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Under-occupancy Penalty

Volume 587: debated on Monday 3 November 2014

10. What recent estimate he has made of the number of people subject to the under-occupancy penalty who have moved into a smaller home since the introduction of that penalty. (905812)

The latest published figures showed that, as a result of various actions, 65,000 people were no longer affected by the removal of the spare room subsidy. As at December 2013, around 22,000 had downsized or moved a year ago. New figures to be published in due course show that if that trend continues, up to 50,000 will have moved or downsized by now, with the total no longer affected even higher.

The justification for the cruel and heartless bedroom tax is that it would force people to move into smaller homes. As only about 5% of people hit by the tax have been able to move, not least because in areas such as mine there are no smaller properties to move to, does the Secretary of State accept that this policy has manifestly failed?

Actually, I do not, and by the way I think the hon. Lady’s figures are not correct. I gave her higher figures even for last December. The rationale for the policy was fairness. The previous Government left us with the situation where some on housing benefit in the private sector were not allowed to occupy houses that had extra rooms, so balancing that is fair. Getting housing benefit spending under control after it nearly doubled in cash terms under the previous Government, and helping those living in overcrowded accommodation while we build more houses, giving them a chance to move into houses where they can fit their families—that is decent and fair.

Given that, according to recent surveys by social landlords, more than half the people impacted by the bedroom tax are now in arrears, what advice would the Secretary of State give those social landlords, particularly housing associations, about the unsustainable financial position they now find themselves in?

Of course, we always keep in close contact with social landlords to ensure that they do what they are meant to do and do not overcharge. The Homes and Communities Agency’s latest figures show that arrears have fallen in the same period from last year and rent collection among housing associations is stable at around 98%, so I think that it is safe to assume that the under-occupancy penalty has had little effect on housing association arrears.

The bedroom tax surely has a claim to be the most wrong-headed and iniquitous policy introduced by any Government in recent memory. The Government’s justification for this cruel tax was that putting it on social housing tenants would incentivise families and individuals to move into smaller homes, but the policy has one fatal flaw: the absence of homes for those families and individuals to move into. Surely the Secretary of State must today concede that the policy has been an abject failure and scrap the tax immediately.

Apart from the rhetoric, the reality is that the hon. Gentleman is wrong. It was his Government who started the process in the first place. I remind him that when they introduced the local housing allowance, they refused to allow anybody who accepted that benefit to live in a house that had extra bedrooms, because that would be unfair on those who were in that accommodation. We have restored that fairness. That is the right thing to do, and it saves £500 million a year.