Scotland: Underoccupancy Charge

Lord Freud Excerpts

Thursday 24th October 2013 Lords Chamber

[Lord McAvoy]

To ask Her Majesty’s Government what assessment they have made of the report published by the Scottish Parliament about the effects of the under-occupancy charge in Scotland.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, the Scottish Parliament’s report is an interesting and reasoned discussion of the early months of this policy. It suggests that it is difficult to assess impact at this stage, a view that we share. That is why we are undertaking a two-year evaluation on the effects of the policy. Initial findings will be available in 2014, the final report published in late 2015.

[Lord McAvoy (Lab)]

My Lords, I thank the Minister for his Answer. However, the report indicates that 82,000 households in Scotland are affected by the bedroom tax, with an average cost to those households of £50 a month. Some 80% of those households include a disabled adult. Does the Minister still stand by his advice, as published in the Daily Record, that in order to cope with that cost, disabled people should take in a lodger?

[Lord Freud]

My Lords, there is a range of things that people can do, as I have said to the House on previous occasions. The best option will depend on the circumstances. The group of disabled people on higher-rate DLA is 17% of the total. We have provided a lot of discretionary housing payments—we topped them up—and it is interesting to read in the report that many councils are saying that they are managing with that figure at this stage but that it is too early to tell.

[Baroness Gardner of Parkes (Con)]

My Lords, is the Minister aware of the research reported in the press this week on this subject which said that one in 10 of the claimants affected by this policy has moved off benefits? Will he confirm or comment further on that?

[Lord Freud]

My Lords, I have seen the research to which my noble friend refers. Clearly, it is encouraging. I also note that the report by the Scottish Parliament states that in one area the case load has fallen already by 15%. As I said just now, we need to be cautious about early findings but this one clearly is positive.

[Baroness Hollis of Heigham (Lab)]

My Lords, the Minister has stated that the bedroom tax will release larger, underoccupied properties for the waiting list but 80% of those on the waiting list want the selfsame smaller properties as the underoccupiers who have priority. This report shows that it will take three years to rehouse underoccupiers. Will the Minister therefore accept that it is false to claim that the bedroom tax will help those on the waiting list? On the contrary, their waiting times will probably double.

[Lord Freud]

My Lords, I must make the point that while the party opposite likes to use the expression “bedroom tax”, it is deeply misleading. A tax is when you take away money that people earn. We are limiting the amount of money that the taxpayer pays to people. There are 1.4 million one-bedroom properties, which become available at the rate of roughly 100,000 a year. Quite a lot of people are likely to want to keep an extra bedroom because they have the resources and the desire to keep it. Therefore, there will be a period of adjustment, and we are going through it. We are spending the discretionary housing payment to allow that transition to happen in an orderly way.

[Lord Skelmersdale (Con)]

My Lords, will my noble friend confirm that housing benefit, first, is paid for private sector accommodation and, secondly, that under the previous Labour Government it was restricted to a certain number of rooms in those circumstances?

[Lord Freud]

My Lords, my noble friend is right that the private rented sector basis is the local housing allowance, which is paid on the shape of the family who occupies. It is paid on the basis of how many rooms are required. Until now, there has been an imbalance between the provision in the social rented sector and the private rented sector, which this policy corrects.

[Baroness Sherlock (Lab)]

My Lords, the evidence is mounting. On top of evidence from the University of York and the University of Cambridge, in the past week alone the Archbishop of Wales has slammed the effect on Wales and now we have concerns from the Scottish Government. Perhaps most telling of all is a report I read this week in the Spectator by Isabel Hardman in which she suggested that Ministers were now referring to the spare-room subsidy as “Lord Freud’s idea” in an attempt to distance themselves from it? Would the Minister like to take this opportunity to rebut that outrageous slur?

[Lord Freud]

My Lords, a good idea has many fathers. Clearly, everyone in this Government is responsible for the bedroom tax and I am one of them.

[Lord McFall of Alcluith (Lab)]

My Lords—

[Lord Storey (LD)]

My Lords, I was shocked to discover that on Merseyside councils have left unused hundreds of thousands of pounds of discretionary housing payments. Will the Minister comment on that? Does he think that perhaps that money could be rolled over to future years or used in authorities where it would be used?

[Lord Freud]

My Lords, we are currently looking very hard at what the support should be in the next year and possibly beyond so that we will have a smooth transition for this policy. One interesting thing is that there is a real economic mismatch, which I have talked about, in what we are building for people: we have 60% of people requiring single bedrooms and we are building only 13% in any one year. There is an economic mismatch so the signals must be corrected and that is one thing that this policy does.

[Lord McFall of Alcluith]

My Lords—