Housing: Underoccupancy Charge

Lord Freud Excerpts

Monday 18th November 2013 Lords Chamber

[Baroness Hollis of Heigham]

To ask Her Majesty’s Government what assessment they have made of the impact of the underoccupancy charge on the stability of communities.

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

My Lords, the impact of the removal of the spare room subsidy on the stability of communities will be assessed over the next two years as part of the independent evaluation currently being undertaken by a consortium which is being led by Ipsos MORI and which includes the Cambridge Centre for Housing and Planning Research and the Institute for Fiscal Studies.

[Baroness Hollis of Heigham (Lab)]

My Lords, I thank the Minister for his reply. Good social housing requires stable communities where neighbours look out for each other. That is one of the differences between social housing and the scattered private rented sector. How will half a million disabled families cope without their neighbours’ support because they are forced to move by the bedroom tax? How will frail elderly relatives cope when their middle-aged children who care for them have to move away because of the bedroom tax? Ministers quote the changes to the private rented sector in 2008 but those changes were not retrospective, whereas these are, and that is what is so wrong. Will the Minister undertake to ensure, as a transitional arrangement, that the bedroom tax applies only to new lettings and will he lift the bedroom tax for existing tenants and help us to maintain stable communities on which our civic life is based?

[Lord Freud]

My Lords, the policy is in position and is going through. The latest figures came out last week and showed that it now affects approximately 523 million people—

[Noble Lords]

Oh!

[Lord Freud]

I am sorry; I meant 523,000 people. That is a quite substantial reduction. While we do not yet have evidence of how people are responding to the policy—we will get that through our study—it is suggested that some behavioural changes are taking place. It is interesting that the numbers not in employment came down by 10% between May and August.

[Lord Skelmersdale (Con)]

My Lords, is it not a fact that we would not be in this position today if the last Labour Government had not allowed housebuilding to fall to the lowest levels since the 1920s?

[Lord Freud]

My Lords, clearly there are issues with housing. There is a great deal of overcrowding. There are various figures for this but between 250,000 and approaching 400,000 homes are overcrowded, and there are long waiting lists. Also, the economic signals seem odd. The provision of single-bedroomed homes falls very far short of demand, with 61% of people wanting, or meeting the size requirements for, one-bedroomed accommodation.

[Lord Harris of Haringey (Lab)]

My Lords, has the noble Lord seen a report in one of my local newspapers, the Haringey Independent, where one Di Alexander, who chairs a housing association and happens to be the father of the Chief Secretary to the Treasury, said that the bedroom tax,

“is particularly unfair in that it penalises both our tenants and ourselves for not being able to magic up a supply of smaller properties”?

Has the noble Lord also seen the report of the Chartered Institute of Housing on the pilots of capping benefits in the London Borough of Haringey? It points out that,

“2,300 children live in households whose income has been capped”,

resulting in,

“instability in education, increasing tensions within the home, sudden relocation and loss of social and educational opportunities or networks”,

which, it says, is extremely serious. Will he comment on the fact that, according to that study, the cost to local authorities and others of achieving a saving of £60,000 per week was £960,000 over just a four-month period? Does that really make sense?

[Lord Freud]

My Lords, it is simply too early to reach judgments about how the introduction of the benefit cap and the removal of the spare room subsidy bed in. The kind of savings that we were looking for from those policies seems to be being borne out by the very early initial figures that we are now seeing.

[Baroness Maddock (LD)]

My Lords, does my noble friend have the latest figures for the use by local authorities of housing discretionary payments? The last time I looked at this, local councils were not using that money to help people in the short term. I would be grateful if he could update us on that.

[Lord Freud]

Again, my Lords, it is hard to reach definitive conclusions. We now have £180 million for discretionary housing payments for this year, including £20 million that is by demand, to be bid for. So far, we have had just 13 bids in for that money. Last year, some discretionary housing payment money was returned. We are monitoring this extraordinarily closely to make sure that councils are able to deal with their hard cases.

[Baroness Lister of Burtersett (Lab)]

My Lords, there is a body of research showing the importance to families in poverty of local social networks to help them get by in poverty and even get out of poverty. Will the Minister explain how weakening those social networks through the bedroom tax contributes to the Government’s anti-poverty policy and the big society?

[Lord Freud]

My Lords, there is a misunderstanding here about the nature of the provision of a lot of social housing. Some 61% of people in social housing are single: they are not the families envisaged. Those are the people, by and large, who are affected by the removal of the spare room subsidy. We are looking at that very closely indeed.

[The Countess of Mar (CB)]

My Lords, will the Minister say what protection there is for the frail elderly, perhaps living on their own, or the sick or disabled, who do not know their way around the system and do not understand that they can appeal against any decisions that are made?

[Lord Freud]

My Lords, I emphasise absolutely that this policy deliberately excludes those who are retired—pensioners. The reason for that is that it is very tough to ask older people to make the kind of changes that are possible for younger people to make, so it is in that sense a flow measure. We are trying to get people to move down to appropriately sized homes—if they cannot afford to stay in their larger homes—when they are capable of doing so.

[Baroness Gardner of Parkes (Con)]

My Lords, I think most Members of the House believe that it is desirable for people to have the size of accommodation that they need and to free up accommodation for those many families with children about whom the noble Lord, Lord Harris, spoke. However, I have been told that one of my suggestions—about having a lodger—could prove to be very difficult to act on, because some local authorities will not allow you to have a lodger. Can the Government do anything to ensure that all local authorities will allow people who wish to have a lodger to do so?

[Lord Freud]

My Lords, I am grateful for my noble friend’s point. There is a bit of confusion around about sub-tenancies as opposed to lodgers. My understanding is that most housing associations and local authorities will accept lodgers. We have been carrying out an exercise in communication to ensure that people are thoroughly aware of that option.

[Lord McAvoy (Lab)]

My Lords, the Minister has repeatedly said in the past that the implementation of the bedroom tax was only “what the last Labour Government did”. However, my noble friend Lady Hollis has exposed that, because there was no retrospection when we brought out those regulations. The Minister has also complained that the last Labour Government did not build enough one-bedroomed houses or other suitable houses. In that case, why impose hardship, pain and suffering on thousands of disabled people as a result of the bedroom tax?

[Lord Freud]

My Lords, let me make absolutely clear that this is not a retrospective measure. It was brought in in this April and it capped the amount of benefit that we would pay people, reflecting whether they had spare bedrooms.