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Housing: Underoccupancy Charge — Question

– in the House of Lords at 11:22 am on 12th December 2013.

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Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour 11:22 am, 12th December 2013

To ask Her Majesty’s Government how they will achieve the predicted savings from the underoccupancy charge if affected tenants move into the private rented sector.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

My Lords, in asking the Question standing in my name on the Order Paper, I declare an interest as chair of a housing association.

Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions

My Lords, moving into the private rented sector is one of a number of options available to people affected by the removal of the spare room subsidy. The published impact assessment considered tenant responses, including moves. Savings from the policy are expected to be around £500 million a year. There is currently no reason to amend this assessment. The independent evaluation that is currently under way will provide more detail of the individual behavioural responses that are being made.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

My Lords, the Minister wants social tenants with a spare bedroom to free up their homes for the waiting list by moving to smaller flats, mostly in the private rented sector, where rents and therefore housing benefit will be £50 a week or more higher. If they move, the Minister will not make his savings. If they do not move and are fined, the Minister will not make his policy of helping those on the waiting list. The Minister can have his savings or he can have his policy, but he cannot have both. Which does he want?

Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions

My Lords, you have to look at the whole transaction, a bit like a housing chain. If a single person moves into the private rented sector out of a large social sector home, clearly that frees up room for people to move into that home from the private rented sector. That is where either you get a much more efficient allocation or you get the savings.

Photo of Lord German Lord German Liberal Democrat

My Lords, in Questions to the Prime Minister on 27 November on the spare room subsidy clawback, Mr Cameron said that,

“what we have done is to exempt disabled people who need an extra room”.—[ Official Report , Commons, 27/11/13; col. 254.]

For families with a disabled child, there is a blanket exemption. However, households with a disabled adult are subject to the vagaries of local councils using the discretionary housing payment, which has not been great. Does my noble friend agree that now is the time to make a clear exemption, as we do for disabled children, for households with a disabled adult who need a spare room, so that the Prime Minister’s statement of 27 November can be carried out?

Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions

My Lords, the difference between children and adults is that adults can adapt their circumstances in a way that children cannot. We have gone through a judicial review of this policy as it relates to disabled adults. The judges found that it was impossible to reach a coherent definition and that the discretionary housing payment system was created to look after people in those circumstances.

Photo of Baroness Farrington of Ribbleton Baroness Farrington of Ribbleton Labour

My Lords, the Minister recently told the House that a review would be conducted and the results published. I think that the date that he gave was after the next general election. Does he accept that there is grave concern all around the House about the result of this policy and will he undertake an interim review as soon as possible to satisfy the concerns raised by Members of your Lordships’ House?

Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions

I am pleased to confirm that, as I have said in the past, the interim review is due to be published in the spring of 2014. I will be most pleased to discuss the findings of that review with Members of the House, who I suspect will be keen to have that dialogue.

Photo of Baroness Browning Baroness Browning Conservative

My Lords, the National Debtline has announced today that the most rapid growth in personal debt is in the area of rent arrears. In the context of the Question asked by the noble Baroness, Lady Hollis, will my noble friend agree to examine on a regular basis the way in which personal debt is accounted for by rent arrears and to identify exactly why that is and what remedies might be brought in to suppress the increase of personal debt in this way?

Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions

My Lords, my noble friend is absolutely right that personal debt in this country is a major problem. There has been a series of important reviews of that in recent weeks. I am looking at it very closely in the context in particular of the introduction of universal credit. That is one of the factors in the review that I mentioned in response to the last question and I will keep it very much in mind.

Photo of Lord Best Lord Best Crossbench

My Lords, will the noble Lord join me in correcting a mistaken view that some have expressed that reducing support for people in council houses and housing association properties who are deemed to have a spare room is only repeating a measure already in place for private sector tenants? Does he agree that the arrangements for private sector tenants are quite different, in that people are given a sum of money—the maximum that they can spend—and are sent out to find a property on the private market, balancing the number of bedrooms against the location and other factors? In particular, a major difference between the two sectors is that in the private rented sector these measures apply only to new and future tenancies and have not been applied retrospectively to people in existing tenancies—namely, the 660,000 people who find themselves covered by a measure that relates to the past and not, as in the private sector, one that relates to future tenancies.

Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions

My Lords, clearly there is a difference between the structures of the social and the private rented sector arrangements but the objective is the same. The taxpayer provides the appropriate amount of money to house that individual or family in the same way in the private rented sector as in the social rented sector.