Under-occupancy Penalty (Wales)

Steve Webb Excerpts

Tuesday 22nd January 2013 Westminster Hall

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I congratulate the hon. Member for Newport East (Jessica Morden) on securing the debate. It is good to see the number of hon. Members who have taken part. I will try to respond to the points that she has raised. In general, I will take interventions from her but not from other hon. Members, until we get near the end of the time.

Let me set the context. Obviously, we want to focus on the impact of the policy on Wales, and I want to respond to some of the particular points made by the hon. Member for Newport East, but for the record, the Government are seeking to take £18 billion a year of what we spend on social security and tax credits because of the vast amount of borrowing that we had to deal with. It is not that the Government woke up one morning and thought, “Wouldn’t it be nice to cut people’s housing benefit?” We have to stop a situation in which for every £3 the Government were raising in tax, they were spending £4. That is unsustainable. It is not fair to the children whom we are expecting to pay our debts. That is why the Government are looking to save money on social security.

Housing benefit is a vast and rapidly rising bill and inevitably had to be looked at, so within the housing benefit budget, what can be looked at? We have looked at private sector rent. We have looked at shared accommodation for younger people. Within the social sector, there are two reasons why spare bedrooms—where they are spare bedrooms—need to be looked at. The first is the unfairness between social tenants and private tenants. At present, a private tenant cannot have housing benefit for a property with spare bedrooms. They can have housing benefit only for a property of the size that they need. However, a social tenant living next door can have housing benefit for a bigger house. That is an unfairness. At a time when we are trying to take costs out of the system to deal with the deficit, being fairer to private tenants and not giving social tenants an advantage over and above the advantage that they already have through a subsidised rent is an issue of fairness.

There is also an issue of fairness in the system in relation to people who are overcrowded. There was absolutely no mention in the hon. Lady’s speech of people who are living in overcrowded accommodation. If we have a limited social housing stock—frankly, successive Governments have failed to build enough social houses; it is a finite stock and a social house, with a subsidised rent, is a very valuable thing—we owe it to those who are overcrowded to make maximum use of the housing stock.

Getting from here to there is a painful and difficult process. I accept that, but many housing associations and social landlords around Britain have been creative and imaginative—I accept that the position will be different from area to area—about moving people who were in overcrowded accommodation into family homes and finding places for people in under-occupied accommodation to move to. It is not a static case—on the register this week, there are only so many empty properties. Social landlords have to start getting to know their tenants much better than they have in the past. All too often, they have not done that. That process—I accept that it will be a difficult transition—should lead to better use of the social housing stock.

[Jessica Morden]

Will the Minister accept that it is possible to be creative without being cruel? It would be possible to work far more closely with housing associations in relation to asking them to do more about under-occupancy, but the broad-brush approach that will be taken in April will hurt many people.

[Paul Murphy]

It is about saving money.

[Steve Webb]

The right hon. Gentleman says that it is about saving money. I do not apologise for the fact that we have had to save money, because otherwise we would just pile up debts for our children, and that is not progressive, wherever someone is on the political spectrum.

On the hon. Lady’s specific point, yes of course, in theory, successive Governments have tried to work with housing associations and social landlords, and it has not worked, because we have the best part of 1 million empty bedrooms paid for by housing benefit at the same time as we have thousands of people in overcrowded accommodation. The challenge is therefore to use the need to save money to create fairness between private and social tenants and to create fairness between people who are living in overcrowded accommodation and those who have spare bedrooms.

[Ian Lucas]

Will the Minister give way?

[Steve Webb]

No, I want to respond to the hon. Lady. She said that these are the lifetime homes of some people, and I entirely accept that. That is why we have exempted pensioners as a group. A set of pensioners have spare rooms, living in the home that they have occupied all their lives, and we are not touching them for the reasons she gave.

Those who are below pension age can clearly respond in a range of ways. It will be different for every person. For example, we are often told that some people in social housing or on housing benefit are in work, and the average £12 shortfall in Wales is the equivalent of two hours at the minimum wage, so for some people, as the hon. Lady said, it will be a matter of working a few extra hours. I accept that that is not an option for everyone, but it is for some. Others might have the opportunity to do a part-time job, if they are not currently. She said that some would not be able to take in a lodger or tenant, but some can. I had a constituent ring me up to say, “I am in a three-bedroom house, I live on my own and I have just had one of these letters. What shall I do?” We started talking and she said, “To be honest, my brother and sister-in-law would quite like to move in. Can we do that?” Yes, they can, and that would be using the house to much better effect. That will not be right for everyone, but there will be a range of responses. The system is geared so that if people have a boarder or sub-tenant—most social landlords should allow a sub-tenant, in an organised way—they get to keep at least the first £20 a week of the income. Those are all options, which will not work for everyone, but there is a range of them.

The hon. Lady mentioned Bron Afon and Duncan Forbes. I have looked at some of the case studies. One of them is just wrong. In the case she mentioned of the ex-serviceman with a teenager who might go off to university, provided she is not away for more than 13 weeks at a time, she can have the bedroom. That means that social landlords have to be good at communicating with their tenants. I have seen good examples, although I have also seen some bad ones. The other examples may well be true but I saw that case and it jumped out at me, and I thought, “That is not right”, although there is a description of how distressed the man was. Someone has a duty to know the rules—we have to communicate them effectively, but so do the social landlords. I have seen letters sent out by social landlords that are excellent, that explain the rules and what discretionary housing payments are, but I have seen others that do not even mention discretionary housing payments. We have to ensure that social landlords up their game.

I must respond to several points on discretionary housing payments, which are crucial. The right hon. Member for Torfaen (Paul Murphy) cited a figure of £50,000, £54,000 or something. The figure for that local authority for the year we are talking about, when the policy comes in, is not £50,000 but £193,000. That is when the policy comes in. Clearly, the point of discretionary housing payments is not to make up everyone’s shortfall, or we would not make any money out of the policy—we would not be saving any money—but it is for the hardest cases.

There is an issue to do with whether we try to prescribe in primary or secondary legislation the exact categories of people whom we want to help, of which one is people with major disabled adaptations. We could have done that, but the second that is done and we try to define a substantial adaptation, we get someone whom we did not think of just the wrong side of the line and someone whom we did not need to include on the right side of the line. For example, if someone has had stairlifts, extra rooms, widened doors and all the rest, it is pretty obvious, or if someone has had a handgrip, it is pretty obvious, but what about all those in the middle? Rather than us in Whitehall trying to define for every local authority, for every sort of adaptation, that this is in or this is out, we have trusted local authorities.

We have given the money specifically for people who have had disabled adaptations or, to give another example, for foster carers; for some of the other housing benefit changes as well, we have given the councils a pot of money and said, “You know your local people. You can meet people case by case.” Thus, a lone or separated parent who has the kids regularly and needs that room, and nothing else can be done, could go to the local authority for DHP. We were not going to try to prescribe for DHP, however; we were not going to legislate for such things as whether so many nights qualify or whether there are certain arrangements for the kids. The idea is that the local authority treats people as individual human beings and meets their individual needs. The pot is not unlimited—

[Ian Lucas]

Will the Minister give way?

[Steve Webb]

I really want to respond to the hon. Member for Newport East, because I have other things to say about the points she made.

We tried not to prescribe in a rigid, central, one-size-fits-all way, but to make substantial extra money available so that people could respond individually.

[Jessica Morden]

Does the Minister accept that the pot of money is very small compared with the number of people we are talking about? If the aim of the policy is to use the housing stock better and to save money, it will fail on both counts. As we have mentioned—it would be helpful if he could address this point—the pressures in Wales are because we have larger properties and few smaller properties, and because people will pay more in private rents.

[Steve Webb]

On whether people pay more in private rents, a lot depends on where the people who occupy the houses that have just been vacated come from. For example, if someone is in overcrowded private rented accommodation, on which they are claiming housing benefit, and they move in to reduced rent social housing property, that saves us money, so a lot depends on the dynamics. It is not a static situation. The hon. Lady said that this is not much money, but take her local authority of Newport: last year, in 2011-12, Newport got £47,000 towards DHPs, and next year, it will get more than a third of £1 million.

[Jessica Morden]

It is not enough.

[Steve Webb]

Of course, it is not enough for everybody who will lose, because the policy is part of trying to reduce the deficit.

The hon. Lady made other points about the lack of suitable housing stock, and that is a long-term issue that needs to be addressed. Housing associations and local authorities, when looking at the future housing stock, need to consider unmet need. Of course, there is a lead time on that, but if we just sit and wait, it will never happen. Yes, this is a trigger to tackle the deficit, but it is also a trigger for a much more rational allocation of the houses we already have, and for a much more rational building policy, so that we build homes that meet the needs of the people we have. All too often in the past, that has not happened, and it is time that it did.

The hon. Lady asked about the impact on Wales, and she is right that we are talking about roughly 40,000 households. The average loss in Great Britain as a whole is about £14 a week. In Wales, because rents tend to be lower, it is about £12 a week.

My hon. Friend the Member for Ceredigion (Mr Williams) mentioned rural communities. We will evaluate the impact of the policy over a two-year period, but with interim reports that we will publish across England, Scotland and Wales, and across rural, urban and suburban constituencies. As a consequence of debates in the House of Lords on the Bill as it went through, we agreed—we were well on the way to doing this anyway—proper evaluation, so if there are particular issues in Wales or in rural areas, we will have the chance to respond, for example, by adjusting the allocation of discretionary housing payments. That allocation has been set for 2013-14 but not beyond, so if we learn things during the year, we can look at whether we need to change the allocation. We could change the rules of the scheme. Obviously, that is a more fundamental change, but we have a fairly flexible lever if we get early signs that there are problems in particular areas.

We are trying to support social landlords, so we have worked with the Chartered Institute of Housing to produce a toolkit for landlords called “Making it Fit”, which provides an overview of how different social landlords are responding. The last thing I want to convey is that the change will be easy for people, that there will not be people who find it difficult, and that it will not be disruptive. However, there is a difference when social landlords engage, get in there early and get to know their tenants—for example, those who sit with their tenants and say, “Are you claiming all the benefits you are entitled to? Could you be getting disability living allowance, for example, which would top up the household income?” There is chance to have a constructive engagement with tenants to find out their needs and what is happening. Many social landlords do not know whether their tenants are even there, or whether they are sub-letting. A lot of beneficial things that need to happen could happen as a result.

[Jessica Morden]

Does the Minister accept that with the report, that is precisely what Bron Afon has done? It has spoken individually to every single person who is affected, and in the report, there are the harrowing personal stories that people have told.

[Steve Webb]

I accept that Bron Afon has been out and talked to its tenants, and if that has triggered the process, it is a good thing. As I said, I have some doubts about at least one of the case studies, and in terms of some of the other case studies, I hope that the housing association has explained what discretionary housing payments are, because I think, from memory, another one had a disabled adaptation, or something like that, and that is what DHPs are for. It certainly was not a criticism of Bron Afon, but there are social landlords who are upping their game, engaging, and trying to generate extra revenue through benefit take-up. They are being creative, looking at the private market, and they are moving people around. They accept that the change is coming and are not simply saying, “Oh, this is terrible”, but doing something constructive. I welcome any housing association or social landlord that does that, and they deserve credit.

I have mentioned the discretionary housing payment money. The particular people we had in mind are those with disabled adaptations and foster carers, but the local authority has discretion to use it in individual cases. I do not belittle the impact that this significant change will have. We need to save money, but we have the potential to make better use of our social housing stock to deal with not only under-occupation, but overcrowding, and to be fair between social and private tenants. At a time when we are trying to take very large sums of money out of the housing benefit bill to deal with the vast, yawning deficit that was not dealt with, we need to look at this area but manage the process, and that is what our research and use of DHPs is designed to achieve.