Housing Benefit (Under-occupancy Penalty)

Liam Byrne Excerpts

Wednesday 27th February 2013 Commons Chamber

[Steve Webb]

I am grateful that someone has brought a voice to the voiceless in this debate. I have heard nothing about the 250,000 people shamefully left in overcrowded accommodation by the last Government and the nearly 5 million men, women and children on housing waiting lists up and down the land. Their voice deserves to be heard, so I am grateful to my hon. Friend for his intervention.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I was pleased to hear the Minister’s comments about fairness. I notice that the Conservative literature in Eastleigh says that the Liberal Democrats oppose further changes to benefits that would, they claim, make our welfare system fairer. Is he 100% sure that this measure will deliver the savings set out by the Chancellor? Yes or no.

[Steve Webb]

Our impact assessment is our best estimate based on what we expect the impact of the policy to be. That is all any Department ever produces. We believe that it is a robust best estimate.

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[Steve Webb]

We know that the housing benefit bill doubled in a decade—up 50% in real terms—and that Labour did nothing to tackle it. With the collapse in house building under the last Government, it is not surprising that private rents, and as a result housing benefit bills, soared.

[Mr Byrne]

I know that the Minister does not want to deliberately mislead the House, so I know that he will stand up now, correct the record and say that Labour introduced the local housing allowance and limits on housing benefit, and acknowledge that our manifesto set out plans for a cap on benefits, including housing benefit.

[Steve Webb]

That is very interesting. The right hon. Gentleman and his party were in office for 13 years and decided in their 2010 manifesto—the manifesto to which he just referred—to do something to control housing benefit. In office, they do not do it, but as they are heading out of government, they promise to do something.

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[Steve Webb]

Perhaps I could make a little more progress.

The hon. Member for Banff and Buchan—[Interruption.] Sorry to disturb her—referred to private sector tenants and the relative position of social housing tenants. We spend more housing benefit on social housing tenants than on private sector tenants and we pay for their rent subsidy, so it is wrong to say that we subsidise private tenants more than we do social housing tenants. That is simply wrong. But if someone is living in private rented accommodation, broadly speaking we do not allow them an extra bedroom. Why, then, is it fair to have two houses next door to each other, one of which is privately rented and the other socially rented, and give a spare bedroom to the person in social accommodation, who also benefits from subsidised rent, but not to the person in the private rented accommodation?

[Mr Byrne]

The Minister is being characteristically generous in giving way. Why does he not tell the House the whole story and admit that the DWP has lost its case in the Court of Appeal and that its policy of discriminating against disabled people and not giving them any kind of special treatment has been struck down by the courts? That is why his Department has applied to the Supreme Court to have it looked at again. Why is he taking that to appeal and why will he not come clean to the House about how his policy is suffering at the hands of the courts because it is wrong?

[Steve Webb]

The case to which the right hon. Gentleman refers is in the courts now—before this policy has been implemented—so it is not specifically about this policy, but about a broader issue concerning the private rented sector. So it is a challenge to the regulations that his party was responsible for.

I will say more in a moment about the specific way in which we are planning to address the position of disabled people, because that is an important issue. Roughly two thirds of all social tenants have a disability as defined by the Disability Discrimination Act 1995, based on the measure used in our impact assessment. That is a similar proportion to those affected by this measure, so it is not disproportionate. If we look at the stock of social tenants, we inevitably find that about two thirds of them are in that category, and that is true of this specific measure.

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[Steve Webb]

We got the right one, as it were.

We are all in favour of incentives to encourage people to make better use of the housing stock, and I welcome any measures the hon. Member for Swansea West (Geraint Davies) took to that effect, but they have not worked. We have 1 million spare bedrooms among people on housing benefit. The changes have simply not worked on the necessary scale—

[Mr Byrne]

rose—

[Steve Webb]

I have given way three times to the right hon. Gentleman, and I want to make further progress.

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[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I think that most Opposition Members will have been pretty disappointed by what the Minister has said. A range of important arguments have been advanced this afternoon, but they have received no answers whatsoever.

Let me begin by congratulating the Green party, Plaid Cymru and the Scottish National party on tabling the motion. We support it, and we will support it in the Division Lobby later today. Since the Welfare Reform Act 2012 first saw the light of day, we have warned of the flaws that have loomed large this afternoon. It was my right hon. Friend the Member for East Ham (Stephen Timms) who first warned that the people who will be hit by the Act have nowhere to hide and that they will just have to pay up, and it was my noble Friend Lord McKenzie who said in the other place that the discretionary housing fund would nowhere near cover the costs and consequences of this policy. I am afraid that everything we have heard this afternoon merely confirms what they have said. That is why through Divisions in the Chamber and in Committee here and in the other place we have tried to put in place safeguards which would have stopped the horror show that will begin in April.

As the weeks have gone by, my colleagues have clearly set out the faults and flaws in glorious 3D Technicolor. First, we learned that someone who is handed a 12-month sentence will be exempt from this policy. I have here a list of offences which attracted a sentence of less than 12 months in 2011. It includes some 43 people who were convicted of threat or conspiracy to murder, who will be exempt. There are also 273 people convicted of sexual offences; they, too, will be exempt. Yet mothers of members of the armed forces who are currently out there serving, like Alison Huggan—the case raised by my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop)—will be hit, and the Minister defended this policy this afternoon.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I know the right hon. Gentleman would never want to unwittingly mislead the House. He has said that if someone is convicted, they will be exempt. They are not exempt. Only those on remand will be exempt. Would the right hon. Gentleman like to correct the record?

[Mr Byrne]

Well, I am sure the House will draw great comfort from the fact that people on remand for threats to murder, sexual offences, burglary, robbery and public disorder will—

[Mr Duncan Smith]

rose—

[Mr Byrne]

I am very happy to take the Secretary of State’s correction, but—

[Mr Duncan Smith]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Secretary of State, you cannot be standing up at the same time as the Member who has the Floor. I am sure the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) is willing to give way. You should both have a little patience with each other. We do not want to end up bickering across the Dispatch Box, do we? Is Liam Byrne giving way?

[Mr Byrne]

I am very happy to give way, but let me tell the Secretary of State that the House will draw little comfort from the fact that people on remand for these offences will still be exempt from this policy.

[Mr Duncan Smith]

I just want to establish one thing: the right hon. Gentleman is now changing his party’s legal policy. It has been a very good principle in this country down through the ages that people are innocent until proven guilty, not guilty before they are proven innocent. The reality is that we stick within the existing strictures. The right hon. Gentleman has every right to oppose this measure, but he is now saying that as soon as someone is accused of a crime, they should immediately be treated as if they are guilty.

[Mr Byrne]

The Secretary of State cannot defend the fact that families of serving soldiers will be hit by this policy while those on remand and accused of the most serious offences we can imagine will not be hit by it. I do not think that the Secretary of State, of all people, will want to defend that. He should be speaking to his colleagues the Secretary of State for Defence and the Prime Minister, who I understand is the Chair of the Sub-Committee on the Armed Forces Covenant, and he should be bringing to this House safeguards for the families of armed personnel out on service, should he not? As he remains in his place, it is clear that he is not going to bring forward those safeguards for the families of people serving on the front line. The House will be disappointed to have observed that.

Foster parents will also be hurt. Again, we heard nothing from the Minister today about how foster parent families are going to be helped. [Interruption.] I listened very carefully to what the Minister said, and he said nothing today that countermands what he sent out in a recent circular, which says:

“a household that has an extra room for a current or potential foster child will be treated as under-occupying.”

Families in that position will be hit, therefore. [Interruption.] We then hear that under universal credit a couple where someone is a pensioner and someone is not will also be hit. [Interruption.]

Over all this, of course, looms the truth that two-thirds of the people hit by this bedroom tax will be disabled. [Interruption.] The Minister has been pleading from a sedentary position that the discretionary housing payment will somehow help. He will, no doubt, have seen the National Housing Federation research that found that 200,000 people who will be hit by this bedroom tax are on disability living allowance. The NHF estimates that if we spent all the DHP money helping those people, it would help 73,000 people, so there would be 127,000 people in receipt of DLA who would get absolutely no help whatever. Of course, that would leave nothing for foster parents either. I am afraid that the Minister cannot simply plead that the DHP is of some help to foster parents, those who are disabled and people whose houses have been adapted. The truth is very different, and he has been found out this afternoon.

[Andy Sawford]

Much has been said about particular groups who will be hit by this policy and my right hon. Friend is right to talk about the impact on disabled people and foster families. There are also, however, people like my constituent Hayley Duncan, who has two boys aged one and 13 who are now expected to share the same bedroom. I can honestly say I would not ask two children of mine of such different ages to share the same bedroom. Does my right hon. Friend think this is right? Is there hypocrisy here?

[Mr Byrne]

Of course there is. The Minister, unlike his party colleague the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), did not resile from his support for a whopping great tax cut for millionaires at the same time as Hayley Duncan and her children are being hit by this bedroom tax.

This is a policy that is unique in its cruelty. It sets out to tackle the problem of under-occupancy, and the Minister made much of the 1 million spare bedrooms he wants somehow to bring on to the housing market. As he knows, however, the policy will only save the money chalked up in the Treasury scorecard if it fails. That is the reality. About £490 million is earmarked to be saved by this policy over the course of this year, but it will be saved only if 660,000 households are hit for £14 a week for 52 weeks a year. That is how those savings will be delivered. This is not about bringing spare bedrooms on to the market; it is about hurting vulnerable people and asking them to pay extra.

What is particularly troubling to many Opposition Members is the Minister’s refusal to acknowledge that in many parts of the country there will simply not be the smaller houses for people to move into. Again the NHF has been very clear about that. In large parts of the country there is simply not the housing stock for people hit by this tax to move into. The Government have removed any shelter where vulnerable people can take cover before opening fire. This is a policy of unique cruelty, therefore. The Government are not seeking to solve under-occupancy. Instead, they are simply seeking to make the poorest and most vulnerable even poorer. As the Secretary of State once cared about poverty, perhaps he would like to justify that fact?

[Mr Duncan Smith]

Will the right hon. Gentleman explain the following two important points? Under the Labour Government’s local housing allowance changes, the situation for children of the same sex in respect of the size criteria was exactly the same as we are now introducing in the social sector. Why is it good for one but not for the other? Secondly, he is crowing about the number of social houses in existence, but why did the last Labour Government leave the building programme at the lowest level since the 1920s?

[Mr Byrne]

Like me, the Secretary of State will have followed the recent remarks of the Deputy Prime Minister—

[Mr Duncan Smith]

Answer the question.

[Mr Byrne]

I am answering the question. The Deputy Prime Minister said:

“If I’m going to be sort of self-critical, there was this reduction in capital spending when we came into the coalition government…But I think we’ve all realised that you actually need, in order to foster a recovery, to try and mobilise as much public and private capital into infrastructure as possible.”

But what has happened in the past couple of years? What has happened even in the past year? For the last year for which records are available, the number of housing starts in this country has fallen by 11%. That is the reality of what this Government have delivered.

This policy is not simply a cruel punishment; it is a cruel and unusual punishment, because it is not normal—it is not usual in a modern, advanced and civilised country—to reward the rich in quite the way this Government are proposing while punishing the poor. It beggars belief that next month—the month in which those on £1 million a year will get a £2,000-a-week tax cut—those with a spare bedroom will face a £14-a-week rent rise. In what world is that fair or normal and usual? It is only in a Tory world, defended by a Liberal Democrat.

[Mr Raynsford]

As some very misleading comments about housing have been made by those on the Government Front Bench, will my right hon. Friend confirm that in 2007, the last year before the recession, the net additions to the housing stock in this country numbered 207,000? The current Government have presided over a collapse, and fewer than 100,000 new homes were started last year. That is their shocking record and they should not pretend otherwise.

[Mr Byrne]

My right hon. Friend is absolutely right about that. Of course, the Labour party is proposing to have a tax on bankers’ bonuses in order to release £1.3 billion for new housing and to spend the 4G licence proceeds on building homes. That is in sharp contrast to the sob story from the Deputy Prime Minister lamenting the fact that the Government cut capital spending too far and too fast.

[Geraint Davies]

Does my right hon. Friend accept that the savings that the Government anticipate and project are gross savings, not net savings? That is because many local authorities will end up with voids without rents and will make losses, so they will not be able to do their repairs, at a time when private sector rents will be pressed up by excess demand, giving returns on buy-to-lets to the private rented sector and increasing housing benefit costs. This does not add up at all.

[Mr Byrne]

My hon. Friend is absolutely right. The Secretary of State may truly believe that this policy will save his Department £490 million a year, but his Minister of State was rather less than forthcoming earlier on swearing that that would be the figure. The Secretary of State may genuinely believe that this policy will save £2 billion over the forecast period. If he does genuinely believe that it will save the money set out by the Treasury in Budgets gone by, he is deluding himself, because the evidence is staring him in the face: this policy will cost more than it saves.

[Mr Duncan Smith]

I stand by our assessments. Will the right hon. Gentleman apologise for what was done in Labour’s 13 years? The current Government have increased the level of social house building by 18% on what we inherited; it had collapsed under Labour. Will he apologise and explain to the nationalists that one reason why we are in this predicament is that house building collapsed under his Government?

[Mr Byrne]

House building did not collapse. In the final years of our Government we brought forward serious new investment for housing, and it is the Labour party that is proposing serious investment in social housing and new housing today. That position seems to be shared by the Deputy Prime Minister, but his Government are presiding over an 11% collapse in the number of houses being built.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Does my right hon. Friend agree that it is extraordinarily hypocritical for the Secretary of State to be talking about investing in housing when—

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[Stephen Doughty]

I will withdraw it, and I apologise, Mr Deputy Speaker. It is extraordinary for the Secretary of State to be talking about this measure when he is putting many of our housing associations and registered social landlords at risk. Moody’s downgraded housing associations’ credit ratings this week, which means that they are not going to be able to invest either in the properties they have or in building new ones, as my hon. Friend the Member for Swansea West (Geraint Davies) just said.

[Mr Byrne]

My hon. Friend is right. We have the National Housing Federation to thank for estimates on the amount of arrears, which housing associations now say are going to grow. Some estimates I have seen show that housing associations face up to a quarter of a billion pounds-worth of arrears because of this policy and other changes the Secretary of State is making. At a time when the country’s debt rating has been downgraded, that will make things incredibly difficult for housing associations in delivering on future social housing builds. The bedroom tax will only make the situation worse.

[Jane Ellison (Battersea) (Con)]

The right hon. Gentleman has slightly moved on from the point he was making about the so-called millionaires give-away, but it is a certainty that Opposition Members will come back to it repeatedly. Will he explain, as he is particularly well placed to do so having been in the Treasury, why it was in only the last 37 days of the Labour Government that any measures were taken to increase taxes on the richest people in this country? If he is going to refer to this issue continually, he should, being a former Treasury Minister, be prepared to explain why that was the case.

[Mr Byrne]

I am happy to do so. It will not have escaped the hon. Lady’s notice that today’s fiscal circumstances are somewhat different from those of the 13 years of the previous Labour Government. She supports—[Interruption.] I will answer her question just as soon as the Government Front Benchers simmer down slightly. The truth is that her Government have delivered a double-dip recession and perhaps worse; they have just presided over a downgrade in the nation’s debt rating; and growth has been flatlining for the past couple of years, which has made the deficit position far worse. This Government are going to borrow more in this Parliament than Labour did in 13 years, so the question now has to be: how is the pain of paying down the deficit to be shared? Labour has always said that there has to be a mixture of growth and sensible public spending cuts—that is how to get the deficit down. What we should not be doing is having a £3 billion tax give-away for Britain’s richest citizens while asking 660,000 people to pay an extra £14 a week. How would she justify that to her constituents?

[Jane Ellison]

That is just not good enough from the right hon. Gentleman. The financial crash happened in 2008 and, by independent agreement, there was already a structural deficit at that time. In order not to bequeath an ever-growing structural deficit and rising debt to another incoming Labour Government or, as it turned out, this coalition Government, no action was taken in the immediate aftermath of the financial crash. Surely he cannot justify that fact.

[Mr Byrne]

If we are to go back over the history, I should say that, as the hon. Lady will know, at that time the Conservative party supported Labour’s spending limits—that was the announcement made by the then shadow Chancellor at the party conference. The question that confronts the country now is: how do we bring the deficit down? Once upon a time, we were told that we were “all in it together” but we now know that the truth is quite the opposite. Once upon a time, the Chancellor said that he was not going to balance the books on the backs of the poor, but now we know the truth—he absolutely is balancing the books on the backs of the poor, starting with £14 a week extra from 660,000 people.

The evidence that this policy is going to cost more than it saves is now staring the Secretary of State in the face, just as I can see it clearly, too. He will have read the reports from all over the country—[Interruption.] Perhaps he will confirm this from a sedentary position. Like me, he will have read the reports from all over the country that have gone to cabinet meetings setting out the impact of his changes to communities up and down the country. The reports could not be clearer and they confirm the substance of the letter leaked by the private secretary to the Secretary of State for Communities and Local Government that up to 20,000 people will be made homeless as a result of these changes, and that does not include the impact of the benefit cut.

This policy affects councils like Hull city council, which says that 4,700 tenants will be hit, yet in Hull there are just 73 one-bedroom and two-bedroom properties available to let. There is a shortfall of 4,700 properties for tenants. If they move into the private rented sector or to become homeless, that will cost the taxpayer a fortune. This policy will cost more than it saves, as has been powerfully argued today, and I am not surprised that the Minister of State is no longer prepared to swear by the savings that this policy is supposed to deliver.

Here we have a Department that is at the height of its powers. It has brought us a Work programme that is worse than doing nothing, it has presided over a universal credit system that I understand is on the brink of collapsing into chaos, and now we have a policy that will cost more than it saves. Why? Because the Secretary of State has been rolled over by a downgraded Chancellor and has not had the strength to resist him.

We now have the worst of all worlds. We have a Department bedevilled by an excess of stupidity and an absence of spine. The cost is paid not by the Members on the Government Front Bench but by the 1 million children who will be plunged into poverty by the Secretary of State’s Department and the 3.4 million disabled people who will be hit by his strivers tax. He should instead be bringing to this House proposals that would genuinely bring down the welfare bill by getting more people into work. We now have nearly 1 million young people out of work and nearly 1 million people out of work long term, and that is costing us a fortune. He knows full well that the housing benefit bill is set to rise by £8 billion over the course of this Parliament because of his failure to get people back into jobs.

That is why the Secretary of State should be arguing. He should find some spine and tell the Chancellor that it is about time we had a tax on bankers’ bonuses to build new homes and get people into work. If we said to people in this country that they could not spend more than two years on the dole and that at that stage they had to work, that would be a proper plan for welfare reform and for welfare to work. It would be a real alternative to this policy, which is a cruel and unusual punishment from a cruel and useless Government.