Housing: Underoccupancy Charge

Lord Freud Excerpts

Wednesday 29th January 2014 Lords Chamber

[Baroness Hollis of Heigham]

To ask Her Majesty’s Government what assessment they have made of the effect of the underoccupancy charge on tenants.

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

Both an impact and a quality impact assessment have already been published, although it remains too early to say how people are reacting to this change. We have commissioned a consortium to undertake a two-year monitoring of the effects of the policy. The research will include looking at the effects of the measures on supply issues, the impact on rural areas and the effects on financial circumstances and vulnerable individuals.

[Baroness Hollis of Heigham (Lab)]

My Lords, I thank the Minister. Social security sanctions claimants and cuts their benefits if they break the rules, say on JSA, in order to change their behaviour. But the 660,000 families affected, whose existing housing benefit is being cut by the bedroom tax, cannot change their behaviour because there is nowhere smaller for most of them to go. Two-thirds of them are, in any case, disabled, and may need the extra space. Discretionary housing payments, on which the Minister properly relies, can help only a minority even of disabled people. Does the Minister really think it fair to sanction existing tenants for misbehaviour when they have not misbehaved and when they cannot change their behaviour? Are we not punishing people who have done no wrong but who, as they face eviction, are having wrong done to them? Is that now social security’s definition of social security?

--- Later in debate ---

[Lord Freud]

My Lords, I must make clear that the removal of the spare-room subsidy is not a sanction. The numbers are down from 660,000 to 523,000, which may indicate some behaviour trip-change, as people move to smaller places where they can. The self-declared proportion of disabled people is two-thirds, but when you look at the DLA figures it is 17% of the total. We have raised the amount of DHPs to help with the transition; we have £180 million. The signs at the moment are that there will not be a demand for all of it.

[Lord Martin of Springburn (CB)]

My Lords, it is bound to be the case that when tenants vacate a flat or a house, some of the properties will remain empty in parts of the United Kingdom. Will he make sure that records are kept of the cost of their upkeep, and also protect them from vandalism?

[Lord Freud]

My Lords, we are having an intensive review of what is happening. Clearly, there are a large number of people—1.8 million—on the waiting list who would welcome a place to live when it is vacated. We can also look to move some of the people who are living in overcrowded social accommodation; that is a large figure that I discussed with the House yesterday. That will give them some relief.

[Baroness Quin (Lab)]

Will the Minister confirm that discretionary housing payments can cover only a fraction of the losses involved for households as a result of this measure? Research shows that it is of the order of only 6%.

[Lord Freud]

My Lords, clearly people will respond in different ways, which is one of the things that this policy is intended to bring about. The area with which the noble Baroness is closely associated, Gateshead, spent roughly 69% of DHP in the first half-year and put in an application for further DHP that we were pleased to match with another £130,000. This meant that it could spend roughly the same amount in the second half of the year as in the first. That contrasts with the area that the noble Baroness, Lady Hollis, is very closely associated with. It has spent 58% of its DHP. I have not seen its application for further DHP. There is a bidding fund of £20 million that I would like to get spent. Norwich has until Monday to put in that bid, and I hope that the noble Baroness will use her very considerable energies to make sure that it does.

[The Lord Bishop of St Albans]

My Lords, with the Cambridge Centre for Housing and Planning Research showing that 42% of tenants in some parts of Wales, north-east England and north-west England think it unlikely that they will be able to pay their rent in full, what assessment have Her Majesty’s Government made of the implications of the introduction of the charge? In particular, what contingency plans do they have in case that research proves to be true?

[Lord Freud]

My Lords, the way in which we are handling the transition is to make sure that there are adequate discretionary housing payments. That is why we raised that figure. We know that people are making adjustments, which will take time and need funding.

I am very pleased to see some of the innovative ways in which local authorities are responding to the challenge. Places such as Warrington and Salford are converting empty office space. They are purchasing and improving long-term empty two-bedroom homes. Derby has a home-release scheme that provides tenants with money to move—£500 for removal costs, for example. Many local authorities have revised their strategies to allow people with arrears to move, which was a block for some people. We are getting the kind of creative response from local authorities for which this policy asked.

[Lord Lexden (Con)]

My Lords, the party opposite says that it wishes to control welfare spending but believes that this policy should be scrapped. How does my noble friend think that equivalent savings could be made?

[Lord Freud]

My Lords, I have noted that the party opposite has said that it will be tougher on welfare than we are. If it is going to take £500 million of savings and put them back, and then risk matching that and paying the equivalent amount in the private sector—adding up to £1 billion a year—I do wonder where it can get that money back out of the welfare system.

[Baroness Lister of Burtersett (Lab)]

My Lords, almost a quarter of a million children are in households whose benefit has been reduced because of the bedroom tax—we will be debating this later today. What impact will this have on the Government’s child poverty strategy?

[Lord Freud]

My Lords, we monitor child poverty very closely. I am pleased to say—and as the noble Baroness knows perfectly well—that we now have lower relative child poverty and poverty than we have seen for a very considerable time. We will go on monitoring that figure.