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Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014

My Lords, this Motion relates to an order brought forward by the Government to address a loophole that they have belatedly discovered in enacting what they call the social sector size criteria and everybody else calls the bedroom tax. The loophole means that people claiming housing benefit continuously for the same home since 1 January 1996 are exempt from the bedroom tax. It emerged recently, as noble Lords may remember from the discussion on a recent Urgent Question, that the group may be even wider as it may affect some people who have inherited this protection from a former tenant who enjoyed it.

People covered by this exemption have unlawfully had their housing benefit cut. When this matter was discussed in the other place, a number of examples of people affected were given. For example, there was a widower in Staffordshire suffering from mental health problems who had to find an extra £14 a week to stay in his home. There was a 56 year-old women from Rotherham with health-related problems who paid over £700 in additional rent, which we now know was unlawful. In Greater Manchester, a woman who cares for her granddaughter paid £200 extra in rent as a result of the bedroom tax, fell into arrears and was threatened with eviction from the home she has lived in for 26 years. Incidentally, Grandparents Plus notes that kinship carers like her are more likely to be affected by the bedroom tax, because they are older and more likely to have spare rooms, technically, because their children have grown up and moved on.

These people and many others like them are now due a rebate but, rather than apologise for the distress that they have been caused, the Government now want to apply the bedroom tax again to these people and thousands like them. Because local authorities in most cases do not have electronic records which go back to 1996, they are finding themselves having to waste time and money trawling through paper files looking for affected cases. Meanwhile, the Government have brought forward this order to close the loophole, despite having no idea how many people are affected by it.

The Opposition have tried very hard to find out how many people are affected by asking Ministers. On 13 January, the Employment Minister, Esther McVey, gave a Written Answer in the other place. She said simply:

“This information is not available”.—[Official Report, Commons, 13/1/14; col. 449W.]

On the same day, the Secretary of State for Work and Pensions told the other place that,

“the number is likely to be between 3,000 and 5,000”.—[ Official Report, Commons, 13/1/14; col. 577.]

The very next day, the noble Lord, Lord Freud, told this House that,

“the numbers involved in this anomaly are small and the amounts are modest”.—[Official Report, 14/1/14; col. 106.]

However, early reports coming from the ground suggested that the numbers could be rather higher than that. Therefore, under the Freedom of Information Act, the Opposition asked local authorities how many people they believed would be affected. The resulting figures already show that over 23,000 are likely to be affected, even though a third of councils have still to reply and many said that they could not given complete answers because they could not include housing association tenants. Not only is this a mess, but the Government seem to have no idea how many people are caught up in the mess.

We should not be surprised. The bedroom tax was a bad policy in the first place, incompetently executed, with the heaviest price being paid by the poorest and most vulnerable. More than 500,000 households have been hit. Two-thirds of those affected are disabled. Of those affected, 35,000 disabled people have had their homes specially adapted with, for example, wheelchair ramps, wider doors, stair lifts or accessible bathrooms. If they are forced to move, it is estimated that the cost of repeating those adaptations in new properties could reach £234 million.

Some 60,000 of those affected by the bedroom tax are carers. More than 200,000 families with children are affected. On average, people are paying an extra £14 a week—the equivalent of losing all of your child benefit for the second child. Most depressingly, so many of the problems predicted by noble Lords from all Benches during the passage of the Welfare Reform Act have come to pass. According to the National Housing Federation, on average two-thirds of tenants affected by the bedroom tax are currently in arrears; of those, three-quarters have seen their arrears increase since the bedroom tax came in. Of those tenants hit by the bedroom tax who are in arrears because they cannot make up the shortfall, 40% have been issued with a notice seeking possession.

The impact on landlords is also huge. Nearly three in five housing associations say that they have been affected by the bedroom tax either a great deal or a fair amount. That hides huge regional problems, as I know only too well. About 90% of housing associations operating mainly in the north-east and 80% in the north-west report that they have been significantly affected.

What a mess, and for what? What has been achieved by all this chaos and misery? Has the bedroom tax achieved its aims? Ministers have not been able to explain whether the policy is supposed to reduce overcrowding or to save money; it cannot do both. If tenants stay put and accept a cut in their benefits, the state saves money but no houses are freed up. If tenants are forced to move, no money is saved. The costings assumed that people would not move. During the passage of the Welfare Reform Bill, when the matter was voted on in this House on Report on 14 December 2011, the noble Lord, Lord Freud, explained the Government’s position, saying:

“The introduction of size criteria into the social rented sector from April 2013 is essential to reduce housing benefit expenditure”.—[Official Report, 14/12/11; col. 1300.]

So it was indeed about savings. The Minister explained that it would save around £500 million per annum.

I wonder whether those savings really are materialising as Ministers had hoped. Last Friday, Esther McVey was asked on a BBC Radio 5 Live programme how much money the Government had saved through this policy. She began by saying:

“It was never all about saving money”.

The interviewer interrupted just to ask how much it would save. She came back to the question. The interviewer asked her repeatedly whether there would be savings and how much they would be but could not get an answer.

There is now a real risk that the bedroom tax will end up costing more than it saves. Research from the University of York suggests that the policy could save significantly less than the DWP predicted. The National Housing Federation has said that the savings claimed by the Government are “highly questionable”, partly because those forced to move to the private rented sector will end up costing more in housing benefits. Housing associations say that tens of millions of pounds are likely to be lost through the build-up of arrears. I ask the Minister today to tell the House precisely how much of that £500 million savings per annum has been realised in the first year of the bedroom tax. After taking into account the cost of discretionary housing payments, the cost to local authorities and social housing providers and the payment of higher housing benefits to those who had to move, what is the net saving to the public purse? If it was not about saving money, as Esther McVey has said, what was it about?

The Government have since changed tack and claimed that it is about tackling overcrowding or dealing with the waiting lists. They say that people need to be pushed to move out if they have spare rooms so that others can have their houses. At various times, noble Lords from all Benches have pointed out that, in fact, many of these are not spare rooms, and, even if they were, there were nowhere near enough spare smaller

properties available in the areas hit by the bedroom tax. Now we know what has happened. A recent BBC investigation showed that, after the first year, just 6% of tenants have moved.

This entire episode should shame this Government. Half a million people have been affected, most of them disabled, losing an average £14 a week from their already meagre incomes. Instead of bringing forward an order to make the bedroom tax apply to up to 40,000 more households, the Government should announce today that they will scrap this unfair, cruel and unpopular tax. I beg to move.