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Bedroom tax: amended amended amendment will be overturned by Coalition

Despite enormous pressure, yesterday the House of Lords defied the Government on one last amendment to the housing proposals in the Welfare Reform Bill – on the ‘bedroom tax’ for underoccupying social tenants.  It was an amended and watered down version of the amendment that the Lords has supported a couple of weeks ago.  Unfortunately the Government immediately signaled that it would again reverse the Lords’ decision when the issue returns to the House of Commons.
The Lords decision was achieved due to a handful of LIb Dem peers voting against the Government.  Of course, a similar stand by Lib Dem MPs would make it impossible for the Government to get its way in the Commons.  But if form is anything to go by, Lib Dem MPs seem capable of failing to support even their most cherished long term policies.
The ‘bedroom tax’ proposal was hardly noticed when the Welfare Reform Bill was first introduced – although Red Brick covered it here and here and here – but has become an iconic symbol of the meanness of the Bill and the Government’s desire to inflict punishment on social tenants for existing.  It will inflict benefit cuts of £14/week on tenants deemed to be ‘underoccupying’ their homes by a single bedroom.  Even the Government admits that the vast majority, indeed nearly all, of the tenants affected will not be able to move home because smaller units are not available for them to move to.
Lord Richard Best moved a new amendment to the proposal which would ameliorate the impact on vulnerable groups, including disabled people, those not required to work, war widows and foster carers.
Richard argued: ‘Even though this amended, amended amendment is now providing much less relief than I feel the situation requires, it nevertheless draws a line by mitigating at least some of the hardship for at least some of those on the lowest incomes, and now exclusively for those who are not in a position to go out to work because they act as carers or are disabled themselves.’
Minister Lord Freud accepted that most of the 670,000 affected people would not be able to move, but said they had options available to ‘make up the shortfall’ and stay in their home.  Presumably he had in mind freezing or starving among his options.
Over 70 housing and disability organisations wrote to MPs calling on them to support the previous, more wide-ranging amendment, citing examples of families that would be affected, including Grandparents who share the care of their grandchildren; families in which two same-sex teenage children have their own bedroom for privacy and study; disabled tenants who need an adapted room to live a dignified, independent life.  Additional bedrooms in such circumstances would be taken for granted and regarded as entirely reasonable by the vast majority of people.
Following yesterday’s vote, David Orr of the National Housing Federation, which has campaigned tirelessly on this issue, said this result ‘is a victory for common sense and fairness. We are delighted that peers have stood firm and yet again voted to lessen the impact of the bedroom tax. ‘Peers and MPs of all parties have voted to amend these proposals. They have been supported by tenants, social landlords and nearly 80 organisations concerned with housing, family issues and disability. ‘Together, we have shown that it is simply unfair to penalise some of the most vulnerable families for under-occupying their homes when they have nowhere else to move.  For disabled people, war widows and foster carers, with nowhere else to go to, this could mean the difference between making ends meet and living in poverty.’ 
The campaign can be followed on the NHF website at

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Social Tenants' Bedroom Tax: now it’s up to Lib Dem MPs

Yesterday’s defeat of the Government in the House of Lords on the ‘Bedroom Tax’ – the punitive proposal to remove benefit from social tenants deemed to be underoccupying their homes (on very strict definitions) even when they have no possibility of being able to move to a smaller home – gives the Coalition a decision to make.  They can either accept the amendment agreed by the Lords or seek to overturn it when it goes back to the Commons.
The electoral arithmetic is such that the Government will not be able to get this nasty little proposal though the Commons if all Lib Dems MPs oppose it and threaten to join Labour in the voting lobby.  This is what should happen because there is nothing in Lib Dem policy or in the coalition agreement that would suggest they are required to support the Government on this.  Given that Cameron’s favourite game, no doubt learned at his educational institutions, seems to be the ritual humiliation of his fag, it is time for Clegg to make a stand on a matter of principle.
The amendment means that the bedroom tax – loss of £13 per week on average for some 670,000 working age social tenants on housing benefit – would not apply to social tenants with only one bedroom additional to their needs and would not apply unless they had been made an offer of suitable alternative accommodation.
The bedroom tax proposal aims to save some £500m a year on the housing benefit bill, a figure that seems unachievable given that a proportion of households would inevitably become unintentionally homeless at considerable expense to the public purse and a proportion of those having to pay the tax would move into private rented accommodation at higher rents and higher benefit costs.  It has also been argued that it would be counterproductive in tackling underoccupation because it excludes older tenants who are more likely to underoccupy.
Many examples were given during the debate of households that require additional space for entirely justifiable reasons.  Lords also quoted the work done by the National Housing Federation which showed that the number of hosueholds needing to move to one bedroom accommodation to escape the tax would far exceed the total supply of one bedroom properties available to meet all needs.
The whole debate can be found in the House of Lords Hansard .
The amendment was moved in the Lords by Lord Best.  He said:

Under the fierce new test, a family would be counted as underoccupying if, for example, two teenage girls were not sharing the same room, or if an older couple, one of whom is below pension age, have a two-bedroom flat. All those deemed to be underoccupying will have to move and downsize to somewhere smaller. If they do not, even if there is simply nowhere smaller for them to move to, then they must pay the new penalty.
Six hundred and seventy thousand households receiving housing benefit will be caught in this trap, rising to some 740,000 in the years ahead. If they do not move out, they will be charged an average of £13 per week, which will have to come out of their low earnings or their other benefits, which are meant to cover food, fuel, clothing, and specifically not housing. These areby definition very poor households, and the new tax will represent a significant reduction in their living standards.

Speaking in support, Lord McKenzie of Luton said

No one doubts that underoccupation is a problem. We have a chronic shortage of housing stock and a huge demand for affordable housing. Yet the Government’s policy is the wrong way to go about tackling the problem, as it punishes people for housing choices over which they have little control rather than enabling the best fit between the available properties and the needs of households.

Also speaking in support, Baroness Hollis of Heigham said

Grant Shapps said that we should not bully people out of their homes. He is right. Yet in this Bill we are saying to people who have lived in their homes all their lives, done what was asked of them and behaved responsibly-two-thirds of them having some disability-that their benefit is being cut from underneath them through no fault of their own but just because we in Westminster are changing the rules. We tell them to downsize while knowing that they cannot do so, so we fine them instead for what is not their fault and for what they cannot change. It is morally wrong to punish people for something that is not their fault and to punish them when they are innocent. That is not decent, it is profoundly unfair, and we should not do it.

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Callous, coercive and destined to fail

The Welfare Reform Bill, currently in Committee Stage in the House of Commons (follow the debates here), contains many provisions which will have a profound effect on the housing opportunities of people on low incomes in the years to come. 
One of the changes that has attracted little attention is designed to tackle under-occupation in the social rented sector.  From 2013 housing benefit will be reduced if the household is of working age (the limit is rising from 60 to 65) and is deemed to be living in accommodation which is too big for their needs.  An ‘underoccupying’ claimant will lose a proportion of their HB, which will no longer meet their current housing costs, with an average loss of £13 per week. 
The government’s own impact assessment estimates that 670,000 social tenants will be affected, around one-third of all HB claimants in the sector.  In the north, between 40-50% of tenants will be affected, in London around 20%.  This is an extraordinary number of people.
Affected tenants will face a ‘choice’: make up the shortfall from their other income, take in a lodger, or move to smaller accommodation in either the social or the private rented sector.  Even if only half of those affected decide to move, pity the poor landlord in the north when 1 in 5 of all tenants knock on the door asking for an urgent move to smaller accommodation.  In London, additional transfer requests from 10% of tenants would swamp the housing allocations system. 
Nearly 4 in 5 of those affected currently ‘underoccupy’ their homes by just one bedroom.  They are hardly evil – most people with one spare bedroom do not recognise themselves as underoccupiers, and often the last bedroom is small anyway – but they will lose £11 per week on average.  Over recent years policy had moved strongly towards recognising that the real challenge in underoccupation is to tackle cases where there are 2 or more spare bedrooms, where there is most to gain.  Under the new rules, a family of 6 with 2 sons and 2 daughters living in a 4 bedroom property would be deemed to be underoccupiers, and would receive the arbitrary HB ‘fine’. 
The loss of an average of £13 per week might not be noticed by the Cabinet of millionaires, but this is a huge sum of money to anyone on a very low income.  The policy’s only chance of success will be if there is a supply of smaller homes to transfer into.  Yet the government’s impact assessment admits that there are simply not enough smaller housing association and council properties available.    
The policy is the opposite of the ‘moral hazard’ – where people are insulated from the consequences of their own actions.  In this case people will face the consequences of the government’s actions with no reasonable course of action open to them to avoid or pre-empt or respond to the change in policy.  It is coercive and in a nasty way: if they cannot move, they will face deliberate impoverishment with no way out. 
Will the policy achieve its stated aim and save any money?  Labour shadow welfare reform minister Karen Buck thinks not.  Tenants who are unable or unwilling to move will fall into rent arrears, with the risk of eviction (and loss to the landlord) triggering the costs associated with a rise in homelessness.  The government thinks that some will move into the private rented sector, where rents are higher even for smaller properties, so the cost will go up not down.   
And in a final irony, the policy will not even address, indeed will avoid, the biggest single issue in the underoccupation debate – which is what to do with underoccupiers of retirement age whose family has moved on.
For our previous post on the Tories’ market solution to underoccupation, click here.

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Under-occupation – the market solution?

<strong><span class="has-inline-color has-accent-color">Steve Hilditch</span></strong>
Steve Hilditch

Editor and Founder of Red Brick. Former Head of Policy for Shelter. Select Committee Advisor for Housing and Homelessness. Drafted the first London Mayor’s Housing Strategy under Ken Livingstone.

A lot more is said than done about the issue of under-occupation of social rented homes.

Grant Shapps has allocated a piddling sum of £13m amongst the 50 councils with the largest numbers of under-occupiers.  Of course it is a move in the right direction, if a small one, and the linked announcement that a central unit will be set up in the Chartered Institute of Housing should be a valuable resource supporting local initiatives. 

Ministers say there are 430,000 under-occupied social homes in England – where tenants have two or more bedrooms more than they require (against the ‘bedroom standard’).  I support the focus on  tenants with 2+ additional bedrooms because tenants with one spare room over the rather ancient ‘bedroom standard’ do not regard themselves as under-occupiers. 

With an estimated 258,000 social renters living in overcrowded conditions, simplistic arguments are sometimes made that the problem could be ‘solved’ if selfish older tenants were stopped from blocking social homes needed for larger families.  Calls for draconian action of some kind to require under-occupiers to move to smaller accommodation seem to have been rejected – the government says it has “accepted the basic right of older tenants to stay in their homes, and that policies of encouragement are better than those of coercion….. Ministers are clear that they will not force people to move – but want to provide a helping hand to those wanting to do so.” 

Just like older home owners, older tenants have often raised their families in these homes and are emotionally attached to them, still have many family visitors, are part of the local community, have neighbourhood support networks, and now have time to enjoy the garden if they have one.  They have probably paid for the property a few times over in rent, and now contribute through rent pooling to the cost of homes elsewhere. 

Bespoke solutions are needed, with landlords who know their tenants talking with them individually and devising a solution that meets their needs and preferences.  It might involve financial incentives, a choice of suitable alternatives in preferred locations, and practical support with moving and other arrangements.  We need far more schemes like the London Seaside and Country Homes scheme, offering tenants genuine retirement opportunities if that is their choice.  It is regrettable that financial incentives to downsize have been cut back in many places – I suspect by an amount many times greater than Mr Shapps’ new fund.     

Mr Shapps says that he wants to “make it easier for those tenants wanting to move from larger family homes to smaller, more manageable homes, to do so.”  But where, exactly, are these homes?  Like people who are being decanted for development, older tenants realise that they have a little bit of negotiating strength for once.  They will only accept somewhere smaller if it is in some way better or suits their needs more than their current home.  The right to buy and the failure to reinvest mean that there are many fewer smaller dwellings on the ground floor in good locations with access to outside space.  Many top class sheltered housing schemes have had their onsite wardens removed due to changes in the Supporting People regime.  There is little new development.  As in so many other areas, supply and short-sighted funding regimes are the barriers to a sensible policy.   

Now for the warning.  Everything is not always what it seems with this government.  We should not forget the analysis of Mr Shapps’ friends at Localis.  In their report on social housing reform, which pointed the way to many of this government’s policies, they argued for a market approach not a change in powers:

“There has been a number of calls for Landlords to gain more power to require tenants to move to more appropriately sized accommodation to deal with under-occupation. Whilst such powers would assist with this problem, the move to market rents and personal subsidy would, in our view, address this in a more fundamental way as under-occupancy will become more expensive for tenants as their rents, but not their housing benefit, rise.” 

We have had a number of policy shifts in this direction already,  both through rents policy and housing benefit.  Call me cynical  but, despite the warm words, I think this is the real agenda.