Housing: Underoccupancy Charge

Lord Freud Excerpts

Wednesday 20th January 2016 Lords Chamber

[Baroness Quin]

To ask Her Majesty’s Government what is their assessment of the effect of the underoccupancy charge on the health and well-being of those subject to it.

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

Our reforms are designed to ensure that work always pays and the removal of the spare room subsidy has incentivised more people to enter work and increase their earnings. Evidence shows that work can keep people healthy as well as help promote recovery if someone falls ill. Those who require additional support can access discretionary housing payments and we are making more than £800 million available over the next five years.

[Baroness Quin (Lab)]

My Lords, the Government—and indeed the Minister in previous replies—have failed absolutely to concede that there has been an adverse effect on the health and well-being of those who are subjected to the bedroom tax. The Minister talks about evidence, but has he read the reports commissioned by his own department, the academic studies that have been done by a number of universities, the information from local authorities, the information from citizens advice bureaux, or the personal testimonies on blogs such as the “My Spare Room” blog? They tell a very different story. In the light of this overwhelming evidence, what changes will he bring in to this policy?

[Lord Freud]

This is now a long-standing policy of this Government, to make sure that we tie in the availability of social housing to those who need it. People tend to forget the numbers who are on waiting lists or are in overcrowded accommodation and that this policy of matching available stock to people’s requirements improves their outcomes.

[Baroness Eaton (Con)]

Can my noble friend the Minister tell us what is happening in health and well-being in this country?

[Lord Freud]

We have run a well-being survey since 2012, published by the ONS. I am pleased to report that, on all four key measures of well-being, there has been an improvement every year since the survey started almost four years ago; that is, in life satisfaction, finding activity worthwhile, happiness, and reduction of anxiety.

[Baroness Meacher (CB)]

My Lords, I understand what the Government are attempting to achieve through the underoccupancy charge, but does the Minister have an estimate of the number of people who are subject to that charge for whom there is no appropriately sized accommodation available? Does he have any plans to relieve those particular households from the charge, when it is no fault of their own that they cannot move out?

[Lord Freud]

We saw in the report that came out just before Christmas—which we were able to discuss in this Chamber—that nearly 100,000 people have moved and are no longer affected by the removal of the spare room subsidy. More than half of them have been able to downsize—mainly within the social sector, but some in the private sector. More want to do so and the process is continuing.

[Baroness Lister of Burtersett (Lab)]

My Lords—

--- Later in debate ---

[Baroness Manzoor]

My Lords, it is really welcome that the Government have initiated the discretionary housing benefit allowance to offset the negative impacts that the spare room tax has on people’s health and well-being. Despite this extra subsidy, many people are affected. They are going to food banks and are in significant rent arrears. This will be compounded by the ESA WRAG component, under which many people with mental health problems and with a disability may be further affected and may lose their homes. Can the Minister say how this effect will be mitigated?

[Lord Freud]

I just want to point out to the House that some of the concerns that the House rightly had about the impact of this policy on what would be happening to arrears and so forth have actually not come to pass. We are looking now at rent collection levels in the social sector at 99%, and 92% of social housing associations are saying that they are within plan and that customers are managing their rent accounts well.

[Baroness Lister of Burtersett]

My Lords, once again the Minister has talked about the policy incentivising people, but the report to which he just referred—which, as he said, we discussed just before Christmas—found that only 5% of those affected actually found work, and about half of those were still subject to the bedroom tax. In what way does this constitute a successful outcome for either the Government or the tenants, many of whom are clearly suffering hardship as a result?

[Lord Freud]

Some 20% of the total number affected have looked to improve their employment outcomes; among those who are unemployed, that is up to 63%. In the overall figures you can see real changes in behaviour, with the number of workless families in social housing down to an all-time low of 39%. This in a context of dramatic changes in employment levels, with employment at its highest level since records began; record lows in inactivity; record female employment; record youth employment; the lowest number of workless households since 1996; and out-of-work benefits at their lowest level since 1982. We are seeing a transformation and this is part of it.

[Lord Beecham (Lab)]

My Lords, in Newcastle alone, 4,720 households are affected by the charge—1,200 with children and 1,000 of them working households. The average loss per household is £748 a year, and arrears from 2,000 households amount to £639,000. How does the charge contribute to the well-being of these families and will the Government be applying equivalent financial sanctions for underoccupation to those to whom they intend to offer benefits under their starter homes policy?

[Lord Freud]

I understand that the noble Lord is referring to a study conducted by Newcastle University. I have to point out that that study was a qualitative survey, based on interviews with 38 people, which was a self-selecting sample.