Government loses bedroom tax vote after peer brands it 'cruel nonsense'

Published by Jon Land for 24dash.com in Housing

The Government faced a fierce backlash in the House of Lords tonight where plans to dock the housing benefit of tenants living in homes with a spare room were defeated in a vote by peers.

In a bid to cut benefit expenditure to the tune of £500 million a year - and free up larger homes - the Government plans to cut the housing benefit of 670,000 social tenants living in homes with one or more spare bedrooms. It wants to shave some £13 a week from those tenants from April 2013.

However, it's the plans to include those tenants with just one spare room in the cuts that has caused the biggest backlash. These tenants make up 530,000 of those affected, and thus represent £300m a year in savings to the Government.

It was the call by crossbench peer Lord Best to exempt this group - where there is no suitable alternative offer of accommodation - that found favour last night.

Peers voted 258 to 190 in favour of limiting the penalties to tenants with two or more spare rooms - in line with the definition of under-occupation currently used by the Department for Communities and Local Government (DCLG).

The Government will now try and overturn the decision when the Bill heads back to the House of Commons in the New Year.

Telling, however, was the cross-party support for Lord Best's amendment - backed by a host of Lib Dems and even a Tory peer - Lord Newton.

Among its critics was Labour Peer Lord McKenzie of Luton who criticised the fact that the Department for Work and Pensions' (DWP) expected savings were based on the policy "failing".

He said: “The impact assessment is also clear that these savings will be made only if the first intention of the policy, to encourage people to occupy more suitably sized housing, actually fails.”

He added: “How perverse can a policy be, when structuring it to fail is an excuse for hitting 670,000 poor households?”

The point was earlier emphasised by Lord Best who said the Government wouldn’t achieve its savings as those deemed under-occupying may move to the private sector where housing benefit is higher, costing the DWP an extra £50, £60 or more a week.

There was widespread criticism over the impacts on disabled people and children. Indeed, the Government's own impact assessment shows that 450,000 disabled people – twice that of non-disabled people affected by the policy – face losing £13 a week through the cuts.

Labour peer Baroness Hollis of Heigham referred to the exclusion of pensioners - who are more likely to under-occupying - and the impact of shoehorning families into a limited number of smaller homes.

She said: "In future, the needs of pensioners who really want to move can never be met because, as the noble Lord, Lord Best, said, absolutely rightly, any smaller place that becomes available will have to be offered to much larger families who, however, do not want to move, rather than to the single pensioner who does. It is a cruel nonsense."

Responding to concerns last night, before pleading with Lord Best to withdraw the amendment, Lord Freud pledged an additional £30 million a year to the discretionary housing payment budget from 2013-14, in support of the introduction of the size criteria into the social rented sector from April 2013.

He said the cash - which could assist around 40,000 cases - would be used to keep foster carers and disabled people who have adapted properties in their homes.

While acknowledging the “tension” between the bedroom standard - used by DCLG - which deems under-occupation as having two bedrooms or more and plans to lower it to one, he said: “Neither approach is right or wrong.”

Addressing the savings estimates he said "a majority of people will pay the additional amount for the larger property".

He said: “The cost of renting in the private rented sector may generally be higher but those who choose to move out of the cheaper social housing into private housing because they are underoccupying will by definition free up accommodation in social housing that can be offered to those on the housing waiting list or those living in expensive temporary accommodation."

He added: "This measure is necessary to control spending. It is necessary because spending was allowed to spiral out of control under the previous Government, but we also believe that it will encourage greater mobility among households living in the social rented sector. It will help local authorities and other social housing providers to make the best use of their existing housing stock."

David Orr, chief executive of the National Housing Federation, said: "This is a victory for fairness. Peers should be congratulated for taking a principled stand against injustice."