Under-Occupancy Penalty

Stephen Doughty Excerpts

Tuesday 5th November 2013 Westminster Hall

[Mrs Lewell-Buck]

My hon. Friend is of course correct. It will be far easier to leave people in the homes that have been adapted to meet their needs.

In a survey of the 51 largest of its associations, the National Housing Federation, which represents housing associations, found that more than half of those who were affected by the tax could not pay their rent in April or June. For many of those people, that was the first time that they had ever fallen behind with their rent.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is making an extremely strong speech. There are also concerns in Wales. Community Housing Cymru, which represents social housing providers, has made a similar point: 87% of their members have seen an increase in arrears, which has not been seen elsewhere. That is matched by the experience of my council, which has seen a £200,000 increase in arrears on the same period last year. The issue is affecting councils and housing providers across the country.

[Mrs Lewell-Buck]

My hon. Friend makes a valid point. It is decent, law-abiding people who have always paid their rent who are being targeted by the tax.

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[Sheila Gilmore]

Yes, indeed. Landlords will have quite limited choices. If they are not going to do anything about their modernisation programme, they will certainly be looking at their new build programme or at raising rents, which, again, affects all tenants. It is not true to say therefore that these issues affect only those who are directly affected by the bedroom tax.

If the bedroom tax means that less income is coming in and that there is less ability to start and fund new build programmes, it will not increase supply; it will do precisely the opposite of what Ministers have tried to claim that they want it to do. We really need to move away from this approach and to realise that it is not working. We have not only the arrears, but a whole administrative apparatus to help people who have run into arrears and to process discretionary housing payments and appeals for discretionary housing payments, which may have to be reprocessed every year or six months. That involves a cost that people did not have to meet before.

The glib answer is that discretionary housing payments are the solution, but they reduce savings, which is yet another reason for thinking this whole thing has been a bit pointless. Furthermore, people who have, by definition, been means-tested are now being given a further means test—that is what this comes down to—on their already low income to see whether they qualify for discretionary housing payments. The forms ask them about their expenditure and about whether they have Sky television or whether they smoke.

Things such as disability living allowance, which is specifically given to meet the costs of disability and illness are being taken into account in declaring that people can afford to pay the bedroom tax. People were never given DLA to pay their rent, and if they are using it to do so because they have been deemed to have enough income to meet the gap between their rent and the housing benefit that they receive, they are not spending their DLA on their disability. Having a second tier of means tests is quite unacceptable. I talked about outside toilets, and we are back in the 1930s again with this issue; we are back with the means-test officer telling people that they really did not need the sideboard or the record player they had had for some years, because they were too poor.

[Stephen Doughty]

Or we have the Minister, Lord Freud, telling split-up families that the kids should share a sofa bed—that is the type of perversity being suggested by Ministers, and that is the means-testing culture that we are getting into. That is a sad message for a Minister to send out.

[Sheila Gilmore]

I thank my hon. Friend.

We must never forget the personal picture and the difficulties involved. One constituent is a cancer patient, although he is, fortunately, recovering. He has a two-bedroom house—nothing terribly big—and his three children come to him every weekend. One suffers from autism, which creates difficulties if the children have to share a room. My constituent wrote to the Prime Minister asking what he should do, and the Prime Minister said, “Apply for a discretionary housing payment.” Well, my constituent has, of course, applied for a discretionary housing payment, and he has been refused. He appealed, and he has been refused. I am not quite sure what he is expected to do next, other than to fall into rent arrears, which is what is happening. He is worrying about that, which probably is not helping his recovery. Alternatively, he could move, which will make it virtually impossible for him to have his boys to stay, which cannot be right.

I hope that we all agree that we want to increase the housing supply and particularly the affordable housing supply, so we have to agree that the bedroom tax is simply the wrong way to do that. It starts at the wrong end, and it is not resolving the problem, for all the reasons that have been given. If we really want to improve housing supply, we have to do two big things. One, obviously, is to invest in it, and the other is to allow local areas to decide on the appropriate way to address their problems. There will be differences; I have described how different my city is from some places in the north-east of England, which face quite different issues. We therefore need to allow local knowledge and local planning to come into play, but that is not happening with the policy that is being imposed.

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[Julie Hilling (Bolton West) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Riordan. I congratulate my hon. Friend the Member for South Shields (Mrs Lewell-Buck) on securing this most important debate and on her fantastic speech.

A senior officer from one of my social housing providers has said:

“It is as if the Government was following a blueprint of how to ruin social housing within 5 short years.”

Let me give the background to why she said that. Since April, Bolton at Home has had arrears of £200,000. Many people are only partially paying their rent, and 9% of those in debt have arrears of more than £600. Bolton at Home is about to take 25 cases to court because of arrears due solely to the bedroom tax. Wigan and Leigh Housing has arrears of £650,000 and the number of people in debt has nearly doubled to 11,500, so it has revised its income rate to 96% of the amount it should get.

There are knock-on effects on costs. Providers now have to deal with an increased number of calls to the call centre and to employ more people to collect rents. There are increasing court costs, and many other costs besides. All providers are finding it harder to let three-bedroom houses, and have had to increase the number of void days on which they do not collect rent, which again costs them dear.

The Minister of State, Department for Work and Pensions, the hon. Member for Wirral West (Esther McVey), has told social housing providers to knock down three-bedroom houses and build something suitable. I would question her reasoning in the first place, but where are they supposed to find the money to alter houses or to build new ones when they are losing so much money because of the policy?

If the policy is so successful, why have the Government recently increased the discretionary housing payment pot by millions? Welcome though that is, it demonstrates how the policy is just not working. It is ill thought out, and in areas such as mine the majority of the housing stock is three-bedroom, so it will do nothing to alleviate overcrowding. It hinders the building of new homes and simply places people in abject poverty.

Behind housing providers’ problems are real-life difficulties for real people. Most of us would think that people with two children would be suitably housed in a three-bedroom house, but sadly not this Government. Indeed, the Secretary of State for Education clearly agrees with me, because he thinks that every pupil should have a bedroom in which to do their homework. He should speak to colleagues in other Departments who think it entirely appropriate for a 15-year-old studying for their GCSEs to share their bedroom with a crying toddler, or for children to have their education disrupted when their parents are forced to move home—not once, but several times—when they or their siblings reach a milestone age at which the family’s accommodation is deemed unsuitable.

[Stephen Doughty]

My hon. Friend is describing a common circumstance, certainly from the stories I hear from my constituents. Does she agree that the cumulative impact—the stresses caused by high energy prices, the bedroom tax and all these things coming together, particularly for disabled and vulnerable people—is causing pain and distress to many of our constituents?

[Julie Hilling]

My hon. Friend’s intervention leads me nicely to a study by York university and the Northern Housing Consortium, “Real Life Reform”, which states:

“Households are surviving on restricted budgets and struggling to get by. 65% have less than £10 per week to live on following rent and essentials such as food and bills. 37% have nothing left each week. Households are intending to cut back spending on food and fuel. 25% spend less than £20 per week on food. Eight out of ten households are already in debt and 83% are worried about getting into more debt. Over half of those in debt doubt they’ll ever be able to clear these debts… Households are reporting increases in levels of stress and depression. 88% of households are worried welfare changes will impact on their health and wellbeing. Parents report they are going without to protect their children’s health.”

That is a story of absolute misery.

I want to tell a story about two of my constituents, whom I will call Mr and Mrs Smith to protect their identity. Mrs Smith came to see me at my surgery because she was absolutely desperate. She came with her mother, but actually looked older than her mother because of the worry and stress she was going through. Her husband is desperately ill, having had a double lung transplant. Sadly, he is unlikely to survive. He needs apparatus to help him to breathe, so there is no way she can share a bedroom with him. The box room is full of oxygen tanks, and the fire brigade has said that no one can sleep in a room with oxygen tanks, because of the risks.

Mr Smith sleeps in one room, Mrs Smith sleeps in another—she cannot sleep with him because of the apparatus and the noise it makes—and oxygen tanks and other equipment occupy the box room, but they are deemed to be under-occupied by two rooms. That is absolute nonsense. They cannot get discretionary housing payments, because he gets disability living allowance, which just enables them to get about and to lead as normal a life as possible, bringing them up to other people’s income. The DLA is taken into account, which puts them over the rate at which they would qualify. Does the Minister think it right that DLA is taken into account? If not, will he do something to change that?

I will finish with a quote from another of my housing providers:

“It’s the first time I’ve ever seen a policy applied retrospectively. We are used to managing change, but not when the goalposts are moved overnight.”

The policy is cruel and heartless. It will not achieve the savings predicted by the Government. It will not allow the building of new homes and it is causing untold misery. I wish the Government would rethink: do as the Labour party says and abandon this cruel, heartless tax now.