Housing Benefit (Wales)

Nick Smith Excerpts

Thursday 1st May 2014 Westminster Hall

[Steve Webb]

No. For example, when the Labour Government introduced the principle that private sector tenants with a spare room should have to pay for it, they did not describe the measure as a bedroom tax, so I do not see why a similar one for a social tenant should be.

[Nick Smith (Blaenau Gwent) (Lab)]

Will the Minister give way?

[Steve Webb]

No, I will not, because I have two hours of questions to answer, and I want to answer them.

On the role of discretionary housing payments, several speakers, including the hon. Members for Newport East (Jessica Morden), for Llanelli (Nia Griffith) and for Swansea East (Mrs James), mentioned the pressures in their area on the DHP budget. Let us go through the facts, because people might be thinking, “This is terrible. The Government have been withholding funds for local authorities.” Let me make it clear what has happened.

At the start of 2013-14, the figure for DHPs in Wales was £6.9 million; at the start of 2014-15, it was £7.9 million. All of us accept that those are substantial sums of money. We did not leave it at that, however, and one of the themes of the debate is whether we are monitoring and listening and then refining the policy. We listened in two important areas.

We first listened to the position of Welsh and Scottish—mainly—local authorities. We accepted the point also made by my hon. Friends the Members for Ceredigion (Mr Williams) and for Montgomeryshire (Glyn Davies) and others that remote rural areas have particular issues. We therefore allocated additional funding. In Wales, that was £143,000 to Ceredigion, £449,000 to Gwynedd and £387,000 to Powys. Interestingly, my hon. Friend the Member for Montgomeryshire said what a good job Powys had done as a local authority—I pay tribute to it—and one of the reasons it could do so is because the Government had recognised the additional pressures on remote rural areas and come up with the funding. He can therefore report back to the House that it was not largely an issue in his area, because we had monitored what was happening, responded and dealt with it.

We did not leave matters there. We had a national or GB-wide allocation and a remote rural areas allocation, but there might still be acute local circumstances requiring still more funding, so we came up with an additional £20 million pot and invited bids for funding from it. Three Welsh local authorities applied and were given money: Cardiff, Conwy and Caerphilly. No other local authority in Wales asked us for a penny. We cannot simultaneously say that there is unmet need in Newport, Swansea and other areas, and that local authorities are having to turn needy people away, when those authorities did not ask us for the money to top up their DHP budget to such an extent that central Government had unspent additional DHP pot still available for local authorities to claim.

What are those authorities doing? I have no reason to doubt the hon. Members who spoke, but if it is the case that they have constituents for whom the impact of the change has been inappropriate, harsh or unfair—many words have been used—what were their local authorities doing not drawing down the additional money that was available and that was not contingent on matched funding? We did not say to local authorities, “Ask us for more money—but only if you put more in”; we simply said, “Do you need more money?”, and only three Welsh local authorities asked for it.

A number of other issues were raised during the debate and I will respond to one or two. We are being told that allocations are now not based on need. Why is it appropriate to say to private tenants, “Your housing benefit may only cover a house of the size you need,” but not to say the same to social tenants? Why should we not say it to both? When I have challenged the Opposition about when Labour introduced what they now describe as a bedroom tax, but for private tenancies, they say it was for future tenancies and so it was fine. When we intervene on them and ask whether the policy would be fine for future social tenants, Labour Members mumble and go quiet, because they have no answer.

[Nick Smith]

Will the Minister give way?

[Steve Webb]

No, I will not. Labour cannot explain why it is right to say that private tenants have to pay for the size of the house that they live in, but that social tenants should not have to. Some suggestions were made about our views on excluding pensioners from the measure. They are generally excluded because, for example, expecting them to take work would be unrealistic. We have excluded pensioners for that reason, but it is pretty obvious why the Labour party wants to exclude social tenants, but not private tenants.

Someone said during the debate that we cannot both save money and make better use of the housing stock, but we are doing both of those things. The original estimated savings from the measure for the whole country of some £0.5 billion remains our expected order of magnitude. In addition, some people are moving to more suitable accommodation and freeing up accommodation for the people whose voice never gets heard—as has been said in the debate.