Welfare Reform Bill

My Lords, I am speaking to Amendments 12, 14 and 49. I know that amendments to my amendments have been put down and I will say a few words about them. I understand—I hope this is the correct procedure—that my Amendment 14, as amended, is consequential on Amendment 12. It is Amendment 12 that I shall concentrate on now. These amendments cover the new underoccupation penalty for council and housing association tenants, the so-called bedroom tax for those on housing benefit. I am very grateful to the noble Baroness, Lady Hollis of Heigham, for her support, and to the noble Lord, Lord Kirkwood of Kirkhope, and the right reverend Prelate the Bishop of Ripon and Leeds, for theirs. Since the noble Lord, Lord Newton of Braintree, asked for his name to be added to the list, although of course only four are allowed, I know the amendment has support across all of your Lordships’ Benches. The amendment also comes with the backing of an impressive list of concerned charities and voluntary bodies led by the National Housing Federation and Shelter, to which I am very grateful for their hard work. The amendment seeks to prevent a change to the definition of underoccupation currently used by the Department for Communities and Local Government. The Bill paves the way for a much tougher test than at present, with a hefty underoccupation penalty—a cut to the housing benefit—for those whose accommodation fails the new test. Currently, as the Housing Minister Grant Shapps made clear in October, a household in council housing or a housing association home is deemed to be underoccupying only if it has two or more bedrooms above the basic bedroom standard. One spare room is permitted. Under the Department for Work and Pensions’ proposed new definition, one so-called spare room would not be allowed. Under the fierce new test, a family would be counted as underoccupying if, for example, two teenage girls were not sharing the same room, or if an older couple, one of whom is below pension age, have a two-bedroom flat. All those deemed to be underoccupying will have to move and downsize to somewhere smaller. If they do not, even if there is simply nowhere smaller for them to move to, then they must pay the new penalty. Six hundred and seventy thousand households receiving housing benefit will be caught in this trap, rising to some 740,000 in the years ahead. If they do not move out, they will be charged an average of £13 per week, which will have to come out of their low earnings or their other benefits, which are meant to cover food, fuel, clothing, and specifically not housing. These are by definition very poor households, and the new tax will represent a significant reduction in their living standards. This may sound a heartless measure, but the Government’s objectives are not dishonourable. The intentions are to reduce the high cost of housing benefit in respect of tenants who stay put, or to free up bedrooms for larger households where existing tenants are persuaded by the new penalty to downsize. I fear that neither of these perfectly understandable objectives will be achieved by this measure. First, it seems improbable that this will raise tens of millions of pounds. Those deemed to be underoccupying who seek smaller homes as a consequence may well have to move into the private sector, where rents, and therefore housing benefit, will be much higher, costing the DWP an extra £50, £60 or more a week. Secondly, the savings for the DWP will often translate directly into costs imposed on councils and housing associations. These bodies will have to assume the role of tax collectors, extracting the average £13 per week penalty from each tenant who does not move, which will prove to be an administrative and financial nightmare. To see who should be sharing a room, a landlord will need to keep track of the age and gender of each child. They will need to measure the bedrooms to see whether they can fit in two beds. They will need to find out whether family members are living at home or have actually moved out. It will require an army of snoopers to see who must be deemed to have a spare room. If tenants will not pay or cannot pay, the saving to the DWP simply becomes a cost to the council or the housing association in arrears and bad debts. Less money for social landlords means fewer improvements, fewer regeneration schemes, and fewer much-needed new homes. Since the underoccupancy issue is a much more significant one in the north, affecting 46 per cent of working-age tenants in the north-east, and 43 per cent in the north-west, this tax takes money out of local economies in places that most need it. In Bradford, for example, one of the big housing associations has calculated that if it cannot collect all the payments, and has to take the hit in lost rent, it will cost £2.7 million per annum, which it can ill afford. That excludes the heavy cost of evictions—pointless evictions, since so often there will be nowhere cheaper for the household to move to—wherever the landlord cannot keep tolerating rising arrears. Paradoxically, the new measure also makes addressing underoccupancy in council housing and housing association homes more difficult. At present, many social landlords have incentive and support schemes to address the very real problem of underoccupation by pensioner households. For these, a move to smaller premises is positively helpful in manageability, accessibility, cheaper heating and so on. However, pensioner households are excluded from the penalty, provided husband and wife are both over pension age. They can stay put, often in three-bedroom houses, which is what councils have mainly built for the past 70 years or so, without incurring any new cost or requirement to move. Conscientious councils and housing associations will have to change their priorities and henceforth allocate smaller homes that become vacant to younger households to save them from the new tax or penalty, which will lead to reduced incomes, possible arrears and debt. The penalty will hinder, not help, social landlords to tackle underoccupancy sensibly. These are the financial and managerial issues raised by the new measure but even more telling, I suggest, are the human and social issues. The new penalty—the fine where a spare room is discovered—is likely to make normal family life much tougher for the poorest households. The rest of us take for granted the flexibility that comes from having a spare room. Just because young Johnny has left home—has got on his bike to look for work elsewhere—it does not mean that he will never return. To move house as soon as he goes—the liability to the tax starts on the Monday morning after he vacates his bedroom—would be crazy. A spare room keeps a family together. It allows teenagers to have their own bedrooms; it allows parents to help older children pick up the pieces if they come home at a time of crisis; it allows the adult child to come home to look after a poorly parent when they come home from hospital; it allows the divorcee to have children to stay; it allows couples to sleep separately if one is ill or recovering from an operation; it allows the younger disabled child to have their own room; and so on. Houses and flats provided by councils and housing associations represent people’s homes. They are not transit camps or hostels, with people constantly on the move as families expand and contract, but places to settle, put down roots and overcome some of the disadvantages that life has thrown at them. As Christmas approaches, most of us understand what a home can be and how a spare room is so often part of that. This amendment keeps the status quo and maintains the current definition of underoccupancy, which already expects those in social housing to live more compactly than the rest of us. Let us not go down an uncharted road that is likely to add to the hardships of hundreds of thousands of our poorest citizens. I beg to move.