Housing Benefit

Debate between Rachel Reeves and Mark Lazarowicz

Wednesday 26th February 2014 Commons Chamber

[Rachel Reeves]

Closing the loophole will indeed cost a huge amount of money—borne by local authorities that will have to do the work to sort out this mess.

Even as they seek to close this loophole, the Government do not have any understanding of the number of people affected by it. We asked Ministers on the Floor of the House to tell us how many people have been unlawfully charged the bedroom tax as a result of the loophole. On 13 January, the Minister of State, Department for Work and Pensions, the hon. Member for Wirral West (Esther McVey), who has responsibility for employment, told us in a written answer:

“This information is not available.”—[Official Report, 13 January 2014; Vol. 573, c. 449W.]

On the very same day, the Secretary of State told us in this House that

“the number is likely to be between 3,000 and 5,000”.—[Official Report, 13 January 2014; Vol. 573, c. 577.]

The next day, Lord Freud, the Minister for welfare reform, said in another place that

“the numbers involved in this anomaly are small and the amounts are modest.”—[Official Report, House of Lords, 14 January 2014; Vol. 751, c. 106.]

At oral questions this week, the Secretary of State told me that

“some 5,000 people may be affected.”—[Official Report, 24 February 2014; Vol. 576, c. 19.]

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

If 5,000 people were affected across the UK, I would expect about 50 people to be affected in Edinburgh. So far, the council has identified at least 113, and others in housing associations may be affected as well. I am sure that the situation is even worse in other places. Does my hon. Friend accept that as well as the extra cost and waste of money caused by the bureaucratic chaos, many people will apply for and get discretionary housing payments, so the savings to the Government, if there are any, are ultimately likely to be minimal? Why do they not just drop the entire tax completely?

[Rachel Reeves]

That is what we are calling on the Government to do today—to scrap the bedroom tax altogether.

We had no idea of the numbers affected and the Government clearly did not have a clue, so we asked the question that they should have asked: we asked local authorities how many people have been affected. Of 378 local authorities, 197 have now responded, including Birmingham city council, where 2,100 households are affected, Cardiff with 220 and Glasgow with 913, as well as Tory local authorities, such as Cheshire West and Chester council, where 275 households are affected, Tory Peterborough with 200 and Tory Wandsworth with 234—the list goes on. In total, our replies so far suggest that 21,655 households have been affected. That is on the basis of responses from barely half the councils, while many of them have said that they cannot give complete answers that include housing association tenants. It is therefore already clear that not only have this Government made a complete mess of their own policy, but they do not even have a clue how many people are affected by the loophole.

The Government have responded to this fiasco by scrambling to cover up their own mistake. They introduced a statutory instrument to close a loophole in their own legislation, without even giving this House an opportunity to scrutinise and debate it; it is only through this Opposition day that we can have a vote, which is why we called this debate today.

The bedroom tax was misconceived from the start, and it has been incompetently executed every step of the way. The chaos, confusion and extra costs are mounting, with the heaviest price being paid by the poorest and most vulnerable. The Government should scrap the bedroom tax today, but instead they are making it apply to an extra 40,000 households. If this Government will not scrap the bedroom tax, the next Labour Government will do so.