Before I call Rachel Reeves to move the motion, I can inform the House that the Speaker has selected the amendment in the name of the Prime Minister.
I beg to move,
That this House believes that the housing benefit social sector size criteria, otherwise known as the bedroom tax, should be abolished with immediate effect.
Today, Members of this House have a chance and a choice: a chance to put right one of the worst injustices we have seen under this unfair, out-of-touch Government; and a choice to make about where they stand on the question of how we treat some of the most vulnerable and disadvantaged members of our society. In just a few hours, we could vote to abolish and repeal the bedroom tax, an extraordinarily cruel and unfair policy that has hit half a million low-income households, two thirds of them including a disabled member and two fifths of them including children, with a charge of more than £14 a week, on average, which most cannot afford to pay, simply because they have been allocated by a council or a housing association a home that the Government now decide has too many rooms.
One week before Christmas we have a chance to bring hope and relief to hundreds of thousands of people who are struggling to stay in their home, pay the bills and put food on the table by scrapping this cruel and punitive tax on bedrooms, which is yet another example of Tory welfare waste.
There is a slight groundhog day quality to this debate. I am sure that we have had an identical debate before. Indeed, I was thinking of making the same speech that I made last time in this debate, and wondering whether anyone would be interested. There is something that I do not understand, and have never understood. The previous Government introduced exactly the same policy for tenants in the private rented sector on housing benefit, so why is it thought appropriate to have that policy for tenants on housing benefit in the private rented sector, but not appropriate for tenants in social housing on housing benefit?
If the right hon. Gentleman participated in previous debates on this matter, he would know that the rule for private housing was not retrospective, so it did not affect people who were already living in their accommodation. In addition, in the private sector there is no security of tenure, which has hitherto existed in the social rented sector.
The numbers affected by this indefensible policy are shocking, but it is individuals and families whom we must keep in mind. I want to tell the House about a young man I visited at his home in west Wales a few weeks ago. Warren Todd is 15 years old. He has a rare chromosomal disorder called Potocki Shaffer syndrome, which affects the development of his bones, brain and other organs, and means that he suffers from epilepsy, autism, skeletal problems and learning disabilities. For most of his life, Warren has been cared for by his grandparents, Sue and Paul Rutherford. They have dedicated their lives to giving him a decent childhood and, by enabling him to live at home instead of residential care, they are saving us, the taxpayer, thousands of pounds every week.
We should celebrate and applaud the incredible contribution that these people are making to Warren’s life and to our country, but instead this Government have deducted £60 a month from their housing benefit, because they live in a bungalow with three bedrooms, one of which is deemed a spare bedroom, chargeable under the bedroom tax. They asked the Prime Minister to visit them in their home and see why they needed that room. Warren’s grandfather said:
the Prime Minister—
“saw how we were living he would end the tax straight away. But of course he hasn’t been to see us”.
I have seen this “spare bedroom”, which is crammed with special equipment for Warren and a sofa bed for respite carers to use. There is nothing remotely “spare” about it. Without it, the Rutherfords could not possibly do the incredible job they do of looking after Warren at home.
The bungalow has been fitted with a track system and hoist to help Warren into the bath, his bed, and on to the sofa. It would cost a fortune to replace and reinstall it if they had to move to another property. There are countless other cases like that of people whose lives have been turned upside down by this punitive and indefensible tax on bedrooms.
I am listening very carefully to the hon. Lady, and I think she would want the House to have all the facts. I read the details of her visit, but is it not the case that that family receive a discretionary housing payment, for exactly the reasons that we put this policy in place? They have not suffered any financial penalty from this policy at all, so perhaps she should fill the House in and give a full picture of the case, rather than tell a partial story?
I was going to come to the discretionary housing payment, but I shall discuss it now. Leeds, where I am a Member of Parliament, received £1.9 million in discretionary housing payment in 2013-14, but it spent £2.27 million, and the Government made up the shortfall. In 2014-15, Leeds city council has been given just £2.05 million, and has been told that there is no option to apply for more. The council has put in £0.35 million of its own money, but spending to date is forecast to exceed what it has set aside, including that extra money. The point about discretionary housing payment is that there is not enough money to cover all the cases, and city councils and councils across the country have had to use their own money to make up the Government shortfall.
By its very nature, discretionary housing payment is just that—discretionary—and people only find out on a year-by-year basis whether they will receive the money. People who receive it have no certainty that they will be able to stay in their house next year or the year after that. If the hon. Gentleman can give certainty to the Rutherfords and the thousands of families across the country who receive discretionary housing payment that they will receive it next year and the year after that, that would be extremely welcome, but I do not think that he can do so.
The discretionary housing payment guidance specifically makes provision for councils to make longer-term awards in cases in which it takes longer for people to adjust to the policy. My right hon. Friend the Chancellor of the Exchequer set out the extra money for DHP for the next financial year to give councils that financial certainty. We have indeed done what the hon. Lady said.
Well, my own council has received less money from the Government this year compared with last year, so some people who received DHP last year will not receive it this year. Leeds city council says that there have been more applications for DHP this year. My understanding is that the overspend last year was £3 million, so people are applying for DHP but are just not getting it.
One of the most ridiculous things about the tax is the fact that local authorities and local housing authorities were told that they had to build houses with two bedrooms. There are no one-bedroom houses in my constituency for rent, so how can people move in those circumstances?
I have similar issues in my constituency, where there are 26 blocks of high-rise flats that are almost all two-bedroom flats. The council tries not to house families in that accommodation, and tries to put single people in there, because there is a feeling that a high-rise flat is not always the most appropriate place for a family to live. Many single people who have been put in two-bedroom flats in high-rise buildings have been forced to pay the bedroom tax through no fault of their own.
My hon. Friend has rightly raised the issues for carers such as the Rutherfords. Is it not the case that 60,000 carers should be exempt from the bedroom tax? If anyone should be exempt, it is unpaid family carers. All kinds of things have been said to suggest that they are, but they are not, and it is causing them hardship. If the Minister really believes that the Government want to fund people such as carers through the discretionary payment, they could do that now: they could exempt carers by regulation.
My hon. Friend tabled a motion to exempt the 60,000 carers affected by the bedroom tax, but the Government blocked it, which was an unwise and disappointing decision.
The hon. Lady is making a powerful case. Does she agree that as well as being cruel and unfair the policy is simply not working on its own terms, because the properties are not there? In Brighton, 88% of those affected have not been able to move because there is nowhere for them to move to. Four hundred households are in arrears, and in over half of those homes there are people with disabilities.
I shall come on to statistics for one local authority to make exactly the same point.
Several hon. Members
I shall make a little progress before taking interventions.
We have discussed the needs of carers, but we must also consider people who need safe or sanctuary rooms to protect themselves against the threat of domestic violence. There is the woman whose case is now being heard by the High Court, and whose situation my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) tried to address with her ten-minute rule Bill. Others have kept a room for sons and daughters serving in the armed forces when they are home on leave. In The Daily Mirror this morning we read about the shocking case of Maureen Bland who was forced to move out of her home to avoid the bedroom tax after her son lost his life serving our country in Afghanistan. Quite frankly, people like that should not be forced to pay the bedroom tax because of such grief and tragedy.
The bedroom tax has been cited by the Trussell Trust and others as a key driver behind the shocking growth in food bank use under this Government. A recent in-depth study published by the Trussell Trust, along with Oxfam, the Church of England and the Child Poverty Action Group, found that at one food bank, 19% of users had been hit by the bedroom tax, many of them having applied unsuccessfully for DHP. We will have an opportunity to vote on a motion on food banks later this afternoon, but Members can make a start in this debate by voting to repeal the cruel bedroom tax, which is one of the key causes of the food poverty crisis we see in our country today.
My hon. Friend is making a powerful case. Perhaps the cruellest element of the bedroom tax is the fact that the stress and anguish it causes is making ill people even more ill.
People affected by the bedroom tax are facing impossible decisions that, frankly, no one should have to make: whether to pay the bills or put food on the table; or whether to pay the rent, at the risk of getting into debt, or risk losing their home. We have seen the evidence from the Trussell Trust and the Child Poverty Action Group, but we do not have to turn to that report to see the devastating impact of this vicious policy; we need only look at the evaluation commissioned by the Government themselves. It was conducted by the centre for housing and planning research at Cambridge university and slipped out this summer, when the Government no doubt hoped no one would notice. Its findings are clear and damning.
London is not the area worst affected by the bedroom tax. In fact, regional variation is one of the striking things about it, because there is more overcrowding in the south and more under-occupation in the north. Despite that, we have 860 households currently affected by it. Does my hon. Friend share my astonishment that in recent years councils and housing associations, such as Westminster city council, have sold 240 one-bedroom properties, thus removing the very opportunities people need to downsize in order to avoid the bedroom tax?
That is a really important point. Six months after the restrictions on housing benefit had been applied, only 4.5% of those affected had moved into smaller homes within the social sector, despite that being, as the report put it,
“a key aim of the policy”.
The vast majority of claimants said that they were unable to move because of their need to remain close to work, services or support networks, or simply because, like the Rutherfords, they needed the room that the Government had decided was surplus to their requirements.
The Government’s evaluation also found that a shocking 60% of those affected were in arrears. Social landlords were beginning eviction proceedings in some cases, even though they knew that their tenants could simply not afford the rent increases. Most devastating of all are the official findings on how tenants have struggled to pay the shortfall. The evaluation reported
“widespread concern that those who were paying were making cuts to other household essentials or incurring other debts in order to pay their rent”.
It reported that 57% of claimants had said that they had cut back on household essentials.
There are not many of them here, but let me say a few words about the Liberal Democrats, who took the publication of the independent evaluation as an opportunity to try to wash their hands of this notorious policy. The Deputy Prime Minister said he had changed his mind after seeing the evidence in the report that most people were unable to move in order to avoid the tax, but what did he expect? Did he expect that half a million households would find new, smaller, affordable homes and that everyone would live happily ever after?
The reality is that it was always obvious that that was not going to happen. The Government’s own impact assessment, published in June 2012, assumed that no one would move and warned that if they tried there would
“be a mismatch between available accommodation and the needs of tenants”
“in many areas...there are insufficient properties to enable tenants to move to accommodation of an appropriate size”.
Indeed, the very report that the Deputy Prime Minister cited as the “trigger” for his attempted U-turn points out that the smaller number of moves that had taken place were actually
“higher than some had expected”
in the Department for Work and Pensions. The utter disingenuousness of the Deputy Prime Minister’s attempts to excuse his collaboration with the Tories on this issue once again confirms that we simply cannot trust a single word he says.
Given the predictability of this and the absence of small houses to move to, is it not obvious that the objective was simply to tax the poor for being poor? It has nothing to do with moving to smaller houses; it is about punishing people who are poor because of the bankers’ errors. There is no other rationale.
I thank my hon. Friend for that intervention.
This afternoon the amendment signed by the Deputy Prime Minister aims to remove our call on the Government to abolish the bedroom tax immediately, and instead merely “notes” that the Liberal Democrats have come up with some “proposals” to change the way the bedroom tax is implemented. We would not be supporting the amendment, because “noting” the latest Liberal Democrat “proposals” is not going to pay anyone’s rent or keep anyone in their home. What matters in this House is how Members vote, how they use the power entrusted to them by their constituents. What we on the Opposition side and people watching the debate will “note” is where Members took their stand when they had an opportunity to make a difference.
Will my hon. Friend also note that the reason we are having this debate is exactly the one just given by my hon. Friend the Member for Swansea West (Geraint Davies)? This is about taxing the poor, because the Liberal Democrats supported not only the bedroom tax, but the cut in the rate of tax for millionaires, giving their friends a £100,000 hand-back last year.
Yes, and it tells us all we need to know about the priorities of this Government when people earning more than £150,000 got a tax cut while another group of people, two thirds of whom are disabled, got a £14 increase in their rent that they simply cannot afford. What we will note is that there would be no bedroom tax without the Liberal Democrats. They joined the Tories in the Lobby time and again to vote it through, and they combined with the Tories again and again to block Labour’s attempts to repeal it.
In conclusion, the bedroom tax is a cruel and unfair tax that is hitting around half a million low-income households. It has left vulnerable people feeling insecure in their own homes through no fault of their own.
The hon. Lady says that ours are mere proposals, but in fact they are encapsulated pretty much word for word in my Affordable Homes Bill, which of course has the support of the House. Surely that is the route to take. What we need to do is find a consensus. If she is really as concerned about this issue as she claims to be, she should apply today’s motion to the private rented sector in the same way as it would apply to the social rented sector.
If the hon. Gentleman is so serious about doing the right thing, I hope that he will join us in the Lobby this evening, because “noting proposals” will not pay the rent or keep people in their homes. Only by voting with Labour this afternoon can Members do the right thing and repeal this unfair and cruel tax.
The bedroom tax has pushed many into debt and to resort to food banks, and it has brought others to the point of eviction and homelessness. It is wreaking havoc with local housing policies and with the finances of social housing providers, creating extra costs and perverse consequences on all sides. It is yet another example of Tory welfare waste—wasting time and energy even as it fails to deliver the savings that were promised.
The bedroom tax will be remembered for years to come as a signature policy of this unfair, out-of-touch Government. Today we have given Members on both sides of the House an opportunity to come together and consign this cruel policy to the history books. However, if Government Members do not do the right thing and join us to abolish it this afternoon, I pledge that the first thing I will do if I am Secretary of State next May is cancel the bedroom tax, removing that symbol of the injustice we have seen under this Government. That is a fully funded commitment that we will pay for without extra borrowing by closing tax loopholes and reversing the tax breaks with which this Government have favoured the wealthy.
That will be a signal of how different things will be under a Labour Government: dealing with the deficit in a fairer way and treating those who work hard to care for the most disadvantaged and vulnerable members of our society with the decency and dignity they deserve—so different from what Government Members have done. For hundreds of thousands of families across the country, that change cannot come soon enough.
Several hon. Members
Have you got something to say, Mr de Bois? [Interruption.] No, you have not.
I will have plenty to say later.
In that case, you should stand up and indicate at the normal time, rather than shouting from a sedentary position.
I beg to move an amendment, to leave out from “House” to end and add:
“regrets that the Government took over a housing benefit bill which was out of control, and without reform would have been more than £26 billion in 2014-15; notes that the reforms the Government has implemented have brought housing benefit spending under control and helped to tackle over-crowding and better manage housing stock; further notes that the Coalition has protected vulnerable groups through £165 million of discretionary housing payments in 2014; notes that, following the interim evaluation of the policy, the part of the Coalition led by the Deputy Prime Minister has proposed reforms to introduce other formal exemptions to the policy, including where claimants have not been made a reasonable alternative offer of accommodation; and believes that the Opposition’s failure to support the Government’s wider welfare reforms, including the wholesale abolition of this policy, is financially unsustainable, and would put at risk savings of nearly £50 billion over the present Parliament, as well as leaving people languishing in over-crowded accommodation.”
I am very pleased to move the amendment. It is interesting that the hon. Member for Leeds West (Rachel Reeves) spent so little time on how she was going to pay for this policy. When I explain a little later the costs of her policy and how her proposed ways of paying for it are not going to work, I think the House will probably realise exactly why that was. Today’s debate speaks volumes not so much about what Labour Members say but about what they do not say.
Will the Minister give way?
No, I will not. I have barely started my speech, and I want to make sure that I finish in the 20 minutes or so that the occupant of the Chair indicated. [Interruption.] The hon. Member for Bristol East (Kerry McCarthy) says from a sedentary position that the shadow Secretary of State gave way. She gave way generously to Members on her own side of the House but not very generously to Members on our side. I am happy to give way when I have uttered more than one sentence.
Today of all days, Labour would rather talk about anything than the positive jobs figures that we are seeing. More people are in work than ever before—up by 590,000 on the year and up by 1.7 million since 2010. More women are in work than ever before— up by 300,000. More disabled people are in work—up by over a quarter of a million.
Labour Members do not like to hear this, do they? Let me just finish this good news on today’s jobs figures and then I will be happy to give way to the hon. Lady. More people are in private sector jobs than ever before—up by nearly 2.2 million since 2010. At the same time, unemployment has fallen, youth unemployment has fallen, long-term unemployment has fallen, and the number of people on the main out-of-work benefits is at its lowest for 24 years.
Any suggestion that any Labour Member does not welcome the fall in unemployment is simply not the case. In relation to this debate, is the Minister not aware that people in work can be, and are, subject to the bedroom tax?
I am very familiar with the way that the policy works, and that is why it is perfectly relevant for me to point out how many people are in work. I did not say that Opposition Members did not welcome the fall in unemployment; I simply pointed out that they do not like talking about it. It is not the only thing they do not like talking about.
Several hon. Members
It is very cynical that Labour has chosen on their Opposition day to have a debate that is contrived to scare people, instead of welcoming the record employment figures. I say that because the hon. Member for Leeds West referenced a specific case, which she went through in considerable detail, but omitted to mention the very significant point that the family in question get a discretionary housing payment and so suffer no financial penalty. When I intervened on her, she still would not confirm that I was in fact right and she had omitted to share that information with the House.
Several hon. Members
If one is going to lay out a case for the House, one should share all of it. Trading individual cases and trying to politicise them is not the right thing to do; we should discuss the policy. I could cite a number of cases where the spare room subsidy has led to a positive position for someone’s housing, but that is not a very sensible way of proceeding. If one is going to lay out a case, one should lay it out in full and not mislead the House. [Interruption.]
Order. The rest of the House might not want to listen to the Minister, but I do. If he is going to give way to a Member, he will indicate that to them. Members on both sides of the House should just chill out a little bit. Let us hear what the Minister has to say.
I am very keen to give way during the debate, but I am also conscious of the fact that quite a number of Members wish to speak.
Order. I have just been prompted about something that I did not hear because of the row. Apparently the Minister said something about misleading the House. Did he accuse the hon. Member for Leeds West (Rachel Reeves) of misleading the House? Will he confirm that he did not say that?
I am very happy to confirm that I do not think that I said it, but if I did, then it is not what I meant to say. I was very clear that the hon. Lady was telling half a story and was not giving the House all the facts on which to make a balanced judgment.
I have given way to an Opposition Member, so I give way to my hon. Friend.
I absolutely appreciate the principle that we need to match housing to housing need, and we certainly need more family-sized houses for larger families. Does my hon. Friend agree, however, that for the spare room subsidy policy to work fairly, as well as effectively, there will have to be a sufficient number of one-bedroom properties for those who have to downsize to move into, so that they do not face penalties when they are trying to do the right thing but cannot?
My hon. Friend makes a good and sensible point. It is worth putting on the record that there are 1.4 million one-bedroom homes across the social rented sector, with significant turnover. Sixty per cent. of social sector tenants require only one bedroom because they are single or childless couples, and local authorities and housing associations are now starting to match their new building more accurately to that profile. Seventy-seven per cent. of homes approved under the new affordable housing scheme are one or two-bedroom homes—up from 68% in the last round—and the proportion of one -bedroom homes is up from 17% to 20%. The policy is having the desired effect in terms of the building of new homes.
Several hon. Members
Let me make a little more progress.
It is also worth putting on the record that, when Labour Members were in power, they increased spending on a broken welfare system by 60%. They have rejected every welfare reform that we have implemented. They are seeking immediate abolition of this policy, which restores fairness. As my right hon. Friend the Member for Banbury (Sir Tony Baldry), who is no longer in his place, said, it brings the social sector into line with a policy that Labour Members themselves advocated for the private rented sector, and it ends the unfairness of 820,000 spare rooms being paid for by taxpayers when 250,000 people were living in overcrowded homes and 1.7 million were on waiting lists, as was the case when this reform was implemented. The Government are determined to help those families as well. Numbers on waiting lists have now fallen by a fifth to 1.4 million—the lowest for a decade.
I am sure that the hon. Lady will welcome that.
I hate to disappoint the Minister, but I will not welcome the figures he has quoted. He is making a point about fairness. Does he think it is fair that 60,000 carers should have to pay the bedroom tax? They do not have spare rooms; they are essential rooms that they need to sleep in so that they can carry on their caring. It is cruel to keep on repeating that when 60,000 people who are struggling, unpaid, to care, and saving the state a lot of money, are not exempt from this cruel tax. Is that fair?
Someone who has an overnight resident carer is exempt from the policy. To deal with particular circumstances, we have given local authorities the ability to use discretionary housing payments in what they judge to be appropriate cases. I am sorry that the hon. Lady would not welcome the news that waiting lists have fallen by a fifth to 1.4 million. That is a very welcome statistic, showing that fewer families are waiting for homes because we are now using the housing stock in the social sector more efficiently.
While my hon. Friend is on the subject of fairness in the system, does he think it is fair that the Labour-run council in Leeds has spent almost £3 million on new websites, furniture and tarting up meeting rooms rather than on concessionary payments?
My hon. Friend makes a good point. Local authorities obviously make decisions about how they spend money. If they have indeed spent it on the things that he mentioned rather than on assisting families, their voters can make a judgment on that when they come to make these decisions at the appropriate time. I am glad that he put that on the record.
Will the Minister give way?
Let me make a little more progress and then I will give way again.
Labour’s motion says nothing about the costs of its proposal. That is not really a surprise. It is, of course, a fact that the removal of the spare room subsidy is saving money: £490 million in 2013-14; £525 million in 2014-15; and £830 million to date, with savings increasing in future years. Abolishing this reform would cost over £500 million a year. The shadow Work and Pensions Secretary has made an “absolute pledge” to do so, but she has no idea of how she is going to fund it.
We did say, in 2013, how we would pay for that. There are three different measures. First, we would reverse the Chancellor’s tax cut for hedge funds announced in the 2013 Budget, which it is estimated will save £150 million. Secondly, we would reverse the Chancellor’s shares-for-rights scheme, which has opened up a tax loophole and will lead to £1 billion being lost to the Exchequer, according to the Office for Budget Responsibility. Thirdly, we would tackle disguised self-employment in the construction industry, which—again, these are Treasury estimates—will save £380 million. That would happen in every single year and more than pay for the cost of cancelling the bedroom tax.
First, it is interesting that the shadow Secretary of State did not bother to share any of that detail with the House in her speech. She was trying to avoid doing so, but I am very pleased that she has put those points on the record. Let us look at the three measures.
The first proposal is to ensure that the building trade pays its fair share of tax, which the hon. Lady said would raise £380 million. In fact, the Government are already cracking down on the use of intermediaries and contrived contracts, including in construction. The changes announced in the autumn statement in 2013 are already saving more than that amount, so the revenue that Labour says it could raise no longer exists.
The second proposal, to reinstate the stamp duty reserve tax charge, would place a £160 million charge on pensions; the Chancellor did not provide a tax cut for hedge funds. That means that the impact of Labour’s tax rise would fall on pension savers and retail investors. That is the same old Labour—balancing the books on the backs of pensioners.
The last proposal, to end the employee shareholder scheme, is even better, and Members will want to listen. Labour has pledged to reverse the removal of the spare room subsidy immediately, but in 2015-16, ending the employee shareholder scheme will raise no revenue for the Exchequer.
The House can see that the three measures are not going to pay for the Labour policy. If the country were unfortunate enough to have the hon. Lady in the position so ably occupied by my right hon. Friend the Secretary of State, I am afraid that when she walked in on day one she would already have a £500 million hole in her funding, and would have to find some other way of funding the payments. The Government have capped welfare, restored fiscal discipline and seen the first real fall in welfare spending for 16 years, in contrast to more unfunded spending commitments and going back to more borrowing, more spending and more taxing once again.
Does my hon. Friend share my concern about Opposition Members’ scaremongering, which may cause so much fear and concern, particularly among parents of disabled children, even though he and his colleagues have already put in place clear provision to make sure that disabled children get the support they need?
My right hon. Friend, who is very familiar with this policy area, is absolutely right. We have put in place clear policies for disabled children. As in the case highlighted by the shadow Secretary of State, discretionary housing payments have been put in place specifically for cases that are complex and cannot be dealt with under the rules. Ample protection is in place for the families who need it.
There is no clearer illustration of Labour’s reckless lack of control than housing benefit. Under the previous Government, housing benefit spending increased by nearly 50% in real terms, from £16 billion to £23 billion. If we had not reformed it, spending would have risen to more than £26 billion this year. We have brought that figure down by £2 billion, and last year saw the first real-terms fall in housing benefit for a decade.
That is something to welcome, and I am sure the hon. Gentleman will do so.
I will respond to that point. Does the Minister accept that 70% of the doubling of housing benefit in the past 10 years has been due to rent rises? The strategic solution should not be to inflate rents and housing costs, but to build more houses, which is the opposite of what he is doing. He will end up with housing benefit costs that are higher, not lower, because of his incompetence.
With the greatest respect, the period during which the housing benefit bill rose so fast, as the hon. Gentleman has just said, was of course when his party was in government. He is quite right about the need to build more houses, but housing starts fell to a historical low under Labour. We have actually increased the building of new homes. Nearly 500,000 homes have been built since 2010, and a further 275,000 affordable homes will be built from 2015 to 2020. More affordable homes are planned over the next Parliament than in any equivalent period in the past 20 years. The point he makes is right, but this Government have absolutely dealt with it. Overall, the changes we have made to housing benefit will save £6 billion during this Parliament.
The removal of the spare room subsidy is a key part of the reforms. Despite some outlandish claims about its effect, it is working. In the interim evaluation, half of those affected and unemployed had looked for a job, and one in five of them intended to plan to earn more. It was alleged that the change would move people into poverty. In fact, the figures show that thousands of those affected have moved into work.
Despite the Opposition’s scaremongering about evictions and arrears, the evidence has been to the contrary. The latest statistics show—[Interruption.] If we are to have a sensible debate about such matters, it would help if people did not make outlandish claims. I listened very carefully to the intervention by the hon. Member for Westminster North (Ms Buck). It is worth remembering that, when we discussed the benefit cap, she said that huge damage would be done to the 400,000-plus working households in private rented accommodation. However, we know from work that we published this week that 41% of people affected by the benefit cap are more likely to go into work. People are doing more to find work, and the policy has actually been very successful. In London, where the highest number of people are subject to the benefit cap, very few people have actually moved, and those who have moved have not moved great distances.
Will the Minister give way?
Since I mentioned her, I will of course give way to the hon. Lady.
Perhaps the Minister will explain to the House why, in the last year alone, there has been a rise of almost 30% in the number of households forced outside the area in which they originate? That is in contradiction to the advice given by Housing Ministers for years and years that homeless households should not be placed outside their local authority.
It is simply not the case that people have been pushed out of London: 84% of the capped households in inner London that have moved continue to live in the central boroughs. The idea that hundreds of thousands of people would be forced out of London is simply not true.
The Minister is making a point about employment and people moving into work. Is not the end of dependency a huge social change? Each one of those people has been helped by this Government.
My hon. and learned Friend is absolutely right.
According to the latest statistics, landlord claims for possession across the whole social rented sector are down 14% on the year, and warrants for eviction are down 3%. Housing association rent arrears have fallen on the year, and rent collections are stable at 99%. We have not seen a mass exodus to the private sector. Social sector lettings have increased, moves from the social sector to the private rented sector have fallen—down almost 20,000 since 2010-11—and, as I have said, the cost of paying housing benefit in the private sector has fallen in real terms for the past two years, in contrast to what happened when the Labour party was in power.
As we approach the general election, we face a choice. The Opposition talk about welfare waste, but they wasted £26 billion on botched IT and lost control of welfare spending when they were in government. They also wasted the lives of a lot of our constituents. At its peak, there were 5 million people on out-of-work benefits—1 million for a decade or more—while youth unemployment increased by a half, long-term unemployment doubled in two years, one in five households were workless and the number of households in which no one had ever worked almost doubled.
Several hon. Members
I will make some progress, because I am keen to allow other Members to speak.
We are now seeing record employment. Two thirds of the rise over the past year has been accounted for by UK nationals, and 95% of the increase is in full-time work. Some 600,000 people have started a job through the Work programme. More than 50,000 households have had their benefits capped, while 12,000 have moved into work or are no longer on housing benefit.
It is small wonder that Labour does not want to talk about the jobs figures, the economy or immigration. As we learnt from the recently released document, Labour’s approach is, “If you don’t want to talk about something, change the subject.” I do not blame them: it is the only thing to do with policies that are uncosted and unfunded.
This debate is a manoeuvre to avoid talking about our successful long-term economic plan of halving the deficit by the end of this year, meeting the welfare cap commitment in every year of the forecast, reducing welfare spending as a proportion of GDP, making reforms that will save nearly £50 billion over this Parliament, and restoring hard-won security, hope and aspiration to families across Britain. Having listened to the Opposition, I have one thing to say: they need more time in opposition to work out why the public do not believe they are fit for office.
Several hon. Members
Order. Nineteen hon. Members wish to take part in the debate, and we have to reach the wind-ups by 4 o’clock. I am going to start with a time limit of five minutes for each Back Bencher, but if there are a lot of interventions it will be necessary for that to be reduced.
I am delighted that we have the opportunity for this debate. I would actually have preferred another debate, though; on 2 April, the Select Committee on Work and Pensions published a report entitled “Support for housing costs in the reformed welfare system”. As yet, however, we have not had the Government response.
It was interesting to hear the Minister say that various things had recently been published, given that we are still waiting for that response. You will know, Madam Deputy Speaker, that the Government are normally given two months to respond to a Select Committee report, and it has been a lot more than two months in this case. Every time the Government’s response has been chased up, we have been told that it is lost somewhere in government—I am not quite sure where. Of course, a Select Committee cannot apply to the Liaison Committee for a debate if it does not have the Government response. However, today’s debate gives me an opportunity to raise some of the points that the Work and Pensions Committee made.
The Committee did not call for the scrapping of the bedroom tax, although personally I would like it to be scrapped as soon as possible, and we called it the “social sector size criteria” to try to depoliticise the matter. However, we made important recommendations about how the worst effects of that pernicious policy could be mitigated. A lot of them were about exempting particular groups that have already been mentioned in the debate—such as carers, disabled people who need extra room and anyone living in a property that has had adjustments made to it, who would probably find it impossible to move.
The Minister gave the game away when he talked about discretionary housing payments. Groups of people such as I have mentioned were clearly not meant to be included in the bedroom tax when the policy was designed; the fact that they were to get discretionary housing payments indicates that they were not meant to be caught by it. However, discretionary housing payments are what they say they are—discretionary. They are not long-term.
In reply to my hon. Friend the shadow Secretary of State, the Minister said that they had been extended to give families time to adjust, but the family that my hon. Friend mentioned cannot adjust—they need a house the size of the one they are in. A woman who has had a refuge built cannot adjust and move, because it has been specifically built for her. I cannot see why the Government persist in turning their face against sensible proposals for exemptions. They keep arguing that it is all right because people get discretionary housing payments, but those payments are not permanent. People need permanent provision for their adjustment.
The number of people across the country caught by the bedroom tax is quite staggering. In my constituency, where unemployment is really low, there are still 419 people affected by the bedroom tax. Across Aberdeen, where most people are in work—there is almost full employment —more than 1,600 are affected. The irony in such a place is that people are being forced out of a two or three-bedroom council house because of the bedroom tax, but the Government seem willing to pay even more through housing benefit in the private rented sector, because the rent on a one-bedroom house in that sector is higher than that on a three-bedroom council house.
I am sure that all Members will recognise that people are being driven out of the social rented sector into the arms of private landlords. I trust the figures given by my hon. Friend and her Committee more than the ones that the Government give. Has she seen a figure for the number of people who have been driven from the public rented sector into the private rented sector?
I am afraid I do not have that figure.
I suspect that the Minister is seeking to intervene on me to tell me the figure, and I will give way to him in a moment. I suspect that across the country, if the situation is anything like in Aberdeen, the houses with fewer bedrooms are in the private rented sector. However, many people cannot afford to go into that sector, because the cap that the Government have introduced on the local housing allowance means that they cannot find anywhere that they can rent. That is despite the fact that the cap is higher than the rent they were paying when they were living in a two-bedroom council house.
I apologise if the House did not spot this when I mentioned it in my speech, but moves from the social sector to the private rented sector have actually fallen. The English housing survey—I admit that this is not in Scotland—shows that they are down by 20,000 since 2010-11. The number has fallen, so people are not being driven from the social sector to the private sector. It is actually the other way round.
That fits with what is happening in Aberdeen. People are not going into the private rented sector, because it is too expensive. Rents are above the cap that the Government have set. The irony is that the Government are prepared to pay money up to a cap that is higher than the amount that people would be paying in rent if they were not subject to the bedroom tax. That is the important point.
It is not much good for the Minister to give the number of one-bedroom properties across the whole country, because when the Housing Minister, the hon. Member for Great Yarmouth (Brandon Lewis), appeared before the Work and Pensions Committee and was asked where the spare capacity was, he said that it was in Grimsby. That is not much good to people in Aberdeen who cannot find a house to move to.
I assure Ministers that there are no places in Aberdeen for people to move to. In fact, there is a labour shortage because there are not enough properties to allow people to come and work and live in Aberdeen. That is a real problem, and the bedroom tax does nothing to mitigate it. If anything, it makes the situation worse, because it makes people feel insecure in what should be a secure tenancy. They are often in houses that they have lived in all their lives and seen their families grow up in, but now they are either being forced to pay extra or being forced out of their houses and finding that there is nowhere else for them to go. That is why the policy is pernicious and should be scrapped.
I am pleased to follow the Chair of the Work and Pensions Committee. However, one cannot on the one hand say that people are being driven from the social sector to the private sector, and on the other argue the opposite case by saying that the number of people moving to the private sector is falling because rental prices are going up. Those are contradictory points. Members have to choose one line of attack.
The only choice that a person has is to stay where they are and pay the bedroom tax. That is the problem.
I am glad that that has completely cleared up how Members can argue two entirely different things.
Let us put the matter in context. There is a lot of scaremongering, wild words and passion from Opposition Members, but very little attention to the facts. The Government removed the spare room subsidy simply to equalise the situation with what was going on in the private sector. I find it absolutely extraordinary that Labour Members are saying that it is all very well to have a discrepancy between social housing and private rented housing. Let us look at some more facts. Currently, 1.4 million households are on social housing waiting lists in England alone, and nearly 250,000 families are living in overcrowded accommodation. On what planet does it make sense not to have some degree of equity or fairness between people who rent in the private sector and those in social housing?
I am so sick and tired of listening to Tories crying crocodile tears about this. Some 822 people pay the bedroom tax in Hammersmith, and the last Conservative council sold off or demolished 500 council houses. How does the hon. Gentleman think that that possibly helped with overcrowding?
I am not aware of the details of the hon. Gentleman’s borough council, but Members across the House have widely acknowledged that there is a problem with housing supply. However, I am confused when the Labour party says that those in private rented accommodation should pay an extra amount, but that social housing should be exempt from that—and all in the context of people living in overcrowded accommodation and not having enough rooms. People come to our surgeries who are living in cramped conditions, and Labour thinks it is all very well to carry on as before.
The wider point is that even if we were running a balanced budget, this would be a legitimate subject for debate. When we add in the context of a country that is borrowing £100 billion a year—largely thanks to the efforts of the Labour party when it was in government—and when both sides of the House are trying to reduce Government expenditure, it is the financial management of the mad house not to look at welfare expenditure and try to reduce it. Again, there are facts to back this up. Without reform, the overall housing benefit bill would have risen to more than £25 billion in 2014-15, and as the Minister established, we have saved £2 billion.
Several hon. Members
Forgive me. Each and every one of those reforms and attempts to reduce expenditure have been opposed by the Labour party. It is well and truly said that Labour is the party of welfare: by my estimate, it has opposed £83 billion of welfare spending savings this Parliament. Under the previous Government it was notorious and a scandal that the maximum housing benefit award was £104,000 a year—[Interruption.] These are well-established facts; for exactly that reason, when the Government introduced the £26,000 welfare cap, it was the most popular Government policy since the second world war and since polling began. There is wide acknowledgement among the public that those reforms, although difficult, are crucial in trying to reduce the deficit and get the country back to some form of sanity in the conduct of its economy.
I have listened with great attention to the hon. Gentleman’s compelling rhetoric. He spoke about the management of the mad house. Is it the management of the mad house to try to force families in houses that allegedly have too many bedrooms out of that accommodation in a borough such as Hackney, where there simply are not enough one or two-bedroom flats for them to move in to?
We have established that there is a supply problem, but what we must agree on—and the general public agree—is that reform in this crucial area was needed. Neither of the interventions that I have taken addressed the fact that there is massive overcrowding, and that a quarter of a million families are living in accommodation that is physically too small for them.
In such a situation, surely it is common sense to try to equalise and rationalise the supply. [Interruption.] It is all very well for Labour Members to shake their heads and deny there is a problem, but at least the Government have had the courage to try to address the issue. They are doing so not by applying radical new ideas, but by doing what Labour did in government when they introduced a change to private sector rental agreements. It is time for the Labour party to wise up and get real—
Order. This afternoon’s debate is following a sort of pattern where the Opposition shout at the Government, the Government shout at the Opposition, and then both sides complain that there has not been a proper debate. I hope that Members who continue to shout across the Chamber will resist the urge to do so and listen to the debate.
Kindly commentators may say that the bedroom tax is simply an example of a short-sighted, ill-thought-out, thorough administrative mess up, but actually it is worse than that: it is cruel, nasty, and the cause of a great deal of misery and hardship. It springs from the same policy mindset as the belief that food banks are somehow an acceptable part of the social fabric in the 21st century.
The mess-up theorists are right when it comes to how the bedroom tax works, because it does not work. The Government originally said that it was all about addressing overcrowding and freeing up bigger properties for bigger families, but the reality is different. In Wigan there is a real problem in finding tenants for three and four-bedroom houses, and they are remaining empty for long periods. In fact, the voids bill has risen to £1.1 million—double that of last year—because of the time it is taking to fill those properties.
My hon. Friend is making a powerful point. Is part of the problem with the bedroom tax that it was retrospective in nature? Many tenants were allocated those properties and accepted them in good faith. They now find themselves trapped and having to pay bills that they did not foresee.
Absolutely. It is simply not the case that hundreds of families in Wigan are packed together like sardines, waiting for people with extra rooms to move out. The Government say that it is about fairness and levelling the playing field between those in social housing and those who rent privately who cannot afford spare bedrooms. Again, that is not the case in Wigan where one-bedroom properties are much rarer and people in the private rented sector can have a spare bedroom without paying for the privilege. That is because—contrary to the myth perpetrated by Government Members—the local housing allowance does not exactly work in the same way. It was not introduced retrospectively, and it is based on the average rent in an area for the size of property. Therefore, if a family can find a larger property that remains within the LHA rate, they can rent it with no penalty, as can be the case in Wigan.
Even if it were possible for a family to move easily to a smaller property, what would be the consequences? After all, a “spare”, or to put it crudely, “extra” room measure takes no account of disabled people’s adapted homes, foster parents who need rooms to take children in, separated parents who share custody of a child, or the grandparent in my constituency—as I know, grandparents are not always pensioners—who looks after her daughter’s child while she works nights. She would have to move.
I have had situations in Bristol where the housing department has decided that someone needs a second bedroom, but the housing benefit people have said that they are eligible for the bedroom tax. On one hand it is judged that someone does need an extra room, but on the other they are told that they have to pay for it. Is that not grossly unfair?
Absolutely, and that is the problem with a discretionary payment. Do we really want people to move every time their circumstances change? Let us look at it logically. A young couple move into a one-bedroom flat. They have a child so they move to a two-bedroom flat. Then they have another child. The children start school and can share a bedroom for a certain time, but when the first child is older the family move again to a three-bedroom property. Then, when the eldest child is 18, they move back to the two-bedroom flat. Then they go to a one-bedroom flat. Is that not a sure way to break down communities, take away social cohesion and spoil children’s education just when they need it? However, that point is academic, because, as I said, there just are not the properties available for people to move around like that. People are not chess pieces.
Perhaps the Government know that. This is not really about overcrowding, but saving money. Even by that yardstick, however, it still does not work. The Department for Work and Pensions assessment has been downgraded a number of times. It now appears that the cost of dealing with the debt, eviction, abandonment of properties and widespread misery and mental health problems caused by this pernicious tax might mean that cash savings are minimal or non-existent.
Will my hon. Friend give way?
Not at the moment.
Debt, eviction and widespread misery are what we are talking about. They are the result of the Government’s reform. People have not been given a choice. If they cannot move to a property with fewer bedrooms, they have to make up the rent difference themselves. For tenants in Wigan, the financial impact ranges from nearly £10 a week to nearly £25 a week, or £1,273 a year. That is a lot of money to find on a low income. As I said, they cannot move because there is a shortage of housing, so they have nowhere to go, are staying put and building up debts. One clear consequence of the policy is the build-up of rent arrears. Figures from my constituency demonstrate that 44% of under-occupation households were in arrears in March 2014. The amount of arrears from the 3,319 households was £381,000, with £225,000 solely attributable to the under-occupation charge. That is not a good outcome for a local authority trying to balance its budget, and it is not good for the people themselves, who are at risk of being evicted because they simply cannot find the extra money to pay their rent. It is bad for tenants and it is bad for the councils that are trying to balance compassion with getting the money in. The only alternative to building up debts is to cut down on essentials, such as heating and food. I think we can certainly conclude that the bedroom tax has played its part in pushing people towards food banks, which have surely become the defining image of the Government in their dying days.
It is not too late for the Government to do the right thing and scrap this cruel and unfair tax. It has not given them what they wanted—budget savings—and has not helped to end overcrowding or make our housing system fairer. All it has done is to make poor people more stressed and desperate, living with the constant uncertainty of discretionary housing payments. I stress the word “discretionary”, because there is nothing certain about them at all. The human cost of the policy does not justify any savings that may have been made. I urge Government Members to look at that at Christmas and vote with the Labour party.
It is a pleasure to follow the hon. Member for Makerfield (Yvonne Fovargue). She is well respected as a knowledgeable expert on these issues. She said that the under-occupancy penalty is cruel and described the mindset of those who would introduce such a policy. Presumably, that is the same mindset that introduced this policy into the private rented sector and reinforced it. My record on this issue can be seen on a number of occasions, including on the Affordable Homes Bill, which received a 75-vote majority in this House on 5 September. My opposition to the under-occupancy penalty has been consistent throughout, including during the previous Labour Government.
It is not the fault of those who are in housing need that successive Governments have failed to build enough homes of the right size, and they should not be made to pay the penalty for that. It would be nonsense to move disabled people from homes that have been converted, often expensively at taxpayers’ expense, only to have to do it all over again in another property. It is rare in my constituency, and I know in many others, to find a suitable alternative home within 20 or 30 miles. It is wrong that people who have a settled life in a local community should have to uproot themselves from their social and family, and other supportive, connections to meet the requirement of this unacceptable policy.
The fundamental moral point is that the poor are just as entitled to a stable family home as the better off. There are many circumstances where apparent under- occupancy is for a good reason: the visiting carer; the young nest returner coming back to a family home—something that middle-class people expect to offer to their younger people—after perhaps not getting on in life as they anticipated; and those who provide shared care. We should be encouraging housing associations and other social housing providers to build larger homes. When I worked in this sector, I always sought to ensure that social housing providers had some flexibility. Having larger homes provided flexibility in the management of their estate. This policy drives them in the opposite direction. I fear there is also a sinister agenda to create an environment in which poor families will ultimately turn on their poor neighbours and blame them if they are living in overcrowded accommodation, rather than looking further afield to find the real culprit.
What happened to the hon. Gentleman’s private Member’s Bill? How was it stopped? He mentioned poorer families. What is the actual cost? Is it costing £15 or £25 a week for those families who have to move?
It is already on record as 14% and 25%, depending on the number of rooms. I am concerned about the trading of statistics in the debate so far. I have to say that they are far away, and wildly so, from many of the statistics I have scrutinised when looking at the impact of the policy. They need to be traded in a calmer environment.
There is a division between Liberal Democrats and Conservatives on this issue, and I think it will be amplified now.
I want to make a separate and important point. We have a very creative local housing association in our area, Peaks & Plains, which has established pop-up business schools to enable more people to set up their own businesses and become established on their own two feet. Does the hon. Gentleman believe that that, and other policies from the Government Benches such as the new enterprise allowance, is helping more people to get established and be better able to take care of their housing costs?
I think that is slightly outwith the focus of the debate. Nevertheless, I of course acknowledge the merit of what the hon. Gentleman suggests.
The Conservatives have form when it comes to spending public money on the under-occupancy of residential property. After all, the last time they were in government on their own they introduced a council tax discount for second homes. Hundreds of millions of pounds of taxpayers’ money was spent every year subsidising the wealthy to have their second homes, when there were thousands of local families who could not afford their first home. That defines the Conservatives’ approach: they reward the wealthy when they under-occupy their second home and they penalise the poor when they under-occupy their council home.
The Conservatives claim that the purpose of the under- occupancy penalty is to save money by cutting benefit where the recipient occupies a property that is larger than they need, and to ensure the efficient use of a scarce public resource—social housing. Those two objectives, however, contradict each other. If the second objective—the effective use of public resource—were achieved and every last cubic centimetre of every council house was fully occupied, it would fail to meet their first objective of saving money.
I have a problem with the Labour party’s motion, partly because it deals only with the social sector, which is odd. If Labour had applied it to the private rented sector, I might have considered voting for it. Above all, I am concerned to deal with this issue seriously. We can either play party politics and come up with the kind of motion the Labour party has come up with today, or we can use the vehicle that is available, the Affordable Homes Bill. Although my amendment has not been accepted for debate, we should still be working together to seek political consensus to help the victims of this policy, instead of using them to score party political points, and that could be done with the money resolution necessary to advance my Bill. The Minister asked how we would pay for it. We could pay for it by driving down rents, rather than driving people out on to the streets. On the money resolution, I am afraid—
Order. Will the hon. Gentleman stop talking about the money resolution and get on with it?
The money resolution concerns my Affordable Homes Bill, which would address this issue, were we to solve the problem with the money resolution.
In conclusion, we should be seeking consensus, rather than scoring party political points.
Several hon. Members
Order. I am now reducing the time limit to four minutes, and there is a serious danger that some Members will not get to speak even with a four-minute time limit if we do not start making better progress.
This is a tax by any other name. It is horrendous and pernicious, as was said, and targets some of the most vulnerable people in our communities. It attacks the elderly, the disabled, families of all sizes and, above all else, those already struggling to get by day after day. I am incredibly saddened to see that my city of Glasgow is one of the worst affected in the whole UK: 12,000 people in Glasgow have been hit by the bedroom tax, including 2,000 in my constituency alone. That is too many.
Does my hon. Friend think that the Secretary of State learned anything when he visited Easterhouse in Glasgow and listened to what he was told about the level of poverty there?
The one thing we know about Ministers, who are having a wee chat among themselves, is that they do not listen to anybody. That is the problem with the Government. They sit and have their little chats because they are bored by the common people in the Opposition trying to help them. [Interruption.] They can say what they like, but that is how it looks to me.
I was listening carefully to the hon. Gentleman, and I was quite surprised by his comments, because the Scottish Government have decided to use some of their own money to ensure that people in Scotland are not affected by the spare room subsidy withdrawal.
The Minister is right, except for one thing: it was thanks to the Labour party north of the border frightening the Scottish Government into it. [Interruption.] They are having a wee chat again, but that’s okay. He misses the whole point. This is about people who care. It is about a side of government he does not understand. The Opposition worry about people who do not have much. Whether they live in Scotland, Wales, Northern Ireland or England, I still care about the people of this country. I am a United Kingdom Member of Parliament, and I will look after everyone within this nation.
I want to mention a couple of cases. John, a disabled man, lives on his own and has two teenage kids at school. He wants to keep in touch with his family—he wants them to be a part of his life, and he wants to be a part of theirs—so he keeps a bedroom ready for them so they have the freedom to visit at weekends, to stop in on the occasional weekday and to come and go as they please. He desperately wants to keep his family together, but moving to a one-bedroom house would end that freedom for him and his children. I cannot imagine the hurt and anger I would feel, as a father of three, if I had to tell my children or my grandchildren what John now has to tell his kids: that they cannot come and stay, even to look after him when he is not well. That is due to this Tory-led Government—make no mistake about that. It is the Tories who have done this.
I know the Minister said he did not want to hear about cases, but I will mention another one. I know why he does not want to hear about cases: because they are about real people, people we care about but they do not—[Interruption.] They are having a little chat again. A constituent of mine, Christina, wrote to me and explained her situation. She is a self-employed 60-year-old who lived in her house for 19 years with a son who recently moved out. She gets by in life, but gives all the time she can to voluntary work in her community, and she suffers from mental health issues. She feels safe in her home and in her community. She is not opposed to downsizing, and she understands that another family might need the two bedrooms more than she does, but she cannot afford to move: she cannot afford the new white goods she would need in a new home; she cannot afford to furnish and decorate a new home; and she cannot afford a removal van to take her possessions with her. Most importantly, however, she cannot afford the £41 a month she will need to make up the difference. For people such as Christina, it is literally a choice between rent and food.
Madam Deputy Speaker, I have taken two interventions already, and I do not want to take up any more time. I think I have made my point. This pernicious tax on the poorest in our society has to be got rid of, and if the Government, with their friends on the Liberal Benches, will not do it, we will.
I am amazed that the Labour party wishes to portray the withdrawal of the spare room subsidy in the light it does. It seems to have forgotten that it introduced similar rules in the private rented sector, as was illustrated by my right hon. Friend the Member for Banbury (Sir Tony Baldry). Difficult decisions have not been made regarding the social housing stock; instead they have been ignored.
It is appropriate that tenants make a contribution towards their rent if they are living in accommodation that is too large. As I will illustrate, the majority of tenants in the district I represent agree with this change, which will bring the social housing sector into line with the private rented sector. With that in mind, I looked at how the change was affecting people in the district in which I live. This debate needs that level of analysis to show that the charge is not affecting many people and that there is widespread agreement on the need for tenants to contribute to their rent, which we are all paying for, or to move out of houses that are seen to be too large for their needs.
There are almost 7,000 recipients of housing benefit in my district, of which almost 3,000 are in the private rented sector, which leaves 4,000 in the public rented sector. At the beginning of April 2013, the total number of social tenants having their housing benefit cut by the withdrawal of the spare room subsidy came to 474. By September 2014, this had fallen by 27%. In April 2013, the numbers affected amounted to 7% of the housing benefit case load; by September 2014, this had fallen to 5%. That is not a lot, but I believe passionately that the interests of those affected should be looked after.
For that reason, I looked at the discretionary housing payments. In the first period, 212 people applied for DHP. Of these, 139 received awards, leaving a total of 79 who applied but were rejected. Of those 79, only one appealed, and the officer’s decision was upheld. This year, the number of applications dropped from 212 to 40. Awards were made to 27; 13 were refused. Of those in receipt of DHP in July 2014, more than half accepted they needed to make up the deduction, while a total of 32% had either moved to a smaller property or returned to work and were no longer eligible for housing benefit. This is in a constituency where the unemployment rate has successfully dropped to 278.
Social housing tenants accept that they need to contribute to their rent or find work. Furthermore, there has been no significant impact on homelessness, and there remains an ongoing duty to accommodate homeless people. In 2012-13, homelessness stood at 44; in 2013-14, it stood at 40; and in 2014-15, it stood at 34. By the end of 2013-14, the level of rent arrears stood at 1.7% against a target of 2%. There is no denying that the spare room subsidy has affected a number of households, but the impact has not been widespread and many are accepting that they need to share the costs of this accommodation. That is in a district that is building accommodation that is suitable for people to move to as quickly as possible.
Eighteen months ago, on a brilliant spring morning, a Meriden grandmother, Stephanie Bottrill, got up, sat down at her kitchen table, wrote notes to her son, her daughter, the grandson she adored and her friends and neighbours, fed the cat, put the keys through a neighbour’s door and then walked three miles through the early dawn light to the M6, where she threw herself under a lorry and committed suicide. The last straw for Stephanie Bottrill was having to pay the bedroom tax.
What kind of Government causes such pain to decent men and women? Once in a generation there is a tax so bad that the next generation looks back and asks, “Why did they do it?” Such was the poll tax, and now we have the bedroom tax. To add insult to injury, on the very day the bedroom tax was introduced the Government gave millionaires a £100,000 tax cut. In Birmingham, more than 10,000 households have been hit hard, 1,529 in my constituency, with an average loss of £16.42 to the most vulnerable and with some losing as much as £1,400 a year. A quarter of them are disabled. Who benefits? The Chancellor, because as far as he is concerned we have seen a weekly reduction in housing benefit of £179,000, with him netting £9 million a year while 10,000 people lose out.
Let me give some brief examples from my constituency. Terry lives in a two-bedroom house with his wife, and he has to have a separate room because she needs specialist breathing apparatus at all times. They have had to pay the bedroom tax because they are in a two-bedroom home. Brian lives in a two-bedroom property and was desperate to move to a one-bedroom property to avoid paying the bedroom tax. He tried time and time again, but he could not do it because there were only 43 available in the whole of Birmingham for in excess of 10,000 households.
On that point, in Stoke-on-Trent, there is nowhere for the 2,700 families affected by the bedroom tax to go. There are no other properties for them to take.
My hon. Friend is absolutely right. They are trapped, having to pay the bedroom tax whether they like it or not.
A third constituent, Nicky, lives with her husband in a two-bedroom property. Her husband is a paraplegic and they are unable to share a bedroom, which is why they are in a two-bedroom house. They, too, have to pay the bedroom tax.
The Opposition are all in favour of reducing the housing benefits bill, but housing benefit is being pushed up by low wages and high rent. I met a young mother in the food bank in the Baptist church at the end of Erdington High street. She is in work, doing two jobs, but she is on poverty pay and is having to claim housing benefit as a consequence.
There are also not enough homes in our country. In government, we built 2 million homes and 500,000 affordable homes, but under this Government we have the lowest level of house building since the 1920s. Tens of thousands of people all over the country are trapped in homes in which they have often lived for decades, having to pay a retrospective tax and struggling as a consequence.
In conclusion, Government Members, particularly those on the Front Bench, just do not get it. They just do not understand the pain that has been felt as a consequence of their actions. The Secretary of State has often affected a damascene conversion on the road to a Glasgow housing estate, yet now he is presiding over pain on a grand scale to tens of thousands of decent men and women in this country. He has sat there throughout this debate with a Cheshire cat smirk on his face, oblivious to the consequences of his actions. This is a cruel, callous tax and one of our first acts as a Labour Government will be to confine it to where it richly deserves to be: the dustbin of history.
What is depressing about this debate, which we have time and again, is that it calls for a policy that was invented by the Labour party to be reversed and does not offer any solutions for moving forward with the welfare state. We should take such opportunities to get out of the soundbite bingo and to get on with making policies that might help to tackle the long-term problems.
Out-of-control welfare spending leads to the situation that we find in countries not too far away—in Ireland, perhaps. In real terms, public pay, pensions and benefits had to be cut significantly to regain control of the public finances. There is nothing just about running an economy in that way, because when eventually people need to rely on the welfare state—which we, as the sixth richest nation in the world, should be proud of—they cannot, because the governing body of the day has destroyed the economy and left no money.
In these times, we lose sight of the original five evils laid down in the Beveridge report: squalor, disease, want, ignorance and idleness. We have tackled many of those, and we must ensure that we do not go backwards, but we are in danger of placing an increasing burden on the modern welfare state while still operating a system invented a long time ago. We need new thinking about how best to deliver efficiently and about ensuring that the resources we have are used in the best way to tackle poverty.
On 18 December 2012, I introduced a ten-minute rule Bill on the subject of a welfare cash card to pay benefits to all recipients of benefits in this country, in work or out of work, through electronic means. I have spent the two years since then researching some of the criticisms made at the time, the practicalities and how the idea could move forward. I thank the Joseph Rowntree Foundation, Oxfam, the Trussell Trust and the Money Advice Service for the discussions they have had with me.
A key point about electronic payment is the speed at which it can focus resources where they need to be and deal with one of the key problems that emerges in our discussions about housing benefit. The Trussell Trust highlighted the problem of people having to choose whether to eat and the problems caused by delays in benefit payments, which can sometimes lead to people having to go to a food bank. Electronic payment would allow immediate upload; there would be no delay.
It is sad that a dogmatic approach, saying that we absolutely cannot have such cards because they are equivalent to food vouchers, stops new thinking about efficient ways of using the state. If we do not move to a modern system, and if we do not move away from a system of barter like that in the Bible, quite frankly, we run the risk of making the system completely unworkable. We must therefore use debates such as today’s sensibly to consider how the welfare state can move forward to deliver the needs that people have when they hit hard times. That is what this debate is about. It is about how the Government can support people. Simply saying that we need to pour in more money and to reverse policies will leave us with a situation in which the welfare state will be inoperable because the country has gone bankrupt. We see this all around Europe, where people in the greatest need do not get the support they need.
The Minister began his contribution this afternoon with the good news about unemployment. He made a case for giving the full picture, so this is a message for both Front-Bench teams—the one that has overall charge of the economy, and the one that has charge of the economy mainly in Wales. In the last quarter, unemployment in Wales went up by 8,000. That is indeed the full picture.
I welcome the motion. The bedroom tax is one of the most ill-thought-out policies brought about since the poll tax, and I think it should be abolished with immediate effect. The under-occupancy penalty, if we must call it that, has been applied to about half a million people, more than 60% of whom have a disabled member and the vast majority of whom have absolutely no hope of downsizing in order to avoid the penalty. In fact, in Wales, 35,000 households have been affected. Many of them were allocated their current homes a very long time ago—and they are their homes, which is a very important point. They are homes—not properties or just houses—where people live and have lived for a very long time.
Before the bedroom tax was first proposed, I asked the then Minister what assessment had been made of the elasticity of the local housing supply in the private sector in Wales. I asked whether the Government had thought about it beforehand. Tellingly, the answer was “none”. The Government’s motive was to cut. People could neither move nor take in a lodger, and no attempt was made to prepare people to move to smaller houses if needed. This was and is a ruthless money-saving exercise. Those of us who warned of the implications of the bedroom tax beforehand and opposed it from the very start take absolutely no pleasure in saying, “We told you so”—but that is the case.
Ministers have been keen to point to the discretionary housing payment fund, saying that it is helping to fill the gap. The average DHP funding per head in Britain is £2.83. In Wales it is £2.51—in marked contrast with comparable areas such as the north-east of England, where it is £2.80, and Scotland, where it is £5.39. I shall return to that point later. Ministers have sought to reassure us by saying that the DHP fund will receive an extra £40 million in the next year. Given that rents are rising again, I have some doubt about whether that will fill the gap and, as has been said, that is not long-term funding.
Looking back to the Welfare Reform Bill in early 2011—now the Welfare Reform Act 2012—I note that Labour Members abstained on Second Reading. Their action speaks for itself. In early 2013, it was left to Plaid Cymru, the Scottish National party and the Green party to use one of our few Opposition day slots to have a debate on the bedroom tax and then to force a vote on its abolition. That was down to my party, the SNP and the Green Member.
When, early in 2014, the finances allowed it, the SNP Scottish Government implemented a top-up from their budget in order to mitigate the effects of the bedroom tax. The Government of Scotland, voted for by the people of Scotland, were protecting their people from the worst excesses of a Westminster Government for whom they did not vote. Many of us in Wales naturally turned to our own devolved Government to see what they would do. Again, it was left to Plaid Cymru to push in the National Assembly for mitigation of the cuts to council tax benefit—thanks to the efforts of my colleague, Rhodri Glyn Thomas, AM.
Labour could have recognised that the bedroom tax was affecting the most vulnerable and implemented mitigation measures, but it chose not to do so. It did choose to allocate some money to the smaller houses—357 houses in all of Wales, to be precise, while 35,000 households are affected by the spare room subsidy. The Welsh Government could have implemented a no evictions policy, but chose not to do so. Leaving all that aside, I think the people of Wales can clearly see that it is Plaid Cymru in Wales, the SNP in Scotland and the Green party that have led on this matter—and they will act accordingly at the general election.
As always in these debates—we have had a few of them—I rely on the statistics and figures from my outstanding South Derbyshire district council, which has retained housing. In the first 12 months of this policy, 318 tenants were affected and needed help. The council was proactive, employing a tenants sustainability officer to help to ensure that all the relevant benefits were being paid to those who needed help. I am delighted to tell the House that, over the last 12 months, only 73 tenants have been affected by the policy. That is an outstanding achievement. I am incredibly proud of the council.
A number of factors came into play. The council has been very proactive in using the discretionary housing budget. When it had used about 80% of its allocation, the Government offered more money to affected councils. It put in a bid and was given more money, and has now used more than 80% of the grand total—the larger amount. The council understands about keeping communities together and about dealing with carers and disabled people.
There is another crucial reason for the fact that the situation in South Derbyshire has completely and dramatically changed. This is, of course, a groundhog day debate, but it proves yet again that the Opposition are hardly worthy of the name. One of the reasons for that dramatic change—apart from our having a caring Conservative council—is the huge drop in our unemployment figures. In May 2012, 1,402 people in South Derbyshire were unemployed; in November 2014, 517 signed on. The point is that this Government believe that work should pay, this Government believe that people should have every opportunity to get back into work, and this Government are sitting on the fact that the number of tenants affected by this policy has fallen from 318 to 73.
Does my hon. Friend agree that, as a result of the tough decisions on welfare that the Government had to make and the lower borrowing rates that they have now produced, we can give businesses the tax cuts that will enable them to pay more than the minimum wage and hopefully go further, thus helping the poorest in society to get on?
Absolutely. I do not know whether you will allow me to give my hon. Friend a proper answer, Madam Deputy Speaker, because this is slightly off the point, but two major companies have factories in my constituency. One is Faccenda, whose turkey-processing plant is very busy at the moment, and the other is Nestlé. Both have announced publicly that no one working in those factories will earn less than the living wage. They are taking the lead, and that is the moral thing to do.
I am incredibly proud of my businesses, my council, and the tenants who have found the right way to obtain jobs and get out of the welfare benefit society that the Opposition seem to want to make everyone pay for. It should not be like that. Get into the 21st century, guys!
I speak as chair of the all-party group for muscular dystrophy, and as one who knows families who have been devastated by the disease. They have written to me asking me to convey their views, and to describe to the House what they experience every day.
This policy has caused a huge amount of concern to most disabled adults, including those with muscular dystrophy or related neuromuscular diseases. Many disabled people and their families who require adapted housing and special access to accommodate their needs have been hit hardest by the bedroom tax, as it is more widely known. That applies particularly to people who live on their own or with a partner. They may need extra space for vital home adaptations and equipment storage, as well as space that enables carers to stay overnight. If appropriate new housing cannot be found for those people, they face a stark choice. They must force themselves to move to properties that have not been adapted, or remain in their houses and make a number of cutbacks or fall into debt.
Let me give the House some examples that people have asked me to give. Denise is affected by a progressive muscle-wasting condition known as myotonic dystrophy. She lives in a two-bedroom flat with her husband, who acts as her primary carer. Following the Government’s reforms, Denise was told that her housing benefit would be reduced in April. However, the fluctuating nature of her condition makes it necessary for a carer to stay overnight on occasion. The spare room is also used to store ventilation equipment, a shower chair and other equipment, and Denise’s husband uses it occasionally when it is not convenient for him to sleep with her. She must choose whether to stay there or pay the debt.
Kerry has a rare neuromuscular condition. She lives with her husband, who is her full-time carer and who also works part time. Their property contains a spare room, but Kerry is now having to pay £58.16 per month in bedroom tax, although the room is used to store her wheelchair, hoist and shower chair, and is also used by her husband at some points during the week to catch up on sleep outside regular hours. Besides the small wage her husband earns, the couple rely on benefits. That only just covers the bare necessities of life: food, utilities and rent. The cut of nearly £60 has impacted on her independence. She and her husband do not have a car, and because of the new costs, she is now unable to get out of the house. That is the reality of the bedroom tax. This is not about the to and fro of debate; this is what people are living with day in, day out.
My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said that the Conservatives do not get it. They do get it. What they get has been shown by the previous speaker, the hon. Member for South Derbyshire (Heather Wheeler). This is about creating an argument between our side and their side. They want to portray us as being the party of welfare. Well, we are the party of welfare; we are the party of the welfare state. We created the welfare state, and we did that because the Conservatives were perfectly happy to see poor people carrying rich people. That is exactly what we are seeing today, too, with people such as those I have talked about being robbed of £60 while Conservative Members’ friends get a £107,000 payout of taxpayers’ money in the previous Budget and again in this one.
It is clear what this is about. It is not about looking after people. It is about creating a dividing line, so that when the Conservatives go into the next election they can say, “We’re the party who don’t believe in welfare. Labour do.” Well, let us be clear: today we have seen clearly that Labour stands up for the poor of this country, the vulnerable and the sick. It will be interesting to see what the Liberal Democrats do, because if they get it wrong today, it will be yet another nail in their coffin when next May comes around.
It is a great pleasure to follow my hon. Friend the Member for Blaydon (Mr Anderson). He is completely right: our party stands for a strong economy and a fair society, while the Conservatives have overseen a complete economic catastrophe, with the amount of debt escalating to 80% of the economy now.
Does the hon. Gentleman agree that he and his colleagues have collective amnesia about what happened during 13 years of Labour Governments?
Share of debt has gone to 80% from 55%, the Conservative-led Government have now borrowed more in four years than we did in 13 years, and the economy is flatlining when it had grown by 40%. Their economic incompetence and the bankers’ errors are being borne on the shoulders of the most vulnerable, the most needy and, in the views of the Tories, the people least likely to vote. This is completely cynical and disastrous, in particular in poorer areas such as Wales.
In Wales, 46% of tenants are affected, versus 31% in the rest of the UK. Some 60% of people who have been inspected since a year last April are now driven into arrears, so the council has got less money still for repair and renewal. We have a situation where money has been spent on disability changes for flats and houses and those need to be decommissioned. The whole thing is horrendous.
The reason, allegedly, is twofold. One reason is housing benefit escalation, which has doubled in 10 years, but 70% of that is because of private rents going up. We need more homes. We do not need the Government, as they are doing, to use the funding for lending scheme through the Bank of England to spend more and more money on mortgages, to inflate the price of existing houses rather than building new ones. The money to small business is cut by 40% so wages, productivity and innovation do not grow. This is an horrendous, cynical and incompetent business and social experiment that is going disastrously wrong.
According to the House of Commons Library, the level of under-occupancy in the social sector is 10.2% versus 15.7% in the private rented sector and 49% in the owner-occupied sector. It is being said that people in social housing should not have homes. The reason why that rate is so low, of course, is that we build two-bedroom or three-bedroom houses and then the kids grow up and there is a part-empty home for them to be able to come back and see mum and dad or whoever. Then people die and those houses are recirculated. That is why that housing is efficiently used. In the owner-occupied sector that does not happen, of course, but the Conservatives do not care about these people on estates who need stable communities to build stable futures and jobs, and security for all of us. The whole thing is a complete disgrace.
We know that two thirds of the people affected are disabled. The Government are pretending that everything they are doing is right, but in fact they are hitting people in many different ways. For example, a couple with two children in which the woman is earning £10,000 and the man is earning £25,000 will now be losing £9,417 unless they separate. The Government have set in train incentives for families to break up as well as stripping them bare of their money.
The bedroom tax is one of the most horrendous examples of the Tories ripping the food out of the mouths of the poorest to the extent that, at Christmas time, they have to go to food banks. In Swansea, we are really being hit. The amount of money going to public servants has been frozen and the amount going into the public sector is going down. The amount of money in the local economy has been massively reduced. On the benefits side, tax credits for people on low wages are being cut, as is housing benefit. We are seeing desperate people being driven into the hands of loan sharks and having to use food banks.
This new Dickensian society that the Tories have created must be ended, and I hope that we will soon see the advent of a new, stronger Labour Government who will deliver a strong, united Britain in place of the weak, divided future that the Tories are heralding.
Once again, we are debating the bedroom tax—the policy that I believe will come to define this Tory-Liberal Government and their four-year-long assault on people with low incomes who live with disabilities and health problems. The bedroom tax has caused real hardship for some of the most disadvantaged people. More than 70,000 households in Scotland are currently liable for the tax, 80% of which are home to a disabled adult. Those are the people who already have the least choice about where they live. They are already living in the cheapest housing available—housing that has been allocated on the basis of need, not of household size.
The bedroom tax is making those disabled and disadvantaged people the scapegoat for the systemic problems in the housing sector, as well as reducing their incomes. It is a policy that should never have happened, and I hope that people will remember, when the election comes round, that the Tories, backed up by their little helpers on the Lib-Dem Benches, were prepared to put disabled people on the front line of austerity cuts.
My colleagues and I will be pleased to support the Opposition motion today, but I have to ask those on the Labour Front Bench what took them so long. It was only in September 2013 that Labour announced that it would repeal this pernicious piece of legislation, and reports in The Guardian on 25 October suggest that the Scottish Labour leader was actively prevented from criticising the bedroom tax for a year prior to that while Labour made up its mind.
I understand why the hon. Lady wants to make those remarks, but I find it extraordinary that she should suggest that we did not speak out against the bedroom tax. We voted for various amendments in Committee and we voted against the Bill’s Third Reading, so it is not true to say that we did not vote against the bedroom tax.
I did not say that Labour Members did not vote against the bedroom tax; I was talking about what was alleged in the report in The Guardian on 25 October. If that is true, it is a shocking indictment—[Interruption.] That is what I said.
I am pleased that the Scottish Government have taken action that has fully mitigated the effect of the bedroom tax for those affected this year and in the next financial year. I understand that, as of next week, the section 63 orders will be in force to allow local authorities to make discretionary payments—as they have been doing for some months on the basis of assurances—to ensure that no one in Scotland will lose out. I am relieved that tenants will no longer be experiencing hardship or accruing rent arrears due to the bedroom tax, but we should make no mistake that while it remains on the statute book, legal liability will remain with the tenants. Moreover, the £35 million that the Scottish Government have allocated to mitigate the bedroom tax this year has had to be found from other devolved budgets at a time when public spending is under pressure. So this is far from being an elegant or sustainable solution, and it is interesting to note that the Welsh Assembly has refused to go down a similar route.
The issues underlying the problems with the bedroom tax are the chronic shortage of social housing and the serious mismatch between our existing housing stock and the needs of present-day tenants. In Scotland, research by the Convention of Scottish Local Authorities has found that the implementation costs of the bedroom tax exceed the projected savings by around £10 million—money that could have been reinvested in social housing.
I recognise that the Government want to cut the housing benefit bill, but squeezing disabled tenants is a vicious way to do that. When we look closely at the increases in housing benefit over the past 10 years, we see that almost a third of the UK increase is attributable to London alone. By contrast, in Scotland the total cost of housing benefit has increased by 22% in inflation-adjusted terms over 10 years, but the increase has been much lower in the social rented sector, at only 6% over 10 years. Housing benefit inflation is being driven by out-of-control rent increases in the private sector, a problem that is most extreme in the London area.
I will not give way again.
The problem is most extreme in the London area, so if the Government want to save money, they should address it instead of scapegoating disabled social tenants. Taking money out of the budgets of low-income households will not make more housing available, will not curb the rent increases and will not tackle overcrowding in the areas of very high demand.
As well as being a bad policy, the bedroom tax is, above all, a nasty and vindictive policy. It does not surprise me that the Tories have imposed it on us, but it is shameful that not one of the Scottish Liberal Democrats is here today to defend their Government’s policy, which they pushed through when it came before the House in the first place. This is supposed to be the season of good will, but there is a distinct lack of Christmas cheer among the people still dealing with the financial consequences of this fiasco of a policy. As the Scottish Liberals scramble to save their seats in the run-up to May, I hope that people in Scotland will remember who let the Tories do this to our most vulnerable citizens. They know that it is a failed policy—that is why they will not defend it—and it needs to be consigned to the scrap heap.
When the Minister spoke at the beginning of the debate, he accused the Labour party of contriving to scare. I have to say to him that that is a gross insult to my constituents, who feel very strongly about this issue. In one ward in my constituency, Norris Green, more than 1,000 tenants are directly affected by the bedroom tax, and in total 2,500 people are affected across my constituency. With all due respect to the hon. Members for Henley (John Howell) and for South Derbyshire (Heather Wheeler), to whom I listened carefully, the scale of the challenge in a constituency such as mine is completely different from what they described in their constituencies.
An interesting piece of work has been undertaken, with those directly affected by the bedroom tax, called the Real Life Reform report. It is being constantly updated, and its latest research shows that one in eight of those involved has used a food bank at least once in the past three months. One of the most concerning findings in the Real Life Reform research is that people who are having to pay the bedroom tax are spending less on food—on average, about 10% less; the typical spend on food in September 2013 was £3.28 a day, which is hardly a massive amount of money, but the latest figure is £2.79 per day. So when we say that people are confronted with the choice of paying the bedroom tax or paying for food, we know that the research is demonstrating that for a significant number of people that means spending even less on food.
A constituent of mine has had a row with her daughter, who has moved out, and wants the bedroom to be left available for her daughter when she comes home. In the meantime, as she waits for her daughter to come home, she eats nothing but sandwiches, because she has to pay the bedroom tax.
I am grateful to my hon. Friend for raising that issue, and I have encountered countless examples like that in my constituency. I am grateful to the registered social landlords in my constituency—Riverside housing, Liverpool Mutual Homes and Liverpool Housing Trust—for providing me with up-to-date information ahead of today’s debate. Let me run through some of what they have told me, some of which is different from what we heard from the Minister. I accept that the impact of this policy is different in different parts of the country, but I am speaking about what I have been told by the RSLs in my constituency.
I am told that there is a significant increase in current tenant rent arrears. Riverside housing told me that those affected by the bedroom tax are twice as likely to be in arrears with the rent as those not affected by it. LMH and LHT tell me that there has been an increase in the number of empty properties—there are more void properties. They say that that is linked mostly to prospective tenants either choosing to wait for a suitable-sized property to meet their housing need or simply being unable to afford the rent if under-occupancy is applicable, given their own family circumstances. Thirdly, housing associations are struggling to let some of their lower demand properties, as applicants are unable to make up the shortfall in rent. One of the consequences, certainly in Liverpool, is that the average re-let period has increased for those two housing associations from 27 days to 40 days—in other words, properties are left empty, so rental income declines for RSLs.
On the shift to the private sector, the experience in Liverpool is very different from the figures that the Minister shared with the House. Riverside housing tells me that of those who have moved, 30% have moved from the social rented sector as a result of the bedroom tax into the private sector. As my hon. Friends have said, that is often more expensive to the public purse because the level of housing benefit paid out in the private sector is higher, as private rents tend to be higher.
I shall conclude by saying something about discretionary housing payments. Last year, Liverpool spent £2.5 million on over 9,000 DHP awards. It spent all the money allocated by the Government, and it topped it up—there simply was not enough. The same thing is on course to happen again. The scale of need in a constituency such as mine, in a city such as Liverpool, cannot be met by the amount of money provided in DHP. We have no assurance that those housing payments are there for the long term.
A much more intelligent and straightforward policy is advocated in today’s motion, which recognises the hardship that this cruel tax has created. It recognises that it has led to an increase in household debt, and that it has hit the poorest, the most vulnerable, and disabled people. I make an appeal, even at this late stage, for Government Members to come through the Lobby with us this afternoon so that we can repeal this cruel tax.
Several hon. Members
Order. Members tend to forget that when they accept interventions and thus increase the time limit for their speech by a minute, they deprive their colleagues of the opportunity to speak. I have to reduce the time limit to three minutes. I call Jim Shannon.
Thank you Madam Deputy Speaker. [Interruption.]
Order. If hon. Members wish to complain they will not speak at all. If the hon. Member for Nottingham South (Lilian Greenwood) takes four minutes her colleagues will not get a chance to speak. Is this a question of being selfish or of being reasonable? Mr Shannon.
Thank you Madam Deputy Speaker. It is a pleasure to add my comments to this debate.
We have discussed this issue before, as hon. Members have said. It is something that our constituents bring to our attention, and they express concern and anxiety about it. We have to highlight again in the Chamber the fact that it affects the most vulnerable people in society: parents, those suffering with disabilities, and the elderly.
I should like to give the Northern Ireland perspective. As we all know, the legislation comes straight from Westminster to Northern Ireland, and the devolved Administration and our Minister are responsible for its implementation. Earlier this year, my party took the initiative in the Northern Ireland Assembly to set aside some £18 million in our block fund money to address the bedroom tax. That has been held up by the talks process, which is ongoing at this moment. My party opposes the bedroom tax in this Chamber, and in Northern Ireland, where we have control of it, if the legislation gets beyond the talks process.
We can see how this issue affects families. We can see the problems for foster parents; for disabled families with a carer; and for families with two children of different genders, who are now required to share a room. Some 66% of existing Northern Ireland Housing Executive tenants and 62% of working-age housing benefit recipients come into the category of under-occupiers, according to information and facts in The Guardian earlier this year. Indeed, 38% of current NIHE working-age housing benefit recipients under-occupy by two rooms or more. The bedroom tax is a massive issue, and we oppose it. An article in The Belfast Telegraph has stuck in my mind. It said that
“officially, foster children don’t count as real so if yours has his/her own room, that’s also deductible…if your son or daughter only spends a few nights a week with you because’
the family relationship has broken up, that does not count. If someone has a soldier son or daughter in the Army who sometimes comes home, that does not count either.
There are many reasons why we are concerned about the bedroom tax. I am also very much concerned about discretionary housing payment. The Government say that they have set aside £30 million for that, but people will still lose benefits, with an impact of £100 million. People on disability living allowance will receive £2.51 extra a week, but they will lose £14 a week in housing benefit because of the bedroom tax. So 230,000 disabled people who receive disability living allowance will lose an average of £728 every year in housing benefit. Those figures are substantial. We must work together to ensure that those who need the most help do not lose out. With that in mind, I wholeheartedly support the motion.
Can I just say to the Minister who led for the Government that his statements were very thin? They lacked any sense of compassion. He wanted to debate numbers and affordability, but that showed that he does not really care about the impact on the people affected. I think that probably comes from the Secretary of State, so I am sorry to say that about the Minister, because I think that he set out to do his job with compassion. However, this policy clearly has no compassion built into it, apart from those parts forced on the Government by Opposition attacks, because it was even worse when it started.
The policy is punitive, and it is clearly designed to be so. In the context of modern family structures, it is clear that families dissipate much earlier than they used to, and young people increasingly want their independence, leaving parents who are not yet 60 with extra rooms that they are expected to give up, which often means moving out of their community. That is the effect of this policy.
There is a housing problem, with public housing stock being too low. Governments have not built enough public housing stock. As far as I am concerned, this basically comes down to a deliberate attack on people in hardship. There has actually been a 27% increase in housing benefit applications in the two authorities I represent, and a lot of that is because people are in work—we have heard the great boast about the fall in the number of people on the claimant register—but they are not working in a way that allows them to pay all their bills without claiming tax credits and housing benefit. That is what I have seen in my constituency surgeries over the last period.
The solution is very simple: we need to build more public housing to rent. That is clearly the priority, and I hope it will be taken up by the next Labour Government. We need to build houses that people in the public sector can rent, and we need to build them in such a way that there are smaller houses they can go to if they wish to move, because at the moment that cannot happen. I tried to ask the Minister—he would not let me intervene—how many of the 820,000 spare rooms have in fact been given up. The answer, it turns out, is 4.5%. When it comes to effectiveness, this policy is a failure. It does not work. Around 25,000 fewer people now have spare bedrooms, according to the Government.
In addition, there is the allocation system. Most authorities now have priorities for the homeless, for movers and for first-time applicants. What is happening is that homeless single people are demanding to move into apartment blocks that were designed for the elderly, and social dissonance is growing because they cannot live side by side. That is another aspect of this policy being forced on people by the Government. Single people would have taken an extra bedroom, but now they do not have that option and have to live within their means. Therefore, my pensioners are coming to me to say that people are being inappropriately housed in buildings designed for single pensioners. It is a punitive system and it must end.
The first thing I want to address is the claim that all the Government are trying to do is make the situation in the social rented sector the same as that in the private rented sector. I have revisited the debates we had when the Bill was in Committee and found not a single mention of that argument, so it is not the case that I have forgotten. Strangely enough, it was not the prime motivation for the legislation. Rather, it is one of the arguments that were made after the Government realised that the other arguments were not holding up.
Of course those arguments are not the same. There is a big difference between someone taking up a new private rented sector tenancy and knowing what size property they are looking for, as in fact has been the case since 1989—it was not introduced by the Labour Government—and someone being told that the house they have lived in for 10, 15 or 20 years is now deemed to be too big for them and that they will have to start paying extra for it right away. If this argument was about people refusing to make a reasonable move, that might be a different matter. That would be more comparable to the private rented sector.
The hon. Member for St Ives (Andrew George) included an amendment in his Bill which was initially proposed by the Opposition. Our earlier amendment went to the House of Lords and there was ping-pong on it. Unfortunately, the hon. Gentleman, who supported it at the time, could not get his colleagues to join him, or this would have been put right at the outset.
If we want to be fair to the private rented sector, perhaps we should look at other ways in which we could make the two sectors the same. However, the Government are not quite so enthusiastic about improving quality or security of tenure in the private rented sector, or looking at longer tenancy periods or limiting rent rises in the private rented sector. The Labour Government did that with things such as the decent homes standard, while in Scotland there was the Scottish housing quality standard. We want to equalise the sectors. There are many ways in which we could do that, but the bedroom tax is not the right one.
We are told that housing benefit is not rising and there has been some sort of saving. I know the Prime Minister no longer seems to be quite so keen on the Office for Budget Responsibility, but it has said that its forecasts for housing benefit spend have had to be revised on each occasion it has reported on this because of the rise in the number of people in the private rented sector, weak wage growth, and rent inflation that has been higher than expected.
In March 2013, two weeks before the bedroom tax came into force, I secured an Adjournment debate to highlight the problems that this cruel and unworkable policy would create for some of the people in my city—those who were least able to afford it. I highlighted which households would be affected, with two thirds including someone with a disability, one third being families with children, more than a fifth being working households on low wages, and many having no spare room at all. They were families where older children needed their own room and a quiet place to do their homework, couples who needed to sleep separately because they were caring for a disabled partner, or separated parents who wanted to have their children to stay at weekends. For people in Nottingham, the bedroom tax would mean having to find, on average, an extra £11 a week if they had one more room than they were allowed, or £22 a week if they had two. Perhaps that is not much to a Government Minister, but for someone on low pay or out of work it is the difference between eating or going hungry, turning on the fire or sitting in the cold, borrowing money to pay the rent or going into arrears.
Back in March 2013, I was conjecturing about what would happen to those affected by the bedroom tax—but now we know. My local Labour council and its arm’s length management organisation, Nottingham City Homes, have worked hard to try to support those hit by the bedroom tax. However, by June 2014, 2,046 of the 3,445 Nottingham households hit were in arrears, owing an average of £218.71. This year, 1,393 tenants have been awarded discretionary housing payments, but they live in anxiety, worried that it could be withdrawn. The council is drawing on its own financial resources to support those affected because the allocation of £965,000 is not enough to meet the level of need.
The Government argue, as did the Lib Dem Minister who replied to my debate 21 months ago, that these people should simply move into smaller properties, but his own impact assessment said that tenant mobility was limited—as was the Government’s intention. His plan—their plan—to cut housing benefit relied specifically on the inability of tenants to move, balancing the books on the backs of poor and vulnerable people.
Nottingham City Homes has worked with tenants affected by the bedroom tax, but only 97 tenants—2.9%—were able to downsize in the year to April 2014. That compares with 81 homes freed up for families in the previous year under the Right Size project. So this flagship policy has made no difference to tackling under-occupation. The truth, as we know, is that it was never about that. It is about cuts and taking money from the households least able to afford it, at the same time as handing out tax cuts to millionaires.
People in Nottingham—people across this country—know that we cannot trust the Lib Dems, who are now wringing their hands having supported the Tories’ legislation every step of the way. Only a Labour Government will scrap this wretched tax. Next May cannot come soon enough.
Every time we debate the bedroom tax, it is clear that it is not achieving what Ministers said it would. As costs rise for landlords and more is spent on discretionary housing payments, as even the hon. Member for South Derbyshire (Heather Wheeler) described, the bedroom tax is not only not saving what was predicted, but, as the Minister for Employment claimed on BBC 5 Live in March, it is not about saving money anyway, but about making better use of the housing stock. The bedroom tax is clearly failing to achieve that when just 5.9% of affected households have downsized. That is hardly surprising, given the mismatch between the stock available and the number of families who are under-occupying, as has been highlighted by speaker after speaker. From Aberdeen to St Ives, from Liverpool to the north-east of England, where the number of families with spare rooms is larger than the number of overcrowded families by three to one, such a mismatch means that people simply cannot move.
The Minister for Disabled People claimed that housing waiting lists are falling, and implied that that was because of the bedroom tax. May I tell him that it has nothing to do with the bedroom tax? Waiting lists have been coming down because the eligibility criteria for housing have been tightened.
Meanwhile, individuals have experienced massive hardship, as my colleagues have described. Some 220,000 families with children, 60,000 carers and 330,000 disabled people have been affected by this pernicious tax. Most have lost £14 a week, or a total of £1,260 to date. People under-occupying by two or more rooms have lost considerably more—£25 a week—and disabled people, who also lose £14 a week, have so far lost a total of £415.8 million as a result of the bedroom tax. That is a disgraceful hit on disabled people and their households.
As a result—[Interruption.] I am coming on to discretionary housing payments, and the Minister for Disabled People will want to listen when I do. Two-thirds of those affected spent less than £40 a week on food, and less than £20 a week on fuel; according to the Disability Benefits Consortium, 12% have used food banks, and that figure rises to 15% for those hit by other cuts to welfare payments; two-thirds have struggled to pay their rent; and only 41% have been able to pay their bedroom tax in full, while 20% cannot pay it at all.
As a result, not only have some people got into arrears, but many more have gone into debt. The Real Life Reform research, which my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) mentioned, shows that 74.3% of the families it is following are now in debt. They owe on average a shocking £3,971, which is up 71.8% on the debt they had before the bedroom tax came in. That must be shameful and worrying to Ministers. They have rightly expressed concerns about rising personal debt; yet their policy is causing it. Those people have experienced rising personal debt, but it is true that their weekly repayments are lower. However, that is because credit periods have been extended and extended to the point at which nearly half those followed by the Real Life Reform research say that they have no idea how they will ever pay off their debt.
The system is riddled with injustices and cruel perversities for those affected by this tax, such as those who need space for special equipment, as described by my hon. Friend the Member for Leeds West (Rachel Reeves), and couples who cannot share a room. Those whose homes have been adapted are also affected: 35,000 such houses have been adapted, at an average cost of £6,700. The £234 million cost to local authorities is now in danger of being written off because those families are being forced out of their homes. That is another example of Tory welfare waste.
Children with high or moderate care needs are exempted from the bedroom tax, but not those with high-rate mobility. The Minister for Disabled People said that overnight carers have been exempted. That is true for overnight carers for adults, but it is not true for overnight carers for children, or for resident carers.
Despite all that, the Prime Minister said in the House on 6 March last year that disabled people were protected from the bedroom tax. That is simply not the case. As hon. Members have mentioned, nor are separated families; non-resident parents with their children visiting, whom my hon. Friend the Member for Glasgow North West (John Robertson) mentioned; those at risk of domestic violence; or the bereaved, who enjoy a 12-month so-called period of grace, which will be reduced to three months under universal credit.
It is not just individuals who are suffering. Registered social landlords are experiencing a loss of rent and are left with arrears and voids, as my hon. Friend the Member for Makerfield (Yvonne Fovargue) pointed out. That means that their credit rating and their ability to borrow cost-effectively, and therefore to build the new homes that we need, are damaged. It is an utterly illogical policy.
Government Members said that the situation was the same as for the local housing allowance in the private rented sector. That point was made first by the right hon. Member for Banbury (Sir Tony Baldry), and then by the hon. Member for Spelthorne (Kwasi Kwarteng), who might want to stop playing “Candy Crush” now, and a number of other Members. Let us be clear about the differences between the two markets and about how long the situation has pertained. As my hon. Friend the Member for Edinburgh East (Sheila Gilmore) rightly pointed out, we have had size criteria in the private sector since 1989, so they were not first introduced under Labour as Government Members suggested.
In the social sector, housing is allocated based on need. That is not the case in the private sector, in which, without criteria, people could theoretically rent any property at all. As many Opposition Members have pointed out, the local housing allowance was not introduced on a retrospective basis, and it covered pensioners. Ministers have chosen to exclude pensioners from the bedroom tax, and they have to recognise that pensioners under-occupy the majority of stock. The policy is therefore doomed to fail, and the local housing allowance is not directly comparable with it.
The Minister mentioned discretionary housing payments, but they are clearly not the answer. They are temporary, and by definition they are discretionary. As my hon. Friend the Member for Aberdeen South (Dame Anne Begg), the Chair of the Work and Pensions Committee, pointed out, for some families the idea of a discretionary payment is completely perverse given that they are living in circumstances that they simply can do nothing about. What is more, as the Chartered Institute of Housing has pointed out, discretionary housing payments are not always properly advertised, and some local authorities are discouraging people from applying or appealing. Some are treating disability living allowance, for example, as income when calculating entitlement, which hits the people affected doubly hard.
Larger cities have had to apply for additional funds for discretionary housing payments—so, it would seem, has South Derbyshire—or had to use their own resources. Some authorities that had apparently underspent now say that they need more money. Redbridge wants to carry forward its underspend, Barking says it will spend in full by the end of the year and Harrow says it will spend £41,000 more. Eight councils account for £1.2 million of failure to spend, and Wandsworth for nearly half of that. Some £30 million more than originally planned has had to be allocated through DHPs to cover the cost of foster carers, and the administrative costs to local authorities alone amount to £1 million.
How are people responding to the pressures? I heard it argued today, but without the basis of any evidence, that the bedroom tax was encouraging people to get into work, but there is no evidence that it is doing that, or, if it is, that it is getting them off housing benefit. One reason for that is self-evident: given that two thirds of those affected are sick, disabled or carers, it is very difficult for them to get into work or increase their hours. What is more, Ministers have previously suggested that people could take in lodgers, but people might not feel safe taking a stranger into their home—I know I would not—and many landlords will not allow lodgers at all. It is not possible for people to move, because there are no suitable homes in many parts of the country and many landlords will not allow people to be rehoused if they are in arrears.
The Kafkaesque proportions of this policy are beyond what we would have imagined even from this Government. It is perverse, cruel, unfair and unworkable, and it is time that it was scrapped. That will be the first action of a Labour Government, and for half a million households it cannot come soon enough.
Unlike the shadow Secretary of State I have listened to every speech in this debate in the hope that three questions would be answered—this is a Labour motion, and Labour Members have three questions to answer. First, how they would pay for this motion, which we recognise would cost in the order of £0.5 billion a year? The Minister for Disabled People completely demolished the hon. Lady’s argument about where the money would come from. The Leader of the Opposition said that Labour would not make any unfunded promises, but we have one before us today. The bulk of the money to pay for this motion will allegedly come from “ensuring that the building trade pays tax”, from which Labour claims we will get £380 million. It does not seem to be aware, however, that we have done that already. In the autumn statement 2013, measures to take effect in April 2014 will raise £400 million a year, so the bulk of that money has already gone.
The second point that was mentioned is reversing the stamp duty reserve tax charge, which is money from pension funds and savers. It is true that we can get money by taking it from pension funds—indeed, Labour has quite a record of taxing pension funds—but I am not convinced that that is the place to find money for welfare. The third measure Labour proposed is ending the employee shareholder scheme which, given that it wants to implement the policy in 2015-16, is rather puzzling as the policy costs nothing in 2015-16. In other words, the whole £0.5 billion is either raided from pension funds or does not exist at all.
The second question that we hoped would be answered is why it is fair to apply this principle to the private rented sector and not to social tenants. In other words, during all its time under the local housing allowance scheme, Labour was perfectly content for private sector tenants to pay for extra bedrooms, but not social tenants. When the shadow Secretary of State was briefly in the Chamber and we intervened to ask that question, she gave two reasons. The first was that the local housing allowance was not retrospective. On that basis, do Labour Members think it is okay to say that people in new social tenancies should pay for a spare bedroom? They are not saying that at all, so clearly they are inconsistent.
The hon. Lady’s second argument was absolutely bizarre. She said that people in social housing tend to have secure tenancies while those in the private rented sector tend not to. That presumably means that private rented sector tenants are more vulnerable than social tenants, yet Labour is willing to ask private tenants to pay for a spare bedroom, and not social tenants. Utterly incoherent.
The third thing I waited for in the hon. Lady’s speech—just like her leader who forgot the deficit, she forgot to say how Labour would pay for this policy—was a word that never passed her lips: overcrowding. She did not mention the plight of overcrowded people once, and we heard case studies of people affected by these measures during the debate—[Interruption.]
Order. People seem to be talking about all sorts of things around the Chamber. The Minister ought to be heard.
Case studies were mentioned, including one from the shadow Secretary of State who then forgot to tell the House that discretionary housing payments were covering the shortfall. Let me share an example of a previously overcrowded family. Suzanna lived in a four-bedroom home in south Yorkshire when this measure was introduced, and decided to downsize. She joined the HomeSwapper scheme to find a more appropriate property and said:
“I was impressed with the quantity of matches that HomeSwapper provided…the lady I swapped with…had needed to move for a long time but her landlord had been unable to move her. She desperately needed the space for her overcrowded family.”
That is the sort of thing this policy is helping to achieve, but the voice of overcrowded tenants is not being heard in this debate.
I will give way to the hon. Lady because she mentioned the situation in her constituency. Perhaps she will explain why Nottingham applied for extra cash from the Government, was given an extra £0.5 million, and did not spend it.
The Minister is wrong. Nottingham city has spent the whole allocation that it was given by the Government, and is having to find extra resources to help people. The Minister mentioned HomeSwapper, but that existed before the bedroom tax was introduced. His Government cut money and funding for local authorities that were pursuing projects to encourage people to downsize, including £75,000 that supported Nottingham’s projects.
Nottingham was allocated discretionary housing payment and was given an additional £0.5 million, and of that combined amount it spent 78%. On the question of HomeSwapper, this policy has prompted more people to look to downsize and swap. That is an entirely good thing, as it makes better use of the housing stock.
I want to respond briefly to some of the contributions to the debate. The Chair of the Select Committee, the hon. Member for Aberdeen South (Dame Anne Begg), initially made the claim that the spare room subsidy measure was forcing people into the private rented sector. When my hon. Friend the Minister for Disabled People pointed out that the rate of moves into the private rented sector had fallen, she then said in response that people are not moving to the private rented sector because rents are unaffordable. Well, it cannot be both. It has to be one or the other.
The hon. Member for Makerfield (Yvonne Fovargue) referred to the position of foster carers, but we have recognised this particular need and provided an exemption for foster carers. The hon. Member for Glasgow North West (John Robertson) referred to his constituents as the most affected by the policy, whereas the policy—
I never said that.
Yes he did. The policy is bought out in Scotland.
On a point of order, Madam Deputy Speaker. I wonder whether you could protect this Back Bencher from a Minister making a statement that I never made. I never said we were the worst area of all. I said we were one of the worst. That is completely different. [Interruption.]
Order. The hon. Gentleman knows that that is not strictly a point of order. He wished to correct the record and he has done so. He has also taken up more time in this short debate.
I give way.
Will the Minister tell my Select Committee when we can expect the Government’s response to our report on housing costs, which was published in April?
Even as we speak, officials are working on it and the hon. Lady will have it shortly.
The hon. Member for Edinburgh East (Sheila Gilmore) suggested that the comparison with the private rented sector was something of an afterthought. Uncharacteristically for her, she had not read the impact assessment we published in 2012, in which we made that very point.
We heard from some of my hon. Friends about how their local authorities have been very proactive in this area. We heard how, in Henley and in South Derbyshire, local authorities had substantially reduced the number of people affected by working with tenants. That is exactly the sort of thing that we want to see.
My hon. Friend the Member for St Ives (Andrew George), to whom I pay tribute on this issue, raised whether further mitigations were needed. Let me come to that point. We have a second motion before us, the Government’s amendment, which sets out the areas on which we agree. The areas where we agree are clear: we agree that it is unfair to say to private tenants and low-paid workers not on benefit that they have to pay for a spare room, but that for social tenants there should be a blanket exemption. The coalition parties also agree that the blanket application of the policy would not have been fair. That is why we have exempted pensioners, foster families, serving personnel living at home and disabled children who cannot share a room. In addition, we accepted that further mitigation would be needed. That is why large amounts of discretionary housing payments have been found. That is why an additional fund to bid for was found in 2013-14, and why additional money was found for rural areas. There is agreement between us on that.
In the light of the summer report that indicated the impact of the policy, the Liberal Democrats took the view that further mitigation was needed. Our view is that mitigation is needed for disabled people, adults who cannot share a bedroom, and those who do not have an alternative offer of accommodation. That point is made very clearly in the amendment. I hope my hon. Friends will support the amendment.
It is very easy to put down a simple motion saying, “Let’s have some free money. Let’s spend half a billion pounds reversing a policy, with no idea where the money will come from. Let’s not address the issue of overcrowding. Let’s not address the issue of the welfare budget. Let’s simply promise the voters more money and hope that they will buy it.” Evidence shows that they will not buy it. I therefore urge the House to accept our amendment.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
17 December 2014
The House divided:
Question accordingly negatived.View Details
Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.
17 December 2014
The House divided:
Question accordingly agreed to.View Details
That this House regrets that the Government took over a housing benefit bill which was out of control, and without reform would have been more than £26 billion in 2014-15; notes that the reforms the Government has implemented have brought housing benefit spending under control and helped to tackle over-crowding and better manage housing stock; further notes that the Coalition has protected vulnerable groups through £165 million of discretionary housing payments in 2014; notes that, following the interim evaluation of the policy, the part of the Coalition led by the Deputy Prime Minister has proposed reforms to introduce other formal exemptions to the policy, including where claimants have not been made a reasonable alternative offer of accommodation; and believes that the Opposition’s failure to support the Government’s wider welfare reforms, including the wholesale abolition of this policy, is financially unsustainable, and would put at risk savings of nearly £50 billion over the present Parliament, as well as leaving people languishing in over-crowded accommodation.