Housing: Underoccupancy Charge

Lord Freud Excerpts

Tuesday 14th January 2014 Lords Chamber

[Lord McKenzie of Luton]

Lord McKenzie of Luton to ask Her Majesty’s Government, in the light of reports of anomalies in the operation of the underoccupancy charge, whether they have any plans to amend housing benefit regulations.

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

The housing benefit regulations will be amended in March 2014 to ensure that all working-age social sector tenants who underoccupy their homes are subject to a reduction in their eligible rent, regardless of the length of their tenancy, unless they fall within one of the limited exceptions. The exceptions include certain excluded tenancies, shared ownership tenancies, mooring charges for houseboats, rent for caravan sites, temporary accommodation and supported exempt accommodation.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for that reply, but is not what has happened just another example of the incompetence that surrounds the Government’s welfare reforms, and their careless approach to people’s lives in introducing it? The upshot is that there are thousands of people who are being hit illegally with housing benefit reductions, and thousands of people who are unnecessarily caused undue stress because of the effect of this tax. I would like to ask the Minister how the Government are going to rectify matters for individuals who are denied their full benefit entitlement to date, whose rent arrears may have affected their credit rating, who have moved house in response to the tax and given up their security of tenure, or who have fallen into the clutches of private sector landlords who are now intent on evicting tenants claiming housing benefit? Is not this mess a further reason to scrap this wretched tax?

[Lord Freud]

My Lords, I can tell the noble Lord that the numbers involved in this anomaly are small and the amounts are modest. We have put guidance out to local authorities and we intend to regularise the matter through regulations in March.

[Lord Paddick (LD)]

My Lords, the legislation agreed by this House includes the requirement for a full review of the underoccupancy charge. Would my noble friend the Minister tell the House what progress has been made in putting this review in place, and will he confirm that this important process will include not only the impact of the policy but the methods of implementation?

[Lord Freud]

My Lords, we have an elaborate review, about which I have given full information to this House in the past, that is coming out in two stages. We have the interim report coming out later this year, and we have the final report coming out in 2015.

[Baroness Lister of Burtersett (Lab)]

My Lords, the numbers may be small, but it is people’s lives that have been affected, and I do not think the noble Lord the Minister actually answered my noble friend’s question about what will happen to them. Could he please answer it now? Also, it is quite likely that many of these people will have got into debt as a result of this. Will the Government pay compensation to cover the interest payments on that debt?

[Lord Freud]

The reductions in housing benefit will of course be repaid as we correct the anomaly for this period, so people will be made whole.

[Lord Greaves (LD)]

My Lords, when the repayments have to be made by local authorities, will they be reimbursed by central government, since it is clearly not the fault of local authorities that this cock-up has occurred?

[Lord Freud]

Yes, my Lords, the payment will of course go through as housing payment in the normal way.

[Lord McAvoy (Lab)]

My Lords, what a catalogue of disasters: the bedroom tax applied illegally to thousands of people; refunds that will be demanded and quite rightly paid; thousands paid a discretionary housing allowance by mistake and not obliged to repay the cash; and people forced to move house from areas they have lived in all of their lives. The Minister boasted of his role in introducing this tax. Will he now admit his personal responsibility in this disaster, and admit that it is a financial and a social disaster?

[Lord Freud]

My Lords, I will not. The department is engaged in a massive programme of reform. We have successfully brought in a benefit cap, and we have launched PIP, the universal credit and housing benefit reform, to name just a few.

[Lord Martin of Springburn (CB)]

My Lords, will the Minister acknowledge that in circumstances where couples are required to leave underoccupied houses, it is not necessarily the case that the house that is vacated will be easily re-let?

[Lord Freud]

My Lords, the position is that we have got a large number of overcrowded social homes; we have got a very long waiting list, stretching out to 2 million people; and the job of local authorities is to make sure that available homes are matched with the requirement of people who have larger families.

[Lord Christopher (Lab)]

My Lords, what plans do the Government have to deal with the problem, before it gets widespread, of the growing number of private landlords who have decided not to let any properties to people on benefits?

[Lord Freud]

My Lords, there are always flows between private landlords coming into the market and coming out of it. The underlying statistics are that, since we introduced the local authority housing changes, the number of people in private rented accommodation has gone up.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, would the Minister undertake to read after this Question Time the questions that have been put to him and which he has not yet answered? For example, there was a question about people who have lost secure tenancies as a result of the Government’s errors. What are the Government going to do to help them?

[Lord Freud]

My Lords, as I made clear, the regulations that will come in in March will go back to the position that was intended, so people at that stage will have to make adjustments where they need to. So there is a timing issue, but not an underlying one.

[Lord Grocott (Lab)]

My Lords, will the noble Lord acknowledge that this House is often not a bad barometer of whether a policy is going well or badly? Could he note, as I have certainly noted, that there has been quite an absence of enthusiasm on his Benches for this policy, and for asking him helpful or even supportive questions? Could he just report that back to the department?

[Lord Freud]

My Lords, I am pleased to remind the noble Lord that the survey conducted on this policy by Ipsos MORI a couple of months ago found that 78% of people thought that it was important to tackle this problem, and 54% thought it was fair to have this kind of reduction.

[Lord Hughes of Woodside (Lab)]

My Lords, the Minister said that the regulations would be brought forward in March, which is two months from now. What will happen between now and then to the people who have suffered the difficulties that have been described, and how long after the amendments have been made will they take effect?

[Lord Freud]

I am not quite sure that I got that question. We have put out guidance to local authorities to make it clear that people in that position should not have a reduction in their benefits until the regulations have been introduced in a corrected form.