Housing Benefit

Tobias Ellwood Excerpts

Tuesday 12th November 2013 Commons Chamber

[Rachel Reeves]

When a Labour Government introduced the welfare state it was a safety net for some of the most vulnerable people. The 400,000 disabled people who are going to be hit by the bedroom tax are exactly the people who Beveridge’s and Clement Attlee’s welfare state were designed to protect—and shame on you for taking that safety net away.

Many of the people affected by the bedroom tax have nowhere else to go and no choice but to take the financial hit, making impossible choices between feeding their children, paying the gas and electricity bills, and paying the rent.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

The hon. Lady talks about affected families. What does she say to the almost 400,000 families who are living in overcrowded situations when they look over their shoulders at the almost 1 million spare bedrooms in Britain?

[Rachel Reeves]

I say that instead of presiding over the lowest rate of house building since the 1920s, this Government should get on and build some houses.

No wonder the Trussell Trust—[Interruption.] Government Members do not want to hear about food banks, and nor does the Prime Minister, but they will hear about food banks. The Trussell Trust cites the bedroom tax as the key driver behind a threefold increase in the use of food banks since April this year. No wonder more people are turning to payday lenders and to food banks. No wonder the Samaritans are training up staff to help people left desperate and distraught by the Secretary of State’s bedroom tax. Those who do not move may end up in less suitable housing—homes without adaptations for people with disabilities, or where children have to change school or live further away from family or support networks.

--- Later in debate ---

[Steve Webb]

I am pleased to hear the hon. Gentleman refer to overcrowding, because strangely that was an omission from the Labour motion. It is almost as if the voice of the overcrowded has not been heard. To give him a sense of scale, based on the English house condition survey we estimate that more than a quarter of a million households in social accommodation are overcrowded. Census data, which offer a different definition, suggest there are getting on for 400,000 overcrowded households. The research the Government are undertaking as the policy is rolled out will monitor the extent to which people are trading down and moving from overcrowded accommodation, and the extent to which they take jobs, take in lodgers or use discretionary housing payments. People can respond to the policy in a whole raft of ways, but the idea that we can have hundreds of thousands of people in overcrowded accommodation while there are free spare bedrooms does not seem fair.

[Mr Ellwood]

There is a sense of déjà vu in this debate because we discussed this issue in 2008 with reference to the private sector. Going back to 2008, one major problem is the lack of housing stock and new builds. Just 30% of new houses are single dwellings, although the demand for that is 60%. Does the Minister agree that that imbalance needs to be addressed?

[Steve Webb]

My hon. Friend is right. Labour Members say there is a mismatch between housing stock and housing need, but who was doing the house building for 13 years? Why do we have that mismatch? On the volume of social housing construction, I was shocked when I saw that in many years of the previous Labour Government, fewer than 25,000 new units of social housing were built per year. Even in these difficult economic circumstances, the coalition Government are already building more social housing every year than in most years of the Labour Government, and that will only increase.

--- Later in debate ---

[Mr Tobias Ellwood (Bournemouth East) (Con)]

I was getting flashbacks to 1970s socialism during that contribution—[Interruption.] The hon. Member for Liverpool, Walton (Steve Rotheram) is very proud of that; that is good to hear.

It is said that a lie can be halfway round the world before the truth has got its boots on, and such is the case with Labour’s bedroom tax. I am pleased that the name of the debate has changed, and I welcome the chance to clarify the details of the policy. I am sorry that the debate has been somewhat binary. Some good points have been made by Members on both sides and some pertinent questions have been asked. The hon. Member for Manchester Central (Lucy Powell) posed a very important one: how does somebody who is told to go out and work in order to pay for that second room manage to do that? I hope the Minister will elaborate on this, but the universal tax credit system will come in to address that.

The debate has illustrated the cultural divide that exists between this Government and Labour. On one side there is an attitude of responsibility and holding welfare reform to account, and on the other there is a continuing concept of offering welfare as a lifestyle choice. That is no longer possible. After 13 years of Labour the cost of housing benefit doubled to £21 billion. That is unacceptable. The cost to taxpayers was £900 per household. The system was getting out of control. There was no house building programme, leading to overcrowded accommodation, and there was no management of the housing stock, which left some families receiving housing benefit of more than £100,000.

[Katy Clark]

Does the hon. Gentleman not accept that the reason that housing benefit has gone up is the rising cost of rent in the private sector? Does he not accept that this Government’s policy of trying to force house prices up is putting rents up, which will make the housing benefit problem even worse?

[Mr Ellwood]

The hon. Lady makes an important point. I cannot accept that a doubling of housing benefit to £21 billion is accounted for by the private sector alone. There are other aspects, such as the type of housing we are building. We were building the wrong type of houses—60% of new houses built needed to be for single occupancy, but only 30% were. That is Labour’s legacy. It raises the fundamental question of today’s debate: in these financially tough times, should those on housing benefit be allowed to stay in accommodation with more bedrooms than they really need? This Government say no and Labour says yes, even though it said no in 2008 when we had exactly the same debate on private sector housing, proving that a little inaccuracy sometimes saves a ton of explanation.

[Mrs McGuire]

Will the hon. Gentleman give way?

[Mr Ellwood]

Very briefly; we are eating into other Members’ time.

[Mrs McGuire]

I do not think that the hon. Gentleman was in the Chamber for the earlier clarification, given by my hon. Friend the Member for Westminster North (Ms Buck), that the local housing allowance was not retrospective. This tax is retrospective and it penalises people for not changing their circumstances.

[Mr Ellwood]

I welcome the hon. Lady to the debate. It is clear that Labour still has not learned from its mistakes. In the last eight years of government, Labour lived beyond its means. In 2002-03, it spent £26 billion beyond its means. Four years later that rose to £33 billion. In its final year of office, the deficit rose to £156 billion. That always accumulates, which means that by 2010 when Labour departed office we had a debt of more than three quarters of a trillion pounds. Where are these benefits that Opposition Members endorse? Where will that money come from? To date, Labour has refused to support a single reform to the benefit system put forward by the Government. Aside from failing to recognise, first, the need for reform of our complex system, and secondly, the consequences to society in promoting a something-for-nothing culture, Labour has voted against £83 billion-worth of welfare savings introduced by the Government, proving that it has yet to learn the lessons of the past.

Labour owes the taxpayer an explanation as to how it would afford to keep its complex, costly and broken benefit system in place. The challenge is simple. Thanks to the housing shortage, created under Labour, some 400,000 people are in overcrowded housing. Yet there are almost 1 million spare rooms throughout the UK paid for by the taxpayer at a cost of around £0.5 billion a year. This policy better matches our housing stock, but also protects the most vulnerable, such as pensioners, those in foster care, disabled children and those requiring overnight care. They are all exempt, as indeed are those who have served in the armed forces.

Those affected by the policy, as others have made clear, who are living in larger than necessary housing have four choices. First, they can participate in a house swap scheme, which has not really been embraced by all councils. Secondly, they can pay the reduction in housing benefit, which equates to about £14 a week for a room. Thirdly, they can sub-let that room. Finally, they could apply for the hardship scheme, and a couple examples have been given of that. I am pleased to hear the announcement today that if councils run out of that hardship funding, they can apply for more. That is a message that needs to be sent from both sides of the House, to ensure that councils do not run out of this important support.

The policy already exists in the private sector, introduced, as I say, by Labour in 2008. I welcome this policy and the debate, which I hope will help Labour Members to recognise how inaccurate and misleading some of their comments have been. I am pleased that the hon. Member for Aberdeen South (Dame Anne Begg) is in her place. I have a lot of respect for her, but she spoke eloquently about a council home being a home for life. I cannot agree with that analysis. A council home should be there as a method of support for those trying to get on in life and for those in a difficult period of their life. It should not just be given to somebody as a gift, early on in their lives, never to move away from. That is the distinct difference between the two sides of the House, on which we will have to agree to disagree.

I welcome the policy and the debate, and I look forward to the Minister clarifying some of the many points that have been made by Members on both sides of the Chamber.