Under-Occupancy Penalty

Lilian Greenwood Excerpts

Tuesday 5th November 2013 Westminster Hall

[Mrs Lewell-Buck]

My hon. Friend makes a valid point. It is decent, law-abiding people who have always paid their rent who are being targeted by the tax.

[Lilian Greenwood (Nottingham South) (Lab)]

I want to add to the point made by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty). Nottingham City Homes, our arm’s-length management organisation, has seen an increase in arrears directly as a result of the bedroom tax of £260,000 since April. We expect the amount to be about £500,000 this year—money that could and should have been spent on refurbishing homes or building new homes.

[Mrs Lewell-Buck]

I will address that issue in my next point. My local citizens advice bureau is receiving more than 33 inquiries every week related to the bedroom tax.

One case study identified a young lady who had never been in rent arrears. As a result of the bedroom tax, she has only 84p per day to live on—to buy food, clothes and toiletries. That is an absolute scandal. Her story resonates with what food banks and homelessness charities in my constituency have told me. They feel that the increase in demand for their services is directly linked to the bedroom tax.

At the same time as the crisis was looming, the Secretary of State for Work and Pensions was quoted in our local newspaper, the Shields Gazette, saying:

“When 13,101 households are stuck on a waiting list for social housing in south Tyneside, there’s a big problem that needs addressing… it can’t be right that many households across the north-east are living in an overcrowded home. There’s nothing fair about making families wait and wait for a house that is big enough, while other households on benefits are allowed to live in homes that are too big for their needs, at no extra cost.”

The Secretary of State helpfully advised that my constituents may

“decide to take up work, or work a few more hours to cover the difference”

or

“move to more appropriately-sized accommodation or take in a lodger.”

I would like to take this opportunity to invite him to South Shields to deliver that advice personally to my constituents.

--- Later in debate ---

[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.

[Lilian Greenwood]

Does my hon. Friend agree that our social landlords are not only facing extra arrears, but having to put in extra resources to deal with having to chase people for arrears? Nottingham City Homes told me that it has already had to spend an extra £300,000 on staff and resources to deal with the extra demands on the rent arrears team. Is it not a concern that the extra spending on such things is not going on other tenants and their homes?

[Sheila Gilmore]

Yes, indeed. Landlords will have quite limited choices. If they are not going to do anything about their modernisation programme, they will certainly be looking at their new build programme or at raising rents, which, again, affects all tenants. It is not true to say therefore that these issues affect only those who are directly affected by the bedroom tax.

If the bedroom tax means that less income is coming in and that there is less ability to start and fund new build programmes, it will not increase supply; it will do precisely the opposite of what Ministers have tried to claim that they want it to do. We really need to move away from this approach and to realise that it is not working. We have not only the arrears, but a whole administrative apparatus to help people who have run into arrears and to process discretionary housing payments and appeals for discretionary housing payments, which may have to be reprocessed every year or six months. That involves a cost that people did not have to meet before.

The glib answer is that discretionary housing payments are the solution, but they reduce savings, which is yet another reason for thinking this whole thing has been a bit pointless. Furthermore, people who have, by definition, been means-tested are now being given a further means test—that is what this comes down to—on their already low income to see whether they qualify for discretionary housing payments. The forms ask them about their expenditure and about whether they have Sky television or whether they smoke.

Things such as disability living allowance, which is specifically given to meet the costs of disability and illness are being taken into account in declaring that people can afford to pay the bedroom tax. People were never given DLA to pay their rent, and if they are using it to do so because they have been deemed to have enough income to meet the gap between their rent and the housing benefit that they receive, they are not spending their DLA on their disability. Having a second tier of means tests is quite unacceptable. I talked about outside toilets, and we are back in the 1930s again with this issue; we are back with the means-test officer telling people that they really did not need the sideboard or the record player they had had for some years, because they were too poor.