Housing Benefit (Under-occupancy Penalty)

Owen Smith Excerpts

Wednesday 27th February 2013 Commons Chamber

[Steve Webb]

My hon. Friend raises an important point. We have allocated funds to local authorities with two particular groups in mind: foster families and those for whom there has been a substantial adaptation to the property. We can all see whether a house has been substantially adapted; moving someone somewhere else and adapting the property again will not be a good use of public funds. That is the basis on which the funding was allocated. We have indicated that to local authorities, but I agree with my hon. Friend that we can probably do more and will do more to make sure that local authorities are aware of the needs of those groups.

[Owen Smith (Pontypridd) (Lab)]

Will the Minister confirm that the total amount of money available in discretionary funds to Wales will be £6.1 million? He will have seen that the Welsh Government last week estimated the total cost to Wales of the bedroom tax at £25 million. Does he concede that there is a significant shortfall, or is he proposing to increase the money available to Wales—and, indeed, to the rest of the country, where a similar shortfall will apply?

[Steve Webb]

I started my remarks by talking about deficit reduction because this measure is intended to save money. The shortfall to which the hon. Gentleman refers is the saving to the Exchequer. If we fill the gap completely, we will not save any money, so we might as well not do the policy. I have to say that if Wales is getting a fifth of the shortfall, it is doing exceptionally well relative to the rest of the country.

[Steve Webb]

If I may, I shall respond to the Chairman of the Select Committee, who made an important point about those who are “intentionally homeless”. Although it is for local authorities to make decisions on homelessness applications as they do now, under current statutory homelessness legislation, if the only reason for the person’s homelessness is a reduction in benefit that is outside their control they should not be considered intentionally homeless by the local authority. I can put that on the record and hope it is helpful.

[Owen Smith]

The Minister is generous in giving way. He says that Wales is doing exceptionally well, but his own impact assessment demonstrates in black and white that 46% of claimants will be affected in Wales versus a UK average of 31%. Wales faces the largest impact—more than anywhere else in the country. Will the Minister therefore reconsider his remark that Wales is doing particularly well out of the bedroom tax?

[Steve Webb]

The impact of ending the spare-room subsidy that we currently pay will be an average loss in Wales that is below the national average—£12 a week, as opposed to £14 a week—and the same is true of Scotland. Both Wales and Scotland will experience below-average losses.

The hon. Gentleman asked about the size of discretionary housing payments. Across the country as a whole, we have allocated £30 million, relative to a saving of about £500 million. That £30 million is on top of the £20 million that local authorities already receive in DHPs, so a total of £50 million will now be available to them. If Wales is receiving a bigger proportion of that, it is receiving a bigger proportion of the DHPs.