Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014

Lord Beecham Excerpts

Thursday 3rd April 2014 Lords Chamber

[Baroness Lister of Burtersett (Lab)]

My Lords, as the Regret Motion makes clear, we have to understand these regulations in the context of the impact of the bedroom tax.

My noble friend Lady Sherlock quoted Esther McVey on Radio 5. I will take us back to her rather wonderful interview on Radio 4, in which the interviewer had to drag out of her that the Government’s estimate is that only 8% of people had moved—a whole two percentage points more than the BBC estimate which she had been contesting. She was asked if she was disappointed. She replied:

“Well no, because it wasn’t that you had to move house”.

How is that consistent with her statement in debate in the other place? She said:

“The reason that we are putting these measures in place is that we want to ensure we make the best use of our social housing”.—[Official Report, Commons, 26/2/14; col. 311.]

In addition, how is it consistent with the constant refrain:

“How can we justify 1 million spare rooms when other people are sometimes crammed together in a room?”.—[Official Report, Commons, 24/3/13; col. 27.]

Can the Minister tell us exactly how many rooms have been freed up by this policy? As the Work and Pensions Committee report observed, it is,

“a blunt instrument for achieving this”

aim, and one that is causing hardship, as we have already heard from other noble Lords.

Why, then, have people not moved? As has already been said, it is partly because there is nowhere to move to. In the Independent, on 3 March, it was reported that,

“a severe shortage of smaller council homes across the country is being exacerbated by the right-to-buy scheme—leaving many victims of the bedroom tax with no choice but to accept reduced benefits”.

Also, many people do not want to move because they do not want to lose social networks that are very important to them—a point I have made over and over again in this House. We are not talking about housing in the abstract, but about people’s homes within communities that matter to them.

As Demos said, in a study it carried out on social ties,

“policies can serve to actively undermine the kind of self-help and mutual support that families engage in”.

One would have thought that that would be approved of by a Conservative-led Administration who believe in the big society. Reforms such as the removal of the underoccupancy penalty—dubbed the bedroom tax—have left people with a choice of either finding more money for rent from already stretched budgets or moving away from support networks that make life liveable for many.

We have heard about rising rent arrears, but they are only the tip of the iceberg. Earlier this week I attended the launch of a report by Community Links on the impact of the first year of so-called welfare reform—although I would call it social security cuts—in the London borough of Newham. The person presenting the findings pointed out that many people prioritise rent for fear of eviction. Therefore, there may not be rent arrears, but what other impact is it having on what people can spend on other essentials, and how many people are turning to payday lenders or, even worse, to loan sharks? That morning we heard tales of utter despair—the result of the cumulative impact of this and other benefit cuts such as council tax benefit.

The suggestion has been made: “Let them take lodgers”. Do we know how many people have taken on lodgers as a result of this policy? Some noble Lords who are following the Immigration Bill will know that later this afternoon we will talk about its residential tenancy provisions. Anyone who takes a lodger as a result of the bedroom tax will be turned into a mini-immigration officer and will have to check the immigration credentials of their lodger. Do we really want people on benefit being turned into mini-immigration officers to prevent illegal immigration?

The Minister, Esther McVey, pleaded that the BBC report showed how complex this is. I can suggest a simple solution: follow the policy of the Opposition—which I hope will very soon be the official policy of the Liberal Democrats—and abolish the bedroom tax.

[Lord Beecham (Lab)]

My Lords, I think I am the only serving, elected councillor who is likely to speak in this debate, unless the noble Lord, Lord Tope, in his declining days as a councillor—I believe he is standing down shortly—joins in to proclaim the new, belated Lib Dem policy on the bedroom tax. I bring a snapshot from Newcastle, where 5,400 households are affected, at an average cost to each of them of £13.47 a week. If paid, that represents around £3.75 million to be taken out of the local economy, so there is a knock-on effect, quite apart from the housing effect, on that economy. Just under one-quarter of those are working households, one-third have children and, as we have already heard, many have disabled people in them. In my own ward, there are 315 such households.

As has already been pointed out, it is not a simple matter to transfer into a smaller property. In Newcastle, we have 3,558 people seeking one-bedroom accommodation. The average number of available one-bedroom properties per year is 64. It would take a generation or more to accommodate those people. Some 615 are seeking to move down to two-bedroom accommodation. There is, admittedly, a slightly higher availability of this—all of 101 a year. Any effect on the private sector, which in Newcastle is largely taken up with students, will drive up rents. Landlords are increasingly reluctant to take tenants who are on benefits of one kind or another. This policy is not only cruel and inefficient; it is based on a complete misunderstanding—to put it generously—of what happens in the social housing market. It is damaging people’s lives.

I conclude with an anecdote about meeting a couple of people in their fifties—not in my own ward—who benefited from the decision which required the Government to effectively refund the amount paid because of the length of their tenure of the property. I was able to tell them they would be getting the money back but I also had to give the bad news that the Government were seeking to ensure that the money returned to them was spent on paying the bedroom tax. Here were two disabled people, living in a house for just under 30 years, with one of their grandchildren staying with them when I called. This just illustrates the cruelty and incompetence of the measure and I congratulate my noble friend on bringing this Motion of Regret.

[Baroness King of Bow (Lab)]

My Lords, when I saw that the Government were introducing an amendment to the bedroom tax, I mistakenly assumed they wanted to put right the wrongs visited on tenants by this unjust law. Instead, they want to close loopholes and increase the number of people victimised. As one housing expert said:

“This is a shambles caused by the DWP failing to understand the significance of their own legislation”.

This is an extraordinary failing by the Government that disproportionately burdens the most vulnerable, two-thirds of whom, as we have heard, are disabled. These people will have to wait for a Labour Government to abolish the bedroom tax—unless the Minister would like to tell us something quite unexpected today. One way that Labour will fund the reversal is to abolish the Government’s tax cuts for hedge funds. I have nothing against hedge funds—I want to see the City of London thrive because our economy depends on it. However, I do not want it to do so on the backs of the poorest and the disabled. I have rarely heard anything so perverse.

Austerity demands choices: choices reveal priorities. The Government’s priorities here are absolutely shameful. Why do they not concentrate on closing loopholes to end tax evasion by the richest instead of closing loopholes that hurt vulnerable people so much? I urge the Government to abolish this tax.