Housing Benefit (Wales)

Madeleine Moon Excerpts

Thursday 1st May 2014 Westminster Hall

[David T. C. Davies]

I am certainly not suggesting that we suspend the bedroom tax—or spare room subsidy, or under-occupancy charge, or whatever it happens to be called. I am suggesting that there are widespread concerns about direct payments. Pilot studies set up in Torfaen—the right hon. Member for Torfaen (Paul Murphy) is in his place—suggested that debt grew when direct payment was put in place. There is great concern that some housing associations will struggle as a result of the policy. The Committee concluded that the financially sound decision would be to ensure that any tenants who have any problems at all with money management are able to continue under the old system. It may be laudable to encourage people to be given the money themselves to pay it on, but that will be impractical for a lot of people.

[Mrs Madeleine Moon (Bridgend) (Lab)]

I suggest to the Chair of the Select Committee that the Minister should also look at what happened in the 1980s when the self-same policy was introduced under the Thatcher Government. I was a social worker in Bridgend at the time, and can tell him that it caused chaos. We were constantly writing to the benefits agency about people who had direct payment of benefits. The Government should go back and look at the disaster that was caused when they tried it before. Let us not make the same mistake again.

[David T. C. Davies]

I am sure it could not have been that much of a disaster.

[Mrs Moon]

It was.

[David T. C. Davies]

Well, the hon. Lady had 13 years, from 1997 onwards, to put things right.

[Mrs Moon]

It was repealed.

[David T. C. Davies]

In actual fact, in 2008, further changes were made to how housing benefit was paid that kept in place the spare room subsidy rules for the private rented sector, so the principle seems to be widely accepted.

[Mrs Moon]

I am talking about direct payment—

[Sir Roger Gale (in the Chair)]

Order.

--- Later in debate ---

[Mrs Madeleine Moon (Bridgend) (Lab)]

I must apologise, Mr Betts, that because of the late running of the debate, I will not be able to stay until the end. I have a pre-booked ticket to get me back to Wales that, because of the Independent Parliamentary Standards Authority’s rules, I will not be able to change.

The bedroom tax, as every speaker has said, has had a disproportionate impact in Wales. I want to address how it has affected the county borough of Bridgend in particular. It has had a massive impact, because of a lack of one and two-bedroom homes. As of March 2014, Bridgend county borough council had 1,393 homes where over-accommodation was a problem because of the bedroom tax. Of those, 1,094 were over-accommodated by one room. Only 7% of those 1,396 affected have been able to move into smaller properties. That demonstrates the huge problem that we have with the lack of smaller properties: many constituents cannot move. We have already heard that if they moved into the private rented sector, where rents are on average 37% higher, it would not save any money for the Government. The individuals, as well as having been clobbered by the bedroom tax, would somehow have to find the costs of removal, plus the cost of new carpets, new curtains and everything else. People are trapped in a financial spiral of debt through no fault of their own, and they cannot escape.

The increase in the discretionary housing payment does not cover the funding needed for the number of people in Bridgend who are financially affected. As of April 2014, 16% of the social tenancies in Bridgend were affected by the bedroom tax. Of those, 50% are in arrears. I stress the emotional impact on those people. As Members have said, people who have never in their life been in debt are struggling, facing debt and the horror of possibly losing their home.

I saw the local impact of the direct payment of housing benefits in the 1980s, when I was a social worker. We spent a totally disproportionate amount of our time having to visit families in debt who were about to lose their properties. We would write letters to the Department for Work and Pensions saying, “This person must no longer receive the benefit directly to them. It must go directly to the landlord.” That was the only way that people could get back to their rent payments going directly to the landlord. That cost a fortune. If the Minister looks at what happened in the 1980s, he will learn that we must avoid that disaster happening again.

We also need to recognise the bedroom tax’s impact on our housing associations. They are facing increased debt among their tenants and have difficulty in securing loans for improvements, because they do not have a guaranteed income to show the banks. Some of them have financial viability issues, and they are having to face court costs in taking tenants to court to get possessions. Housing allocations are no longer based on need, but on property size and the sex, age and number of children that applicants have. We are not fitting people into homes because of need; we are fitting people into homes because their family composition fits the size needed to not get into housing benefit arrears.

The Shelter website says:

“The vast majority of housing benefit claimants are either pensioners, disabled people, those caring for a relative or hardworking people on low incomes, and only 1 in 8 people who receive housing benefit is unemployed.”

More than 90% of new housing benefit claims over the past two years are for people in work. Wales is a low-wage economy and we are disproportionately affected. We do not have the properties that would enable people to move. Our people are being persecuted because of the Government’s fantasy about the availability of housing stock in Wales. The benefit change should not be imposed as it has been in Wales. I, too, completely endorse the Labour party’s policy to rid us, as one of its first steps in government, of the pernicious attack that is being made on people in Wales.