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[Mr Peter Bone in the Chair] — Bedroom Tax (Scotland)

– in Westminster Hall at 12:00 am on 8th May 2014.

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[Relevant documents: The impact of the Bedroom Tax in Scotland: Interim Report, Fourth Report from the Scottish Affairs Committee, HC 288, and the Government response, HC 937.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Greg Hands.)

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee 1:30 pm, 8th May 2014

In speaking on the report and the Government response, it is appropriate that I indicate at the beginning that unusually, the report was not unanimous. It is the product of a Division in the Committee: four Labour members voted for the report, one Liberal and one Conservative voted against, four other members were absent and I as the Chair was unable to vote except in the event of a tie.

It is clear that the bedroom tax is, as we describe it in the report, cruel and unfair, and we remain in favour of its abolition. We believe that the tax was introduced not so much because of anything to do with housing as because of the Government’s desire to cut public expenditure. It has been levied in a way that has hurt the poorest in our society and has placed burdens on them that many have been unable to bear. It has forced many people into deeper poverty. It has forced many people to move house, or to run up debts.

We recognise that in Scotland, the tax has often been levied in circumstances where there are no other homes for people to move to. People are being taxed for having what are described as spare bedrooms and being urged to move, but no alternative accommodation is available.

Photo of Anne Begg Anne Begg Chair, Work and Pensions Committee, Chair, Work and Pensions Committee

This report is specifically about Scotland, but the Select Committee on Work and Pensions, in its report on housing costs, said that the victims of the so-called bedroom tax were often not the intended targets—those who could move. Instead, many were people who needed the extra space and who were therefore not over-housed in the first place. Is that the case in Scotland too?

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

Absolutely. Substantial numbers of disabled people who require an additional bedroom due to their condition have been hit by the bedroom tax. We heard the absurd proposal that people should mitigate the effects of the tax by taking in lodgers, as well as the suggestion that people should earn more by working longer hours when, as most of us are well aware, that is not a realistic option available to many of those affected.

Photo of Fiona O'Donnell Fiona O'Donnell Labour, East Lothian

My hon. Friend is being generous in giving way. I congratulate him and his Committee on the excellent work they did preparing the report. On the advice about taking a lodger, I visited a family with children aged two, three, four and five.

Does he not think that it is not just stupid but highly risky to suggest that such a family should welcome a stranger into their home?

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

That is absolutely correct. In our hearings, we had a whole string of witnesses telling us how worried they would be about taking an unknown lodger into their home in circumstances where they would fear that their children might be at risk.

I also want to consider the issue in the context of devolution. I have been a long-time supporter of devolution; I was a member of the campaign for a Scottish Assembly before such things were fashionable. As well as the arguments for devolution because we wanted to move power closer to the people, there was also a strong argument that we wanted a devolved Scottish Parliament as a bulwark and protection against a Tory Government, to mitigate the worst effects of Tory economic and social policy. It is therefore doubly regrettable that right from the beginning, the present Scottish Government failed to use the whole range of their powers to mitigate the impact of the bedroom tax on the people of Scotland.

In our investigations and witness sessions, it became eminently clear to us that discretionary housing payments were inadequate and not an appropriate method of reaching everyone affected by the malignant impacts of the bedroom tax, who included those with mental health issues, learning difficulties and chaotic lives, as well as those too proud to apply for another benefit. It was clear that, despite the best efforts of local authorities of all political persuasions, they were unable to reach all those who were adversely affected by the bedroom tax.

In those circumstances, people who were unable to mitigate the effects themselves or with the assistance of the local authority were left with the alternatives of paying up and suffering, building up arrears and debt, or moving. We discovered that if people were able to move, they were often obliged to move into the private rented sector, which actually cost the public purse more in housing benefit than if they had remained in their existing home.

Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East

Perhaps my hon. Friend would not be surprised to know that the real problem is the shortage of homes, which is why people end up in the private rented sector. In Edinburgh this week, out of all council and housing association homes, only 22 one-bedroom properties are advertised, and six of them are in sheltered housing, which by definition does not suit people affected by the bedroom tax because it is for retired people. However, it has also not led to any increase in the number of larger houses available: only five three-bedroom houses and one four-bedroom house are available in the city, which is much the same as before the introduction of the bedroom tax, so it has not solved that problem either. Yet, at the same time, the number of new starts of affordable homes in Scotland has fallen dramatically in the last three years.

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

That is absolutely correct. I notice that there are numerous other Members here who will undoubtedly want to speak. I did not intend to spend most of my time on the iniquities of the bedroom tax, because that is common ground for the vast majority of us here; I wanted to discuss what is to be done and what should be done. For those reasons, I will turn to the campaigns that have been run and that have sent witnesses to us, which have exerted enormous pressure on public representatives to do something about this.

I regret that from a very early stage, the Scottish Government refused to use the full range of powers available to them to mitigate the effects of the bedroom tax. The Under-Secretary of State for Scotland, who is the appropriate Scotland Office Minister, said that the Scottish Government had powers beyond DHPs; the Chief Secretary to the Treasury said exactly the same thing. We understand from both Ministers that the Scottish Government never made the least effort to contact them to find out what, in their view, might be legally available alternative methods of mitigating the bedroom tax.

Photo of Lindsay Roy Lindsay Roy Labour, Glenrothes

I congratulate my hon. Friend on securing this debate. Can he offer an explanation why?

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

There is an explanation; it was given to us by John Swinney himself, no less, when he said that he did not want to let Westminster off the hook. Of course, it was not actually Westminster that was hanging on the hook; it was people in Scotland who were finding themselves in tremendous financial difficulty as a result of the introduction of the bedroom tax.

There has been progress. We have to recognise that the Scottish Government were forced by Labour and other parties in the Scottish Parliament, as well as by outside campaigns, to make available in their budget the full amount of money necessary to mitigate the effect of the bedroom tax. They said that they could not spend it because they could address difficulties only through the DHP mechanism, but I believe, and I note that Ministers and campaigning groups also believe, that that is not true.

The Scottish Government said that the only way they could address the bedroom tax is by DHPs, and I think we have to accept that that is not true, but they chose to rest their case on that position. Why? I think it is because they want a clash between the UK Government and the Scottish Government over the question of powers, and they are quite prepared to see some of the people of Scotland become casualties of that conflict in the hope that they will be able to make a political point about the lack of powers held by the Scottish Parliament, rather than seek ways to mitigate the effect of the bedroom tax on the people of Scotland.

Photo of Lindsay Roy Lindsay Roy Labour, Glenrothes

What other options might be available to the Scottish Government?

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

The information that we have from relatively brief discussions is that the Scottish Government may give money to social housing providers to allow them to write off debts. They could do that at any stage, so the debts built up under the bedroom tax could simply be written off.

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

I am glad to hear that. That could have been done throughout the whole of Scotland. The Scottish Government could have said to social housing providers, “Any arrears you have, you write them off, and we will refund you the money.” That is perfectly legal and could have been done, but they deliberately chose not to do so.

We had a Scottish Government resolutely seeking to make a political point by refusing to fund mitigation of the difficulties caused by the bedroom tax in any way other than by getting the cap on DHPs lifted, and a Conservative and Liberal Government who were, at that stage, resolute in saying that they would not move because the Scottish Government already had powers to deal with the issue if they so desired, and the people of Scotland were potentially caught between the two. In those circumstances, it is difficult for either side to find a way to change their position without appearing weak, or making it look as though they had the wrong solution in the first place, or suggesting that anything they say at any particular moment may be merely transitory and can be changed.

With the debates we are having at the moment about the referendum, I understand that it is much more difficult for anyone to change their adopted stance on any issue. In those circumstances, I think it is to the credit of the Secretary of State for Scotland and the Under-Secretary of State that they have persuaded their colleagues in the Westminster Government to change the line and to give powers to the Scottish Parliament to extend or to increase the amount of money spent on DHPs. We have to recognise that that has been a change in the Government’s policy, and one that I welcome. However, there are still difficulties with it.

First, there will be a delay in the transfer of powers. I hope that the Minister will tell us that every possible step will be taken to make that transfer as speedy as possible. Secondly, the Scottish Affairs Committee does not believe that DHPs are the best way to address the problem because an application is required, and in the categories of people I described earlier, we found many who were either unable or unwilling to make an application. We therefore want to discuss at some stage—I will recommend to the Committee that we explore these issues further—whether the methodologies that local authorities have at the moment are adequate.

In our view, it is legally possible for local authorities to abandon the system of application and simply ask someone whether they want a DHP. If the principle is that everyone who applies for one gets one, presumably the sort of 95-page forms that some local authorities are using are not needed. If the payment is going to be automatic, the equivalent of the Chinese general baptising his troops with a hose could be adopted and anyone who was simply asked whether they wanted DHP could be given one, but that approach has yet to be tested.

We also want to clarify what the position will be regarding last year. If the bedroom tax is evil, malignant, cruel and unfair this year, and the Scottish Government are prepared to make money available to mitigate its effects this year, what are they prepared to do about last year’s effects? Something that is wrong this year was surely equally wrong last year. There are people with arrears of the bedroom tax as a result of non-payment last year. The Committee’s view is clear: those debts should be written off. We believe that the Scottish Government should take steps to write off the arrears of bedroom tax accumulated by Scots last year. They have the power and they have the money; what they possibly lack is the will, but we will no doubt hear about that later on.

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

Oh, I am glad to see that a Member from the Scottish National party is not only here, but prepared to intervene in a debate on the Scottish Affairs Committee’s work.

Photo of Pete Wishart Pete Wishart Shadow SNP Spokesperson (Culture and Sport), Shadow SNP Spokesperson (Constitution)

I am not going to go into the reasons why we do not participate in the hon. Gentleman’s Committee.

I accept the Labour party’s sincerity about scrapping the bedroom tax—it has said that it will do so at the earliest opportunity—but will the hon. Gentleman direct me to the Labour shadow Minister’s comment that Labour will pay in full any arrears of the bedroom tax built up in the rest of the UK? How much would it cost the rest of the UK? How would the UK Government pay for it?

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

Regrettably, we are not in power at the moment. We do not have the power either in Scotland or in the UK to take such decisions. However, the SNP is in power in Scotland, and it could do that tomorrow—well, not tomorrow actually, because the Scottish Parliament is closed tomorrow, but it could do so next week. Indeed, I am particularly glad that the hon. Gentleman asked me that question, because yesterday in the Scottish Parliament, Jackie Baillie asked whether the Scottish Government would support a proposal that they cancel out any bedroom tax for 2013-14, but an answer from Nicola Sturgeon came there none.

I understand the point being made. The hon. Gentleman wants to play political games, saying, “We are not going to do this, because what have you said about it?” Let us lay aside these games. The question is—

Photo of Peter Bone Peter Bone Conservative, Wellingborough

Order. I know that the hon. Gentleman is addressing me. Certainly I have no opinion on this matter whatsoever.

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

I apologise, Mr Bone. I know that you have opinions on a whole range of matters, some of which I agree with, but this is not one I would want to draw you into.

The Scottish Government have a responsibility to act now, because they have the powers. To do nothing is a choice. The question is whether they will take up the exhortation from the Scottish Affairs Committee and Labour in the Scottish Parliament to pay off arrears now.

A second, related issue—I understand that this point is more difficult, but it is one on which I think we have to agree—is that of moral hazard: that if we write off arrears, we will send out a message that, in many ways, not paying rent is a lifestyle choice or is acceptable. I do not take that view. If we write off bedroom tax arrears, we also have to recognise the position of those who scrimped and scraped, who in many cases used their savings if they have them, or who borrowed from friends and family, in order to pay their bedroom tax. It is simply unfair that some people might have their bedroom tax written off, and others might also have the situation—

[

Interruption.

]

The SNP has chosen not to participate in the Committee’s deliberations, and then the hon. Member for Perth and North Perthshire wants to come along and heckle. I am quite prepared to take interventions. He should stand up like a man and give us his view.

Photo of Pete Wishart Pete Wishart Shadow SNP Spokesperson (Culture and Sport), Shadow SNP Spokesperson (Constitution)

Will the hon. Gentleman either say yes or no to this? I accept that the Labour party will to scrap the bedroom tax if it comes to power, but does he believe in principle that a Labour Government should recompense every victim of the bedroom tax? Does he believe that that is what a Labour Government should do?

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

I do. That is absolutely and completely my view. I cannot be any clearer than that. I persuaded the Committee of that in our report and I hope in due course to persuade the Labour party of it. That is my view, and it is the view of all the bedroom tax campaigners that I have met and of local authorities. It is also the view of the SNP chair of the Dundee housing committee. He wanted to see the Scottish Government not only writing off the arrears, but refunding the amount of money that had already been paid.

Let me be clear about what the Committee is recommending and what it believes. If the bedroom tax is going to be dealt with this year, however inadequately—we have difficulties with the methodology that the SNP Government insist on using—we hope that in the spirit of unity and harmony that so often characterises political debate in Scotland, there will be an understanding that if the DHP methodology does not work successfully, other routes and channels will be found, so that the objective we share can be achieved, which is to have all the effects of the bedroom tax written off for the current year. However, we have to be absolutely clear that what we want is the arrears written off for last year and full refunds for the years coming, as a prelude to the next Labour Government abolishing the bedroom tax altogether, not in 2016 or at some mythical date after independence in the event of a yes vote in the referendum, but when a Labour Government come to power.

Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries) 1:51 pm, 8th May 2014

It is a pleasure to serve under your chairmanship, Mr Bone. When discussing the report today, the key issue that we should not lose sight of is that the bedroom tax should never have happened in Scotland. There has been a broad cross-party consensus that it is a regressive measure and it should be abolished. However, the truth is that it should never have been introduced in the first place. It was brought to us by a Tory Government—propped up by their Liberal Democrat allies—for whom people in Scotland did not vote, and it reflects the same Tory values that brought us the poll tax 25 years ago, and which have been rejected time and again at the ballot box.

The bedroom tax has caused enormous hardship for some of the most disadvantaged tenants in Scotland, the vast majority of them disabled. It has created problems for social landlords and it has cost more than it has saved. The problems created by the bedroom tax were entirely predictable, and were in fact predicted by local authorities, housing associations and organisations representing tenants, as well as by Members of Parliament here and in Edinburgh.

To a large extent, the report we are debating today has been overtaken by events, given that a few days ago the Under-Secretary of State for Scotland said that the UK Government would provide Scottish Ministers with a power to set the statutory cap on discretionary housing payments in Scotland, using section 63 of the Scotland Act 1998. The Deputy First Minister made a statement in the Scottish Parliament yesterday and, I believe, met the Under-Secretary earlier today to discuss the process from here. That is a very welcome, if belated development, and follows several months of silence from the UK Government on the issue.

Yesterday’s announcement paves the way for discretionary housing payment to be made to everyone affected by the bedroom tax in Scotland. As the law stands, the only legal way to make regular and ongoing payments directly to tenants to make up for their loss of housing benefit is through discretionary housing payments. The UK Government has allocated Scottish local authorities £15 million for discretionary housing payments, but that is less than a third of the £50 million needed to mitigate the penalty for everyone affected.

Photo of Pamela Nash Pamela Nash Labour, Airdrie and Shotts

Does the hon. Lady accept that local authorities in Scotland have found other ways to give money to their tenants and residents to mitigate the impact of the bedroom tax, without using DHP? Can the Scottish Government not also use that, as the UK Government have confirmed?

Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries)

I am grateful to the hon. Lady for raising that point. It is something that parties in Scotland have looked at very closely, and I know that senior Labour MSPs such as Jackie Baillie and Iain Gray have very much been part of discussions with the Scottish Government about those issues. Even they have agreed with the Scottish Government about the way to distribute the extra money, in compliance with the law as it stands. They agree that DHPs are the only clear legal route to provide funding for bedroom tax arrears directly to the people affected on a regular and ongoing basis. We are having to jump through a lot of legal loopholes. It is clear there are some solutions—the Scottish Government, certainly, were looking at them very carefully—but it seems that the clearest way forward is through discretionary housing payments and the challenge for all of us is to make sure that they are made.

Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries)

I will not give way just now, because I have quite a lot to say and I need to make some progress.

The Scottish Government have made an explicit commitment to mitigate fully the impact by making £35 million available in this year’s budget for councils to distribute through discretionary housing payments. I believe that agreement has been reached with the Convention of Scottish Local Authorities to ensure that funding is targeted according to need, and much of the funding has already been allocated. My understanding is that councils in Scotland have been allocated extra funding up to the limit of the Westminster cap on how much an individual local authority is allowed to spend on discretionary housing payments. Across Scotland, however, that still leaves a £15 million shortfall, which can be allocated only once the cap is lifted.

I have raised the issue of the cap on several occasions both with Department for Work and Pensions Ministers and with Scotland Office Ministers. The Deputy First Minister wrote six letters, and I raised the issue personally with the Deputy Prime Minister. COSLA wrote, as did the Scottish Parliament’s Welfare Reform Committee. It has taken much longer than it should have. It is also worth making the point that the UK Government have not committed to lifting the cap, but will transfer powers to Scottish Ministers to allow them to do so. Inevitably, that two-stage process will take longer than if the UK Government had agreed simply to raise the cap.

Photo of Fiona O'Donnell Fiona O'Donnell Labour, East Lothian

That is exactly why East Lothian housing association in my constituency took action to write off arrears. Is the hon. Lady saying that it has acted illegally?

Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries)

By no means. I commend the work that has happened in some local authority areas and with some housing associations, but that is perhaps a more feasible option for some than for others. The agreement that has been reached among the parties in Scotland, on a cross-party basis, is that the discretionary housing payment system offers the clearest legal route to do that in a way that can be regular and ongoing. It is a bit of a legal quagmire, as far as I understand it, and it is not as straightforward as it might first appear. It is also not always easy to disentangle what are bedroom tax arrears and what are arrears due to another financial hardship such as losing one’s job, other welfare reforms or other loss of income. It is not entirely straightforward. Nevertheless, it is a very serious issue and I absolutely share the hon. Lady’s concerns.

I am glad that we have a commitment to proceed under section 63 of the Scotland Act. I pay tribute to the Under-Secretary of State for Scotland, who has succeeded where the DWP has failed over the past five months. I hope that the Minister will use this opportunity today to outline a speedy timetable for that process to be enacted. It means that local authorities can plan ahead on the basis that the shortfall will be met in full and that they will have funding to ensure that every single tenant subject to the under-occupancy penalty can receive a discretionary housing payment. Twelve of our local authorities already have a full funding allocation to mitigate the bedroom tax in their areas. The rest have extra funding up to the level of the cap and can now be assured that the rest is coming, just as soon as the relevant orders can be laid in Parliament.

The challenge for all of us is to make sure that tenants apply for their discretionary housing payment. I will certainly be going back to every constituent who has been in touch with me about the bedroom tax, including those who applied unsuccessfully for DHPs in the past, and urging them to reapply. I will also ask my local authority what it will be doing proactively to ensure that everyone who is entitled to discretionary housing payments gets them, now that the policy has been fully funded and there is no excuse for anyone who is subject to the bedroom tax to be left without the support that they need.

Photo of Katy Clark Katy Clark Labour, North Ayrshire and Arran

The hon. Lady will be aware that different local authorities are taking very different approaches. For example, in Renfrewshire, which is adjacent to my constituency, staff are employed to go around proactively and get people to apply for discretionary payments. In my area of North Ayrshire, that does not happen. Does she think that the resources need to be put in to ensure that that happens, if we are going to follow the path that she is suggesting?

Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries)

The hon. Lady makes a really important point, because there are a range of practices across local authorities. However, this is very much their responsibility, and I hope that they will be putting in place a more proactive approach across the board. I know that some have already done that in dealing with other aspects of welfare reform, but I also know that the Scottish Government have made it very clear to every local authority that that money is to be used for the purpose for which it is intended—to mitigate the effects of the bedroom tax—and they need to ensure that everyone gets it. It is incumbent on us all to ensure that our constituents know that and to encourage them to get their forms in. After all, it is in the interest of local authorities to ensure that people do not fall into arrears, because that just creates further problems for them down the line. I am confident that most local authorities in Scotland will be keen to ensure that that policy is properly implemented.

The mitigation measures mean that no one should fall into arrears or face eviction because of the bedroom tax, but we cannot ignore the fact that it is still on the statute book. The Scottish Parliament does not have the power to abolish it. That means that tenants are still legally responsible for the shortfall in their rent caused by the cut to housing benefit. We should not lose sight of the fact that in order to mitigate the worst impacts of Westminster’s bedroom tax, money has had to be diverted from other devolved spending priorities.

The bedroom tax and the other changes to housing benefit are only one aspect of the UK Government’s assault on people in low-income households. By the end of this financial year, about £4.5 billion will have been taken out of the pockets of people on low and middle incomes in Scotland through welfare reforms and other changes to the tax and benefits system. The figure will rise to £6 billion by 2015-16. Apart from in the bedroom tax itself, that is most evident in the changes to tax credits, which have cost 110,000 households in Scotland an average of £700 each, and of course the uprating of working-age benefits at a level substantially below inflation, which has meant real-term cuts in the value of support. The freezing of child benefit means that, cumulatively, a family with two children will be more than £1,000 worse off by next year. In many cases, the people who have been hit by the bedroom tax are the same people being affected by those other changes. It is those people whom the mitigation measures will help, but we must recognise that we cannot fill a black hole of £6 billion without the powers and the budgets to do so.

The Scottish Government have invested £258 million to temper the worst aspects of welfare reform, but we need to be clear that it is a damage limitation exercise, not a solution. As well as the extra £50 million for the bedroom tax, the Scottish Government have put in place arrangements to ensure that 500,000 people in Scotland still get council tax benefit, and have introduced the Scottish welfare fund, which so far has helped 35,000 people.

However, the Scottish Government do not at the moment have the powers or the budget to plug a £6 billion cut in public spending. People would think, listening to the earlier comments today, that the bedroom tax was dreamt up in Scotland and was being imposed by the Scottish Government. The truth is that the bedroom tax is the brainchild of a callous Tory-Liberal coalition Government whom people in Scotland simply did not elect. Responsibility for the bedroom tax rests right here in Westminster. The fact is that housing benefit is a reserved issue and this House has the power to scrap the bedroom tax.

Photo of Katy Clark Katy Clark Labour, North Ayrshire and Arran

Does the hon. Lady not believe that the Scottish Parliament should be looking to raise the amount of money that it receives through taxation? Can she explain why her party will not support measures such as raising the higher rate of income tax to ensure that we have more money to spend on welfare?

Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries)

I am very much looking forward to the referendum in September, when people in Scotland will have a say on whether they want control of their own affairs and responsibility for setting income tax levels. I led an Opposition day debate on this issue back in February last year, when I called on the Government to end the policy, but we have had a number of opportunities in the House since then to voice our opposition, which includes opposition on the Government’s own Back Benches. The best chance we had to get rid of the bedroom tax was in November last year, when the Government came tantalisingly close to being defeated in the Commons in a vote following a Labour Opposition day debate. A defeat in the Commons would have forced the Government to rethink their approach, because it would have shown that even their own Back Benchers in the coalition—

Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries)

I said that I would not take any more interventions, so I will not. [Interruption.] Well, I did say that earlier.

A defeat in the Commons would have forced the Government to rethink their approach, because it would have shown that even their own Back Benchers in the coalition recognised the manifest injustice of the bedroom tax, but that vote was lost by a margin of 26 votes, and 47 Labour MPs did not vote for their own motion. They included 10 Scottish Labour MPs, who apparently were in cosy pairing arrangements with their Tory counterparts. That was the best real chance we had at Westminster to sink the bedroom tax, and it was wasted.

I am well aware that there are often very legitimate reasons why Members of the House of Commons cannot attend votes. At times, all of us will have to deal with illness, bereavement, caring responsibilities or competing demands from our constituencies, but for matters of importance, most of us will move heaven and earth to be in the Lobby when we need to be. Those who missed that vote need to ask themselves whether what they were doing was really more important than voting down the bedroom tax.

Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries)

I am winding up my speech, so I will not give way. The bedroom tax and the other changes to our tax and benefits system that are fuelling poverty and hardship in communities across Scotland are the price that we pay for being governed by people we did not vote for. Scottish MPs overwhelmingly opposed the bedroom tax, but we have it anyway, and even now we cannot get rid of it; we can only seek to limit the damage that it is causing. The bedroom tax illustrates perfectly why Scotland needs decision-making powers on these issues. I am looking forward to the day when the people of Scotland have a Parliament with the normal powers of a normal state, a Parliament that is elected by us, responsive to us and accountable to us and that can consign the bedroom tax to history once and for all.

Photo of Fiona O'Donnell Fiona O'Donnell Labour, East Lothian

On a point of order, Mr Bone. Could you advise me on whether it is in order for Dr Whiteford to attack Labour Members for not being present for votes on the bedroom tax when in fact members of her own party have missed several votes on—

Photo of Peter Bone Peter Bone Conservative, Wellingborough

Order. That is clearly not a point of order. While I am on my feet, it might help right hon. and hon. Members to know that the winding-up speeches will start at 20 minutes to 3. I do not wish to impose a time limit on speeches, so I hope that Members are aware that a number wish to speak.

Photo of Katy Clark Katy Clark Labour, North Ayrshire and Arran 2:06 pm, 8th May 2014

It is a pleasure to have the opportunity to speak in this debate. I congratulate the Scottish Affairs Committee on the work that it has done on this issue and, in particular, some of the recommendations in the report, which I believe will be significant in moving the debate on the issue further forward.

It must be said very clearly that the responsibility for this policy and the impact that it has had on so many millions of people throughout the United Kingdom lies with the coalition Government. In Scotland, the policy has caused misery for many thousands, indeed hundreds of thousands—perhaps millions—of people. According to the UK Government’s own estimates in the Department for Work and Pensions impact assessment, 33% of people of working age who receive housing benefit are affected by the policy. In my constituency, as in most of Scotland, the policy has caused not only huge distress to individuals, but significant problems for those who provide social housing, whether they are local authorities or housing associations. Out of the almost 3,000 tenants affected by the bedroom tax in North Ayrshire, only

139 were able to downsize last year. Of course, that is because of the mismatch between the types of housing that social housing providers have and the Department’s determination of the size of housing that people need.

The proposals in the report are important because they recognise clearly where the problem is. It is quite easy to work out who is affected by the bedroom tax, because the social housing provider calculates who will be impacted by the discount, so I have to disagree with the spokesperson for the Scottish National party, Dr Whiteford, on this issue.

It is clear, however, that the funding has not been available from the Department for Work and Pensions to mitigate and deal with the problems that its policy has caused. Let me consider my own area, North Ayrshire. The Department provided £309,823 last year. The Scottish Government provided £460,000, and the local authority put in £4,676 to bring the discretionary housing payment funding up to the maximum that was required. Despite that, many of my constituents who have applied for a discretionary housing payment have not received one. On some occasions, they are refused the first time, but when they go back they may receive one. In other cases, they may be granted a discretionary housing payment on the first occasion, but when they go back to reapply, they are refused on that occasion. Quite often, they are refused because they are deemed to have coped adequately and budgeted well, so they have not been able to show the required level of hardship.

The report is absolutely correct to highlight the fact that many who have been impacted—many of whom are among the most needy—have not been helped under the regime that has existed until now. The impact is felt disproportionately by people with disabilities, their carers and those whose personal circumstances genuinely require them to have extra rooms in their properties for medical equipment, carers’ accommodation or other purposes.

The way in which the matter has been dealt with in Scotland is incredibly unfortunate. The majority of parliamentarians in Scotland did not support the policy, and it is very unfortunate that the issue has become so politically contested. However, action to ensure that those affected by the bedroom tax receive the mitigation that they were promised, after the Scottish Parliament voted in favour of providing full mitigation in February, has been far from consistent. Some of the reasons that the hon. Member for Banff and Buchan gave for that—I fully appreciate that she is merely putting forward a position that has been created by other people—were frankly inadequate. Mitigation can be provided in many ways other than through discretionary housing payments, and others have described how some organisations have written off arrears accrued as a result of the bedroom tax, or used other mechanisms to provide help to those who need it.

I want to say clearly that I agree with the approach outlined in the report. We must look at all who have been affected by the bedroom tax since its introduction in April 2013, and we must say clearly that we expect their representatives to take action to ensure that they are not worse off as a result. Members of Parliament have met many individuals who have suffered greatly as a result of the policy. The Scottish Labour party wants housing benefit to be fully devolved to the Scottish Parliament. I have absolutely no doubt that if it was, all parties would work together to ensure that this situation did not occur again. We need to take steps now to put in place the mitigation for which the Scottish Parliament voted in February this year. I therefore call on those in the Scottish Government and Westminster Ministers to do everything they can to ensure that that policy is implemented as soon as possible, so that everybody who has been affected by the bedroom tax in Scotland can get full mitigation.

Photo of Graeme Morrice Graeme Morrice Labour, Livingston 2:13 pm, 8th May 2014

It is, as always, a pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend Mr Davidson, the Chair of the Select Committee on Scottish Affairs, of which I, too, am a member, on securing this debate on one of the most important but depressing subjects that I have had to consider since my election to the House.

The bedroom tax—I will refer to it as a tax, because our evidence has shown that the vast majority of those who are affected have absolutely no option but to pay it, and are totally unable to change their circumstances to avoid it—is one of the worst pieces of legislation that I have ever encountered. I therefore fully endorse the conclusions of the Committee’s report. As a member of the Committee, I have heard overwhelming evidence from every corner of Scotland that the policy is completely failing our constituents, our housing providers and even each of the Government’s stated outcomes. It does not make the social housing system fairer or more efficient, and it will not save the Government money in the long run. The bedroom tax succeeds only in punishing those with the smallest stake in society at a time when they are being assaulted from multiple directions by the Government, who refuse to prioritise their day-to-day struggle.

Ironically, this policy came into effect in the same month that the Prime Minister announced tax cuts for the privileged few who earn in excess of £150,000 a year. Nothing that I heard in evidence to the Committee came close to justifying why ripping off some of the poorest and most vulnerable citizens is an absolute necessity; but somehow it is economically and morally proper to pay for tax breaks for the super-rich.

When we took evidence in West Lothian, where my constituency is located, we were told by the local authority that more than 50% of tenants are now in arrears, and that 500 households have tried to downsize to avoid the bedroom tax, but that because of pressures on the housing stock, only a small number have been successfully rehoused. To put the problem into perspective, West Lothian council estimates that at the present rate of transfer, it could take between 10 and 15 years to allow all the tenants who want to downsize to do so. That does not take into account new applicants who join the waiting list over that period. Alison Kerr, chair of the West Lothian council tenants’ panel, told the Committee of the urgency of acting now, saying that the longer the bedroom tax was allowed to exist unmitigated, the greater the number of West Lothian tenants who would have to make the impossible choice between eating and heating.

Of course, it is not only the UK Government who are to blame for the debacle. The Scottish Government could have acted much sooner to mitigate fully the effects of the bedroom tax in Scotland. I find it strange that the Scottish Government have not once approached the Committee to challenge statements made in evidence that they have had the powers necessary to mitigate those effects from the start.

Photo of Pete Wishart Pete Wishart Shadow SNP Spokesperson (Culture and Sport), Shadow SNP Spokesperson (Constitution)

We have just committed to mitigating fully the impact of the bedroom tax. While the hon. Gentleman is going on his tour of Governments throughout the UK, what does he make of his Welsh Labour colleagues in the Welsh Government, who have done absolutely nothing to mitigate the impact of the bedroom tax in their jurisdiction?

Photo of Graeme Morrice Graeme Morrice Labour, Livingston

I am not qualified to respond on the situation in Wales. Today’s debate is about Scotland, so if the hon. Gentleman does not mind, I will continue to focus on that.

The point that I was making before the hon. Gentleman intervened was confirmed by the Under-Secretary of State for Scotland in oral evidence to the Committee on Tuesday, and by the Chief Secretary to the Treasury in the past. After months of posturing, the Scottish Government this week ended their ridiculous game of brinkmanship with the UK Government when an agreement was finally reached to lift the spending cap, allowing the bedroom tax to be effectively ended in Scotland. I think I speak for many when I say that that should have happened much earlier. It is thanks to the Labour Members of the Scottish Parliament that a solution has finally been arrived at, after a year of attempts by Scottish Labour to drag the SNP into accepting that action could be taken in Scotland to bin this iniquitous tax. Late action is better than no action, and it will come as a relief to many Scots that the bedroom tax can and, I hope, will be fully mitigated.

I find it incredible that the Scottish Government did not even contact the UK Government until recently to try to find a way to end the bedroom tax in Scotland, just over a year before it was introduced and more than two years since the law was first enacted. People can draw their own conclusions about the reason why, but political posturing and blaming others hardly demonstrates responsibility or maturity; moreover, it lets down those who need our help the most.

To return to the report, witness after witness from London to the Western Isles told the Committee that they wanted the tax to be scrapped. Many felt abandoned by both Governments, who have had the power but not, until the eleventh hour, the political will or inclination to do something about it. However, although I welcome yesterday’s announcement on Scotland, more must be done throughout the rest of the UK. We have heard in several testimonies that the fail-safes to protect the most vulnerable are inadequate and largely do not reach those most in need, to the despair of housing providers. We heard from those on the front line that, despite repeated contact, a sizeable number of affected tenants do not engage, or are unable to engage sufficiently, with housing suppliers in order even to apply for a discretionary housing payment.

When the Select Committee visited my Livingston constituency, Donald Forrest, head of finance and estates at West Lothian council, told us that, despite considerable efforts since April last year to contact and engage with 2,195 tenants who are affected by the bedroom tax, between 500 and 600 tenants had still not applied. Craig Martin, leader of Falkirk council, told the Select Committee that 50% of tenants applying for DHPs in his locality had some form of recognised mental health problem. Such responses were not untypical of the evidence we heard from a range of witnesses from across Scotland and beyond. If DHPs are not reaching those most in need, then simply expanding the scheme’s eligibility to catch everyone is no guarantee of protecting anyone. The simplest way to protect all tenants is to either alter the scheme drastically or scrap it altogether, which is the Select Committee’s preferred option.

Simply put, at the heart of the bedroom tax debate is the worst kind of politics, with Scottish social tenants finding themselves stuck between two Governments: one distracted by a referendum on separation, who acted only when forced to do so by the Scottish Labour party and grass-roots campaigners; and another who want to look tough on welfare and spending, despite every indicator telling them that they are failing. The Scottish local authority body, the Convention of Scottish Local Authorities, has released figures showing that this year alone the bedroom tax will actually cost an additional £60 million to implement in Scotland.

Even after yesterday’s announcement, my message to the decision makers in both the Scottish and UK Governments is simple: they must stop the bickering, stop the finger-pointing, stop using some of the most vulnerable people in society as political pawns and stand behind the Select Committee to sort out the problem using the power that the Scottish people have granted them. The Labour party in Scotland has forced the SNP Scottish Government to this point, and has offered bipartisan support to help to find the money in the Scottish budget to sort things out. I sincerely hope that, now that we have a clear course of action and offers of help from almost every side, we will be able to get on with our day job of helping our constituents.

Of course, whatever happens, in May next year, Labour will repeal the bedroom tax as one of its first acts of national Government.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith 2:23 pm, 8th May 2014

I hoped to take some time to discuss the experiences of some individuals in my constituency, but since time is limited, I will not do so; I will simply say that I have had the same experience in my constituency that other Members have described.

The Government’s claim that the bedroom tax will free up more housing flies in the face of reality, certainly in my constituency and city. For example, the latest council figures for the end of March showed that some 3,300 tenants were over-occupying, according to the Government’s definition. However, at that same time there was a total of only 22 one-bedroom properties available in the social rented sector, from Edinburgh council and the housing association combined.

The Government’s solution to the problems with the bedroom tax has been to say that people can apply for discretionary housing payments. They have increased the sums available for such payments, but the very fact that they have had to do so more than once underlines how badly the policy has been working.

To introduce a complicated and bureaucratic system, with means-testing, different criteria applied in different areas, and no reasonable certainty that applications will be successful—a system no doubt costing millions to operate throughout the UK, which is the reality of the discretionary housing payments now used to deal with the bedroom tax—is certainly not an advertisement of successful Government policy; to do so by releasing cash to local authorities in a piecemeal way causes extra complications. It has meant that local authorities have had to change their criteria for DHP applications during the course of a financial year in an attempt to ensure that cash is paid out in cases that previously had been refused. No wonder some local authorities have found they cannot use up all of the funds that became available during the course of the year. That does not show that the policy is right or the Government generous; it is yet another example of a bankrupt policy that has caused immense distress and financial loss to people throughout the country.

The Labour party believes that the answer to problems caused by the bedroom tax is clear: abolish it and provide a real increase in the amount of affordable housing available to rent throughout the UK. That is certainly an urgent priority in my constituency, and both the UK and Scottish Governments are not doing enough; more must be done.

The focus of today’s debate is of course on the recent decision by the UK Government to allow the Scottish Government to lift the cap and spend more of their resources to deal with the effect of the bedroom tax in Scotland. The UK Government’s decision has come very late in the day, on top of an approach by the Scottish Government that, as many of my hon. Friends have pointed out, seems to have been motivated more by other political objectives than the interests of those in Scotland hit by the bedroom tax.

I am glad that my Labour colleagues in the Scottish Parliament, along with many community organisations, pressed the Scottish Government to change their stance, and that they eventually did so. It is good to see that parliamentarians in the Scottish Parliament can work together in the common interests of Scotland—I mean that with all sincerity, because that is what they have done on this occasion.

Nevertheless, as the Select Committee report points out, lifting the spending cap is by no means a complete solution. I suspect that some of those most affected by the bedroom tax will be precisely those people who are least likely to apply for discretionary housing payments—we all know about the problems with benefit take-up in other areas of welfare. Nevertheless, we must work with the UK Government’s concession.

The task now must be to ensure that the new power is devolved to the Scottish Government and Parliament as quickly as possible and the necessary legislation passed by the Scottish Parliament. Thereafter, the Scottish Government and local councils should work together to put in place a system for discretionary housing payments in Scotland that is as simplified and streamlined as possible, in order to ensure that decisions on discretionary housing payments are made speedily and with the minimum of bureaucracy, and that no one in Scotland suffers because of the bedroom tax until it is finally abolished.

Photo of Lindsay Roy Lindsay Roy Labour, Glenrothes 2:27 pm, 8th May 2014

I congratulate my hon. Friend Mr Davidson on securing this debate and his tenacity in opposing the bedroom tax. Indeed, he has been an ambassador for nullifying its impact, particularly in Scotland but throughout the rest of the UK as well.

The imposition of the hated bedroom tax is one of the most vile, abhorrent pieces of legislation ever passed by Parliament. The timing of this debate could not be better, because, thankfully, Labour and the SNP have come together to put pressure on the Government to ensure funding through the devolved budget. I pay tribute to all those who worked together to achieved that. I will say more on the matter at the end of my speech.

The bedroom tax been nothing more than an unwarranted and vicious attack on the most vulnerable, disabled and disadvantaged people in our society who have experienced the most disgraceful and punitive financial penalties at a time when the coalition Government insult our intelligence with their disingenuous claims that, in a time of financial restraint, “We’re all in this together.” So much for the oft-quoted slogan, “Those with the broadest shoulders will bear the heaviest burden.” In effect, this is the politics of mirage and fantasy. The coalition partners believe that if something is said often enough, people will believe it. Thankfully, those who live in the real world are not so gullible and do not share the same self-delusion. The coalition’s hypocrisy is no better exemplified than in their almost simultaneous tax break for millionaires and their lack of the missionary zeal so evident when imposing the pernicious bedroom tax when dealing with widespread tax evasion and tax avoidance and the energy companies’ exorbitant profits.

This gross injustice was initially perpetrated by a small core of ideologically bankrupt Tories, who are completely insensitive and uncaring to their fellow citizens. Yes, there are housing capacity and benefit issues in our society, but this simplistic approach is symptomatic of a Secretary of State and ministerial team who adopted a rigid dogma, with very little research or basic homework to assess the implications for hundreds of thousands of decent people in our society who have been trying to make ends meet in challenging circumstances, and sometimes in vain.

Even more worryingly, the DWP warlords have been actively supported in this gross injustice by other political zealots, which has rightly regained them the infamy of being “the nasty party”. Along with the spineless Liberal Democrats, with a few notable exceptions, they have railroaded and sustained this offensive legislation, despite accurate warnings and predictions of the dire consequences. If that was not bad enough, the anguish, despair and anxiety caused by this cruel tax, the bureaucracy associated with it and the overall budget shortfall have become patently obvious throughout Scotland and the rest of the UK. So uncaring were the Government that not only did they block loopholes, but they brazenly carried on regardless, ignoring the overwhelming evidence for repeal. Not willing to repeal the measure, they have dismissed positive proposals for exemptions that make eminent sense.

The Scottish Affairs Committee has been conducting inquiries into the damaging impact that this vile tax has had in Scotland, and it has challenged the Government on their unworkable policy that is putting thousands of Scots in financial hardship, debt and indignity. Indeed, people are having to resort to food banks to feed their families. We have carefully considered how local councils and the Scottish Government have worked together, and I pay tribute to my council, Fife council, for the way it has dealt with the situation by encouraging people to take up discretionary housing payments and going above and beyond the call of duty so to do.

I conclude by returning to the point I made at the beginning. I welcome the introduction of a system whereby the Scottish Government will provide funding, but I have to ask this basic question: why was that not done last year? Was it because of an obsession with independence? Or was it a cruel approach to allow people to suffer before playing the blame game by blaming Westminster for political advantage? It strikes me that people will have to make that decision for themselves when they vote, but yet again it seems to be a game of self-helplessness and blaming other people, rather than taking advantage of the opportunities provided by the available budget to mitigate the circumstances last year as well as this year.

Photo of Pamela Nash Pamela Nash Labour, Airdrie and Shotts 2:33 pm, 8th May 2014

It is a pleasure to serve under your chairmanship, Mr Bone.

It is good for Scottish Members of Parliament to have an opportunity to debate the bedroom tax and its impact on Scottish constituents and constituencies. As well as examining the specific problems and effects in Scotland, the report considers what should be done to mitigate those problems. We were inspired to produce our report by the policy’s impact on our constituents and the constituents of colleagues across Scotland—across parties, Members were concerned. I was delighted to welcome the Committee to my hometown of Airdrie to see the impact of the bedroom tax and what is being done in Airdrie and throughout north Lanarkshire.

Before the inquiry started, I campaigned on the bedroom tax in my constituency. At the beginning of my campaign I started a joint campaign with the local Scottish National party. That had not been done before, but we came together as two local political parties because we were united in our anger at the UK Government—the Tories and the Lib Dems—for introducing the policy, which was doing so much harm in our local area. Unfortunately, it quickly became clear to us in Scotland that the Scottish Government were not doing everything they could have done, and with regret the happy partnership ended rather quickly.

When the Chair of the Select Committee, my hon. Friend Mr Davidson, spoke earlier, Pete Wishart was chuntering as usual, and I want to get it on the record. What he said—please correct me if I am wrong—is that it was ridiculous that the Chair of the Select Committee dared to mention that the Scottish Government had played politics on this issue by announcing that the bedroom tax has now been fully mitigated.

The Scottish Government let people suffer for more than a year. Some 82,000 households across Scotland have suffered, losing, on average, £50 a week. By definition, those are the poorest households: they are claiming housing benefit because they are low-income families and low-income households, and 80% of those households have a disabled member. Perhaps the Scottish National party should have spent more time considering what it could do, rather than pointing the finger at us and at the Labour party as a whole.

I was not going to spend time on this, but I feel that I have to defend myself and the Labour party. Dr Whiteford mentioned the Opposition day vote on the bedroom tax. I asked to intervene, but she was in full flow. I agree that that number of Labour MPs should not have been paired, and I am already on the record as having said that—I have said it publicly and I have said it locally. But it is misleading to say, I assume accidentally, that those pairings changed the outcome of the vote. Every single Labour MP was paired with a Government MP, as was confirmed by the parties at the time. It is not true that there would have been a difference in the outcome of the vote. We have to put that on the record, and it is nothing short of hypocritical for the SNP to say that when every single SNP Member of Parliament has missed a vote on bedroom tax legislation.

Photo of Pamela Nash Pamela Nash Labour, Airdrie and Shotts

I have had it checked by the House of Commons Library. I voted against the bedroom tax seven times, which is all the votes on legislation, and I supported a private Member’s Bill, yet the SNP choose continually to mention the Opposition day debate on which some Labour MPs were paired and therefore did not attend. I am sorry to labour that point, but it is important to get on the record the facts of who represented Scotland by voting against the bedroom tax and who did not.

I unequivocally agree with all Members who have said today that, as the report clearly states, the bedroom tax should never have come into fruition and should never have been introduced by this UK Government. I think the bedroom tax should be abolished immediately, but that does not let the Scottish Government off the hook. In my hometown, people still remember the impact that Strathclyde regional council made during the miners’ strikes. That was part of the inspiration for devolution and for the Scottish Parliament: when a local authority could protect its local people, imagine what we could do for all of Scotland. That has been used as an argument for independence, too, but it is an argument for devolution. Devolution was designed to get the best out of the UK and to protect it when something goes wrong and there is a policy with which we do not agree. The SNP has remained anti-devolution and uses the Scottish Parliament only when it suits the SNP.

I hope the Minister will announce the abolition of the bedroom tax today. I will not hold my breath, but I hope she will at least tell us whether the Government are doing an analysis. If that analysis shows that the Government’s aims for the policy are not coming to fruition, will they consider abolishing the bedroom tax not just for Scotland but for all the UK? I am relieved that my constituents will not have to suffer from the bedroom tax in future, although they have already incurred debts. I look forward to a Labour Government abolishing the bedroom tax for the entire UK in 2015.

Photo of Peter Bone Peter Bone Conservative, Wellingborough

I congratulate hon. Members on their self-restraint. Every Back Bencher who wanted to speak has spoken.

Photo of Stephen Timms Stephen Timms Shadow Minister (Work and Pensions) 2:48 pm, 8th May 2014

I am delighted to serve under your chairmanship, Mr Bone. I congratulate the Scottish Affairs Committee on its report and my hon. Friend Mr Davidson on his introduction of the debate this afternoon.

It is refreshing to see an official document—the two reports from the Scottish Affairs Committee—that finally calls a spade a spade and uses the term “bedroom tax”. My hon. Friend Graeme Morrice drew attention to that as well. I was disheartened and my heart sank when I started to read the Government’s response to the report. Their very first point states:

“The Government has noted with some dismay the title of the Scottish Affairs Committee’s current inquiry”.

The complaint is about using the term “bedroom tax”, but everybody uses that term. Both parties that have spoken in this debate have used that term. The Minister for Welfare Reform in the other place used the term “bedroom tax” on more than one occasion. It is sometimes claimed that the term was invented by the Labour party, but I can reassure the House that that certainly was not the case. In fact, it is what the people call this hated measure. The Committee is absolutely right to reject specious arguments from Ministers that some other convoluted form of words should be used. I noticed in the Government response to the report that there is a long-winded phrase, which I cannot recall, but it has 10 syllables instead of the three in the phrase “bedroom tax”, and that is what it is absolutely right to call it.

My hon. Friend Lindsay Roy is right to say that the measure reflects straightforward Tory ideology. It is not a surprise that the Government’s housing benefit changes have hit the most vulnerable in our society the hardest. This has been explored to some extent, but it is disappointing to hear that the Scottish Government held back from protecting vulnerable claimants on the grounds that to do so would be to let Westminster off the hook. I welcome the progress that has been made in the past few days in overcoming that constraint.

The bedroom tax is the most hated of all the changes that the Government have introduced. The report is absolutely right to say that it is cruel and unfair, and is making a big contribution to the cost of living crisis faced by families in Scotland. Research by Sheffield university shows that it is the poorest who are picking up the tab, when we have seen tax cuts for the highest paid and a huge increase in bankers’ bonuses since the Government were elected. One of the biggest drivers of the loss in household income for ordinary families in Scotland is the bedroom tax.

The uniquely dreadful feature of this measure is that it cuts the income of people who are already hard up, without giving them any realistic options for making up the loss. We know that only 6% of those affected across the UK have been able to move, so 94% are taking the hit. The smaller social rented homes that would be needed to make the policy work—as we pointed out in the Welfare Reform Bill debates three years ago, and as Ministers must have known when they introduced the policy—are simply not available in many areas. We have heard from my hon. Friend Mark Lazarowicz that in Edinburgh 3,300 people are affected by the tax and 22 one-bedroom homes are available—less than 1%—and that is not an uncommon percentage being reported from cities around the UK.

There are also particular difficulties in rural areas. In some of them, there is almost no one-bedroom accommodation available at all. I noticed the submission made by the Orkney Islands council on the Scottish Affairs Committee’s website that made a strong case for a derogation from the bedroom tax for remote and rural island areas. But the truth is, whether we are talking about cities, towns or rural areas, the bedroom tax needs to be scrapped.

Given that there are not smaller homes to move to, many people simply have to take the hit. Many are now in rent arrears, and those who simply cannot afford the extra and cannot find anywhere to move to are going to lose their homes.

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee

Does my right hon. Friend the Member for East Ham—my party’s spokesman—accept the recommendation of the report that all bedroom tax should be written off and all payments made refunded? Would he, like me, welcome the opportunity to go into a general election with the slogan, “Vote Labour and get your bedroom tax back”?

Photo of Stephen Timms Stephen Timms Shadow Minister (Work and Pensions)

That sounds a very good slogan, but, sadly, I cannot give my hon. Friend the assurance that he seeks. I agree with him about the distinction between the Scottish Government currently in power in Scotland and the position that would face a newly elected—hopefully, Labour— Government.

The point has also been made in this debate—absolutely rightly—that across the UK two thirds of the households affected include someone with a disability. My hon. Friend Pamela Nash indicated that the proportion is even higher than two thirds in Scotland. It seems particularly ridiculous that homes on which public money has been spent specifically to provide adaptations for families living with disabilities should be affected by the bedroom tax, and some people are being forced to leave them, even though public money has been spent to adapt them specifically to their needs.

We had a debate last week about the impact of the bedroom tax in Wales. The Committee’s interim report acknowledged that Wales was the part of the UK worst affected by the tax. The Government’s response to the report by the Welsh Affairs Committee once again rejects the idea of an exemption for adapted homes. That is very disappointing, and it is another aspect of the wastefulness of this measure. It contributes to the likelihood, as pointed out by researchers at York university and elsewhere, that the bedroom tax will end up costing more than it saves. Without smaller homes to move to, the measure is simply a tax on the poor. As my hon. Friends have said, the right thing to do is to scrap it.

I welcome the agreement that will enable the effects of the bedroom tax to be nullified in Scotland. Can the Minister tell us why the same provision cannot be made for Wales? Why are the Welsh Government not allowed to offset the effects of the bedroom tax? And what about the Greater London Assembly, so that my constituents could also be spared this pernicious measure?

Last week, my hon. Friend Alison Seabeck rightly brought to the attention of the House the issue of panic rooms, which are not exempted from the bedroom tax.

We have long argued that the hated bedroom tax was a mistake. Even the Conservative Chair of the Welsh Affairs Committee has recognised that it is a mistake in Wales. Our policy is that it should be scrapped. We will continue to press the Government to scrap it. That was the aim of the private Member’s Bill moved recently by my hon. Friend Ian Lavery. If our efforts do not succeed and the bedroom tax is not scrapped by this Government, we have made it absolutely clear that it will be scrapped by the next Labour Government.

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

It is a pleasure to serve under your chairmanship, Mr Bone. I thank the Liaison Committee for securing this debate and I welcome the attention that the Scottish Affairs Committee is giving to welfare reform generally and to housing benefit reform specifically. I appreciate the opportunity to put the Government’s position in this debate. The Committee produced both this report and the subsequent report without seeking any input from the Department or its Ministers.

It may be helpful to discuss why this policy was introduced in the first place. The issue is difficult and complex. It has taken up a lot of time on all sides of the House, as well as the Government’s time. However, people have to understand what we are looking to solve, because we were delivered a huge problem by the Labour party, now in Opposition: a housing bill spiralling out of control, going up from £13 billion in 2002-03 to £24 billion in 2012-13—as it would have been—and increasing. What were we going to do? This was unaffordable. How was it going to be affordable, not just now, but in the future, for future generations? Who was going to pick up that debt and solve this issue, and get as fair a solution as possible?

Of course, we are listening to what is said about people today who will end up having to pay a certain amount of money for extra rooms in their houses, but what about the people in the private rented sector who are still getting paid housing benefit? They do not have the luxury of a spare room in their houses. The Labour party introduced this very same change in housing benefit—

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

I will not give way at the moment.

The Labour party introduced this same change in 2008 and, at the same time, it was talking about its implementation. So I am afraid it does not wash, now, when Labour are in Opposition

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

I will not give way just yet.

Since I am talking about people who have to afford their homes, what about people who have bought their own home on a low income but cannot have a spare room because they cannot afford it? We have to look at fairness to the taxpayer and to people in private rented homes, and those in social rented homes, as well as at a bill spiralling out of control. As I said, I am afraid that this problem was handed to us. It is not an easy problem; it is a complex one. It is a difficult problem to solve, but we are solving it.

Talking about the extra support, which is key, we trebled discretionary housing payments for the complex cases; that is the money that we have handed out. We recognise the rural issue and have provided an extra £5 million for that, and we recognise significantly adapted homes, whether with a room for those affected by domestic violence or with specific adaptations for disabled people, for example. We have put an extra £25 million into that. All those things have been acknowledged.

At the same time, claimants or their partners who receive frequent overnight care from someone not in their household were exempt. Parents of disabled children who could not share a room were also exempt. Foster carers had an extra room. Parents with adult children in the armed forces who remained at home when not on operations had exemptions, too. All those people were recognised.

Photo of Pamela Nash Pamela Nash Labour, Airdrie and Shotts

The Minister mentioned a few numbers relating to money given in mitigation. Exactly how much have the Government saved as a result of this policy? Which organisations have come to the Government, during their analysis of the policy, before and after implementation, and said, “This is a good idea”?

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

I am not just talking numbers; I am talking lives of people right across the country who are affected by this. We are looking to save £500 million per year. That is what is being rolled out and what is being saved, because at the moment people are moving into other homes. At the moment, that is the amount being saved.

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

I have always made it clear that this is not merely about saving money. It is about the use of housing stock, going forward, and about fairness for all those people paying into the system and all those needing homes. It is not just about money, but money is part of that, too.

Before I give way again—

Photo of Peter Bone Peter Bone Conservative, Wellingborough

Order. It might help hon. Members—there is clearly still quite a lot of interest in this debate—to know that a vote is scheduled at 3.5 pm, which might be a convenient time to end the debate, so the Minister might have a little more time than she thinks.

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

Thank you, Mr Bone.

As we look at the question, it comes into sharper focus. I need to remind all hon. Members, particularly those on the Opposition Benches, that Labour Members fully supported and voted for an overall welfare cap—[Interruption.] Some Scottish National party Members did not vote for it. My question for the Opposition and Committee members is this: if savings are not to come from housing benefit, which aspects of welfare spending and the welfare bill—potentially £500 million a year—are they going to cut? Will it be disability benefits or support to children, or will pensioners be affected? All this is rather complex, because I am afraid that the Opposition voted for an overall welfare cap.

Photo of Graeme Morrice Graeme Morrice Labour, Livingston

The right hon. Lady talks about the cost. Does she not accept that the evidence provided to the Committee by various witnesses from Scotland and beyond—all the housing providers, welfare rights organisations, tenants, local authorities and even the Convention of Scottish Local Authorities—says that the tax is costing everybody more money than it is saving? How does the Minister respond to that, and particularly to the COSLA figure, supported by all political parties in Scotland, that in Scotland it is costing an additional £60 million to administer?

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

I do not agree with that. We are seeing people moving round. The debate never considers the people in overcrowded accommodation. There is an issue in Scotland in that regard, too, although the problem is not as big there as in the rest of Britain. What about people living in overcrowded accommodation? What are we to do with people who do not have the right-sized room for their children, whether disabled or otherwise? What about people on housing waiting lists? We are forgetting about all these other people who have issues, too.

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

I am afraid that, in opposition, the Labour party has forgotten about those people. We are dealing with those people. I should like to state some facts about arrears, which were mentioned by the hon. Members for Glasgow South West (Mr Davidson), and for East Lothian (Fiona O'Donnell). The regular Scottish household survey found that arrears in December 2013 were lower than at the same point in both 2012 and 2011, and 55% of Scottish social landlords reported a fall in the percentage of their rent arrears between March and December 2013. These are the figures that we are looking at. The Chair of the Committee asked about support for disabled people. I have talked about that and the extra money in that regard.

Stephen Timms talked about the difference between a tax and a subsidy. He is a mathematician—he went to university with a friend of mine—so I know that he knows the difference between a subsidy and a tax. However, I wonder whether it is because the Opposition do not know the difference between the two that we are in incredible debt at the moment. They do not understand the ins and outs of money and how it is best spent; that is why they left us with a £150-billion-a-year deficit.

Photo of Pete Wishart Pete Wishart Shadow SNP Spokesperson (Culture and Sport), Shadow SNP Spokesperson (Constitution)

Will the Minister bring her remarks back to Scotland, which is what this debate is about? There are legitimacy issues here. We did not vote for any of this. Why should Scotland put up with it?

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

We have, in our latest discussion—this is why we are here today—asked how we could best deal with this situation and what to do. We have put extra money on the table, and the Scottish Government were paying in as well. We have now allowed the matter to be devolved to Scotland, for it to consider what it can do. Although the proposal in Scotland might be an immediate answer to Scotland’s issues and problems in this regard, it does not solve the underlying problem about what people are doing, how Scotland will change its housing stock, how it will get the right people in the right houses, and how it will pay the bills, with an ageing population and more people going into social housing.

Although money might be put towards this issue, we are dealing with other issues too, not only in England, but in Wales; we are looking at the stock and getting the right people in the right houses—something that Labour has kicked down the road. It is not dealing with those issues now, and did not deal with them in office.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

Given that the Minister has mentioned the solution that the Government are putting forward, will she say when the necessary order will go through the House of Commons? We may prorogue next week; can she guarantee that it will be put in place before we prorogue? Otherwise, the Scottish Parliament will not be able to take the necessary action until several months have passed.

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

I hope that the hon. Gentleman appreciates that the announcement was made only on Friday. It is very much early days. We are working through the detail of how the policy will work, and we have to make sure that the solution works. I want to check the debate timings with you, Mr Bone, because I know that the Chair of the Select Committee wants to reply. How much longer has the debate got?

[Mr Joe Benton in the Chair]

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

I welcome my fellow Merseyside MP to the Chair.

Photo of Lindsay Roy Lindsay Roy Labour, Glenrothes

The Minister spoke about a potential saving of £500 million. When will we get the actual figure?

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

We will get the actual figure as it works through. That figure is the one we are working to. I have always made it clear, and I make it clear today, that it is about getting the correct use of the housing stock and fairness for those paying for their own home, those in the social rented sector, and those in the private rented sector. It is about stopping the spiralling increase in the housing budget, which Labour allowed to run out of control. That budget doubled in monetary terms in 10 years. How best can we tackle that problem? We are dealing with it and solving it, and we are getting it right.

When we look at the changes that have taken effect, we see that, so far, 9% of people in the UK, and 7% of people in Scotland, have moved. The changes that we were hoping for when we put that into effect were that people would downsize, and that larger houses would be freed up for those in overcrowded accommodation on the waiting list. That has happened, but there is still a way to go.

Several hon. Members:

rose—

Photo of Esther McVey Esther McVey The Minister of State, Department for Work and Pensions

I am running out of time. If I have only 20 more seconds, I had better not take an intervention. [Interruption.] I feel I have given way many times to Members. It is important that the issue is tackled. It is difficult and sensitive, and it has kept a lot of us up late at night, trying to get it right, and that is what we are doing. The issue is very complex.

Photo of Ian Davidson Ian Davidson Chair, Scottish Affairs Committee, Chair, Scottish Affairs Committee 3:02 pm, 8th May 2014

It is true that much of what we reported on has been overtaken by events. The movement that we sought has to a great extent been achieved. It is fair to place on the record my thanks, and those of the Committee, to those Scotland Office Ministers who pursued and ensured the increase in the discretionary housing payment. It is also fair to recognise that the Scottish Parliament and the Scottish Government have also moved. They told us unequivocally that they could not find the money to increase DHPs, but they have done so. We offered to help them find the money, but they found it themselves.

What happens now? In the Scottish Parliament, Iain Gray asked the Deputy First Minister if she would

“categorically confirm that any tenant affected by the bedroom tax who applies for DHP support will automatically get it”—[Scottish Parliament Official Report, 7 May 2014; c. 30617.]

Many tenants in those circumstances will have difficulty clarifying whether they should be making part-payments at the moment, if it will take some time for the DHP cap to be lifted. I hope that the Scottish Government will agree that anyone who has made or continues to make part-payments should get those refunded. It would be iniquitous if anyone who paid part of the bedroom tax during the current year did not get that money back, while someone who had not paid any of it did not have to pay anything. If the Scottish Government can pay back a certain amount of money paid this year, there is no reason why they cannot pay back the amount paid through the bedroom tax last year. We have to look for the Scottish Government to refund the money that has already been paid, and to write off any accumulated debts.

I look forward to the Scottish Affairs Committee meeting a series of groups—we have already met some—to continue to ask how best we can mitigate the entire effect of the bedroom tax in Scotland, as a prelude to the next Labour Government abolishing it entirely.