Housing Benefit (Abolition of Social Sector Size Criteria) Debate
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Mark Harper
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Housing Benefit (Abolition of Social Sector Size Criteria)
Mark Harper Excerpts(9 years, 4 months ago)
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Rachel Reeves
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:
“If he”—
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.
The Minister for Disabled People (Mr Mark Harper)
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?
Rachel Reeves
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.
Mr Harper
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.
Rachel Reeves
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.
The Minister for Disabled People (Mr Mark Harper)
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.
Mr Harper
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.
Mr Harper
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.
Sheila Gilmore
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?
Mr Harper
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.
Mr Harper
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.
Mr Harper
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.]
Madam Deputy Speaker (Dame Dawn Primarolo)
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.
Madam Deputy Speaker
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?
Angie Bray
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?
Mr Harper
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.
Mr Harper
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.
Barbara Keeley
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?
Mr Harper
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.
Alec Shelbrooke (Elmet and Rothwell) (Con)
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?
Mr Harper
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.
Mr Harper
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.
Rachel Reeves
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.
Mr Harper
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.
Maria Miller
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?
Mr Harper
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.
Geraint Davies
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.
Mr Harper
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.
Ms Buck
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.
Sir Oliver Heald (North East Hertfordshire) (Con)
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.
Mr Harper
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.
Mr Harper
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.
Dame Anne Begg
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.
Mr Harper
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.
Dame Anne Begg
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.
John Robertson
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.
John Robertson
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.