Welfare Reform Bill

My Lords, I will speak to Amendments 14ZZA and 49A, which are in this group and are amendments to Amendments 14 and 49. I start with an apology to noble Lords for tabling these amendments somewhat late. We thought, on reflection, that it was appropriate to import into the proposition of the noble Lord, Lord Best, the circumstances in which a local housing authority or registered provider of social housing is able to make a suitable alternative offer to somebody who is underoccupying social housing. I am pleased that the noble Lord felt able to signify his acceptance of that. The presumption would be that such an offer would be taken up. In these circumstances a tenant could not rely on the spare bedroom to avoid an underoccupation charge—or tax, as it is more appropriately called. In that respect it would be consistent with Amendment 17A, tabled in my name and those of my noble friends Lady Hayter and Lady Hollis. However, the amendments would not disturb the basic proposition in the amendments of the noble Lord, Lord Best, so that where there is no suitable alternative offer the DCLG definition of underoccupation should be used, and the tax would not apply unless there was more than one spare bedroom. We support this. Our amendment leaves the definition of what constitutes a suitable alternative offer to regulations—the same formulation we have used in Amendment 17A. It raises questions of how and by whom the determination is to be made, but these practical issues should not be insurmountable and may be dealt with in regulation. The definition would carry the implication that suitability should reflect the broad needs of the actual tenant in terms of size, location, extent of adaptation, proximity to transport and relevant support facilities. It should recognise that it would not, in all circumstances, have to be bedroom standard plus one, and would not carry any implications that RSLs or local housing authorities would have to manage their housing stock in any particular manner, although tackling underoccupation should clearly be a key part of the strategy. No one doubts that underoccupation is a problem. We have a chronic shortage of housing stock and a huge demand for affordable housing. Yet the Government’s policy is the wrong way to go about tackling the problem, as it punishes people for housing choices over which they have little control rather than enabling the best fit between the available properties and the needs of households. We have heard that this measure will encourage tenants to make the same choices about their housing as those in the private sector or those who own their own home. Social tenants are, however, the group least likely to be underoccupying their property using the standard DCLG definition. Eleven per cent of social renters, or 429,000 households, have two or more spare bedrooms above the bedroom standard and approximately half of these are pensioners. In comparison, 47 per cent of owner-occupiers and 16 per cent of private renters have at least two bedrooms over the standard. Social tenants are, therefore, much more likely than other households to be living in a property which is considered to be the right size. It seems that the Government are intent on strengthening this disparity. Under the reinvigorated right-to-buy provisions, there is nothing to stop tenants who underoccupy from buying their property at the full, relevant discount. These matters depend on whether an additional bedroom is fairly described as spare. This implies that it is surplus to requirements but, as we have heard from the noble Lord, Lord Best, for many it is not. The Housing Futures Network survey shows just some of the uses to which such an additional room might be put. These include a couple sleeping apart for medical purposes, storage of equipment—especially medical equipment—occasional use by overnight carers and many more which the noble Lord, Lord Best, instanced. We know that the vast majority of tenants do not recognise that they are underoccupying their homes at all. This is a reflection of space standards confirmed in the national figures on occupation. The DWP definition is out of kilter with what has become the norm for reasonable occupation in England. There also appears to be a huge administrative advantage in recognising the flexibility of the additional room. Without it, there is the risk of tenants having to constantly report changes of circumstances such as the son or daughter returning from university, somebody returning home because they have been made redundant and are struggling with their rent and the onset of an illness or infection with requires a couple to sleep apart. Are we really going to make these routinely reportable events? The Government have also suggested that a further aim of the policy is to increase work incentives. Claimants who are underoccupying and who cannot move will be expected to find, on average, £13 a week to meet the shortfall in their rent. The DWP impact assessment suggests that they may do so by moving into employment or increasing their hours—even in the current circumstances, even with the current unemployment figures. Given that the whole aim of universal credit is to make work pay, it seems unclear why this additional work incentive is needed. Even if it does force some people to move into work, they are likely to be outnumbered by those who will move into debt. In Committee, the Minister cited research by the Housing Futures Network, a coalition of four housing associations, which had interviewed 452 of their residents who would be affected by the underoccupation penalty. The survey found that 29 per cent of these would consider a move into work, but also found that 52 per cent would find it ““very difficult”” or ““fairly difficult”” to make up the shortfall in housing benefit. More than a third of those surveyed said that they were ““very likely”” or ““quite likely”” to move into arrears. The department’s own assessment notes the possibility of arrears, noting that the cost to social landlords of implementing this policy will include the cost to run schemes to enable affected tenants in the social rented sector to move home within the sector. The assessment also noted that the costs of action taken in relation to tenants failed to make up the shortfall between the rent and their housing benefit entitlement. The third rationale given for the policy is the need to reduce expenditure on housing benefit. The equality impact assessment states: "““The overall cost of Housing Benefit needs to be controlled, and reduced in order to tackle the budget deficit. This measure is part of the effort to rein in Housing Benefit expenditure””." However, the impact assessment is also clear that these savings will be made only if the first intention of the policy, to encourage people to occupy more suitably sized housing, actually fails. The impact assessment states: "““Estimates of Housing Benefit savings are based upon the current profile of tenants in the social rented sector, with little tenant mobility assumed. If a significant number of tenants wished to move, this would reduce direct savings and place extra demands on social landlords … If all existing social sector tenants wished to move to accommodation of an appropriate size, there would be a mismatch between available accommodation and the needs of tenants””." How perverse can a policy be, when structuring it to fail is an excuse for hitting 670,000 poor households? In this situation, where there is simply not enough accommodation available to ensure that everyone has a home of what the DWP considers to be the right size, tenants will be left with no choice but to either take a hit to their incomes or move to the private rented sector, where the state will pick up the bill for the considerably higher rent that tenants are likely to face. The people facing these choices are not likely to be able easily to absorb a £13-a-week hit on their income. The impact assessment shows that around 20 per cent of such families include a child under 16. The Housing Futures Network research found that more than 70 per cent of the households affected include someone with a disability or major health concern. The research also found that more than 40 per cent struggle to manage financially and more than two-thirds have an income of less than £150 a week, excluding benefits—meaning that they will have to spend around 10 per cent of their income to make up the rent shortfall. The Minister has suggested that shortfalls might be met by discretionary housing payments, but there has been no indication that local authorities will be given extra resources to meet the cost. The impact assessment finds that the cost merely of administering these payments could reach £500,000. I ask the Minister: is there to be a top-up for this policy—a top-up to the pot that my noble friend Lady Lister in Committee called the ““loaves and fishes”” approach to funding? The Government’s approach will therefore fail to deal with the problem of underoccupation while asking some of the poorest and most vulnerable people to pick up the tab for this failure. We would expect a more rational approach to the problem of underoccupation that encourages local authorities to prepare a strategy to address the issues of occupation and enables them to encourage people to move, but only where suitable alternative accommodation is available. We know that good policy and the right incentives can enable a better fit between people’s housing needs and the available accommodation. Some people do want to downsize. The Housing Futures Network found that 12 per cent of those surveyed said that their current accommodation was slightly too large for them, but that they needed help and support to downsize. Shelter cites the successful example of the Oldham programme that offers financial incentives and support with moving arrangements, which has freed up 130 family-size homes in 16 months. If it were possible to roll out this programme nationwide, Shelter estimates that about 45,000 homes could be freed up. Shelter emphasises that, to achieve that, local political will is needed as well as sufficient to local resource. To summarise, Amendment 14, as amended by our amendment, and our Amendment 17A would imply that people had to take up suitable accommodation when it was offered. Amendment 17A would prevent the underoccupation tax applying at all where there was no such offer, and Amendment 14 would allow the reduction in housing support—the tax—to operate where there was more than one spare bedroom. The Government's approach aims to tackle underoccupation, but will not do so, and will save money only at the expense of some of the poorest families in the country. Where there is a suitable offer of alternative accommodation, it may be reasonable to ask families to move, but to enable that to happen, we need to ensure that local authorities are working to address underoccupation rather than punishing those families for failure to do so. We support the amendment moved by the noble Lord, Lord Best, and, clearly, our Amendment 17A.