prices, the bedroom tax and all these things coming together, particularly for disabled and vulnerable people—is causing pain and distress to many of our constituents?

[Julie Hilling]

My hon. Friend’s intervention leads me nicely to a study by York university and the Northern Housing Consortium, “Real Life Reform”, which states:

“Households are surviving on restricted budgets and struggling to get by. 65% have less than £10 per week to live on following rent and essentials such as food and bills. 37% have nothing left each week. Households are intending to cut back spending on food and fuel. 25% spend less than £20 per week on food. Eight out of ten households are already in debt and 83% are worried about getting into more debt. Over half of those in debt doubt they’ll ever be able to clear these debts… Households are reporting increases in levels of stress and depression. 88% of households are worried welfare changes will impact on their health and wellbeing. Parents report they are going without to protect their children’s health.”

That is a story of absolute misery.

I want to tell a story about two of my constituents, whom I will call Mr and Mrs Smith to protect their identity. Mrs Smith came to see me at my surgery because she was absolutely desperate. She came with her mother, but actually looked older than her mother because of the worry and stress she was going through. Her husband is desperately ill, having had a double lung transplant. Sadly, he is unlikely to survive. He needs apparatus to help him to breathe, so there is no way she can share a bedroom with him. The box room is full of oxygen tanks, and the fire brigade has said that no one can sleep in a room with oxygen tanks, because of the risks.

Mr Smith sleeps in one room, Mrs Smith sleeps in another—she cannot sleep with him because of the apparatus and the noise it makes—and oxygen tanks and other equipment occupy the box room, but they are deemed to be under-occupied by two rooms. That is absolute nonsense. They cannot get discretionary housing payments, because he gets disability living allowance, which just enables them to get about and to lead as normal a life as possible, bringing them up to other people’s income. The DLA is taken into account, which puts them over the rate at which they would qualify. Does the Minister think it right that DLA is taken into account? If not, will he do something to change that?

I will finish with a quote from another of my housing providers:

“It’s the first time I’ve ever seen a policy applied retrospectively. We are used to managing change, but not when the goalposts are moved overnight.”

The policy is cruel and heartless. It will not achieve the savings predicted by the Government. It will not allow the building of new homes and it is causing untold misery. I wish the Government would rethink: do as the Labour party says and abandon this cruel, heartless tax now.