Housing Benefit (Under-occupancy Penalty)

Michael Ellis Excerpts

Wednesday 27th February 2013 Commons Chamber

[Stewart Hosie]

The Minister says it is a right. I believe it may be a matter of discretion. It is not at all clear whether my constituent could meet the criteria for a discretionary payment, and even if he did, getting it would depend on whether any money was left in the pot.

I did not intend to speak in such general terms. In the final three minutes, I will concentrate on what is happening in Dundee. We have figures from the council telling us that 3,387 households will be affected by this tax—and it is a tax. Of those, 583 will lose 25% of their housing benefit. That is a loss that will have the impact of a tax.

[Michael Ellis (Northampton North) (Con)]

Will the hon. Gentleman give way?

[Stewart Hosie]

No, as I have only two and a half minutes left.

The other 2,804 households will lose 14% of their housing benefit. Tenants in two-bedroom council properties could lose benefit entitlement of approximately £9.93 a week, which is £516 a year. Those with two so-called spare rooms will lose an entitlement of £20.07 a week, which is more than £1,000 a year. Does the Minister understand what the loss of £1,000 a year means to families who are already struggling to make ends meet? Does he understand the consequence of that level of indebtedness? Legitimate lending companies will not lend to people in those circumstances, and credit unions can only do so much. This policy will drive people into the hands of loan sharks and illegal moneylenders, and the consequences of that will be picked up by social work departments, health services and the police, at a cost to the public purse for a policy that is unlikely to save this Government any money in the first place.

--- Later in debate ---

[Jacob Rees-Mogg]

I am grateful to the hon. Lady, but even if people cannot work, they can take in a lodger, and can get £20 coming in without any effect on their benefit, so they can be better off, because the average that would be lost for one room is £14. The Government have a policy that makes people who are not in work potentially better off, and those who are in work can also be better off, because they will similarly be able to take in lodgers, but they might be able to move to cheaper housing, which they can afford to pay for themselves, rather than being dependent on the state.

[Michael Ellis]

As usual my hon. Friend makes an excellent series of points. As well as the option for those who cannot work of taking a lodger, does he agree that for those people who can work, and are in some work, in many cases the sums involved would require only two hours of the minimum wage per week to make up the difference?

[Jacob Rees-Mogg]

I am sympathetic to what my hon. Friend says, but I think that people need to be able to take responsibility for themselves and to make choices for themselves. The choice they have is either to maintain the benefit they need for the housing they need, or to stay in housing where they have an extra room and adjust their behaviour accordingly. It is not for the state, putting its expenditure on the backs of hard-pressed taxpayers, to fund indefinitely people’s lifestyle choices, and it is a choice if people decide to have an extra room that they are not actually using; they can choose whether to move to a smaller property or, under this new policy, to find a way of getting the extra income they need.