Affordable Homes Bill

Mark Harper Excerpts

Friday 5th September 2014 Commons Chamber

[Andrew George]

Will the hon. Lady allow me to make this point, if she does not mind?

In advancing the Bill in the form in which it now appears on Second Reading, I know that there have been a number of discussions between all parties. I ask the Minister whether he will confirm in responding to the debate that collective responsibility will be suspended on this private Member’s Bill.

[The Minister of State, Department for Work and Pensions (Mr Mark Harper)]

indicated assent.

[Andrew George]

I notice that the Minister nods his assent to that question, so I am given to understand that collective responsibility will be suspended on the Bill. That is important, and I am very encouraged that we have an opportunity for a more open debate.

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[Mr Harper]

The hon. Gentleman said that he wanted the House to make an informed decision, so I thought it would be helpful if I shared with hon. Members in all parts of the House the Government’s estimate of the costings of the Bill, whose drafting goes rather wider than the spare room subsidy. The Government estimate that the Bill would cost about £1 billion of public expenditure, so I would be grateful if he let the House know what spending cuts or tax increases he intends to put before it when it makes its decision.

[Andrew George]

That is most interesting because the Minister was not prepared to share that estimate—that speculative figure—with me before today’s debate. Looking at the consequences of the regulations, we see that if people had no other purpose in their life than simply to be the stimulus for the workings of the housing benefit system, and no say in how or where they lived, there would be no savings for the Government in any case. If the purpose of Government policy is to ensure the proper, efficient and effective use of the social housing resource with no under-occupation, so that every cubic centimetre of every social property is fully occupied, there will be no saving in housing benefit.

My point is that the policy is putting pressure on vulnerable people and they are expected to go into debt, and indeed the evidence shows that they are doing so as a consequence of the policy. That is the reasoning behind these modest and reasonable measures, which are based on the evidence. We can certainly debate the Minister’s speculative estimate of the cost. In any case, when the Government first proposed the measures, they said that they would make savings of £500 million, and they have had to revise that down again and again. We must take into account the number of tenants who have had to move into the private rented sector, where rents are higher, and the number of disabled people who have had to move, requiring adaptations to be made at taxpayers’ expense.

There are elements of the Government’s estimates that we have not seen properly, and I would like to scrutinise the evidence that the Minister believes he has for them. He simply stood up and spouted one figure without any evidence. Perhaps when he winds up the debate, we will hear more about that figure, and I hope that he will come and talk to me before the Bill goes into Committee.

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[Mr Raynsford]

The hon. Gentleman has clearly not been listening to the debate. My hon. Friend the Member for Dumfries and Galloway (Mr Brown) very forcefully made the point that the policy introduced by the previous Labour Government was not retrospective and did not penalise people on the basis of their existing circumstances. Quite simply, given the higher cost—[Interruption.] Perhaps the hon. Gentleman who asked the question would like to listen. He will know that private rented housing is generally very much more expensive than social housing. Social housing is allocated by landlords on the basis of how many bedrooms people need. If people who take private rented housing—they are not subject to allocation, but can choose their property—were able to select much more expensive properties that are larger than they need, that in itself would be reasonable grounds for a restriction. However, that applies only when people move into such housing, not retrospectively. Finally, I put it to him that if he and the Government were really concerned to make better and more efficient use of under-occupied social housing, they would not have exempted elderly people because it is predominantly that group whose properties are under-occupied. That point absolutely goes to the heart of the process: this is not about better use of the social housing stock; this is about trying to make cuts in public expenditure, which has been the Government’s objective from the outset. I now want to make some progress.

This whole ghastly process, which has caused anxiety, misery and hardship on a very large scale to hundreds of thousands of our fellow citizens, was based on a false premise, without any proper evidence to justify what was done. It was a truly dreadful example of the worst type of policy making. Ideally, the whole policy should be consigned to the dustbin immediately, and it will be if the Labour party forms the Government after the next general election.

In the meantime, the hon. Member for St Ives has given us an opportunity significantly to limit its negative impact by restricting its application in three specific ways. The first way is by excluding cases where significant adaptations have been made to a property to meet the needs of a disabled tenant or a close relative who lives in the house. Quite why the Government did not accept the need for such an amendment from the outset is difficult to understand. It is clearly wasteful of public expenditure to drive disabled people out of properties that have been adapted for their needs if, as a consequence, they move into unadapted properties that have to be adapted at considerable expense to make them fit for them to live in. That is yet another illustration of the perversity of the whole policy. The exemption is long overdue and will remedy one of the blatant injustices and endemic nonsenses that are inherent in the bedroom tax policy.

Secondly, an exemption is proposed for tenants and close relatives who are in receipt of disability living allowance or personal independence payments and who, because of their disability, are not able to share a bedroom with someone with whom, under the bedroom tax regulations, they would be expected to share a bedroom. Again, that is a sensible, humane exemption that ought to have been agreed from the outset. Instead, the Government argued that discretionary housing payment could be made in such cases, ignoring three principal objections.

First, not everyone who might qualify for discretionary housing payment will apply for it. The Government’s own review has demonstrated that that is the case. Secondly, not every local authority will approve DHP in all appropriate cases. Thirdly, the DHP regime is temporary. The Government have not confirmed that it will continue to be available beyond 2014-15, despite being pressed by the Work and Pensions Committee to give such a guarantee. It is far better to exempt those who are in receipt of DLA or PIP from the bedroom tax than to depend on the vagaries of DHP.

I do, however, have an anxiety about the precise wording of clause 2(1)(b). I have mentioned this point to the hon. Member for St Ives and I hope that, if necessary, the provision can be amended in Committee. As hon. Members will know, there are two levels of bedroom tax: it is 14% when the tenant is deemed to have one bedroom more than is strictly required and 25% when the tenant is deemed to be occupying two or more bedrooms more than they need. The exemption in the Bill is qualified by clause 2(1)(b)(v), so that it does not apply when the tenant has two or more bedrooms more than is strictly needed, even when the tenant has established that he or she cannot share a bedroom and so needs one bedroom more than their strict entitlement. The provision appears, therefore, to leave the tenant exposed to a 25% benefit reduction in such cases, rather than the more limited 14% reduction, which would appear to be fairer. I may be wrong in seeing that as a potential loophole that needs closing, and I would be delighted to hear from the hon. Gentleman if that is the case. If not, I hope that he will consider an amendment in Committee.

[Mr Harper]

I want to correct for the record a factual point that the right hon. Gentleman made about future funding. In the autumn statement in 2013, the Chancellor announced that an extra £40 million would be made available in 2014-15 and 2015-16 to ensure that discretionary housing payment for those affected by the removal of the spare room subsidy would be maintained. The right hon. Gentleman said that no such commitment had been made. I just wanted to ensure that the facts were put on the record.

[Mr Raynsford]

I immediately withdraw my comment if that is the case. I was working from the Library briefing dated 3 September—so it is very recent—which indicates that no such commitment has been given. I apologise if that is not the case, but I was speaking in good faith on the basis of the latest available Library briefing.

Thirdly, we come to the last and most far-reaching exemption. Clause 2(1)(c) exempts tenants from liability to the bedroom tax when neither their landlord nor the local authority, in cases where they are not council tenants,

“has made a reasonable offer of alternative accommodation.”

That addresses the appalling unfairness by which tenants who cannot move into smaller accommodation because their landlord or the local authority does not have sufficient homes to provide that option still end up having their benefit cut.

The DWP’s own evaluation admits that in the first six months of the bedroom tax, only 4.5% of affected tenants were able to downsize. Even though the figure subsequently rose to 19%, the DWP still confirmed that social landlords

“had not yet been able to accommodate most of those who wanted to move to a smaller home”.

On those figures, we know that less than 10% of those who are affected and who want to move are able to do so because of a lack of alternative accommodation.

It is a common-sense amendment to stop penalising people who have no opportunity to move into smaller accommodation and so avoid the impact of the bedroom tax. It is a long overdue amendment and, once again, a far better safeguard than the hope of getting discretionary housing payment.

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[Sir Tony Baldry]

My hon. Friend the Member for St Ives sought to lull us all into a sense of reasonableness by asserting that this was just a Bill to tidy up and amend the spare room subsidy. It is clear, however, from the comments of the right hon. Member for Greenwich and Woolwich, that the real intention of those who support this Bill is to remove the spare room subsidy completely, so the purpose of the Bill is not what my hon. Friend the Member for St Ives said; it has a completely different purpose.

My fundamental point is still valid. If this Bill costs £1 billion, then given the welfare cap—which the hon. Member for Rhondda (Chris Bryant) and pretty much all Labour Members voted for earlier this year—the consequences of enacting it will mean that £1 billion must be saved from somewhere else in the welfare budget.

[Mr Harper]

I had not intended to intervene, but perhaps I can help to clear up the point. The cost of reversing the removal of the spare room subsidy is around £0.5 billion, as the hon. Member for Rhondda (Chris Bryant) confirmed. I spoke about the cost of the Bill because, whether the hon. Gentleman knows this or not, the Bill as drafted goes much wider than the removal of the spare room subsidy and fundamentally changes the way housing benefit is calculated—for example, it removes deductions for other people living in the household. That adds a further £500 million to the cost of the Bill. Members need to know that when they decide whether they will vote for it.

[Sir Tony Baldry]

May I invite my hon. Friend to intervene on me one more time to clarify and confirm this important point? Am I right in thinking that as a consequence of the welfare cap, whatever this Bill costs, whether it be £0.5 billion or £1 billion, that money must be saved and found somewhere else in the welfare budget?

[Mr Harper]

My right hon. Friend is absolutely right. Labour Members supported the welfare cap, as did the hon. Member for St Ives (Andrew George). I have yet to hear anyone explain how they will pay for the cost of this Bill and which benefits they will cut.

[Sir Tony Baldry]

I am grateful to my hon. Friend. The whole House must recognise that when we debate issues of welfare, we cannot pretend that we did not collectively, and by a very large majority, vote for the welfare cap.

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[Sir Tony Baldry]

I am sure the whole House is grateful to my right hon. Friend for that clarification and confirmation.

I thought it would be interesting to go back and read the Committee proceedings of the Welfare Reform Bill in 2006. Hon. Members might not recall, but, interestingly, when the proposal for limiting housing benefit for those in the private rented sector was first mooted, the original consultation paper also consulted on a proposal to limit housing benefit for those in social housing on exactly the same basis. Nowhere on Second Reading or in Committee did the right hon. Member for Stirling (Mrs McGuire), the then Minister, ever explain to the House or the Committee why the then Labour Government decided only to focus the housing benefit changes on the private rented sector and not to include social housing.

In Committee, various hon. Members sought to make exactly the same proposals and changes as are being proposed today. For example, Members were keen to know whether alterations could be made for under-25s in the private rented sector, and the Minister said that the changes were

“part of a package that is intended to make housing benefit more transparent and more understandable to people….I hark back to our short debate on Tuesday evening: the new local housing allowance applies only to those in the private rented sector.”—[Official Report, Standing Committee A, 2 November 2006; c. 424-45.]

In other words, the changes were being introduced entirely because the last Government thought it necessary to save money.

[Mr Harper]

Perhaps I can help my right hon. Friend. In 2004, my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) asked the then Minister, the late Malcolm Wicks,

“for what reasons the local housing allowance applies only to the de-regulated private sector.”

The then Minister replied:

“We hope to implement a flat rate housing benefit system in the social sector, similar to that anticipated in the private rented sector…We aim to extend our reforms to the social rented sector as soon as rent restructuring and increased choice have created an improved market.”—[Official Report, 19 January 2004; Vol. 416, c. 1075W.]

It is clear, despite all we hear from the Opposition, that the last Labour Government intended to do exactly the same thing.

[Sir Tony Baldry]

It is clear they had exactly the same intentions.

In the final debate in Committee on the revisions of the local housing allowance, when asked to make amendments similar to those being invited in the Bill, the Minister said:

“I reassure the Committee that we already have powers to make different provisions for different classes of people…However… adding the qualification suggested by the amendment to the local housing allowance would undermine its main advantages of simplicity, transparency and fairness….As I said during a debate on a previous amendment, the discretionary housing payment scheme is also in place. That flexible system will enable the local authority to target help to those who most need it.”—[Official Report, Standing Committee A, 2 November 2006; c. 434-5.]

May I suggest that this Government’s discretionary payment scheme for tenants in the social housing sector is exactly the same? Indeed, those comments could have been made by a Minister in this Government in exactly the same way as suggested by the amendments and reforms proposed for changing housing benefit for tenants in the social housing sector.

I conclude by saying that this Parliament has to be grown up about the issues. If the House introduces a cap by an overwhelming majority, we cannot gaily come along, turn up on a Friday in September and seek to spend £1 billion of public money without making it clear to the House and to the country where the consequential savings are to be made elsewhere in the welfare budget. This will happen whether it be under this Government or any other Government. It behoves the Labour party, Labour Front-Bench Members and the shadow Minister when he gets to the Dispatch Box to tell us in terms where he intends those savings to be made. If he cannot do that, it would be irresponsible to support the Bill in the Lobby today. There is no justification for a Labour party and a Labour Government who introduced reforms and changes to housing benefit for those in the private rented sector to think that tenants in the social housing sector should be treated any differently.

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[Chris Bryant]

Of course we voted for the overall benefits cap. I want to cut the cost of welfare in this country, but the best way of doing that is to ensure that the minimum wage and wages in general catch up with inflation. However, we have had inflation ahead of wages for every month except one since this Government came to power in 2010, which is making that a darn sight more difficult to achieve.

[Mr Harper]

As usual, the hon. Gentleman is making a speech that is very rhetorical but rather short on facts. The rate for overall rent collection by housing associations is 98%. Rent arrears for housing associations have actually fallen, rather than gone up, for two quarters in a row between September last year and March this year. On the latest data, they are still lower than they were last September. They have not gone up, as was suggested. Homelessness is down, arrears are down and rent collection is at 98%, so what he is saying is simply not true.

[Chris Bryant]

To be honest, I am always a bit dubious about this particular Minister’s use of statistics. I remember the days when he boldly stood at the Dispatch Box as Immigration Minister and told us that we did not have to worry about net migration because it was falling dramatically, and that we would be able to see that when the figures were placed in the public domain. I think it was last Thursday when we were shown that net migration had risen by 38%. Admittedly, he had stopped being Immigration Minister by then, but—[Interruption.] The truth is that, according to the Government’s own evaluation, one in five people affected are in arrears because they have not yet been able to pay any of their bedroom tax, and that another 29% have not been able to pay all of it. So the honest truth is that one in four of the people in social housing are in arrears. That is a long-term problem that will undermine the whole of the social housing sector.

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[Chris Bryant]

I am glad that I gave way to the hon. Lady, because she made a very fair point. In all honesty, if I were to take any single one of the Conservative Members of the House who will vote against this Bill today to meet any of the kind of constituents that we are talking about, their hearts would be changed. That is why I hope that, in the end, we will be able to get rid of the bedroom tax in its entirety. We will support the Bill today. I congratulate the hon. Member for St Ives on bringing it forward, but in the end I want to scrap the bedroom tax, and that is what a Labour Government will do if we are elected. If this Bill is allowed to go to Committee, I hope that the hon. Lady and others will support amendments that strengthen the move in that direction, rather than amendments that might pull us in a different direction.

[Mr Harper]

rose—

[Chris Bryant]

I have already said that I will not give way again. The hon. Gentleman will get a whole speech—[Interruption.] The Secretary of State has made many allegations in his life. I have hardly ever heard him substantiate a single one. If there was ever an example of someone who is involved in policy-based evidence making, that person is sitting right there now. He is a man who has invented evidence to back up a policy without any facts to back it up, so I will not give way.

[Mr Harper]

rose—

[Chris Bryant]

No, I will not give way. The hon. Gentleman gets to make a speech later.

In an e-mail to me, and I suspect to many others as well, the hon. Member for St Ives said:

“This is a compromise on what I had hoped to bring forward at this stage, which would have been to abolish the Bedroom Tax altogether.”

I am not sure with whom he is compromising. Obviously, it is not with the Conservatives: they are on a three-line Whip to vote him down. I suppose it must be with those on the Liberal Democrat Front Bench. Perhaps it is with the Deputy Prime Minister, the Chief Secretary to the Treasury or the Pensions Minister, who was one of the stoutest defenders of the bedroom tax and saw off all amendments in Committee, including the amendments that will now be brought forward today.

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[Chris Bryant]

And so do I, but I think the hon. Gentleman also wants to scrap the tax as well. Or has he reneged on the position in his e-mail? He sent me an e-mail, and I thought that it was a personal one, so I am taking him at his word.

[Mr Harper]

rose—

[Chris Bryant]

I am being very soft, because the Minister is smiling at me in a cheeky little way. Go on, then.

[Mr Harper]

Given that the shadow Minister took an intervention from the hon. Member for St Ives, he should take one from me. I thank him for giving way. The shadow Minister made a serious allegation that somehow we cooked up the allocation of discretionary housing payments on some sort of party political basis—based on the control of local authorities. I just want to make it clear that the allocations in 2014-15 were based on local housing allowance, removal of the spare room subsidy, the benefit cap and the underlying £20 million a year that is not related to welfare reform. Each element is based on the affected caseload in each local authority area and on the average loss. The reason why there may be higher amounts in London is that London borough rents for social housing are higher on average, and the benefit cap losses are greater. That is the reason. It is nothing to do with the party political control of the local authority, and I hope that he withdraws that appalling allegation.

[Chris Bryant]

Yeah, yeah, yeah. I have heard it all before.

Let us go back to the Liberal Democrats. There is of course more rejoicing in heaven when one sinner, or one party, repenteth—[Interruption.] I am not talking about the hon. Members for St Ives or for Westmorland and Lonsdale because they are slightly saintly in this regard. I hope that we will see an act of mass repentance led by the Liberal Democrat Chief Whip today, including the Pensions Minister, who declared in Committee that all the exemptions we are considering today were “absurd”, the hon. Member for Cardiff Central (Jenny Willott), who is now a Whip, the hon. Member for Redcar (Ian Swales) who, despite making charming speeches in Committee, voted against the exemptions, and the whole bang shoot of them who voted for the tax, voted against amendments and voted against our Opposition day motions on 13 November 2013 in this House and in the Lords. I love them all and I am delighted to hope that they will all vote with us—or rather that we will vote with them—en masse later.

The bedroom tax has pushed the poor further into poverty. I believe that it is at the heart of the malaise of Tory Britain, with millions in arrears, millions relying on food banks, millions having to choose between heating and eating, millions on low wages that have never caught up with inflation and millions on zero-hours contracts desperate to work more hours—two nations if ever there was such a thing. That is why we should scrap the bedroom tax. We will vote for this Bill today and we will try to amend it in Committee. If that fails, we, the Labour Government, next year, in May 2015, will scrap the tax.