Housing Benefit (Abolition of Social Sector Size Criteria)

Kate Green Excerpts

Wednesday 17th December 2014 Commons Chamber

[Kate Green (Stretford and Urmston) (Lab)]

Every time we debate the bedroom tax, it is clear that it is not achieving what Ministers said it would. As costs rise for landlords and more is spent on discretionary housing payments, as even the hon. Member for South Derbyshire (Heather Wheeler) described, the bedroom tax is not only not saving what was predicted, but, as the Minister for Employment claimed on BBC 5 Live in March, it is not about saving money anyway, but about making better use of the housing stock. The bedroom tax is clearly failing to achieve that when just 5.9% of affected households have downsized. That is hardly surprising, given the mismatch between the stock available and the number of families who are under-occupying, as has been highlighted by speaker after speaker. From Aberdeen to St Ives, from Liverpool to the north-east of England, where the number of families with spare rooms is larger than the number of overcrowded families by three to one, such a mismatch means that people simply cannot move.

The Minister for Disabled People claimed that housing waiting lists are falling, and implied that that was because of the bedroom tax. May I tell him that it has nothing to do with the bedroom tax? Waiting lists have been coming down because the eligibility criteria for housing have been tightened.

Meanwhile, individuals have experienced massive hardship, as my colleagues have described. Some 220,000 families with children, 60,000 carers and 330,000 disabled people have been affected by this pernicious tax. Most have lost £14 a week, or a total of £1,260 to date. People under-occupying by two or more rooms have lost considerably more—£25 a week—and disabled people, who also lose £14 a week, have so far lost a total of £415.8 million as a result of the bedroom tax. That is a disgraceful hit on disabled people and their households.

As a result—[Interruption.] I am coming on to discretionary housing payments, and the Minister for Disabled People will want to listen when I do. Two-thirds of those affected spent less than £40 a week on food, and less than £20 a week on fuel; according to the Disability Benefits Consortium, 12% have used food banks, and that figure rises to 15% for those hit by other cuts to welfare payments; two-thirds have struggled to pay their rent; and only 41% have been able to pay their bedroom tax in full, while 20% cannot pay it at all.

As a result, not only have some people got into arrears, but many more have gone into debt. The Real Life Reform research, which my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) mentioned, shows that 74.3% of the families it is following are now in debt. They owe on average a shocking £3,971, which is up 71.8% on the debt they had before the bedroom tax came in. That must be shameful and worrying to Ministers. They have rightly expressed concerns about rising personal debt; yet their policy is causing it. Those people have experienced rising personal debt, but it is true that their weekly repayments are lower. However, that is because credit periods have been extended and extended to the point at which nearly half those followed by the Real Life Reform research say that they have no idea how they will ever pay off their debt.

The system is riddled with injustices and cruel perversities for those affected by this tax, such as those who need space for special equipment, as described by my hon. Friend the Member for Leeds West (Rachel Reeves), and couples who cannot share a room. Those whose homes have been adapted are also affected: 35,000 such houses have been adapted, at an average cost of £6,700. The £234 million cost to local authorities is now in danger of being written off because those families are being forced out of their homes. That is another example of Tory welfare waste.

Children with high or moderate care needs are exempted from the bedroom tax, but not those with high-rate mobility. The Minister for Disabled People said that overnight carers have been exempted. That is true for overnight carers for adults, but it is not true for overnight carers for children, or for resident carers.

Despite all that, the Prime Minister said in the House on 6 March last year that disabled people were protected from the bedroom tax. That is simply not the case. As hon. Members have mentioned, nor are separated families; non-resident parents with their children visiting, whom my hon. Friend the Member for Glasgow North West (John Robertson) mentioned; those at risk of domestic violence; or the bereaved, who enjoy a 12-month so-called period of grace, which will be reduced to three months under universal credit.

It is not just individuals who are suffering. Registered social landlords are experiencing a loss of rent and are left with arrears and voids, as my hon. Friend the Member for Makerfield (Yvonne Fovargue) pointed out. That means that their credit rating and their ability to borrow cost-effectively, and therefore to build the new homes that we need, are damaged. It is an utterly illogical policy.

Government Members said that the situation was the same as for the local housing allowance in the private rented sector. That point was made first by the right hon. Member for Banbury (Sir Tony Baldry), and then by the hon. Member for Spelthorne (Kwasi Kwarteng), who might want to stop playing “Candy Crush” now, and a number of other Members. Let us be clear about the differences between the two markets and about how long the situation has pertained. As my hon. Friend the Member for Edinburgh East (Sheila Gilmore) rightly pointed out, we have had size criteria in the private sector since 1989, so they were not first introduced under Labour as Government Members suggested.

In the social sector, housing is allocated based on need. That is not the case in the private sector, in which, without criteria, people could theoretically rent any property at all. As many Opposition Members have pointed out, the local housing allowance was not introduced on a retrospective basis, and it covered pensioners. Ministers have chosen to exclude pensioners from the bedroom tax, and they have to recognise that pensioners under-occupy the majority of stock. The policy is therefore doomed to fail, and the local housing allowance is not directly comparable with it.

The Minister mentioned discretionary housing payments, but they are clearly not the answer. They are temporary, and by definition they are discretionary. As my hon. Friend the Member for Aberdeen South (Dame Anne Begg), the Chair of the Work and Pensions Committee, pointed out, for some families the idea of a discretionary payment is completely perverse given that they are living in circumstances that they simply can do nothing about. What is more, as the Chartered Institute of Housing has pointed out, discretionary housing payments are not always properly advertised, and some local authorities are discouraging people from applying or appealing. Some are treating disability living allowance, for example, as income when calculating entitlement, which hits the people affected doubly hard.

Larger cities have had to apply for additional funds for discretionary housing payments—so, it would seem, has South Derbyshire—or had to use their own resources. Some authorities that had apparently underspent now say that they need more money. Redbridge wants to carry forward its underspend, Barking says it will spend in full by the end of the year and Harrow says it will spend £41,000 more. Eight councils account for £1.2 million of failure to spend, and Wandsworth for nearly half of that. Some £30 million more than originally planned has had to be allocated through DHPs to cover the cost of foster carers, and the administrative costs to local authorities alone amount to £1 million.

How are people responding to the pressures? I heard it argued today, but without the basis of any evidence, that the bedroom tax was encouraging people to get into work, but there is no evidence that it is doing that, or, if it is, that it is getting them off housing benefit. One reason for that is self-evident: given that two thirds of those affected are sick, disabled or carers, it is very difficult for them to get into work or increase their hours. What is more, Ministers have previously suggested that people could take in lodgers, but people might not feel safe taking a stranger into their home—I know I would not—and many landlords will not allow lodgers at all. It is not possible for people to move, because there are no suitable homes in many parts of the country and many landlords will not allow people to be rehoused if they are in arrears.

The Kafkaesque proportions of this policy are beyond what we would have imagined even from this Government. It is perverse, cruel, unfair and unworkable, and it is time that it was scrapped. That will be the first action of a Labour Government, and for half a million households it cannot come soon enough.