Affordable Homes Bill

Nick Raynsford Excerpts

Friday 5th September 2014 Commons Chamber

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

May I at the outset draw attention to my interests as declared in the Register of Members’ Financial Interests?

I am very pleased to speak in support of the Bill, and I congratulate the hon. Member for St Ives (Andrew George) on seizing the opportunity of his good fortune in being drawn in first place in the ballot to introduce a Bill that will have a significant impact on the living standards and housing prospects of a substantial number of our fellow citizens. The House should warmly welcome this serious Bill, and I applaud his decision to bring it in.

As the hon. Gentleman made clear, the Bill has two main purposes: first, to limit the circumstances in which social housing tenants are subject to deductions in their housing benefit or universal credit because of the impact of the bedroom tax; and secondly, to encourage the development and take-up of low-cost home ownership and other intermediate housing market options to assist people in need of housing who are unlikely to qualify for social tenancies but cannot afford the often prohibitive costs of housing for sale on the open market. I support both objectives, although in several respects I would like the provisions to go further. Indeed, the hon. Gentleman has made clear his own inclination to go beyond the specific measures, but the Bill as presented to the House is a good start in the right direction, and it deserves our support. I will take the two main objectives in turn.

I applaud the three proposed limitations on the impact of the bedroom tax, which is one of the harshest measures introduced by the present Government. The bedroom tax was misconceived from the outset, being promoted on a false—indeed, one might say fraudulent—premise that the objective was to encourage better use of the country’s social housing stock. It was misconceived in that there was no way that the measure could achieve its supposed objective of prompting tenants under-occupying social tenancies to move into smaller homes because the supply of smaller homes available to accommodate them was hopelessly inadequate. Social housing providers and local authorities presented such evidence to the Government time and again when they proposed the bedroom tax, but the Government ignored all the clear evidence that there was simply not a sufficient supply of smaller homes to make it possible for people who would be penalised to move into smaller accommodation.

[Mr George Howarth]

On that point, I can give the example of the Ravenscroft Re-build Housing Co-operative in my constituency. At my surgery last week, two ladies told me that because of how it is funded, the rent for a two-bedroom property is £54.50 a week and the rent for a three-bedroom property is £56 a week, while there are no smaller properties within the co-operative and there is a waiting list of one. If they moved to social housing—say, a one-bedroom flat—the rent would be between £70 and £80 a week, which makes a complete nonsense of the purpose of the policy in the first place.

[Mr Raynsford]

My right hon. Friend’s point is absolutely valid. The policy is based on extremely unproven and in many cases very suspect assumptions. The idea that people eligible for housing benefit will benefit either themselves or the public purse by moving out of accommodation costing £55 a week into accommodation costing £70 seems absurd. That, however, is the consequence of the bedroom tax as it is currently constituted. The Government have made it clear that they expect people to look for alternative options in the private rented sector, even though that sector is in general hugely more expensive than social housing. There are a whole series of contradictions at the heart of this policy.

[Julie Hilling (Bolton West) (Lab)]

Like my right hon. Friend, I absolutely welcome the Bill. Does he agree that from the start there has been a problem about the definition of under-occupation? If someone is disabled and needs a spare room, perhaps to keep their oxygen cylinders in, they are not under-occupying their property.

[Mr Raynsford]

My hon. Friend makes an absolutely valid point. The definitional issues about what constitutes under-occupation have bedevilled the policy right from the outset. We all know of people who have medical needs that mean they require an extra room or spare bedroom, and of those who for a variety of disability reasons cannot share a bedroom with the partner with whom they are assumed to be able to share. We also know the basic human wish of individuals after a relationship breakdown to have a spare room so that their children can come to stay with them. The appalling way in which the Government have ignored these real human concerns and have imposed rules that have a harsh impact without taking account of such issues is one of the greatest condemnations of the whole policy.

[Several hon. Members]

rose—

[Mr Raynsford]

I intend to make some progress, because many hon. Members want to speak. I may give way later, but for the moment I intend to make some progress.

I have made it clear that I regard the premise on which the policy was promoted as fraudulent because the Government’s real objective was to cut £500 million of public expenditure out of housing benefit. As the hon. Member for St Ives has clearly said, that could not be achieved if the policy’s ostensible objective—to encourage movement by tenants in social housing into smaller accommodation—was successful, because there would be no saving in public expenditure. The Government have been in the tortuous position of trying to justify the policy on the basis of making better use of the social housing stock when in practice they were after cuts in public expenditure that could not be delivered if the ostensible objective was met.

[Richard Graham (Gloucester) (Con)]

The right hon. Gentleman has made the point that some people in social housing provided by local councils want a spare room to enable their children or friends to stay. We all recognise that that is the case, but his Government changed the rules about that for the thousands and thousands of people in private accommodation in every constituency. Why should there be one rule for one lot of people and another rule for another lot? It is rank hypocrisy.

[Mr Raynsford]

The hon. Gentleman has clearly not been listening to the debate. My hon. Friend the Member for Dumfries and Galloway (Mr Brown) very forcefully made the point that the policy introduced by the previous Labour Government was not retrospective and did not penalise people on the basis of their existing circumstances. Quite simply, given the higher cost—[Interruption.] Perhaps the hon. Gentleman who asked the question would like to listen. He will know that private rented housing is generally very much more expensive than social housing. Social housing is allocated by landlords on the basis of how many bedrooms people need. If people who take private rented housing—they are not subject to allocation, but can choose their property—were able to select much more expensive properties that are larger than they need, that in itself would be reasonable grounds for a restriction. However, that applies only when people move into such housing, not retrospectively. Finally, I put it to him that if he and the Government were really concerned to make better and more efficient use of under-occupied social housing, they would not have exempted elderly people because it is predominantly that group whose properties are under-occupied. That point absolutely goes to the heart of the process: this is not about better use of the social housing stock; this is about trying to make cuts in public expenditure, which has been the Government’s objective from the outset. I now want to make some progress.

This whole ghastly process, which has caused anxiety, misery and hardship on a very large scale to hundreds of thousands of our fellow citizens, was based on a false premise, without any proper evidence to justify what was done. It was a truly dreadful example of the worst type of policy making. Ideally, the whole policy should be consigned to the dustbin immediately, and it will be if the Labour party forms the Government after the next general election.

In the meantime, the hon. Member for St Ives has given us an opportunity significantly to limit its negative impact by restricting its application in three specific ways. The first way is by excluding cases where significant adaptations have been made to a property to meet the needs of a disabled tenant or a close relative who lives in the house. Quite why the Government did not accept the need for such an amendment from the outset is difficult to understand. It is clearly wasteful of public expenditure to drive disabled people out of properties that have been adapted for their needs if, as a consequence, they move into unadapted properties that have to be adapted at considerable expense to make them fit for them to live in. That is yet another illustration of the perversity of the whole policy. The exemption is long overdue and will remedy one of the blatant injustices and endemic nonsenses that are inherent in the bedroom tax policy.

Secondly, an exemption is proposed for tenants and close relatives who are in receipt of disability living allowance or personal independence payments and who, because of their disability, are not able to share a bedroom with someone with whom, under the bedroom tax regulations, they would be expected to share a bedroom. Again, that is a sensible, humane exemption that ought to have been agreed from the outset. Instead, the Government argued that discretionary housing payment could be made in such cases, ignoring three principal objections.

First, not everyone who might qualify for discretionary housing payment will apply for it. The Government’s own review has demonstrated that that is the case. Secondly, not every local authority will approve DHP in all appropriate cases. Thirdly, the DHP regime is temporary. The Government have not confirmed that it will continue to be available beyond 2014-15, despite being pressed by the Work and Pensions Committee to give such a guarantee. It is far better to exempt those who are in receipt of DLA or PIP from the bedroom tax than to depend on the vagaries of DHP.

I do, however, have an anxiety about the precise wording of clause 2(1)(b). I have mentioned this point to the hon. Member for St Ives and I hope that, if necessary, the provision can be amended in Committee. As hon. Members will know, there are two levels of bedroom tax: it is 14% when the tenant is deemed to have one bedroom more than is strictly required and 25% when the tenant is deemed to be occupying two or more bedrooms more than they need. The exemption in the Bill is qualified by clause 2(1)(b)(v), so that it does not apply when the tenant has two or more bedrooms more than is strictly needed, even when the tenant has established that he or she cannot share a bedroom and so needs one bedroom more than their strict entitlement. The provision appears, therefore, to leave the tenant exposed to a 25% benefit reduction in such cases, rather than the more limited 14% reduction, which would appear to be fairer. I may be wrong in seeing that as a potential loophole that needs closing, and I would be delighted to hear from the hon. Gentleman if that is the case. If not, I hope that he will consider an amendment in Committee.

[Mr Harper]

I want to correct for the record a factual point that the right hon. Gentleman made about future funding. In the autumn statement in 2013, the Chancellor announced that an extra £40 million would be made available in 2014-15 and 2015-16 to ensure that discretionary housing payment for those affected by the removal of the spare room subsidy would be maintained. The right hon. Gentleman said that no such commitment had been made. I just wanted to ensure that the facts were put on the record.

[Mr Raynsford]

I immediately withdraw my comment if that is the case. I was working from the Library briefing dated 3 September—so it is very recent—which indicates that no such commitment has been given. I apologise if that is not the case, but I was speaking in good faith on the basis of the latest available Library briefing.

Thirdly, we come to the last and most far-reaching exemption. Clause 2(1)(c) exempts tenants from liability to the bedroom tax when neither their landlord nor the local authority, in cases where they are not council tenants,

“has made a reasonable offer of alternative accommodation.”

That addresses the appalling unfairness by which tenants who cannot move into smaller accommodation because their landlord or the local authority does not have sufficient homes to provide that option still end up having their benefit cut.

The DWP’s own evaluation admits that in the first six months of the bedroom tax, only 4.5% of affected tenants were able to downsize. Even though the figure subsequently rose to 19%, the DWP still confirmed that social landlords

“had not yet been able to accommodate most of those who wanted to move to a smaller home”.

On those figures, we know that less than 10% of those who are affected and who want to move are able to do so because of a lack of alternative accommodation.

It is a common-sense amendment to stop penalising people who have no opportunity to move into smaller accommodation and so avoid the impact of the bedroom tax. It is a long overdue amendment and, once again, a far better safeguard than the hope of getting discretionary housing payment.

[Sarah Newton]

I am finding the right hon. Gentleman’s comments deeply offensive. The social landlords to whom I spoke this summer, when I was finding evidence of what is happening under this policy, treat their tenants with respect, dignity and compassion. The professional housing officers, who do such a difficult job so well, use discretionary housing allowance and the powers that they have to ensure that tenants are treated well. I urge the right hon. Gentleman not to be so offensive to hard-working housing officers up and down the country.

--- Later in debate ---

[Mr Raynsford]

I have to say to the hon. Lady that the hundreds of thousands of people who are unfairly penalised by the bedroom tax find it an offensive policy. I in no way withdraw my remarks about the culpability of the Government she supports for introducing such an ill-conceived and, in many ways, fraudulent policy.

We come now to the second part of the Bill. Clause 3 addresses a very different but also very important housing need. We are all well aware of the huge constraints facing people who aspire to own a home, but who are squeezed out by the astronomical house prices in most parts of the country or by their inability to raise the necessary deposit to qualify for a mortgage. The option of shared ownership, shared equity or other discounted sub-market sale schemes has been an important, albeit not yet widely available, route into home ownership for people in such circumstances. Developing such options and parallel intermediate market rental schemes also has the merit of reducing the pressure on social housing waiting lists, which are, as we all know, under huge pressure because of the acute shortage of affordable housing in most parts of the country.

The irony of the current situation is that, despite the obvious logic of such low-cost home ownership and intermediate rented housing schemes, and the evidence from so many social housing providers and others that such options are popular and in high demand, they have not yet been developed on a sufficient scale to make an impact on housing needs. That is the background to clause 3, which requires the Secretary of State to carry out a review of the availability of such arrangements, the need for financial instruments to support them, the case for intermediate housing options and some of the obstacles and impediments to the expansion of the sector. It is only a report, but if it acts as a catalyst to stimulate increased activity in this section of the market, it will be worthwhile and should certainly be supported.

I know, from talking to the hon. Member for St Ives a month or so ago when he was framing the Bill, that he would have liked to go further. He was interested in promoting a new financial regime to help overcome some of the practical obstacles that cause difficulties when shared owners seek to sell their home and move on, as well as in helping the development of community land trusts. Those are worthwhile objectives and I hope that he will press for them, whether by tabling amendments in Committee or seeking assurances from Ministers. However, given the constraints facing private Members’ Bills, particularly in a Session that will end sooner than most because of the general election, I understand why he has taken the cautious path of limiting the provisions of the Bill.

In conclusion, this is a Bill that meets very real social and housing needs. It is a worthwhile Bill that addresses serious injustices and that deserves the support of the House on Second Reading.

--- Later in debate ---

[Sir Tony Baldry]

My hon. Friend makes a good point. I suspect other hon. Members will enlarge upon the fact that, under Governments of both parties, new social housing has tended to be a planning windfall gain from new house building. Under the Labour Government, very little new housing was built. In Banbury and Bicester and throughout my constituency, more new housing is going up—as a consequence, new social housing is going up—than for a very long time. He is correct that that leads to new social tenancies.

[Mr Raynsford]

The right hon. Gentleman should bear in mind the fact that the average number of homes built per year during the lifetime of the Labour Government was 145,000. The lowest number in any one year was 124,000. The current Government have not completed 124,000 homes in any single year they have been in office, so it is simply not true that more housing is being built than was built under the previous Government.

[Sir Tony Baldry]

The right hon. Gentleman is a little selective in his use of figures. The previous Government were in office for 13 years, and had they not built houses in all those years, we would have been in serious difficulty. As a consequence of the economic mess they got the country into, during their final years in office and during the early part of the recession—the hangover of the recession overlapped with our being elected—the construction industry was in dire straits. I am glad to say that, wherever I go in my patch, I see signs saying “Bricklayers wanted” outside building sites. The construction industry tells me that it finds it very difficult to get the people with the skills it needs because the building boom, with new housing going up, is running apace, thanks largely to the policies pursued by my right hon. Friend the Chancellor of the Exchequer in turning the economy around.

I should get back to the central point to which I wish to draw the House’s attention. The experience of the pathfinder areas of the local housing allowance led to the previous Government legislating for a national roll-out from 7 April 2008. The local housing allowance measure was contained in the Welfare Reform Act 2007 and associated regulations.