Housing: Underoccupancy Charge

Lord Freud Excerpts

Tuesday 3rd November 2015 Lords Chamber

[Baroness Quin]

To ask Her Majesty’s Government whether they have plans to undertake a regional study of the effects of the under-occupancy charge.

[The Minister of State, Department for Work and Pensions (Lord Freud) (Con)]

We commissioned a two-year independent evaluation in 2013, which included looking at the regional effects. The final report will be published in due course. There is already clear evidence that regions are adjusting to the policy. In the north-west, for example, there has been a 22% fall in the number of households subject to a reduction over the past two years.

[Baroness Quin (Lab)]

My Lords, I believe that recent studies show a wide variation between and, in some cases, within regions. In the north-east, in Newcastle for example, there has been no overcrowding problem—a problem that the Government said they wanted to address—but there is a huge shortage of one-bedroom flats, so that people cannot downsize but bear the full brunt of the bedroom tax. The Newcastle University study showed that many people had been forced into debt for the first time and that their health and well-being, contrary to the Government’s claims, have suffered hugely as a result. I urge the Minister—indeed, I invite him—to visit Newcastle and the north-east to meet with people directly affected and listen to their experiences.

[Lord Freud]

The noble Baroness is right that there is quite a lot of variation in the regional responses. I gave the example of the north-west, where there had been a reduction of 22%. The two regions that have reduced the smallest amount in England and Wales are the north-east, and Yorkshire and Humber. Other areas, such as London, the east of England and the north-west are the outliers on the upside. The other two have had the least-efficient response to this policy.

[Lord Best (CB)]

My Lords, I know that the Minister feels immense sympathy for those people who are unable to move, such as the tenants in Knowsley, where I was on Friday, who cannot downsize even though they wish to. They have taken a big hit in their standard of living. Will he join with me in commending the resilience and fortitude of those families that have taken a drop in income as a result of the so-called bedroom tax and borne a disproportionate share of the burden of deficit reduction?

[Lord Freud]

The noble Lord is quite right to make the point that this is about deficit reduction, for which this has been an important policy. It has now had savings of £1 billion over that period. People have had a range of responses, but the most important is that many people have gone into work or moved off the benefits system, mainly by going into work. That is 70,000 of the 90,000 reduction.

[Lord Kirkwood of Kirkhope (LD)]

Does the Minister accept that there is an important regional dimension to all this? I support the request made by the noble Baroness, Lady Quin, for a regional look at some of this, and also her idea of looking again at the Newcastle study, which demonstrated not only that the bedroom tax increased poverty but that it had an adverse effect on health and well-being, and on social responsibility and networks within neighbourhoods. When the final report is published, will he use his best offices to get a regional dimension into it, so that it considers the community-wide impact, not just the household impact, and the totality of the policy across the piece? I hope that the report will be published before the end of the year.

[Lord Freud]

Yes, the current plan is to publish the report before the end of the year. It does incorporate the regional effects, and I will take the noble Lord’s points about how thoroughly it does so when I go back and talk to the team. For very obvious reasons, I have not seen what is inside that report before it is published, but I will transmit those thoughts to the team.

[The Lord Bishop of St Albans]

My Lords, back in 2013 the Environment, Food and Rural Affairs Committee urged that social housing in rural areas should be excluded from the underoccupancy charge, because of the near impossibility of finding alternative accommodation in many rural areas, where it simply is not available for people to downsize. Already people in rural areas have higher social and housing costs, and there is some evidence that the underoccupancy charge is pushing some families further into debt. Will the Minister tell the House whether Her Majesty’s Government would be willing to undertake a reconsideration of their policy and exclude social housing in rural areas from this measure?

[Lord Freud]

We are actually sympathetic to that point about rural communities, and we ramped up the amount of discretionary housing payments which were particularly targeted at the most remote rural areas, so that the policy could be dealt with by that route.

[Baroness Eaton (Con)]

My Lords—

[Baroness Eaton]

Could my noble friend the Minister say what Her Majesty’s Government have done to support local authorities in mitigating the effects of this policy?

[Lord Freud]

The key route is through the discretionary housing payments, on which we have now spent £470 million in total—£175 million on this particular policy. We have had a range of initiatives to support people, including those living in social housing, into sustained employment. The figure for those in social housing who are workless has now dropped to an all-time low of 39%.