Housing: Inherited Social Housing Tenancies

Lord Freud Excerpts

Monday 24th March 2014 Lords Chamber

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

My Lords, with the leave of the House, I shall now repeat a Statement made by my right honourable friend the Minister of State for Employment, Esther McVey, in the House of Commons earlier today. The Statement is as follows.

“Mr Speaker, the Urgent Question called by the honourable Member for Rhondda is not a new one but part of the 1996 provisions which impacted on the spare room subsidy legislation in 2012 and one that we have debated in the House before.

Upon investigation early this year, it would appear that some claimants may have been unintentionally protected from the effects of the removal of the spare room subsidy, including those who have been in receipt of continuous housing benefit since 1 January 1996 and have lived in the same property since that date, unless the move was due to a natural disaster, fire, flood and so on. A grace period of four weeks—or 52 weeks if the claimant or their partner is a welfare-to-work beneficiary—applies. For example, housing benefit would be classed as continuous if the break is less than four weeks, or 52 weeks for welfare-to-work recipients. Where a claimant dies, the partner or an adult child can inherit the protection, but it must be in respect of the same dwelling and they must qualify for housing benefit.

The issue about inheritance of housing benefit has always been part of our understanding about what the loophole meant. This was also part of the guidance issued to local authorities some weeks ago. The loophole derives from a very narrow but complex set of regulations dating back to 1 January 1996, when local reference rent rules were introduced.

In January 1996, transitional protection was offered to existing claimants, which could, and still can, be inherited if the claimant dies; for example, by a partner, or, where there is no partner, by adult children, and the protection only applied in respect of the same dwelling. Therefore, partners or adult children must continue to live in that property and only if they qualified for housing benefit. This protection ends if housing benefit ceased or they moved address.

With hindsight, the protection offered by the regulations could have been time-limited, but it was not; it has lain dormant for 17 years. The effect is that it has now unintentionally been applied to a group of people who were not financially affected by the local reference rent rules. In fact, in the previous debate, my honourable friend for Hitchin and Harpenden, who was Secretary of State at the time, said clearly that this exemption was never intended to be the case. This matter was fully debated and voted upon on 26 February 2014 to approve amendment regulations to close the loophole. Clearly, the House has already spoken on this issue.

As guidance was sent out a few weeks ago, I would suggest that this is not the appropriate time or place to discuss any questions local authorities may have, and that there are clear channels for them to do so. However, our experience with local authorities at the moment is that they know what they need to do, and are just getting on with it”.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for that Answer—I think. Obviously, this House has not discussed the regulations concerned, although a regret Motion is coming up. I want to ask the Minister two questions, the first on numbers. He has told the House previously that the number of people affected by this loophole in the bedroom tax is small—the DWP says 3,000 to 5,000—but figures obtained under FOI by Labour show that, with more than a third of councils still to reply, already well over 23,000 people are likely to be affected. The new guidance, to which I think the Minister referred, may increase the number still further. Can he therefore tell the House precisely how many people will be affected by the loophole?

Secondly, I want to put to the noble Lord the following statement:

“I worry about what Labour chooses to call the bedroom tax, because so often what is a spare room is in fact a vital part of looking after an elderly person. It enables their relatives to come, it enables carers to be there … I think we introduced that rather without thinking it through very well, and I think that’s costing us”.

It is costing all of us, in discretionary housing payments, in rent arrears and in human misery. Surely the Minister agrees.

[Lord Freud]

My Lords, as I have said in this House previously, the numbers involved with this particular loophole are small. This particular inheritance issue does not change our estimates. A figure of around 5,000 has been attributed to the DWP in defining “small”.

On the FOI figures, it is worth making the point that local authorities are now getting to grips with the actual numbers. The Birmingham figures were quoted quite extensively. It was reported that Birmingham alone had 2,100 cases, the significance being that they make up a large proportion of the figure that we have been looking at. More recently, Birmingham put out a clarification, saying:

“We haven’t finished identifying them at Birmingham so can’t give you an exact number, but the number of possible cases has dropped substantially below the 2100 that was reported in the papers.”

So we can see that some of the FOI responses to which the noble Baroness referred—if that was an example—may be clarified.

We have a process for supporting local authorities and people to make the adjustments through discretionary housing payments, which we have increased in recent years from £20 million to £180 million in the current year—indeed, the signs are that that figure will be underspent. The number of people being affected is coming down reasonably rapidly; it is now below half a million.

[Lord German (LD)]

Can my noble friend tell the House roughly how many people in this country are living in overcrowded conditions or are on housing waiting lists? Can he also put on the record the number of new social houses being built by this Government and compare that with the number built by the previous Government, because, clearly, housebuilding and social housebuilding are crucial?

[Lord Freud]

My noble friend draws the comparison between the amount of capacity that we have in this country and the demand for it. The number of people on the waiting list is 1.8 million, with the figure for overcrowding running at 250,000 on some estimates and 400,000 on others.

When this Government took office, we were left with the lowest level of peacetime housebuilding that this country had seen since the 1920s. Since then we have delivered nearly 400,000 new homes and put in very substantial investment. There is £11.5 billion public investment to boost housing supply over the four years of the spending review, and this is meant to lever in more private investment. The volume of housebuilding is now picking up. The starts in the quarter to December were up 20% compared with the same period last year.

[Baroness Hollis of Heigham (Lab)]

My Lords, every stat I have heard from the Government is either misleading or wrong. The bedroom tax will not help the waiting list because they too want smaller accommodation. It will not much help overcrowding as most families who are overcrowded do not live in the places where there are underoccupied houses. It will not make government savings. As we see, the GHP figures keep going up but the savings stay the same—false. Had the Government followed their own precedent of 1996 of transitional protection for the private rented sector, or had they followed what we did in 2008 by protecting existing tenants in the private rented sector, we would not have the calamity, misery and distress facing so many vulnerable and disabled people in this country. It is shameful.

[Lord Freud]

My Lords, the figures show that there is a reasonable balance around the county; there is not one place with overcrowding and another with waiting lists. We are staying with the estimate of roughly £500 million a year in savings. On transitional protection, we have given even more notice on the changes coming through than we gave on the LHA changes at the emergency Budget of 2010.

[Baroness Quin (Lab)]

My Lords, will the Minister tell us when the review on the bedroom tax will be published? In the mean time, will he undertake to meet many of the people who have been personally affected by this tax, and whose lives have been turned upside down as a result?

[Lord Freud]

We are conducting a review on the spare room subsidy; those figures will be published in the final review next year, and we have an interim publication later this year. I meet a lot of people all the time on this issue—in particular, I am seeing a large number of local authorities and holding discussions with them.

[Lord Campbell-Savours (Lab)]

The Minister says that he is seeing a large number of local authorities. Is he actually meeting people who have been affected by this tax? If he has, where has he met them—in what part of the country, in what boroughs? Perhaps he might tell us when. Also, he refers to 400,000 houses built since the last election in 2010—he mentioned 400,000 in his brief, which he read to the House. How many of those were started under the previous Labour Government? It was the Minister who was playing politics with the stats.

[Lord Freud]

I do not have to hand the number of starts. All I can say is that the number of completions in that last year—the handover year—was the lowest level of building in peacetime since the 1920s, which is a pretty shameful performance from a Government who saw a very long boom. I would like to be able to answer the question, but if I am not allowed to I will not.

[Lord Martin of Springburn (CB)]

There are communities where, unfortunately, the housing estates are known as hard-to-let properties. If the noble Lord, through legislation, is forcing families out of those houses, it is not necessarily the case that those who are on the waiting list will take up those houses. There is a danger that the people who are fighting hard to keep up the morale of the community in hard-to-let housing areas will see empty property vandalised, will despair and will leave the housing estate where they have worked so hard to keep up appearances.

[Lord Freud]

Local authorities clearly have a duty here and interest in their local areas to manage them. We are making sure that they have those resources in discretionary housing payments. Indeed, I have been very keen to spend the extra £20 million of funding on discretionary housing payments. It is a balance of maintaining the housing stock and the people in it with the right people in it. There are always isolated cases where the management of particular estates is tough; those are issues for the local areas.