Housing Benefit

Rosie Cooper Excerpts

Wednesday 26th February 2014 Commons Chamber

[Rosie Cooper (West Lancashire) (Lab)]

I congratulate my hon. Friend the Member for Leeds West (Rachel Reeves) and the shadow team for giving hon. Members the opportunity to highlight what a farcical, ill-thought-through and shambolically implemented piece of legislation the bedroom tax has turned out to be. The identification of the technical error, to use the polite phrase, is another example of the fundamental failings of the legislation and of why the policy has been an abject failure from the beginning.

A year ago, I spoke in a Westminster Hall debate on this issue. In the past year, we have found out that the reforms do not encourage mobility in the social rented sector, that they have not strengthened work incentives and that we are not making better use of social housing. In February 2012, the impact assessment exposed the real motivation for the Government’s actions, stating that

“savings in Housing Benefit expenditure will only be realised in full if social tenants do not seek to move from the homes they are under-occupying”.

Fundamentally, the legislation has always been about the rhetoric of being tough on welfare spending. The Government want it to appear as though they are getting welfare spending under control. Sadly, it is just empty rhetoric.

In West Lancashire, only 33 working-age households have transferred to smaller properties and just three tenants have downsized through mutual exchanges, yet more than 1,000 tenants have the under-occupation indicator. Of those, 625 are in arrears, even though 401 of them were in credit or had a nil balance at the beginning of the financial year. In 81 cases, there has been a notice seeking possession against those who had been in credit or had a nil balance on their rents. Those figures are just for the first six months. That shows the speed with which families have been forced into financial turmoil and uncertainty by the bedroom tax.

West Lancashire borough council has identified 150 council tenants who have been affected by the technical error. That is 150 families who have been pushed to the financial edge unfairly and unnecessarily. We know that that is the case because, in trying to resolve the mess, the council has stated that the situation is complicated by those who have claimed discretionary housing payments. In avoiding duplication, the council will have to recover the payments and reconcile them against the tenants’ overpayments. That is what I call a bureaucratic mess, and a very costly one.

[Philip Davies]

Will the hon. Lady explain why she thinks that a single person on housing benefit, who perhaps does not go to work, should be able to live freely in a three-bedroom property, when a couple who are hard at work and cannot afford such a large property have to pay for that property for them? How can she say that it is fair that people who are working hard and who cannot afford such a large property are paying the costs of single people who do not work at all?

[Rosie Cooper]

Only a Government Member could begin to pose that question. The Government need to provide the means to make the change. Single people do not necessarily want to sit in a three-bedroom house. They need a property to go to. The Government need to provide the means to enable them to make that change. I will not be taught any lessons by the hon. Gentleman.

[Yvonne Fovargue (Makerfield) (Lab)]

Does my hon. Friend agree that housing benefit is an in-work benefit, not an out-of-work benefit? To talk about people sitting at home, out of work, on housing benefit is completely out of context.

[Rosie Cooper]

I absolutely agree with—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I know that you are enthused by the debate, Mr Davies, but it does not help if we have a separate debate going on while a Member is speaking. It would be helpful if we could get through all the speakers. I hope to get everyone in.

[Rosie Cooper]

I agree with my hon. Friend the Member for Makerfield (Yvonne Fovargue). I did not hear the hon. Member for Shipley (Philip Davies) say that those people were out of work.

The idea that welfare spending is coming under control is a myth. West Lancashire borough council has stated that its intention is to raise rents by 4.6% from April. That will increase housing benefit payments by £630,000 a year. We are seeing a significant and rapid increase in the council’s arrears. From being in the region of £375,000, they have shot up to nearly £500,000. How is that keeping welfare spending under control? Arrears are increasing across the sector. Social landlords have had to take on additional staff to collect rent and give budgeting advice.

Let us not forget that the Government have acknowledged that they have made a complete mess by rushing to prop up the housing benefit system using discretionary housing payments. Disabled people and people who need their own bedroom for medical reasons are going cap in hand to prove that they are poor, to get a discretionary housing payment handout. I understand that a large amount of discretionary housing payment is going unspent because the council’s means test is too stringent.

Some councils, believe it or not, are taking disability living allowance into account when determining whether someone should receive discretionary housing payment, even though the guidance from the Department for Work and Pensions states that councils should not do so because it inflates a disabled person’s income unfairly. Disability living allowance is meant to fund additional costs that are due to the claimant’s disability or health issue. It is not meant to fund the additional housing costs resulting from the spare bedroom tax.

Discretionary housing payments should be awarded for 26 weeks or 52 weeks, but some councils, including West Lancashire borough council, are offering them for only 13 weeks, which leads to more form-filling and bureaucracy.

There is no escaping the fact that welfare spending has to be addressed. However, the snapshot that I have given of West Lancashire—just one community—shows that the bedroom tax is not the way to do it. The abject failure of this policy is costing taxpayers more and more. Although Ministers are talking tough, they are, as ever, failing to deliver. In their case, talk is not cheap. The only transitional arrangement that we need to discuss is the transitioning of this legislation off the statute book.