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Under-occupancy penalty

Volume 590: debated on Wednesday 14 January 2015

The Petition of residents of the Bolton West constituency,

Declares that the bedroom tax (otherwise known as the spare room subsidy) punishes the most vulnerable people in society; further that many of those affected by the bedroom tax will need to downsize but there are not enough properties available for them to do so; further that in Bolton, there are only 13 available properties and 3,000 affected households; further that because many of those affected cannot downsize, it is simply a tax on households which are already struggling; further that seventy per cent of those affected are disabled; further that the revenue raised by this tax is a drop in the ocean compared to the money lost through tax evasion and avoidance; further that those affected cannot afford to wait for a change of government; further that lives are being ruined because parents are being ejected from the family home; and further that a postcard campaign in the Bolton West constituency on this issue resulted in 150 postcards being sent to the Member of Parliament for Bolton West.

The Petitioners therefore request that the House of Commons urges the Government to revoke the bedroom tax.

And the Petitioners remain, etc.—[Presented by Julie Hilling, Official Report, 9 December 2014; Vol. 589, c. 839.]


Observations from the Secretary of State for Work and Pensions:

The Government believe that those on Housing Benefit in the social rented sector should face the same choices about where to live as those living in the private rented sector. That is why we have removed the spare room subsidy in the social rented sector by restricting the amount of Housing Benefit paid to working age social sector tenants who live in a property that is too large for their needs. This is not a tax on individuals, but a reduction in the level of state support for housing costs for those who under occupy.

The Housing Benefit bill must be brought under control. It has increased by around 50% in real terms over a decade and in 2011/12 expenditure stood at £23 billion. The Government cannot expect taxpayers to continue to underwrite people’s housing costs regardless of the size of their accommodation. People receiving Housing Benefit who wish to remain in accommodation that is larger than their household requires need to fund part of the cost themselves. We estimate that this measure will result in significant savings of around £500 million a year during 2013/14 and 2014/15.

The Government believe that it is neither affordable nor fair that there were around 820,000 spare rooms being paid for by the taxpayer at a time when almost a quarter of a million people were living in overcrowded accommodation and there were around 1.7 million on social housing waiting lists in England alone, now down to 1.4 million.

Over time the removal of the spare room subsidy will encourage more effective use of social housing stock and a more strategic approach in both the allocation of property and, in the longer term, building programmes, ensuring more appropriately sized accommodation for the demand. It is in the interests of both social landlords and tenants to achieve a better match between housing need and the size of accommodation provided.

This measure is not about forcing people to move, although for some people the lower rent they have to pay when they downsize may act as a work incentive and so improve their financial situation. Many households are choosing to remain where they are and finding a way of making up the shortfall, in the same way that those living in properties that are too large in the private rented sector do. There are other options available to many of those affected by this policy. Some may decide to move into work, some may move to smaller accommodation and others may make up any shortfall from their existing income or savings. Figures show that around 22,000 households affected by the removal of the spare room subsidy either downsized within the social rented sector or moved to the private sector between May 2013 and December 2013.

Since April 2013, the Government have significantly increased funding for discretionary housing payments, providing £345 million to support vulnerable people affected by welfare reform. This includes £115 million allocated specifically to support people affected by the removal of the spare room subsidy.

We believe use of discretionary housing payments offers a more flexible and cost effective approach which enables local authorities to provide additional support such as allowing extra time for those affected to find suitable alternative accommodation as well as providing longer term support for vulnerable claimants, such as those living in significantly adapted accommodation.

The Government recognise that it will not always be possible for people to downsize. However we have worked with the Chartered Institute of Housing who have produced an online guide for social sector landlords “Making it Fit—a guide to preparing for the social sector size criteria” designed to help landlords in supporting tenants affected by this measure and to develop a strategic and operational approach tailored to their area. This includes a section on supporting tenants to pay their rent. It is clearly in the interests of landlords to do all they can to support those tenants who are finding it difficult to adjust financially and to ensure they are fully aware of all the financial options available to them. We believe that proactive work by landlords, together with the support which the Government have provided via discretionary housing payments, is ensuring that most tenants affected, and particularly the most vulnerable, are not at risk of homelessness.

To date the courts have consistently upheld our position on this policy, finding that the Government have fulfilled their public sector equality duties, the effects of the policy had been properly considered and that DHPs are an appropriate mitigation.

The Government have no plans to change the removal of the spare room subsidy.