Housing Benefit (Under-occupancy Penalty)

Nia Griffith Excerpts

Wednesday 27th February 2013 Commons Chamber

[Steve Webb]

It is astonishing that the hon. Lady should suggest that we are trying to get rid of social housing, given that we have built more affordable housing in the last year than was built, on average, over the preceding 10 years under Labour. That is an absurd suggestion. I entirely understand that the hon. Lady opposes everything—it is a kind of nihilism, which is fair enough—but her suggestion is not a credible option for a credible Government.

The research that we will undertake will include small-scale primary research involving a range of local authorities, social landlords and voluntary organisations in England, Scotland and Wales. The researchers will consider supply issues, rural effects—which were raised by my hon. Friend the Member for Argyll and Bute (Mr Reid)—and people who are unable to share rooms. When possible, they will also consider the effects on vulnerable individuals and their financial circumstances, social networks and family life. That was mentioned earlier as well.

[Nia Griffith (Llanelli) (Lab)]

Will the Minister give way?

[Steve Webb]

I hope to end my speech in a moment, but I shall be happy to give way to the hon. Lady.

[Nia Griffith]

If the Minister is so keen for people to receive discretionary payments, can he explain why the Government are taking to court a case in Wiltshire in which a disabled child is unable to share a room with a sibling? Why are they spending money on taking that case to court if they think that money should be given to such families?

[Steve Webb]

There is a limit to what I can say about cases that are currently in the courts. We have been given permission to appeal to the Supreme Court. We are, of course, applying the current Appeal Court ruling, and we have issued local authority guidance on how such cases should be dealt with. That case is very much in flux at present, and I do not want to say too much about it. However, let me make a general point that sums up what we are trying to achieve.

We are trying to tackle a massive structural deficit. The biggest two items of public spending are public sector pay and benefits. We have taken action on public sector pay, with little or no support from the Opposition. We have also had to take action on benefits. We have concentrated on working-age benefits because we have protected the state pension, and no Opposition Member has suggested that we should not have done that. We were trying to find £12 billion from public spending, and housing benefit is one of the biggest working-age benefits. We had tackled private sector housing benefit, and we had to look at the social sector. The most valuable way in which we can look at social sector housing benefit costs is to look at the million spare bedrooms that we currently subsidise, and to ask whether that subsidy is fair to the people who do not receive it.

These are difficult choices, but we have had to make them because of the mess that the Labour party left to us. I hope that the right hon. Member for Birmingham, Hodge Hill will begin with an apology.

--- Later in debate ---

[Kris Hopkins]

No, I will not. I want to make progress on the point I was making earlier.

We wanted to transfer our housing stock into a not-for-profit trust. We renovated 30,000 of those decrepit houses into decent quality houses. We put forward a £1 billion package to transform them into quality houses and put in a 30-year maintenance scheme to sustain them through that stand-alone trust. It is successful. Our Labour councillors, local Labour leaders and trade unions voted against that package, however, and actively campaigned against it. [Interruption.] I hear the scorn coming from the Opposition, but Labour does not want to take real action. Labour councillors and representatives were prepared to allow people to live in slums, rather than intervene.

[Nia Griffith]

Does the hon. Gentleman accept that some local councils, such as Carmarthenshire county council, kept their whole housing stock in-house and have done an excellent job in renovating section after section of it? He should not be saying that the deciding factor is whether a council decides to keep provision in-house or to give it to another authority to look after. What matters is what is done with that stock.

[Kris Hopkins]

I do not know where the taxpayers of Bradford were to find £1 billion over 30 years to renovate those houses. That was the reality and the reason why the housing was put into a trust, which is delivering. The people of Bradford living in social housing were betrayed by the Labour party.

I want quality homes and I shall work to make sure we get them, but the fact is that the housing benefit budget has doubled in 10 years, on the back of the previous Government’s economic failure and mismanagement. We have to spend within our means. The public rightly expect us to get a grip on the benefits regime—a regime the Labour Government allowed to get out of control. Labour failed to build social housing, failed to manage the economy and therefore clearly failed those who are living in social housing and those who need access to it.

--- Later in debate ---

[Nia Griffith (Llanelli) (Lab)]

In Wales, some 40,000 households will be affected by the under-occupancy penalty or bedroom tax, which is 46% of working-age social housing tenants who receive housing benefit. That is one of the highest percentages of any area in the UK, well above the UK average of 31%, and is due to the nature of the housing stock which is mostly three-bedroom houses. In my county of Carmarthenshire the housing department has identified 1,341 households that will be hit, 860 of which are in my constituency. At least the department is being proactive and trying to find people and help them, but it is an impossible task.

We have heard a good deal today about the range of people who should be regarded as exceptional cases, and I endorse the idea that people such as foster carers and those in specially adapted properties should not be penalised. The fact remains, however, that many people of working age in social housing are vulnerable individuals but do not count among those who will receive discretionary treatment. They have often been allocated social housing because they are in need—because they have, for example, mental health problems. Clearly, the discretionary money falls far short of what will be needed to cover the whole of the shortfall for those in need.

Where does that leave us? All hon. Members understand that some households have a spare room. That is simply because the overwhelming majority of council housing and housing association housing is three-bedroomed. In an ideal world, we would free up the three-bedroom properties for families who need them, but that cannot be done overnight. People have sometimes had to accept those homes because they are the only ones available. In recent years, housing associations have built one and two-bedroom properties, and Carmarthenshire county council, my local authority, is building some small bungalows, but they are already in great demand, and there is no way that local authorities can suddenly build enough new properties to accommodate all those who will be affected by the under-occupancy penalty.

Many of those who move to the available one and two-bedroom properties are pensioners, who are mercifully exempted from the bedroom tax. The problem, however, is simply that there are not enough one and two-bedroom properties. My hon. Friend the Member for Swansea West (Geraint Davies) spoke of incentives, but even without incentives, many people want to downsize when their children grow up—downsizing means that properties are easier to look after, and people often recognise the social value of giving up their property to a family and moving into a smaller one. However, they cannot do that if there are no properties to move into.

Let us look at the reality of what will happen. Let us be clear: people on low incomes just do not have extra money to cover the extra rent. As is explained in the House of Commons briefing, the amount of money that people receive in benefits has never been based exactly on need. There has always been a compromise between need and what could attract political support, but the fact remains that people on benefits live on scarcely enough to cover basic needs. There is already a massive squeeze on household budgets, with relentless price rises for essential items such as food, energy bills and bus fares. Those on the lowest incomes suffer the most, because they have no spare cash and have already cut back on anything that is not essential.

Many people will try to stay where they are to avoid disruption to their family and their children’s schooling, or the increased bus fares they would have to pay if they moved away. They will desperately try to pay the additional rent from their meagre budgets. That will mean people turning off heating and cutting back on food, and trying their utmost not to spend anything extra. However, the chances are that, despite their best efforts to keep their secured council house tenancy, because they value that and realise how difficult life is in the private sector, where they are pushed from pillar to post, they are likely to fall into arrears. That will have a negative impact on council housing and housing association budgets and cash flows, and leave less money for maintenance and new build.

Once a family falls into arrears, their problems will spiral. They will be prey to loan sharks as they try to make ends meet. What happens if they are evicted? The council will have to re-house them. They could end up in bed and breakfast or other privately rented property, all of which would be more expensive than the amount saved by imposing a bedroom tax on the extra room in their house. The trouble is that some private accommodation is only temporary—the family will move from pillar to post, with all the educational disruption that that will cause for their children.

The private sector has problems, because there is a lot of pressure from young professional couples who do not have the job security or deposit to buy their own homes. They are pushing up prices and taking the more desirable private properties. Another problem is that, although we have passed legislation to license landlords, it is taking a while for local authorities to do so. There is a lot of backlog in driving up standards and decency in private sector homes, which are often sadly lacking.

Just one aspect of that problem—letting agents—is being covered by my hon. Friend the Member for Rotherham (Sarah Champion) in the debate in Westminster Hall this afternoon. There is so much to tackle in the private sector to bring it up to standard.

If we take into account the cost of administering discretionary payments and the difficulties of trying to share them fairly, when there is clearly not enough money to go around, we realise that it would be far better not to implement the bedroom tax. It would be far better to stimulate growth, get more jobs and more people in work, and therefore increase the tax take. There would then be a chance to get the deficit down. In the meantime, we could use the money from the 4G sell-off to build more homes so we have less of a housing crisis.