Under-occupancy Penalty (Nottingham)

Steve Webb Excerpts

Monday 18th March 2013 Commons Chamber

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

I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on securing this debate. She made no reference whatsoever to the context in 2010 in which an incoming Government had to make decisions or to the fact that the previous Government spent £150 billion more in their final year in office than they had coming in. She knows perfectly well—she did not mention this, but she knows it—that any incoming Government, including an incoming Labour Government, would have sought to take tens of billions of pounds out of public spending. She also knows that out of public spending there are two big things on which Governments spend money. The first is public sector pay, on which the Opposition were very slow to agree with us—they have now finally agreed—that restraint was required. The second is what is loosely called welfare—benefits, tax credits and pensions. It is completely implausible that an incoming Labour Government would not have cut social security spending. This is not a debate about whether social security spending has to be cut back; it is about how.

[Lilian Greenwood]

Will the Minister explain why his Government will deliver a tax cut at the beginning of April for the highest earners in the UK? Individual millionaires will get more than £100,000 each. Why is he choosing to balance the books on the backs of poor people in my city?

[Steve Webb]

I would be happy to respond to the hon. Lady’s question, although I was trying to keep to the subject of her debate. The higher rate of income tax in April will be 45%. For 13 years under the previous Labour Government the highest rate of income tax was not 45% but 40%. If she thinks that a 45% rate of income tax is immoral, why was a 40% rate acceptable for 13 years under the previous Labour Government? In addition, higher earners will pay a bigger share of tax as a result of a combination of measures. The hon. Lady has chosen to mention one, but if she takes the capital gains tax increases and the cuts in pension tax relief into consideration, she will see that overall we are taking more from higher earners than the previous Government did.

Let me focus on the specific issues that the hon. Lady raised. A number of voices were silent in her remarks. She used the word “fairness” and seemed to think that the suggestion that benefits should, broadly speaking, support a household size that a family needs rather than spare rooms was immoral, but that had been the case for private sector tenants for a long time under Labour party policy. The local housing allowance scheme introduced by the previous Government was, broadly speaking, for benefits to cover the household size needed. Why is it immoral to ask social tenants to pay the cost of a spare room, but not private sector tenants?

[Graham Jones (Hyndburn) (Lab)]

Will the Minister give way?

[Steve Webb]

I am sure that the hon. Gentleman will forgive me if I continue to respond to the points raised by the hon. Member for Nottingham South.

Why is it acceptable to restrict private sector tenants on a low income, but okay to allow social tenants to have a spare room?

[Julie Hilling (Bolton West) (Lab)]

Will the Minister give way?

[Steve Webb]

I hope that the House will forgive me, but I want to respond to the points raised by the hon. Member for Nottingham South and have limited time to do so.

There is an issue of fairness as between private sector tenants on a low income and social tenants on a low income, but there is also a second issue of fairness. Our estimates for Nottingham are ballpark figures—the hon. Lady is right to say that we do not have exact figures for her constituency, but we do have regional figures and we can estimate overcrowding—but we estimate that of the order of 2,000 or so households there are overcrowded.

[Lilian Greenwood]

I thank the Minister for giving way. I specifically asked Nottingham to provide me with the figure for the number of people who face overcrowding and it is just short of 630 households, compared with 6,103 households that face the bedroom tax.

[Steve Webb]

One figure over which there is no dispute is the number of people on the housing waiting list in Nottingham, which is 12,000. They are desperate for a family home or for family accommodation, whereas 6,000 households have spare bedrooms.

[Graham Jones]

Will the Minister give way?

[Steve Webb]

No. There is an issue about fairness between social and private tenants and between those who face overcrowding and are desperate for a home and those who have spare rooms, and about fairness for those on the waiting list.

The hon. Member for Nottingham South raised a number of specific issues to which I want to respond. She asked whether people who will find themselves in the private sector will be able to rent if they are on housing benefit. The number of people in the private sector on local housing allowance recently passed the million mark, so more than a million people in the private sector are getting housing benefit. The suggestion that landlords will not rent to people on housing benefit is therefore demonstrably false.

[Lilian Greenwood]

I would be interested to hear whether the Minister ever speaks to anybody in Nottingham, because the experience of social tenants who are finding it difficult to move into the private sector was provided to me by the local homelessness charity, Framework, which has a pretty good idea of what is happening in our city.

[Steve Webb]

All I can say to the hon. Lady is that there are more than 1 million people on housing benefit in the private rented sector. There is not a little island called Nottingham where those people do not exist. Across the United Kingdom, private sector landlords are renting to people on housing benefit.

The hon. Lady mentioned Nottingham City Homes. I welcome some of the measures that it is taking to assist people who are affected by this measure. For example, it has produced a lodger guide so that any tenant who wishes to take in a lodger has information about how to do so. That will not be the answer for everyone, but it will be the answer for some. It will mean that there is better use of the scarce resource that is the empty or unused bedroom in social housing.

The hon. Lady mentioned HomeSwapper, a mutual exchange website that Nottingham City Homes is encouraging people to refer to. That is very welcome because it tries to make better use of the valuable social housing that we have. Nottingham City Homes ran what I think it called a speed-dating event to help match people who want to move to smaller properties with those who want to move to larger homes. It is true that this measure saves money, but it also leads us to make better use of the very underutilised resource of our social housing stock. As these initiatives demonstrate, there are some people living in overcrowded accommodation, whose voice was silent in the hon. Lady’s speech, and some people who are living in accommodation with spare rooms.

There is an issue with what one might loosely call “hard cases”. Those include people for whom a spare bedroom is not spare, but is very important. The hon. Lady dismissed in a very new Labour sort of way the £700,000 that is being given to Nottingham next year in discretionary housing payments, as if it is a drop in the ocean or a trivial sum of money. That money is being given to local authorities so that they can assist people on a case-by-case basis who approach them and say that there is a particular reason why the measure would be unfair or adverse in their case.

[Chris Leslie]

Will the Minister give way?

[Steve Webb]

I hope that the hon. Gentleman will forgive me if I try to respond to the hon. Lady.

It is said that the money will help only a relatively small proportion of people. That is entirely true because it is for exceptional cases. The basic principle is that if people have spare bedrooms, they should either put somebody in them or pay for them, perhaps by earning more if they are able to.

It is important to say that the price we are asking for a spare bedroom is just under £2 a day in Nottingham. That is what we are asking private renters on a low income to contribute anyway.

[Graham Jones]

Will the Minister give way?

[Steve Webb]

No.

We are asking private renters in Nottingham and elsewhere to pay just under £2 a day for a spare room. Obviously, if somebody is on benefit, that it not easy. However, for those who want to retain their spare room, that is the contribution that we are asking. Many people on a low income who are renting in the private sector pay that money.

There were scare stories about mass evictions and homelessness before the limits came in for the private rented sector, but those things have not happened. Just the sort of alarmist language that the hon. Lady used about mass evictions and the rest of it was used before the caps came in for the private rented sector. In some cases, people have traded down. In other cases, people have made a contribution towards retaining the spare room.

The hon. Lady mentioned the Department for Communities and Local Government and ring-fenced funding for under-occupation. She will know that the strategy of the DCLG has been to let local authorities decide their own priorities and not to have ring-fenced funding.

The hon. Lady mentioned the combination of this measure and other measures. She mentioned the reduction in support for council tax benefit. Nottingham city council has taken the decision to charge some of its working-age benefit recipients a contribution to the council tax. Not all local authorities have done that.

[Lilian Greenwood]

It did not have any choice.

[Steve Webb]

Well, other local authorities have avoided doing that. It is noticeable that many Labour-led local authorities have decided to pass the cost on to their tenants. For example, my local authority of South Gloucestershire has not passed on the cut to tenants, so they will receive full council tax benefit. Nottingham city council, however, has decided to expect its low-income tenants to make a contribution. The hon. Lady said that Governments have to make choices, but so do local authorities. Nottingham council has decided to charge low-income working age households a contribution towards their council tax. That was its decision.

Looking forward to the changes we have made, foster families were mentioned and the Government have been clear throughout that we want to protect such families. Our original strategy was to put the £5 million that we think it will cost to protect those families into local government budgets through discretionary payments, but, partly because of the alarmist scaremongering about foster families, we decided it was far better to avoid any anxiety on that point and simply to entitle foster families to an extra bedroom at the same cost. We have not had to find extra money for that measure because it was there already. We always said that we would protect those families, and we will. However, we will do so directly because when we relied on discretionary payments, Opposition Members claimed that we were not going to support foster families, which caused concern among those families. Giving foster families a right to a room seemed a more direct way of providing that support. Likewise, we have made it clear, as the Prime Minister did—

[Chris Leslie]

Will the Minister give way?

[Steve Webb]

No. I only have a couple of minutes left. I have made my point clear. As the Prime Minister made clear from the Dispatch Box a couple of weeks ago, families with disabled children who cannot share a room will have the right to an extra room if they approach their local authority and make their case. Provided that case is accepted, they will have a right to a room. There are a number of elements where we have either given a right to a room, and the hon. Gentleman for, I think, Shipley—

[Chris Leslie]

No.

[Steve Webb]

No. I apologise. I am sorry, I cannot remember the hon. Gentleman’s constituency, but he cited a case where a carer had to come in and use a spare bedroom. To be clear, the rules allow for a non-resident carer who has to stay overnight to have a room. Obviously, I do not know the full details of that individual case, but a spare bedroom is allowed for a non-resident carer.

[Chris Leslie]

I am afraid that the carer rules do not capture that particular case, but I wanted to ask the Minister a particular question about the bedroom tax—sorry, the spare room subsidy. I know the name is important, much like the community charge which some people did not want to call the poll tax. Can the Minister provide a figure for the number of households affected by the bedroom tax that include a disabled person?

[Steve Webb]

The hon. Gentleman glossed over his constituent’s case, but to be clear for the record, a spare bedroom is allowed for a non-resident overnight carer and it is important that he does not alarm people about the issue. In our impact assessment we published the number of disabled people affected by the change, and, as he knows perfectly well, around one in three—broadly speaking—of those affected by the measure is receiving the disability living allowance. Time is running out, but simply to say—