Housing Benefit (Wales)

Lord Murphy of Torfaen Excerpts

Thursday 1st May 2014 Westminster Hall

[Glyn Davies]

I think that it is. It might not be the same in all local authorities—I can speak only for my own—but I must say that, on this issue, Powys county council has been brilliant. It knew that things would be difficult for some tenants—it is not an easy situation—but it employed three specialist officers to help everyone affected to deal with their situation by giving them the best advice, and they have done that. I pay continuous tribute to the work that Powys county council has done with a policy that it may well not have agreed with. It has delivered coalition Government policy and done a magnificent job.

[Paul Murphy (Torfaen) (Lab)]

Does the hon. Gentleman accept that there is a world of difference between local authorities in Wales, particularly between a large rural area such as the one he represents and a constituency such as mine that has a vast amount of former social housing? For example, there were 3,500 applications for discretionary payments in Torfaen in 2013-14, compared with only 700 the previous year.

[Glyn Davies]

The right hon. Gentleman makes a good point in that there are great differences between constituencies. He may well speak later in the debate and describe what has happened in his constituency, but when the policy was debated early on, a number of people said that it was going to hit rural areas harder—that was going to be the real problem. No area is more rural than my constituency, and the reality is that the commitment of the local authority and Mid-Wales Housing Association has made the policy work. I am not pretending that it has been easy, but they have made it work as well as possible.

The final issue I want to discuss is new housing, which is clearly needed for the policy to work well in the longer term. Housing deliverers did not respond to what they could have anticipated, perfectly reasonably, to be Government policy. To say that the policy was suddenly dropped on them, out of the blue, and that they need two years to deliver is, I think, a bit of an excuse. They could have anticipated that the policy would be introduced, but we are where we are.

We need the Welsh Government, as well as housing and planning authorities in Wales, to recognise that we need new properties. They should not be piling on extra costs. The Welsh Government have not delivered on new housing. We only need look at the figures to see that they have gone down. They have put on new costs. The planning authorities demand planning gain for this, that and the other, and make it almost impossible to build housing. The Welsh Government have put on the extra cost of sprinklers, which in themselves are fine—

--- Later in debate ---

[Paul Murphy (Torfaen) (Lab)]

I congratulate the Chair of the Select Committee on his Committee’s work. I thought that the impartial way in which he spoke was exemplary; I expect nothing less of my neighbour. I do not agree, of course, with what is the worst development in benefits in my 50 years of holding elected positions. There is no question but that we can rightly call the bedroom tax a wicked tax. Like many of my colleagues, I absolutely oppose it.

The report states:

“Under-occupation arises where a household lives in a property that is assessed to be too large for its needs. It is usually defined in terms of excess bedrooms.”

That definition is totally at odds with what public rented accommodation has traditionally and historically been about. Whether a person’s home is rented or owned makes no difference to where that home is. Until right to buy came about, my constituency, which has been much cited today, had the highest proportion of so-called social rented accommodation in the whole of Wales. That was mainly because it was a new town. A lot of that accommodation has been sold off, but the proportion is still very high.

The philosophy of the new towns, which has been totally ignored by the Government, was that people could live in rented accommodation, whether public or private—the latter is a small proportion in our areas—or in owner-occupied housing, without distinction. People would not know by looking at the door of a house whether the people living there had bought it or were renting it. The bedroom tax has dug a deep division between those who rent and those who own their homes.

The distinction in much of Wales between private and public rented accommodation is very different from elsewhere in the UK. Often in Wales, people see private rented accommodation as more temporary, and council housing, as it used to be called, as their home and much more permanent. In my constituency, the bedroom tax has been an unmitigated disaster and a failure. It has hit 18.3% of housing benefit claimants in Torfaen. Bron Afon, the social housing provider, estimates that more than £62,000 of arrears are attributable to the bedroom tax, with 268 tenants in arrears who have never before in their lives been in that situation. They see their dignity as being attacked by this appalling policy that is forcing them into arrears.

The reduction of income due to the bedroom tax in Torfaen is almost £1 million, the highest in the whole of Wales. People have £1 million less in their pockets because of the wretched policy. As everyone knows, the availability of smaller houses is very limited in Wales. In Blaenavon in my constituency, it would take 17 years to re-house the tenants suffering from the bedroom tax in smaller accommodation.

The Government say that the situation can be helped by discretionary housing payments, but that is a fudge. Yes, the money to local authorities has been increased to help them out, but most people do not know that the bulk of money that local authorities use for discretionary housing payments is their own. My authority spends to the maximum, with a bit more as well, of all local authorities in Wales. It is complete nonsense and deceptive to say that the payments are there by virtue of a benign Government. It is nothing of the sort; the councils have to take it out of their coffers.

The increase in demand for discretionary payments has been alarming. In 2012-13, there were 700 applications for payments, and in 2013-14 there were 3,500. The main reason given for the tax being brought in was that it would save money on the housing benefit bill, but it is doing nothing of the sort.

The cost of discretionary housing payments and top-up subsidies from local authorities, the increased cost of rent recovery by social landlords, the rent loss and turnaround cost of increased void properties, and the cost of additional health services through additional stress and depression are costing more than the so-called savings from the bedroom tax. Those facts alone justify Labour’s view that as soon as we are in government, out it will go—and with that, one of the worst taxes we have seen in a generation will finally disappear.