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Westminster Hall

Tuesday 23 February 2016

[Nadine Dorries in the Chair]

Under-occupancy Penalty

9.30 am

Jo Stevens (Cardiff Central) (Lab): I beg to move,

That this House has considered the regional effects of the under-occupancy penalty.

It is a pleasure to serve under your chairship, Ms Dorries.

Our debate today on the regional impact of the bedroom tax is important and comes on the back of the Government’s recent judicial review defeat in the Court of Appeal, where it was determined that the bedroom tax discriminates against victims of domestic violence and the families of severely disabled children. I pay tribute to campaigners throughout the country who have put considerable energy and effort into challenging this iniquitous tax and raising public awareness of the Government’s continuing attempt to defend the indefensible. People such as Paul and Susan Rutherford have led the charge in one of the Court of Appeal cases on behalf of their severely disabled grandson, Warren, and Alan Lloyd of Cardiff Against the Bedroom Tax gives voluntary help to victims of the bedroom tax in my constituency of Cardiff Central and across south Wales by preparing and presenting appeals. I spoke to Alan Lloyd yesterday as he was on his way to appear at yet another tribunal to present an appeal on behalf of a woman whose long-time home is at risk because of the tax.

It is clear from the number of hon. Members present here today that the impact of the tax remains an important issue to many people and is not limited to those who pay the tax itself. The Opposition have opposed the bedroom tax since its introduction. Since this grossly unpopular Conservative and Liberal Democrat policy was forced on the public, exactly what we warned would happen has happened. The bedroom tax is not working; it is not achieving the aims that the Government set out to implement; and it is hurting some of the poorest and most vulnerable in our society and giving them a problem that is absolutely no fault of their own.

Ian Lavery (Wansbeck) (Lab): I thank my hon. Friend, who has been a lawyer for many years, for bringing this important issue to the Floor of the House. Normally, people adhere to Court of Appeal judgments, but in the case of the bedroom tax, the Government are once again ignoring what the court said. In what way—the right, decent and honourable way—should the Government deal with the Court of Appeal judgment and listen to what is happening to the thousands of people out there who are suffering as a consequence of this now unlawful and illegal tax?

Nadine Dorries (in the Chair): Can we keep interventions short and not make speeches, please?

Jo Stevens: I thank my hon. Friend for his intervention. The honourable thing would be to accept the decision of the Court of Appeal, but instead the Government

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are proceeding to the Supreme Court, where a decision is expected at the end of this month or early next month.

The bedroom tax and the tripling of tuition fees for students are two of the most painful scars left by five years of the Conservative and Liberal Democrat coalition, and I will take every opportunity to continue to remind the House that the bedroom tax would never have been introduced without the eager help of the Liberal Democrats, including my predecessor. Nearly 500,000 households and almost 750,000 people have been hit by this cruel policy. Two thirds of the households affected by the bedroom tax include a person with a disability. The tax impacts on 60,000 carers—people who undertake demanding and challenging responsibilities and are punished for doing so. Some 57% of those who have to pay the tax have had to cut back on household basics such as food and heating—things that we all take for granted. The bedroom tax has had a corrosive effect on many different households, including the single parent who needs a spare room for when their children visit as part of agreed contact visit arrangements following separation or divorce; grandparents who help with looking after their grandchildren, allowing parents to manage shift working and other working patterns, or following family breakdown; and people with severe disabilities who use their spare room for their medical equipment or care, such as kidney dialysis.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): This issue is big in my constituency of Hackney South and Shoreditch. There is an invidious part to this tax. If two children are of an age when they are supposed to share a bedroom, but one is within reach of their next birthday, when they would qualify for their own bedroom, the family are hit by the bedroom tax. So it is a fluctuating tax that hits people particularly hard.

Jo Stevens: My hon. Friend makes a very good point; the tax increases uncertainty. People cannot budget. Their circumstances change and the fluctuating nature of the tax impacts on them more heavily at different times. Then there are victims of domestic violence and rape whose lives are at risk and need the protection of a panic room.

The particular focus of this debate is the regional impact of the bedroom tax, and I want to outline its impact on my constituents in Cardiff Central and more broadly within the nation of Wales, where 31,217 people are affected by the tax. Across Wales, just under 500,000 people live in social rented accommodation. The tax has had a huge impact, affecting proportionally more housing benefit claimants than anywhere else in Great Britain. Some 46% of claimants in Wales pay the tax, compared with 31% for the UK as a whole. In Cardiff, 3,015 households currently pay the tax, and nearly 500 of those live in my constituency of Cardiff Central.

The cost of the bedroom tax to each household affected will be £3,500 during this Parliament. I am sure I do not need to explain to most hon. Members what £3,500 means to the families in our constituencies, especially the poorest families who visit our surgeries every week. That £3,500 would otherwise be spent on basic necessities such as food, heating, clothes and shoes. The Secretary of State for Work andPensions

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claimed that the bedroom tax would encourage societal movement. However, when the bedroom tax was introduced, it affected about 3,500 households in Cardiff, and only just over 100 smaller properties were available for people to move into. I readily admit that maths is not my strong point, but even I can work out that that sum does not work.

David Simpson (Upper Bann) (DUP): I congratulate the hon. Member on securing this debate. She knows that Northern Ireland did not implement the bedroom tax, although it has cost us financially not to do so. We looked at the issues that she has rightly highlighted, especially those affecting our older generation. In the first place, we did not have the housing stock, but, from a moral point of view, we felt that the hardship was simply too great to impose on older people.

Jo Stevens: I thank the hon. Gentleman for his intervention, which again shows the iniquitous nature of the bedroom tax.

Therein lies the truth about the bedroom tax and its impact and the number of properties that are available for people to move to. The Government knew before they introduced the policy that insufficient smaller properties were available for people to move to. That was the picture right across the country. Even if we gave the Government the benefit of the doubt about their motives before implementation, their own interim report on the bedroom tax after implementation revealed that the policy was not meeting its key aim of freeing up larger council properties. Only 4.5% of affected tenants have been able to move to smaller accommodation. At the same time, with just 4.5% of people able to move and be rehoused, 60% of people affected were in arrears within the first six months of the introduction of the tax. The policy is simply not working. People are not able to move to smaller accommodation because that accommodation simply does not exist, so long-standing, reliable tenants who were previously able to budget and pay their rent regularly now cannot pay it and have built up significant arrears.

Meg Hillier: In parts of London we are seeing people pushing to get two-bedroom properties because they are frightened they will be hit by the bedroom tax, but that also reduces, if there was availability, the stock for people to move down to, if they have the extra bedroom, so it causes a squeeze in both directions.

Jo Stevens: My hon. Friend makes a valid point.

The most vulnerable have been hit the hardest and, in the words of the Lord Chief Justice and his colleagues just a few weeks ago, the Government’s “admitted discrimination” in the judicial review cases to which I referred earlier

“has not been justified by the Secretary of State”.

We now have a farcical situation in which the Government have appealed that decision and the legal costs of pursuing the appeal are likely to be greater than the amount it would cost them to exempt all victims of rape and domestic violence with panic rooms who are paying the bedroom tax. I can conclude only that the Government would rather pay money to lawyers than to rape victims. I challenge the Minister to justify that action.

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I think I can predict that, when he responds to the debate, the Minister will say that the Government have made additional funding available to local authorities in the regions and in Wales in the form of discretionary housing payments, but my local authority, City of Cardiff Council, has had its DHP funding cut by more than 26% between 2013-14 and 2015-16. The regional impact of Cardiff losing more than a quarter of its DHP funding has been hard, so it is disingenuous to argue that the DHP system justifies the bedroom tax.

At the same time as imposing the tax and relying on DHP as justification, the Government are cutting DHP funding. Their own report, which they sneaked out in a huge data dump on the very last day of the parliamentary term in December 2015—obviously in the hope that no one would notice—admitted that 75% of bedroom tax victims did not get DHP; that three quarters of those hit by bedroom tax were cutting back on food; that only 5% had been able to move; and that 80% regularly ran out of money.

The policy implementation of DHP has also been called into question. Evidence on its use has raised serious questions about local authorities adopting different practices, leading to allegations of a postcode lottery. There are references to disabled tenants—particularly those living in specially adapted properties—struggling to get DHP in some areas, and needing to submit repeated applications, with the consequential uncertainty and anxiety. That is not to mention the exclusion of people with lower levels of literacy.

This debate is not the first time that DHP and its impact on disabled people has been raised here. As long ago as 9 April 2014, five Welsh Government Ministers wrote to Lord Freud to call for an exemption from the bedroom tax for disabled tenants who had had adaptations made to their homes. They cited issues with DHP as one reason why such a broad exemption was necessary. They said:

“Disabled tenants cannot easily up sticks and move home. They should be exempt from these reforms and should not be left to rely on help from the discretionary housing benefit system…Our analysis of the discretionary housing payments system shows that demand far outweighs the number of applications being approved. In the first half of the financial year 2013/14 demand increased by around 260 per cent compared to the same period a year earlier in 15 Welsh local authorities.”

Cardiff’s 26%-plus cut in DHP funding, coupled with the increase in applications, presents another one of those stark sums that even I can work out. It simply does not add up to have households with disabled tenants having to pay the bedroom tax if that cannot be offset through DHP because DHP funding has been cut. It is another example of the Government’s policy hitting hardest those who can least afford it.

Tomorrow, we have an Opposition day debate on another of the policy responsibilities of the Secretary of State for Work and Pensions: the adverse impact on around 2.6 million women of the speeding up of the state pension age. I know from discussions with constituents that many of those being advised and represented in bedroom tax appeals in my constituency are those very same women who are adversely affected by the changes to the state pension age. They are also women who are disabled or carers, so there is a double, triple or quadruple whammy on women. As with so many of the Government’s policies, it seems that women are bearing the brunt yet again.

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It is time for the Government finally to accept that the bedroom tax is a bad policy. In the words of David Orr, the chief executive of the National Housing Federation, it is:

“an unfair, ill-planned disaster that is hurting our poorest families”.

It does not work, it causes severe hardship and it hits the most vulnerable, so I say to the Minister: please, listen to the public. It is time for the bedroom tax to be binned.

9.44 am

Corri Wilson (Ayr, Carrick and Cumnock) (SNP): I welcome this debate, which was secured by the hon. Member for Cardiff Central (Jo Stevens).

We already know that the bedroom tax is nothing more than an ideological attempt to reduce the housing benefit bill and make better use of social housing stock by penalising low-income households deemed to be under-occupying their homes, but the problem of under-occupation will not be solved by shuffling people around. That will do absolutely nothing to resolve the underlying problems, which we all know are related to the supply of affordable housing.

A house is not just somewhere we live: it is a home. For all the people it affects, the bedroom tax can mean having to move out of the place that they have lived in for many years, where they raised their children. They have to move away from friends, family, schools, work and, in some cases, their support networks. Each and every one of us is emotionally attached to our homes, and people in social rented accommodation are no different. Just because someone does not own their house, that does not mean that it is not theirs.

The reality is that the under-occupancy penalty affects thousands and will hit the most disadvantaged members of the community. Is it really working? The Centre for Housing Policy at the University of York tested the Department for Work and Pensions’ assessment of the impact on housing benefit costs and found that the expected savings might have been overestimated. The increased post-implementation costs faced by local authorities and the third sector should be taken into account in the overall assessment. Research carried out by Ipsos MORI on behalf of the National Housing Federation concluded that housing associations would spend, on average, an additional £109,000 in 2013-14 to address the implications of the under-occupation deduction.

We must consider not only the effects of the bedroom tax but the associated impacts, such as tenants being unable to move to smaller properties because of rent arrears; an estimated 46% of tenants reporting having to cut back on heating; landlords stating that some tenants face severe poverty and are unable to pay the shortfall; and the risk of homelessness. All that causes stress and worry and affects tenants’ health and wellbeing.

Mr Gregory Campbell (East Londonderry) (DUP): The hon. Lady touched on the issue of arrears. Thankfully, Northern Ireland is exempt from this policy—at some considerable cost to us—but in many instances elsewhere there are vulnerable people, particularly the elderly, who find themselves in a very difficult situation, with minimal arrears, which are going to be compounded if this policy is continued over the next year and the year beyond.

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Corri Wilson: I absolutely agree with the hon. Gentleman. People find themselves in a vicious circle and can never see the end. That is the problem. In other words, we are putting people through absolute misery for nothing.

As we have heard, the Government tell us that discretionary housing payments are available to tackle the shortfall, but Shelter says that that provision is already overstretched. With such extensive reforms to welfare, a shortage of affordable housing and drastically rising rents in the private sector, the reality is that there is only so much that discretionary housing payments can cover. They are a mere sticking plaster and will not solve the problem. Even the House of Lords has deemed the welfare reforms a step too far, causing the Government embarrassment. Worse still, the UK is, shamefully, the first country ever to be investigated by the UN in relation to the convention on the rights of persons with disabilities. The UN is currently looking at our welfare policies for the disabled.

Before the Scottish Government invested millions of pounds to alleviate the bedroom tax in Scotland, many people in my constituency of Ayr, Carrick and Cumnock were a thrown into turmoil by the policy, with some tenants receiving eviction letters that caused unnecessary anxiety and worry. We should not be spending our already diminishing budget on mitigating Westminster austerity policies. That money should be spent elsewhere. Meanwhile, the Scottish Government will ensure that housing continues to be a priority by building affordable housing, creating jobs and boosting our economy. I am pleased that the Scottish Government have committed to abolishing the bedroom tax as soon as they have the powers to do so. I ask the Tory Government to think again and to put the needs of people back at the centre of their welfare policy.

9.49 am

Carolyn Harris (Swansea East) (Lab): It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate my hon. Friend the Member for Cardiff Central (Jo Stevens), a fellow Welshwoman, on securing this debate.

This is a contentious issue of great concern to many people in my consistency. The bedroom tax is discriminatory and punishing. I want to share two short stories. The first is of Megan Wheatland from Bonymaen in my constituency, whose husband passed away in January 2013. He was of pensionable age and Megan was not; therefore, she was liable for the bedroom tax on the three-bedroom house she shares with her teenage daughter. Megan pays £11.85 a week for a small box room. Because of this, she is unable to pay for the extracurricular activities her daughter would like to take part in. She worries greatly that her daughter is missing out on all the other things that her teenage friends do. It really is an issue for Megan.

Then there is Sarah, a single mother with two children. She suffers from severe depression and has an arched spine. She struggles to engage socially and has suicidal thoughts. Because of this, her two children have been taken into care. Now Sarah is paying the under-occupancy penalty for a house that she should be sharing with her two children. It is an absolutely appalling situation.

We have heard about DHP, but it only kicks in after tenants have taken steps to downsize or—God forbid—take in a lodger. Some people who take in a lodger lose out

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on other benefits, because the rent on that room is classed as extra income. I am worried that taking in a lodger when there are children in the house is potentially dangerous, because it means that people are effectively taking a stranger into their home.

If disabled people have to move to smaller properties to avoid paying the bedroom tax, there is the inevitable cost of making adaptations. Surely supporting those who pay the bedroom tax—or, better still, scrapping it—would be a better use of public funds. It is estimated that 10% of disabled people renting properties live in homes specifically adapted to their needs. The cost of adapting a smaller property—or, potentially, a larger property—to suit the personal requirements of the new tenants surely outweighs any income gain from charging for the extra room in the first place. Of course, people can always move to the private sector. In Swansea, an above average number of homes were built between 1919 and 1944, but 15% of those old houses contain category 1 hazards, meaning that they have failed basic health and safety standards.

The Government do not hold data on how many disabled people are affected by the bedroom tax, so I contacted my local authority. I knew the number would be high, but I was shocked by just how high it is. In Swansea, the bedroom tax is paid on a total of 2,467 homes, of which 1,138 are in my constituency. Of the total number, 1,129 people paying bedroom tax are in receipt of at least one of the following benefits: attendance allowance, disability living allowance, personal independence payments or severe disability living allowance. That means that in Swansea a staggering 45.7% of the people paying the bedroom tax are considered to be disabled. The DWP’s evaluation of the removal of the spare room subsidy, which it published in December 2015, estimated that 75% of claimants have either a long-term illness or a disability, and they are living in homes to which the bedroom tax applies.

Historically, social housing policy in Wales has focused on creating sustainable communities and enabling families to become established, so there is a shortfall of one and two-bedroom homes. The Welsh Government’s pattern book for new social housing development requires landlords to build lifetime homes, so social landlords generally see one-bedroom homes as an inflexible and ineffective housing solution. The bedroom tax contravenes the principle of a lifetime home. Those in social housing at the start of their tenancy will have very different commitments and requirements from those they will have further down the road. The bedroom tax therefore creates a transient housing pattern, forcing continual relocation to suit housing needs. That is in direct contradiction to the concept of lifetime homes. The effect will be to damage communities, as they lose the momentum to develop as communities. If a resident is short term, they will not be there long enough to engage with the community and get active in social groups.

I go back to my original point: the bedroom tax is discriminatory and punishing. It financially punishes those forced to pay it and it discriminates—

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Jo Stevens: On the point about the bedroom tax financially punishing people, does my hon. Friend think that it causes people to go to payday lenders such as Wonga and take out loans with extortionate interest rates to survive?

Carolyn Harris: I certainly do. I have casework involving people who have taken out payday loans from Wonga and other organisations and have been unable to repay them without not paying their bedroom tax. It is a Catch-22.

The bedroom tax financially punishes those forced to pay it. It discriminates against communities and individuals, and makes them unable to gel and enjoy stable, sustainable and adequate housing in a community where they can nurture and mutually support each other, and be part of a productive citizenship and community enterprise.

9.56 am

Gerald Jones (Merthyr Tydfil and Rhymney) (Lab): It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate my hon. Friend the Member for Cardiff Central (Jo Stevens) on securing this debate.

The spare room subsidy, or the bedroom tax as it is more commonly known, is causing stress and hardship across the country. It is the most unfair and pernicious tax since Margaret Thatcher’s poll tax. We are here to debate the regional impact of the tax, so I will outline some of the issues it is causing in my consistency and in the south Wales valleys more generally.

The principle of providing larger properties for families and smaller properties for single people and couples is understandable. People often decide for themselves to move to a smaller property when their children leave home or their circumstances change, but that is a choice. Unfortunately, there are not many one and two-bedroom properties in many communities in my constituency, so people affected by the bedroom tax must decide either to stay in their property—thereby incurring a financial penalty that places great strain on their ability to manage—or move to a smaller property in a village or community some miles away.

Before being elected to this place, I was cabinet member for housing at Caerphilly Council, which covers a third of my constituency. In that role, I met a number of people who wished to remain in the homes they had lived in for many years. They did not want to move to a smaller property miles from their family and friends. Unfortunately, the strain of paying the bedroom tax in addition to their utility costs and household bills meant that they often had little money left to put food on the table.

Meg Hillier: My hon. Friend is rightly highlighting the practical difficulties and the unfairness of the policy. Does he think that the fact that there is not a single Government Back Bencher present suggests that there is not widespread support for its implementation, even if it is Government policy?

Gerald Jones: As my hon. Friend says, the vacant chairs on the Government side of the Chamber speak volumes.

I know that the Government will say that they have provided discretionary housing payments, but that is only a temporary fix to an ongoing problem. I would

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like to reiterate the practical difficulties of moving miles away from family and friends. Many communities in the south Wales valleys are geographically isolated, which, coupled with public transport challenges in semi-rural areas, means that people often feel very lonely and isolated if they are moved to unfamiliar surroundings away from their families.

Last week I spoke to representatives of voluntary organisations that work with people affected by poverty and the welfare changes. I was told the story of a lady who, after being affected by the bedroom tax, was forced to move from her home village to another village some miles away. The isolation caused her to become depressed, which led to her taking her life. Tragically, that is not an isolated case. It is the reality of what can happen and is happening as a result of this unfair tax.

I have talked to the local authorities and housing agencies in my constituency, and I have heard about a number of situations that are causing great concern, not least to the tenants themselves. In one such case, a couple who are joint tenants of a two-bedroom house are under-occupying by one room and are thus affected by the bedroom tax, which reduces their housing benefit entitlement by 14%. They are on the transfer list and are eager to move to any one-bedroom property. They both have health issues and have lived in the same close-knit community all their lives. Staff at the council housing department have visited and have applied for discretionary housing payments to assist the tenants in the short term. The tenants are concerned about how they will pay the charge, because they are trying to repay rent arrears that have accrued on their account. They would like to stay in the same area, but, as I outlined earlier, the local authority have few one-bedroom properties in their areas of choice.

I recently spoke to staff at my local citizens advice bureau in Merthyr Tydfil who told me about the many people who come through their doors on a regular basis. People have nowhere else to turn. Such clients often have several other significant issues going on in their lives and, to add to that, they are now in rent arrears due to the bedroom tax. These people could lose their homes, leading to massive consequences. For those who are physically or mentally disabled, it could bring about even more severe issues, such as homelessness, suicidal thoughts, substance misuse or further debt. It just becomes a downward spiral.

In parts of my constituency, the demand for three-bedroom properties is not great. The local authority often advertises them for rent in the hope of getting tenants, yet people are being forced out of these properties and into smaller homes, creating more vacancies. I appreciate that that is not the case everywhere—certainly not in larger cities—but today we are considering the regional impact of the bedroom tax, and that is the reality in parts of my constituency. Of particular concern in my area is the view that the disability living allowance and personal independence payments should be disregarded when considering DHP applications. A recent court case resulted in a ruling of indirect discrimination when DLA or PIP is taken into account as income. It specifically quoted section 29(6) of the Equality Act 2010 and article 14 of European convention on human rights. The DWP’s discretionary housing payment guidance manual of February 2016 also refers to the court case.

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My local citizens advice bureau feels strongly that DLA and PIP should not be treated as income for DHP applications.

Another example involves a single tenant living alone. The tenant does not want to move, as he has lived in the property all his life and classes it as not only a council house, but a home. The property has three bedrooms and the tenant is affected by the spare room subsidy charge, which reduces his housing benefit by 25%. The tenant has to pay an additional £23 a week out of their welfare benefits to cover the charge, leaving him with £50 a week to buy food and pay for all other essentials, including utility bills. The tenant also has support needs, which are provided by his family, who live in the same area. Staff from council have visited and applied for discretionary housing payments to assist the tenant in the short term. They also arranged for a food parcel to be delivered because the tenant was cutting back on food to pay the shortfall. The property was cold when the visit took place in late December because the tenant could not afford money for the prepayment meter. That is the reality of what is happening across our country.

Organisations such as Citizens Advice and others want to make a difference to their clients’ lives. There is a feeling that people are being penalised unfairly. With further reforms in the pipeline, many people’s ability to cope will become increasingly uncertain. I urge the Minister to take on board the real concerns about the bedroom tax policy and to recognise the hardship that this pernicious charge is causing. This charge—or tax; whatever you want to call it—is discredited, indefensible and should be abolished.

10.4 am

Ian Lavery (Wansbeck) (Lab): It was not my intention to speak, but today’s debate really brought back to me the reality of the Government’s merciless attack on the most vulnerable people in our society. It must be said and reinforced that the attack is mainly on disabled people. Of the 600,000 who initially suffered as a result of bedroom tax, 400,000 were disabled. I wonder whether the Minister, who is shaking his head, can clarify or indicate whether those figures are correct. If he can, it will be the first time that anybody has ever challenged them. I am sure that he will want to comment.

The bedroom tax is about ideology. It is nothing else than an attack on those who can least afford it. I wish the room was full of Government Members listening to my hon. Friends’ contributions, but that is unfortunately not the case. The Minister should be ashamed of what the Government have done. Those affected are disabled people and people who are already in poverty. They are not living a life of luxury; they are on benefits. The policy is increasing child poverty and pushing more ordinary people into poverty. I will say it again: the Minister should be ashamed of himself and of the Government for continuing with the policy. A court judgment only a matter of weeks ago stated that the bedroom tax was illegal and unlawful, yet the Government still pursue the matter through the courts. The policy represents a concerted attack on communities. The slashing of benefits does not help people at all.

I am unsure whether the Minister has seen the video, which formed part of the Daily Mirror’s campaign, about a 47-year-old individual who used to live with his

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elderly mother and then his 49-year-old brother in a four-bedroom property that had been adapted for his cerebral palsy. The local authority paid £70,000 for the changes so that the man could wash in a walk-in shower, but the tenants fell foul of the bedroom tax, which they could not afford to pay. They ended up in a bungalow, where the man has to be bathed by his brother in an inflatable paddling pool in the sitting room. That is the sort of thing that the bedroom tax has reduced tens of thousands of people to. Treating disabled people like that is not something that a society such as ours should be proud of, but that is what the bedroom tax is about.

This debate is about what is happening regionally, and the situation in my constituency is pretty bleak. Even the Conservative MPs in my area have suggested that the bedroom tax is not working. Almost 40,000 people are affected by the deduction, and the £454,000 discretionary housing payment fund for 2015-16 has been totally used up and is no longer available, which is causing huge problems. In the past few months, 442,000 homes across the country have seen an increase in the bedroom tax from £14 two years ago to £15.27 this year. That is up more than 9% for people who can barely afford to put bread on the table—£66 more per year—and hitting those who are already suffering even harder than the Tory Government thought would be the case back when the bedroom tax was introduced. It is an absolute outrage that the tax was introduced in the first place.

As a politician, I sometimes wonder where that emanates from, where it comes from. Someone has sat down somewhere and thought, “Well, we could claim money back from people who are disabled”—people who most need the money and who need the finances even to live. We are not talking about a life of luxury, but simply existence. Someone has sat there and developed the spare bedroom policy, “Oh, we’ll charge disabled people. There are 600,000 people out there who are living in a house or a bungalow or a property where they might have an extra bedroom. Why don’t we tax them?” Where does that come from? It is ideology.

Before people suggest that the Government were unaware of the consequences, they should please bite their tongues, because it is the finest brains in this country that devise policies on behalf of whichever Government, and they have been to the finest universities. They understand absolutely who will suffer as a consequence of whatever they put in place. That is the reality. This is a pernicious tax, which is focused on those less well off in society, mainly disabled people, and those who cannot afford it. That is the reason why it was introduced in the first place.

The situation in my area is exactly the same as that described by my hon. Friends. We have people who are looking to move because they cannot afford to pay the bedroom tax, but not enough properties are available. We have people now in rent arrears who have never been in arrears in their life, because of the bedroom tax. One of the big housing companies in my area has had an increase of 42% in rent arrears. These are proud people who are suffering. They have always made their way, but the burden of the bedroom tax has meant that lots of them are now in arrears. Latterly, rent arrears in the sector have increased to somewhere in the region of 50%.

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All in all it is not a great picture—it really is not. At times we have got to tell it as it is, not pussyfoot around and talk about looking at different ways of doing things. The bedroom tax needs to be scrapped. If the Minister has anything about him, he would agree with the court judgment and scrap it as soon as possible.

10.12 am

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): It is a pleasure to serve under your chairmanship, Ms Dorries. I had not expected to speak today, but I felt moved to do so because of the huge impact of the bedroom tax on my constituents. In Hoxton, on the Wenlock Barn estate alone, 74 households out of several hundred are affected.

We have heard from colleagues about the practical issues, so I will touch on some of those. Any policy that starts life with discretionary money provided by the Government as a workaround fund clearly does not stack up in the first place. The invidiousness of a discretionary housing payment when local government budgets are being slashed, and are expected to be slashed further in coming years, is an extra burden on the people affected. People speak to me about the bedroom tax with uncertainty and fear. Even if it does not affect them now, they worry that it will affect them in future.

In my constituency there is no housing stock to move to and no smaller homes that do not already have a huge waiting list. I have been elected in different roles for more than 20 years, and now is the worst time that I have ever seen for housing. My surgeries and those of my council colleagues are full of people desperate to find a home, but unable to afford one in the private rented sector in Hackney. Private rents are now unaffordable. In fact, in the private sector in my constituency, not a single three or four-bedroom property can be rented to meet the housing benefit cap. There is no alternative, and there is a huge waiting list for all social housing. The likelihood of being able to move to a smaller property in the same area, even through mutual exchange, is very slim.

While we are on the subject, will the Minister clarify an issue that came up in a Public Accounts Committee hearing a couple of years ago? Apparently, income from lodgers has no negative impact on universal credit and is completely disregarded. Will he clarify whether that is the case? On Wenlock Barn estate, were people minded or able to have a lodger—this might shock my colleagues from south Wales—they could charge £200 for a room on an estate so close to Old Street and the City of London. Having a lodger might be a solution for some of my constituents, but it is invidious for them to be able to do that because they are in Hoxton, close to Old Street and Silicon Roundabout—I suspect there is not the same opportunity for people in Swansea, Merthyr Tydfil or Cardiff. I am interested in the Minister responding on that point in particular.

As I said, the private sector provides no alternative, and even paying some social housing rents is impossible for many of my constituents on the minimum wage, even with the increases due in it. I remember a man who was a kitchen porter coming to one of my surgeries. He was not very skilled—we all want to see people more skilled up in their jobs, but let us face it and be honest, a kitchen porter will probably not have an employer who

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gives someone a significant amount of training and development opportunity. He was on the minimum wage and was asked by the Department for Work and Pensions to look for work in zones 5 and 6. That is not unreasonable, and he was certainly willing to work. His wife worked part time to help support the bringing up of their two young children. His extra journey time, however, meant difficulties with childcare times, and the extra cost of travel outside zone 2 to zones 5 or 6 was beyond him.

That grown man, who found dignity in work and wanted to find work again, was in tears in front of me in my surgery. He is only one example of the many others who have come to me hugely distressed. At the time he was not hit by the bedroom tax, which can be another worry for such people, but my point in mentioning him is to hammer home to the Minister that the Government need to see all their policies in the round. Many of my constituents have no financial resilience and do not have the opportunity to turn to friends and family for it, because their friends and family are in a similarly difficult position. They have nowhere to turn. They might be poor, but there is no poverty of ambition in my constituency. Many people want to do well, to get jobs and to improve their lot, but those sorts of things keep them down, hammering them into difficult roles.

People who get jobs in local supermarkets, for example, are often restricted to 15 or 16-hour contracts. A number of them have expressed the concern to me, which I have passed on to one of the Minister’s colleagues, that they can never increase their hours to full time, although more people are being recruited part time. Many were pleased, some in their first job, and excited to be able to say to their children, “I’m off to work now”—real pride, doing all the right things and doing all the things that Government want them to do and that we know work for people—but then they could not get the extra hours. That causes real problems for them, including paying their housing bills, which is certainly completely impossible in the private sector anyway.

I have practical examples to show how the bedroom tax is simply not working. One constituent who came to see me was temporarily unemployed. Her eldest son had left home, so her three-bedroom social rented property was deemed too large. Her landlord was an active manager in trying to get her to reduce the size of her property, persuading her to move to a nearby two-bedroom property with a different social landlord. She thought that that was the right thing to do to avoid the bedroom tax. What she had not really clocked until she started thinking about work again was that the rent for the two-bedroom property is higher than that for the three-bedroom property, which is not unusual in the sector. She has struggled to find work that can cover the rent. She does not want to be reliant on housing benefit, but she will be costing the taxpayer in housing benefit partly because she has moved house. Had she stayed in the other property, it would have been cheaper for the taxpayer and better for her.

Another constituent, a single mother, is ambitious to get into work and training and to improve herself, but is at the moment unemployed. She has 15-year-old and 10-year-old boys. Under the rules, they are deemed to share a bedroom, so her three-bedroom property is considered too large. What does she do? Does she wait

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six months for the 15-year-old to reach his 16th birthday and accrue the arrears, or does she try to downsize in that time?

Those are the choices—if we can call them that—that people are having to consider day in and day out. They are not good choices. I have worked and campaigned on housing for more than 20 years and one thing I am passionate about is that a stable, secure home is the absolute basis for getting on in life. Without that it is hard to concentrate on studies or securing a job and that causes stress and strain to the individual and family’s mental and physical health. I suspect that those of us in the Chamber do not have that worry. I know that I can go home to my flat and that it will not be ripped away from me. I am not reliant on anyone but me to ensure that I can keep my home, but that is not the case for so many of my constituents.

An additional factor in London is that many households are reluctant to move into properties that meet their needs. Over the years I have had an increasing number of overcrowded families, but increasingly people, even those in two-bedroom properties, do not seek to get a three-bedroom property. It is true that it is hard to get one, but they know that if they got such a property and a child leaves home or their circumstances change, the threat is that they will be hit by the bedroom tax and that fear stops people from looking to move into the right sized property. There is not a hope of doing that in the private sector and the risks in moving to a larger property in the social housing sector are also an issue.

The Minister must remember that fluctuating employment is a real concern. Many of my constituents are on zero-hours or short contracts and their work and pay fluctuate. Many of them are in arrears because while they have been working, they cannot be sure that every week they will get the hours they need to pay the rent. They are so delighted when they do get a job. I had one woman at a surgery on Monday who had got a good job, but she was still paying off a couple of thousand pounds of arrears from when she had uncertain employment.

That is the reality of people’s lives. If the Government are really keen to promote social mobility, they need to give people at that moment in their lives a leg up to help them fulfil their proper ambitions of wanting to work and support themselves, but instead the Government are pulling the rug out from under people’s feet. I hope the Minister has considered the bedroom tax’s value for money and practicality and that he has asked his officials to look at the cost to the Exchequer, let alone the human cost. My fear is that the bedroom tax is ideological, dog-whistle-based politics that appeals to certain people in parts of the country where it is a distant, remote and probably unheard-of policy, but I am stopped on the streets of my constituency by people who want to talk about it, both those directly affected and those whose children are at school with people affected by it or those who live next door to people affected by it. There is general concern overall.

The poorest and most vulnerable are being hit from all directions and those without the financial resilience to cope have nowhere to go. The despair and depression that comes through my surgery door is the worst it has ever been. I hope the Minister is really listening and that he will go back with the concerns of hon. Members, which were made in a measured way. This is about not

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just ideological party politics but people’s lives, futures and opportunities. If he believes in opportunity, he needs to have a radical relook at this invidious tax.

10.23 am

Ian Blackford (Ross, Skye and Lochaber) (SNP): It is a pleasure to serve under your chairmanship for the first time, Ms Dorries, and to sum up the debate for the Scottish National party. Let me congratulate the hon. Member for Cardiff Central (Jo Stevens) on both securing the debate and speaking so powerfully about the policy’s human cost and impact. I know that she has worked hard on that in her constituency.

Many pertinent points were made by the six Back Benchers who spoke in the debate. It has been referred to that no one from the Government Back Benches cared enough to come along and participate. That tells us everything about the Government’s priorities and how they look on this issue. For the record, nine Opposition Back Benchers have been present, but where are the Government Members? Why are they not taking this seriously? Where is their concern for the ordinary people up and down the country who have been affected?

The hon. Member for Cardiff Central talked about the legal costs of the appeal. The Government are quite happy to spend ridiculous sums of money defending an indefensible policy rather than doing the right thing. As she put it, it is money for lawyers rather than for the rent victims. She and others talked about problems with DHP. My hon. Friend the Member for Ayr, Carrick and Cumnock (Corri Wilson) made the point that that is not working, a theme that came across from numerous speakers, so the Government must take the opportunity given by the debate to reflect on what happened at the Court of Appeal and stop this nonsense.

My hon. Friend and others talked about the policy’s impact on the health and wellbeing of many people and, when we are talking about that, we are talking about people with disability. The most vulnerable in our society have been put under pressure. The hon. Member for Swansea East (Carolyn Harris) spoke movingly about the human cost to people in her constituency. We should listen to the stories of the people who have been affected so disgracefully. She said that it was both “discriminatory and punishing”, which is exactly the point. That is why the Government must listen.

We had a moving speech from the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones). Again, the point is that there is a lack of one and two-bedroom properties. Where in the name of heaven are people supposed to move to? If the Government in the rest of the UK had done what they should be doing and ensured a supply of affordable housing and social housing, perhaps that could have been addressed, but they certainly have not addressed that. We end up in a situation where so many people up and down the country—proud people, as was said—are in rent arrears. That is what the Government have done through their actions.

We heard from the hon. Member for Wansbeck (Ian Lavery) who talked powerfully about the attack on the vulnerable in our society. We keep hearing the same stories—we would have heard others if other Members were in the debate—about the impact that the policy has had in constituencies up and down the country.

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Lastly, we heard the story from London, because this is a story about the impact on not just Wales, the north of England and Scotland but urban centres such as London.

I hope that the debate presents an opportunity to focus on what is a mean-spirited piece of legislation, which has ultimately led to the Government’s defeat in the Court of Appeal. I say that it is mean-spirited, but it is worse than that. It is cruel. It seeks to demonise folk and those who are the most vulnerable in our society. That should shame us all, as the hon. Member for Wansbeck said, yet sadly it does not seem to shame this Conservative Government.

We can all reflect on the policy’s results, but perhaps there is a clue in its name: the spare room subsidy. Here is the nub of the problem. We in Scotland see social security as providing a safety net, accepting society’s obligation to look after the vulnerable among us, while we seek to deliver policies that are aspirational and deliver a road out of poverty. The Government take a very different view, with necessary support for the vulnerable seen as providing a subsidy. Who has ever heard the like? With that kind of approach, the problem is that the wrong decisions are made, just as has been done.

It is not about subsidy; it is about cutting the entitlement to benefits of people who desperately need them. What mentality sees a problem in that? It is little wonder that the Government are deaf to the cries about the impact of their policy on so many people. They should stop using such language as “spare room subsidy” and just come clean on what this is: a reduction in the incomes of some of the poorest in our society. That is all it is.

The Government want to fix the deficit and they are doing so by putting their hands in the pockets of the poor at the same time as doing a cosy, cut-price deal with the likes of Google. As we would say in Scotland, “It’s the same old Tories.” Thank heavens the Court of Appeal has intervened, but, for now at least, the Government still refuse to see sense. Even their own report, “Evaluation of Removal of the Spare Room Subsidy” in December 2015 found that the tax is a failing policy, hitting the most disadvantaged in society. It found that 55% of tenants affected by the legislation were in arrears. Where is the sense in a policy that creates such outcomes? Why will they not accept that it is wrong? They have made a mistake, so reverse it today—do the right thing! The effect of the policy is to push folk into ever greater debt, with all the difficulties that that causes. To many of the rest of us that is no surprise. The bedroom tax is after all a direct assault on the incomes of the disabled, the poorest and the most vulnerable.

The Prime Minister said at his party conference that he wanted a war on poverty— fine words. However, what we actually have is a war on the poor. In Scotland we have an SNP Government committed to abolishing the bedroom tax; and when the powers are passed to us we will take that responsibility. In the meantime, the Scottish Government have been mitigating the effects of the bedroom tax. We have a Scottish Government on the side of ordinary folk and a Tory Westminster Government punishing the poor, ignoring the social consequences of their actions and turning a blind eye to the Court of Appeal.

One of the major flaws in the Government’s thinking was that those with spare bedrooms would move to smaller properties—a point that many have made in this

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debate. That would be a big enough challenge in any part of the UK, but in a large rural constituency such as mine it is almost impossible. What are people supposed to do? Are people in Skye who have an extra bedroom, for example, supposed to move elsewhere in the highlands, and uproot themselves from family and friends? We have been revisited by Tebbit and his “on your bike” philosophy. Caring compassionate Conservatives? Give us a break. It is little wonder that the Tories are so decisively rejected by the people of Scotland. Of course, at the root of the issue is the austerity agenda, but in their lemming-like rush to reduce the deficit they refuse to acknowledge the pain and suffering inflicted through actions such as the introduction of the bedroom tax. Tory ideology is a cover for them to do their worst, and never mind the consequences. To use a saying of the Thatcher period, “If it’s not hurting, it’s not working.” Well, what the Government are doing is not working, but it is certainly hurting. It is time to make a change.

We all want to restore the country’s finances and we all want to reduce the deficit, but the question is what path we take. There is no argument based on economic literacy that suggests there is a need to get to a fiscal surplus in the current Parliament. Yes, progress has to be made, and the SNP demonstrated that the UK Government could increase spending by £140 billion in this Parliament and still have the deficit fall to around 2% of national income. That would be a balanced, sensible approach, which would allow for the removal of the bedroom tax and a more meaningful house building programme, for example. The issue is leadership, or in this case a failure of leadership, from the Government.

The Court of Appeal said that the policy was discriminatory and unlawful. I urge the Government to accept that judgement: show leadership and for once, Minister, and do the right thing.

10.32 am

Debbie Abrahams (Oldham East and Saddleworth) (Lab): It is a pleasure to serve under your chairmanship today, Ms Dorries. I congratulate my hon. Friend the Member for Cardiff Central (Jo Stevens) and everyone who has participated in today’s debate. The speeches have been exceptional. As has already been mentioned, the lack of participation from the Government side is notable, and is hopefully a sign of embarrassment at a policy that is clearly not working.

The Government’s policy of reducing the amount of housing benefit payment to current social housing tenants who are deemed to have superfluous bedrooms—the bedroom tax as the Opposition call it—is deeply unfair, discriminatory and divisive. The fact that the policy was introduced for existing tenants who took out their tenancies based on the knowledge of how much they could afford, only to be told that their income was to be reduced, is unjust and unfair. Added to that, the Government’s inept handling of the housing market, with the lowest level of house building since the 1920s, means that there are not properties for people to move into. That just adds insult to the injury that people feel.

The latest figures for 2015 show that approximately 443,000 people are affected, with an average weekly income reduction of £15.27; that is more than £61 a month or £800 a year—up about 10% from the what the Government originally estimated. As many people today

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have said, those figures are significant for families on low incomes. The bedroom tax is discriminatory because the Government failed to listen to claims that it would affect many older people, disabled people and their carers. As we have heard, two thirds of those affected are disabled, and more than 60,000 carers are also affected. It is also divisive, as it splits families and hits regions that have historically high levels of social housing. The effect in Wales is significant, as we have heard, but in England the National Federation of ALMOs found a distinct north-south divide in relation to the percentage of tenants affected. One year after the bedroom tax was introduced, 13% of tenants in the north were affected, compared with 7% in the south. I wonder if that is really what we call the northern powerhouse.

The Work and Pensions Committee investigated what was happening with housing benefit and raised concerns about the reduction in the number of households affected. At the time there were few data on what was happening. As the Select Committee said in its report, the reduction

“could be related to changes in household structure, moving house, entering work, or increasing hours”

and

“a result of claimants ceasing to claim because their entitlement was reduced to zero, or to such a low level…or because they were already in the process of moving.”

I must note the fact that that report was produced in 2014 and the Government have still not responded to it.

Professor Steve Wilcox indicated in his analysis that tenant moves prior to the introduction of the policy may have accounted for some of the reduction in the number of claims—in addition to the reclassification of bedrooms by landlords—but urged caution in interpreting the decline in relation to social sector tenants. However, the Government’s own evaluation which, as has been mentioned, was slipped out on the last day before the Christmas recess, gives an insight of the impact on people of the bedroom tax. It revealed that the majority of people originally affected by the bedroom tax were still affected nine months later. Of those still affected, only 5% had found work. Claimants were using savings, borrowing from family or friends or accruing debt to pay rent. The implication of accruing such debt is a downward spiral. It is impossible to overestimate the effect of having debt hanging round family’s necks. Three out of four families are having to cut back on essentials such as heating and food.

We have heard poignant constituency case studies in the debate, and I want to mention an example from a Barnardo’s project. A dad asked the staff for some nappies, and when the project worker attended the house to see how things were going she discovered that there were only biscuits and crisps in the cupboard and that the parents were missing meals to feed the children. They had not asked for help because they were too proud. That family’s example is a window into the reality of life for many people. We could see that situation replicated across the country.

The Government’s evaluation also reported that 55% of tenants were in arrears, contrasting with the National Housing Federation’s figure of 59%. The important thing is that the arrears of two thirds of them were attributed directly to the bedroom tax. It has been mentioned that for some people, in some local authority areas, discretionary housing payments have helped where there has been a shortfall between rent and housing

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benefit, but the clue is in the name—it is a discretionary payment, not an entitlement. It is certainly seen as something for the short term, within a wider context where local authorities face significant cuts. Seventy-five per cent. have not had support in the form of discretionary housing payments. Their availability is a postcode lottery.

The recent Court of Appeal judgment agreed that the bedroom tax was indeed discriminatory against a domestic violence victim and the family of a disabled teenager. It was ruled that, in the two cases, the Government’s policy amounted to unlawful discrimination. Although other Members have referred to them, I too want to mention Susan and Paul Rutherford, who argued that they needed a specially adapted spare room in their Pembrokeshire home to care for their disabled grandson Warren. Ms A, who is a single mother living in a three-bedroom council house fitted with a secure panic room to protect her from her violent ex-partner, also argued that that room was needed. We await the outcome of the Government’s appeal to the Supreme Court at the end of this month.

The discriminatory, unfair and divisive nature of the bedroom tax is why Labour has consistently called for it to be abolished. I hope the Minister will recognise that and comment on why the Government continue to pursue this policy, which, as we have heard, is not delivering what it is meant to. It is not making the savings that were anticipated and it is certainly not freeing up family accommodation.

The Government have tried to regenerate the economy on the backs of the poor and disabled. Their modus operandi is about division and blame. Instead of denigrating claimants and our social security system, we should be recognising the importance and value of that system. Like the NHS, our social security system is based on principles of inclusion, support and security for all, assuring us of our dignity and the basics of life, should any one of us become ill, disabled or fall on hard times. The Government need to remember that and stop their attacks on the poor and vulnerable.

10.41 am

The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson): It is a pleasure to serve under your chairmanship, Ms Dorries. I wish to pay tribute to the hon. Member for Cardiff Central (Jo Stevens), who made a passionate, informed and determined speech that was well received by her colleagues supporting her today. Some measured and well thought-out speeches have been made, and cases have been strongly put forward on behalf of each Member’s constituents. I have worked closely with the hon. Member for Swansea East (Carolyn Harris) on a number of measures, and we have been able to find a lot of common ground and ways to move forward in a number of Westminster Hall debates, but I am afraid I am a little way from her arguments on this issue. I will try my best to answer as many of the points made as I can.

Let us first look at the history of this. One of the main thrusts of the opposition to this policy is that it is ideological and was dreamed up by the finest brains of the Conservative-Lib Dem coalition. To be clear, it was the previous Labour Government who introduced this

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policy in the private sector. When challenged in the House in January 2004 on whether the policy would be introduced more widely than the private sector, the Minister then responsible said:

“We hope to implement a flat rate housing benefit system in the social sector, similar to that anticipated in the private rented sector to enable people in that sector to benefit from the choice and flexibility that the reforms can provide.”—[Official Report, 19 January 2004; Vol. 416, c. 1075W.]

Debbie Abrahams: Does the Minister recognise the point I tried to make in my opening remarks about this being a retrospective tax? It applies to tenants already in existence. There was a very different application for private sector tenants. The policy applies to current, existing tenants who had already budgeted for what they could afford.

Justin Tomlinson: I will cover in detail some of those points, but I can tell the hon. Lady that a significant difference was that no additional discretionary housing payment was provided when the policy was implemented in the private sector. It was very much a case of, “Cross your fingers and hope for the best. You will not be getting any support.”

The legal case mentioned is ongoing, so I cannot dwell on it too much. The Court of Appeal previously said that discretionary housing payments were appropriate support. Crucially, it was not about the wider policy; it was about just these very specific categories. In that particular case, those people were in receipt of discretionary housing payments, but that is an ongoing legal dispute.

Jo Stevens: In relation to the receipt of discretionary housing payments, is it not the case that the Rutherfords had been denied DHP in the first instance?

Justin Tomlinson: My understanding is that that is right, but they then got the money on appeal. This comes down to whether we should have discretion in the powers of local authorities or an exhaustive list of those who should be exempted. My view is that if we try to set strict categories, we will not be able to ensure with 100% certainty that everyone will be covered, because people—particularly those with unique issues—do not neatly conform to tidy boxes. If an individual falls just below the line, they will miss out; that is a crucial point. If it is black and white, there will be winners and losers.

Discretionary housing payments allow for everybody’s individual circumstances to be considered and for a flexible multi-agency approach. For example, that approach could involve working with the police, social services and medical professionals. Underlying all those decisions is the public sector equality duty to ensure that the vulnerable in society are protected.

A number of speakers talked about support for the disabled, victims and those who are homeless. I will reel off some of the measures we have introduced to provide support in those areas: £400 million to deliver 8,000 specialist homes for the vulnerable, elderly and those with disabilities; a 79% increase, from £220 million to £394 million, in the disabled facilities grant, which helps about 40,000 people; £40 million for victims of domestic abuse, which triples the support previously in place, so that no one is turned away; £500 million to

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tackle homelessness since 2010; and £25 million a year to support disabled people living in significantly adapted accommodation.

Ian Blackford: I am grateful to the Minister for giving way; he is being generous with his time. What he is outlining is what the Government are having to put into place because the policy is quite simply wrong. How does he respond to the Court of Appeal saying that this policy is discriminatory and unlawful? Those are the words he must reflect on, and that is why he must do the right thing and scrap the policy.

Justin Tomlinson: I gently remind the hon. Gentleman that I have not yet finished my remarks, in which I will set out why I think trusting local authorities with discretion is far better than having an exhaustive list of exemptions. The people who would come up with that list may have the finest minds, but I am sure they would never cover all the people who should be covered. I do not wish to see people who should be protected being missed because of some sort of arbitrary winners and losers line. I will cover more of those points as I progress.

We must remember that it was the former Labour Government who first dreamed up this policy. The pretext for our introduction of this policy is that we had a quarter of a million households living in overcrowded accommodation and 1.7 million people on waiting lists in England alone. Members have talked about the casework they deal with as constituency MPs. I, too, have dealt with a number of similar cases, but I have also been into the properties of families in overcrowded accommodation who are every bit as angry as those whom Opposition Members have mentioned. Those people are in overcrowded accommodation while their neighbours have spare rooms in their family houses because their children have grown up and gone.

Ian Blackford rose—

Justin Tomlinson: I will make some progress and then take more interventions.

Members ask whether this is a popular policy. I can tell them that it is a very popular policy with the people on waiting lists. Some 820,000 bedrooms in social housing were sitting empty while being paid for by the taxpayer. Those rooms were being looked at enviously by families in overcrowded accommodation.

Meg Hillier rose—

Justin Tomlinson: I promise I will take more interventions, but let me make some other points first.

A small issue that will not generally have to trouble Opposition parties—that is the advantage of not being in government—is the financial aspect. Members asked whether this policy is saving money. It has saved about half a billion pounds a year, which is a significant amount of money.

Research has shown that social landlords are altering their allocation policies and are no longer putting single people into family-sized homes. In the first six months of the policy, around one third of developing landlords altered their build plans, and that figure is now up to 51%. There has been a reduction of more than 100,000 in the number of households seeing a reduction in their

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housing benefit award due to the policy since May 2013. There are a number of possible reasons for that. Landlords are not wrongly allocating single people to family homes. There are more one-bedroom properties—I will come on to the numbers on that—and there are people who have downsized. There are also more people either increasing their hours of work or finding work, and we are seeing around 200 people a week come off housing benefit as they are able to do that.

The evaluation report published last December showed that 20% of people affected by the policy had, as a result, looked to earn more through work. Some 63% of unemployed people affected said they were looking for work as a result of the policy, and 20% of people no longer affected said that that was because someone in their household had found work or increased their earnings. As I said, 200 people a week are coming off housing benefit completely.

We believe—I say this as someone who was a local councillor for 10 years—that local authorities remain best placed to ensure that discretionary housing payments are targeted at those most in need, based on local circumstances and working with a number of other agencies, so that there is a multi-pronged approach to providing support.

Since 2011, we have provided £560 million to local authorities and have already committed a further £870 million for the next five years. Since 2013-14, we have also allocated £5 million each year to help the 21 least densely populated areas across Great Britain, which addresses a point made by the hon. Member for Upper Bann (David Simpson). This additional funding aims to avoid any disproportionate impact on those affected by the removal of the spare room subsidy in remote and isolated communities.

Of the £150 million of discretionary housing payment funding that is being allocated to local authorities for 2016-17, £60 million is allocated by reference to the removal of the spare room subsidy. Local authorities are able to top up the Government’s contribution by an additional 150% in England and Wales, and there is no limit in Scotland.

The title of the debate on the Order Paper refers to regional effects, and there is clear evidence that regional areas are now adjusting to the removal of the spare room subsidy. Across all regions of England and Wales, the number of households subject to a reduction has fallen by between 14% and 26% since May 2013. In both the north-west and London, where the biggest change can be seen, there has been a 26% fall in the number of households subject to a reduction since May 2013. However, in Scotland, where discretionary housing payments have been used to buy out the policy, only an 8% reduction has been seen over the same period, and over the past year, it has been the only region to see an increase in caseloads.

Ian Blackford: The Minister talks about Opposition Members opposing the measure. Actually, the Scottish National party is in government in Scotland and we are committed to getting rid of it, but at the same time, we are building more houses, because that is exactly what is required. The rate of social house building in Scotland is far in excess of what is happening in this country. This Government have a housing crisis, and that is what they should be addressing. What they should not be doing is

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punishing the poor. Why do they not do what Scotland is doing, and abolish this measure and make sure that enough social houses are built?

Justin Tomlinson: I thank the hon. Gentleman for that point, because it links nicely to the next part of my speech, which is about housing numbers. However, I gently remind him that Scotland is the only region that has seen an increase in caseloads this year. That is hardly a record of success. I urge him to think very carefully about that, because those are the people who are on the waiting list looking to get appropriate family homes, and who want and support this policy.

On the supply of housing numbers, 700,000 new homes have been built in the past five years, including 270,000 affordable homes. Housing starts are at their highest annual level since 2007. More council housing has been built since 2010 than in the previous 13 years. The number of empty homes across England is at its lowest since records began and, crucially, we are broadening opportunities for people to access housing through schemes such as Help to Buy and the right to buy, along with a number of other measures.

Meg Hillier: The Minister made a point earlier about people being allocated oversized properties to start with. He has also talked about under-occupying by people whose children have left home. However, they are different from people whose life circumstances are fluctuating—their income has fluctuated; their children’s ages are changing. They are living in the home that they will want to continue to live in, and yet they have to go cap in hand to the council for these discretionary housing payments, which in my area are severely squeezed. Does the Minister not acknowledge that this policy really hits people at a point in their lives when they are trying to move out of that situation and get stability?

Justin Tomlinson: That was exactly the same thought process and debate that went on when the Labour Government introduced the policy in the private sector. They faced exactly the same challenges, and it was intended, had there been a general election win for Labour in 2010, for this to be done under that Labour Government. We have done it, but the difference is that when the Labour Government introduced the policy in the private sector, they did not give any additional discretionary housing payments. We are providing £870 million over the next five years and entrusting local authorities and local communities to shape and deliver what they feel is the appropriate support. In the hon. Lady’s constituency, it could be that the local authority wishes to support those with fluctuating conditions, or they may wish to target the money on other areas, but £870 million is being provided.

A number of points were raised, and I shall do my best to go through as many of those as I can. The hon. Lady asked about how income from lodgers would have an impact. Income from lodgers is fully disregarded in universal credit, so there is certainly an opportunity there. I accept that that is an easier way to generate additional income in certain parts of the country than in others.

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The hon. Member for Cardiff Central raised an important point about payday loans. I am very proud to have served as part of an incredibly important cross-party campaign that delivered significant changes in the regulations protecting vulnerable consumers. In summary, we secured the delivery of financial education and support through parts of the national curriculum. All loans have to be displayed fully in cost rather than with complex annual percentage rates, which I discovered even Treasury Ministers could not calculate. Crucially, there has been the capping of costs, the ending of rip-off rates and relentless roll-overs, the freezing of debt and compulsory credit checking to protect vulnerable consumers who should never be lent the money in the first place, as well as signposting to external and, crucially, independent advice for those consumers. It was something that we all welcomed.

Debbie Abrahams: As good as all the initiatives that the Minister has outlined are, is not the point that this Government policy is requiring people to go to payday lenders to keep their heads above water and stay in their family home, regardless of the additional security that may have been introduced?

Justin Tomlinson: This is a Government policy continuing the initial good work of the former Labour Government to make sure that the 1.7 million people left on the housing waiting list, which is now down to 1.2 million in England—a significant reduction—

Debbie Abrahams: Then build more homes. The lowest building since 1920—

Justin Tomlinson: The hon. Lady can shake her head, but we cannot turn a blind eye and ignore the people who are angry that they are unable to access appropriate housing for their families, whereas others who have the benefit of a family home and whose circumstances have changed no longer have the same need as families who are in overcrowded accommodation.

The hon. Member for Wansbeck (Ian Lavery) discussed the impact on people receiving attendance allowance. They would be pensioners, and pensioners are exempt.

The hon. Member for Swansea East raised a point about discretionary housing payments not kicking in until a tenant has downsized. That is not correct: it can kick in from day one if the local authority feels that it wishes to support that individual. It is very much down to the discretion of local authorities.

The hon. Member for Cardiff Central raised a point about Cardiff’s discretionary housing payments being cut. The overall funding will be £870 million over the five years, but that reflects the level of caseload. In Cardiff’s case, as the numbers have fallen, the funding will follow accordingly.

The hon. Member for East Londonderry (Mr Campbell) raised a point about housing associations and their rent collection. The reports we have had back from housing associations are that rent collection is 99% on average, and 92% of housing association providers continue to report that, in terms of current levels of arrears in rent collection and voids, they are within or outperforming their business plans. Of those that are in rent arrears, over 50% already were prior to the introduction of the spare room subsidy, although again we will continue to

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work with housing association providers and local authorities to look at what further support might help to break that cycle.

A specific point was made about the impact relating to PIP and DLA. To quote the guidance:

“When deciding how to treat income from disability-related benefits such as Disability Living Allowance or the Personal Independence Payment, you should have regard to the decision of the High Court in R v. SandwellMBC…In particular, you should consider each DHP claim on a case by case basis having regard to the purpose of those benefits and whether the money from those benefits has been committed to other liabilities associated with disability.”

In effect, therefore, that still remains part of the discretion.

In conclusion, the Government have taken action to protect the public purse and bring a spiralling housing benefit bill under control. The removal of the spare room subsidy has already saved over £1 billion since its introduction. We are protecting the most vulnerable by giving them access to direct housing payments if they need extra help to meet housing costs. The policy is encouraging people to enter work and increase their earnings and we are seeing better use of our housing stock. This is a welcome measure for those who are on the housing waiting list or in overcrowded accommodation.

10.58 am

Jo Stevens: I thank the Minister for his response and all my Opposition colleagues for their contributions to today’s debate. It is very disappointing that no Government Back Benchers were here to participate. Although I have listened to the Minister’s points, I do not recognise what he has said in the impact of the bedroom tax that I see every day in my constituency and which I am sure my hon. Friends do too. I ask him to take away the case studies, stories and points that we have made, and to review the policy again. It is iniquitous, unfair and discriminatory, and it really needs to go.

10.59 am

Question put and agreed to.

Resolved,

That this House has considered the regional effects of the under-occupancy penalty.

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Canary Wharf Bombing: Compensation

10.59 am

Jim Fitzpatrick (Poplar and Limehouse) (Lab): I beg to move,

That this House has considered compensation for victims of the Canary Wharf bombing.

It is a pleasure to see you presiding over the debate, Ms Dorries. It is also very good to see the Minister, for whom I have the highest regard, in his place. I know that the Treasury, the Foreign Office and the Ministry of Justice have been passing or sharing responsibility for this issue among them. I am grateful that a Treasury Minister is here, because I think that this is a financial question. Some issues of compensation are an MOJ responsibility and some issues are a Foreign Office responsibility, but a number of the key questions that I want to ask relate to British financial policy, as I hope to make clear. I am grateful that the Treasury is represented here today to respond to the debate. To be honest, I do not really care which Department takes responsibility and responds. What the victims and I want to see is action.

Two weeks and 20 years ago today, the Canary Wharf bomb detonated. The bombing marked the end of a 17-month IRA ceasefire. It was recently the subject of an excellent BBC Four documentary, broadcast to commemorate the event, entitled “Executing the Peace”. The half-tonne bomb was left in a small lorry about 80 yards from South Quay station on the docklands light railway. It exploded at 19:02 GMT 90 minutes after coded warnings were telephoned to Dublin and Belfast media. Inam Bashir and John Jeffries died when the bomb went off outside their shop on 9 February 1996. Many more people were injured, a number seriously.

I have been trying for a number of years to assist the Docklands Victims Association to secure compensation for the victims who suffered, and are still suffering in many cases, and for the families of those who were killed. The Docklands Victims Association is not alone in seeking justice; many other victims are also trying to do so.

The starting point for all this seems easy enough. Semtex explosive was sold by the Czechs to the Libyan regime of Colonel Gaddafi. It then supplied that Semtex to various terrorist organisations, including the IRA. That Semtex killed and maimed people. But from there things get much less clear. To its credit, the Select Committee on Northern Ireland Affairs—I am pleased to see its Chair, the hon. Member for Tewkesbury (Mr Robertson), in his place—is engaged in an inquiry trying to get to the bottom of this. I cannot do justice, in my brief remarks, to the evidence that it has already heard or the conclusions and recommendations that it will deliver, but its report, I suspect, will not be kind to successive British Governments over the last almost 20 years. I simply wish to ask the Minister why UK citizens have not been compensated, unlike citizens in the United States, Germany and France who were also victims of Semtex supplied by Gaddafi.

One of the most powerful statements that I heard in the Northern Ireland Affairs Committee sessions was from Mr Jason McCue, representing victims in Northern Ireland. He said:

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“Victims…are front-line troops in the war on terror...We have a duty of care to them, and yet we do not seem to value them in our society, like others do—like the French or the Americans do. We do not give them that value; we do not give them that respect. We do not see the humanity in them, and their strength in the war on terror. There is no stronger counter-terrorism measure than a victim standing up”.

The question for me and many colleagues—a number are in the Chamber today—is not whether the victims should be compensated but how. There are several possible ways, and all have been mentioned in the Northern Ireland Affairs Committee hearings, in which members are examining those ways and have suggested a number of parliamentary questions to tease out even more information on this very difficult issue.

Mr Nigel Dodds (Belfast North) (DUP): I congratulate the hon. Gentleman on raising this very important issue again on behalf of his constituents. The Docklands Victims Association is doing tremendous work and working with victims elsewhere whose victimhood came about as a result of Semtex supplied by Gaddafi. I am sure that the hon. Gentleman will accept that Members from Northern Ireland fully support the campaign for compensation in this case, because it will mean compensation right across the board for many other victims as well. We fully support the case and wish him well.

Jim Fitzpatrick: I am grateful to the right hon. Gentleman for that expression of support. He, too, has campaigned strongly on this issue for many years. This is a more general case; it is not exclusively about the Docklands Victims Association. Obviously, those victims are in my constituency, but many others across the country are also involved, and what we want to see is justice for them all.

I was exploring the possible ways forward. The first way forward would have been for the British Government to join a class action with the US Government in their claim for compensation. I would like to quote Mr McCue again. He said in response to a question from the hon. Member for Ribble Valley (Mr Evans):

“There was no reason why the British Government could not have, first of all, petitioned for the British citizens to be in it. There is nothing in American law preventing them from espousing a claim, which is the technical term for it, with another state to bring compensation for a class action. The Americans could have done it.”

A Mr Jury, another witness at the Northern Ireland hearings who was also representing victims, said:

“Can I add to that that the Libya Claims Settlement Agreement is a court-accepted statement of liability towards the UK victims? Under US law, there has been an acceptance of liability, and under judicial international comity, the UK courts would accept that anyway.”

Therefore there is, or at least was, the possibility of an international legal route to compensation, but my main question to the Government is why is there not, or why can there not be, a UK domestic route?

There have been reports that the UK Government have frozen Gaddafi or Libyan assets in UK banks. I suspect that the Treasury was behind that, which is why I have targeted the question in this debate at Treasury Ministers. The amount of funds is not clear. Some

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commentators suggest £900 million; others suggest that it runs into billions of pounds. That raises a number of questions for the Minister, of which I gave his office notice last evening. I must congratulate the Minister’s private office, because it was still emailing me at half-past 8 last night to try to get to the bottom of some of this.

First, do such frozen accounts exist and, secondly, what are they worth if they do exist? More importantly, there are international legal precedents that enable frozen assets of a terrorist or dictator—in this case, Gaddafi—to be used to pay compensation to victims, so my third and most important question, to which I will return at the end of my remarks, is why do the UK Government not go down that route?

A third route is now apparently being explored. An article in TheDaily Telegraph on 16 January quoted the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Bournemouth East (Mr Ellwood), who, to his credit, attended the memorial service in my constituency two weeks ago, on 9 February. He did not tell me that he was coming, but it was good to see him there anyway, and other parliamentary colleagues. The article stated:

“Tobias Ellwood, a Foreign Office minister, told The Telegraph that he had met new Prime Minister designate of Libya, Fayez el-Sarraj, and raised the case for compensation with him in person.”

The hon. Gentleman was quoted as saying:

“We will certainly make the case with the Libyan government in order to pursue this as best we can.

As soon as there is a government to work with I am planning to facilitate bringing the victims’ groups and the Libyan authorities together. It is for the Libyans themselves to say whether or not there would be a case for a request for compensation.”

There are, therefore, three possible ways to compensate victims: join a class action in the US, use interest from frozen assets in the UK or get the new Libyan Government to cough up.

James Cartlidge (South Suffolk) (Con): I thank the hon. Gentleman for initiating this debate, because it enables me to raise the case of Charles Arbuthnot, who is a constituent of mine in Holbrook and whose sister Jane, a 22-year-old WPC, was murdered in the Harrods bombing. I have had extensive correspondence with the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Bournemouth East (Mr Ellwood), and it seems to me that there is still not explicit acceptance that American citizens were compensated by the Libyan Government. Previously, there would be reference only to direct compensation, for example for the Lockerbie bombing, and not to compensation for those cases in which the Semtex was supplied.

Jim Fitzpatrick: I am grateful to the hon. Gentleman for that intervention. I know that this is one of the key issues that the Northern Ireland Affairs Committee is looking at, because evidence was given about the way the Americans secured compensation. That is why I am raising with the Treasury the question whether the frozen assets and the interest on them could be used to compensate the docklands victims, as well as the Harrods bomb victims and others from Northern Ireland. It is a key question.

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The Canary Wharf bombing victims do not care which is best. All they want is to secure the justice that they have been denied for more than 20 years for them and for other victims. Victims are represented by other colleagues, a number of whom are here today. Just yesterday I had two emails about this. One was from the office of the hon. Member for Battersea (Jane Ellison) on behalf of Felicity Prazak, whose husband died on flight LN1103. The other email was from my hon. Friend the Member for Feltham and Heston (Seema Malhotra), who raised the case of Mina Jadeja, a victim of the Harrods bomb.

This is not, and has never been, about the money. However, media accounts of payouts for IRA members—for example, the reports on 30 January that £1.6 million was paid to a republican kidnap gang—can only add to and intensify the sense of injustice and frustration for the victims of the Gaddafi Semtex. Successive UK Governments have failed victims. I was a Minister in both the Tony Blair and Gordon Brown Administrations, and evidence to the Northern Ireland Affairs Committee suggests that the Blair Government were more interested in the glory of bringing Libya in from the cold, closing down its support for and sponsorship of international terrorism, opening up economic ties and securing UK business contracts.

Gavin Robinson (Belfast East) (DUP): Does the hon. Gentleman share my profound disappointment in the evidence given to the Select Committee on Foreign Affairs on 11 December by former Prime Minister Tony Blair, who said that he did not pursue compensation because, clearly, compensation was available? There was a scheme in Northern Ireland, but the same provisions were not available for the hundreds of victims in mainland Great Britain.

Jim Fitzpatrick: The hon. Gentleman makes a powerful point, and I am sure that will be a focus of the report of the Northern Ireland Affairs Committee, of which he is a respected member. I am not able to develop the powerful point as much as I would like to, but I am sure that the Committee will do so in due course.

Mr Laurence Robertson (Tewkesbury) (Con): I thank the hon. Gentleman for securing the debate. I was at the memorial service last week with him and a number of other people. On the Northern Ireland Affairs Committee, we find it frustrating that former Prime Ministers Blair and Brown seem reluctant to give evidence on this very point. If we have to go to America to speak to people there to find out the truth, we certainly will.

Jim Fitzpatrick: The Chair of the Northern Ireland Affairs Committee makes a powerful point that reinforces the concern I raised about the way the Blair Administration dealt with the situation. The Committee was also told that the Brown Government only became interested when the flak started flying over the Megrahi case, when he was being released back to Libya. The Foreign Office then set up the dedicated unit for victims, which, initially, was very enthusiastic, and the current Prime Minister, the right hon. Member for Witney (Mr Cameron), made some very positive statements about helping the victims when he was Leader of the Opposition. Notwithstanding all the reluctance, tokenism and lack of a conclusion, the victims just want results.

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To return to the original question I asked a few minutes ago, I obtained this debate to ask a Minister from the Treasury whether there is a route, through frozen assets in the UK, to end the misery and delay. In my view, that is a Treasury question. If there is not a route, why not and when will the victims see justice? My final quote is from Mrs Hamida Bashir, whose son, Inam, was killed aged 29 at Canary Wharf. She wrote in correspondence:

“we do not require or will not accept any financial compensation for the loss of my Inam. However, due to the murder of Inam and John”—

John Jeffries—

“we do feel a tremendous moral obligation to support all those who have been left severely disabled. A victim such as Mr Zaoui Berezag who desperately needs your help as he is blind, paralysed, has the mental age of a small child and is an amputee. He is cared for by his wife Gemma within a modest council home in East London.”

What further eloquence do the Government need?

Danny Kinahan (South Antrim) (UUP): I thank the hon. Gentleman for securing the debate. From the evidence received by the Northern Ireland Affairs Committee, it seems that we do not actually care about the victims. Does the hon. Gentleman agree that it is about time that we sat down and started looking at those who really need help?

Jim Fitzpatrick: I am grateful to the hon. Gentleman because his intervention brings me to my concluding comments. This is not a party political issue, as is demonstrated by the fact that members of various parties are here expressing concerns about the issue. We all want the Government to address the issue and to come up with a solution, which successive Governments have not done over the past 20 years. The question affects constituencies across the country, including in Northern Ireland, which I have not really mentioned. The victims have been waiting too long.

The Northern Ireland Affairs Committee will require a formal Government response to its report when it is published. Today, the Government have a chance to signal further commitment not only to the victims, who they have failed, but to the country, by acknowledging that the frontline troops fighting against terrorism are innocent civilians and by ensuring us that when those civilians suffer at the hands of terrorists, their Government are ready to ensure that the sacrifice is acknowledged and the debt paid. So far, after 20 years, that sacrifice has not been acknowledged and the debt has not been paid. I look forward to the Minister’s response.

11.15 am

The Exchequer Secretary to the Treasury (Damian Hinds): I am grateful for the opportunity to serve under your chairmanship, Ms Dorries. I thank the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) and commend him for securing this important debate on a subject that is of particular importance to his constituents and on which he has campaigned consistently. I also commend the hon. Members from four different political parties who are attending this debate.

The docklands bombing of February 1996 was an horrific event—a black day for London and the United Kingdom. I add my condolences to all those whose lives

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were affected by the terrible events that day. The horror will not be forgotten. Two people died and 39 were injured, some permanently. It was a breaking of the IRA ceasefire and a failure of humanity. The involvement and support of the Gaddafi regime in this and other events marks a low point even in Gaddafi’s reign of terror. It is right that those whose lives were affected by these senseless bombings seek redress and compensation, and we will do what we can to ensure they get it. I know how important this issue is to the hon. Gentleman and to other hon. Members who are here today.

The hon. Gentleman specifically asked about the Libyan assets frozen in the UK, and the potential use of those to compensate victims of Gaddafi-sponsored terrorism. To answer that, it is important to set out the background of how those assets came to be frozen in the UK, and to explain the limits on the use to which they can be put.

In 2011, the United Nations took action against those involved in, or complicit in, ordering, controlling or otherwise directing the commission of serious human rights abuses against persons in Libya. This included, among other measures, the imposition of an asset freeze against a number of individuals and entities, including Muammar Gaddafi and some members of his family. On 2 March 2011, the European Union implemented these asset-freezing measures through regulation 204/2011, which has direct effect in the UK. The UK Government have no additional domestic freezing measures under the Libyan sanctions regime.

The approximate aggregate value of funds frozen in the UK under the Libyan financial sanctions regime is just under £9.5 billion. It is very important, for the purposes in which the hon. Gentleman is interested, to recognize that the whole Libyan Government are not subject to sanctions. A small number of entities associated with the Libyan Government are subject to asset freezes. The names of those entities are published in the Treasury’s consolidated list of financial sanctions. They include the Libyan Investment Authority and the Libyan African Investment Portfolio, which are subject to partial asset freezes, which means they are free to deal with new funds generated after 16 September 2011. The Libyan Government additionally holds further unfrozen funds in the UK and elsewhere. Therefore, existing financial sanctions would not prevent the Libyan Government from agreeing compensation with victims and making payments to them from unfrozen funds.

Kate Hoey (Vauxhall) (Lab): Given that it could be some time before there is a genuinely workable Libyan Government, why could this Parliament not—the Minister will tell me if this would not be legal—decide to unfreeze a certain proportion of those frozen assets so that we can sort out the issue of compensation to victims in the UK?

Damian Hinds: I will come to that. As for the financial sanctions that are in place, an asset freeze means that the assets of the individual or entity must be frozen where those assets are. The funds continue to belong to the individuals and entities listed under the sanctions regime and are not seized or held by the United Kingdom

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Government. The funds remain frozen in the bank account they were in at the time of designation and, for individuals and entities subject to a full asset freeze, interest may be credited to those accounts provided that the interest is also frozen. The sanctions prevent any person from dealing with those funds or making funds available to the individuals or entities listed under the sanctions regime without a licence from the competent authority—in the United Kingdom, as the hon. Gentleman rightly identified, the competent authority is Her Majesty’s Treasury.

Access to frozen funds can only be licensed in accordance with the grounds set out by the United Nations and the European Union, and there are seven licensing grounds applicable to this sanctions regime. To summarise, the grounds allow for payments in the following categories: first, for the basic needs of the designated person; secondly, for the legal fees of that person; thirdly, for fees for the routine maintenance of frozen assets; fourthly, for the extraordinary expenses of the designated person; fifthly, for the satisfaction of judicial or administrative orders enforceable in the EU; sixthly, for humanitarian purposes; and seventhly, for obligations arising under contracts prior to the imposition of sanctions.

To clarify further, a Treasury licence would not compel a payment to be made, but would simply provide that the payment would not be a breach of financial sanctions. It is clear that none of the licensing grounds would allow the Treasury to select a frozen account at will and require that funds be paid from it to a third party.

James Cartlidge rose—

Kate Hoey rose—

Gavin Robinson rose—

Damian Hinds: I am conscience of the time, so if all three hon. Members will allow me, I want to ensure that I get through what I need to say. If time allows, I will of course be happy to give way.

Although the entities designated under the Libyan financial sanctions are generally ultimately owned by the Libyan Government, they are entities in their own right and are governed by boards of directors who make decisions about the use of their assets. If the Libyan Government came to an agreement with victims to pay compensation, and came to an agreement with individuals or entities that their frozen funds should be used to pay that compensation, the Treasury would be in a position to consider such an application for a licence under the current framework. However, depending on the licensing ground that applies, approval for granting the licence would also need to be obtained from the United Nations.

Although I very much understand and share the concern of hon. Members for the victims of the docklands bombing and other Gaddafi-sponsored terrorism, I am afraid that the legal framework relating to financial sanctions is focused on preserving the funds for the benefit of the Libyan people and does not allow the UK Government to use them as we wish, no matter how worthy or how important to us and to all hon. Members a cause may be. Indeed, the UN Security Council has repeatedly made clear its determination that, when sanctions are lifted, frozen assets must be made available to, and

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for the benefit of, the people of Libya. The Security Council has held that position in a series of resolutions going back a number of years.

The hon. Member for Poplar and Limehouse asked about the 2008 US-Libya compensation settlement. In May 2008, it became clear that the US and Libya were proceeding on a bilateral agreement to settle outstanding claims. The then Government made representations to the US and Libyan authorities to include UK claimants on the list of recipients. Unfortunately that proved not to be possible, mainly because international and US law does not allow the US to espouse the claims of foreign nationals. Furthermore, the Libyans made it clear that they had answered questions about their support for the IRA in 1995 and that they considered the matter to be closed.

Important questions have also been raised about the similarities and differences between this case and the case of the Lockerbie bombing, in which victims were paid compensation. I stress that there are important differences between the two cases. First, the Lockerbie bombing was an act of terrorism directly committed by agents of the Libyan state, not indirectly through IRA terrorists with Libyan supply.

James Cartlidge: Will the Minister give way?

Damian Hinds: If my hon. Friend will forgive me, I will continue.

Secondly, in the case of Lockerbie, the Libyans approached the US Government tacitly acknowledging their guilt for the atrocity. Thirdly, Gaddafi wanted something in return from the United States, namely readmission to the international fold, from which his actions had excluded him. Finally, the Lockerbie claims were supported by a UN Security Council resolution. Above all—this is important—it is highly unlikely that a future Libyan Government would acknowledge themselves as guilty in the same way as Gaddafi, the individual. The Libyans see themselves as victims of Gaddafi, not the bearers of his legacy.

We believe that the best approach in these difficult cases is to support and facilitate contact between victims and the relevant Libyan authorities so that claims can ultimately be settled directly. Unfortunately, the current political and security situation in Libya makes it difficult for victims, their families and representatives to pursue their claims. The Foreign and Commonwealth Office already provides facilitation support to victims, their families, legal representatives and campaign groups where it has been requested and is appropriate. However, it is a long-standing decision for the Government not to espouse private claims, so we do not provide funding for victims’ campaigns. As the hon. Member for Poplar and Limehouse may be aware, there has recently been important progress towards the establishment of a new Libyan Government. The Presidency Council has announced a revised list of Government Ministers, and the next step is for the House of Representatives to endorse that list and the Government programme. We urge the House of Representatives to do that without delay.

The hon. Gentleman may also be interested to know that the Foreign and Commonwealth Office Minister with responsibility for the middle east, my hon. Friend the Member for Bournemouth East (Mr Ellwood), raised the issue of redress for UK victims when he met the

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Prime Minister-designate in November 2015. I assure the hon. Gentleman that the Minister will continue to raise that issue in our engagement with the new Libyan Government, and he will encourage the Libyan authorities to engage with UK victims, their families and representatives, including those seeking compensation, once stability returns and our embassy reopens. The Minister will also meet UK victims in March, and I know that he will also be happy to meet the hon. Gentleman to discuss the issue in greater detail, if the hon. Gentleman would like to do so.

There is going to be time, so I will happily give way to the hon. Member for Belfast East (Gavin Robinson).

Gavin Robinson: I thank the Minister for giving way, which I greatly appreciate. He has fairly outlined the restrictions associated with the asset-freezing sanctions. One issue with which the Northern Ireland Affairs Committee has wrestled is the representations made, at either EU or UN level, when the sanctions were imposed to advocate on behalf of victims, recognising that there were outstanding requests for compensation. I know he is not a Foreign Office Minister, so if he is unaware of the representations that were made, perhaps he could ask those questions and report back to the Chair of the Select Committee, the hon. Member for Tewkesbury (Mr Robertson), or to me.

Damian Hinds: I will have to write to the hon. Gentleman with the detail in answer to that question, but of course the sanctions regimes are not unique to the UK and are governed by international law and UN and EU conventions.

A great wrong was inflicted on innocent victims on that day in 1996, and a key part—

Kate Hoey: Will the Minister give way?

Damian Hinds: If the hon. Lady will forgive me, I will make progress.

Kate Hoey: You have three minutes.

Damian Hinds: Will the hon. Member for Poplar and Limehouse be responding, Ms Dorries?

Nadine Dorries (in the Chair): That is up to you, Minister. If Mr Fitzpatrick is going to wind up, you will have to stop very soon.

Damian Hinds: I want to make sure that the hon. Member for Poplar and Limehouse has brief time at the end.

A great wrong was inflicted on that day, and clearly part of the responsibility lies with the Libyan dictator, Gaddafi. At some stage, the Libyan people will want to come to terms with what was done in their name and consider the issue of reconciliation and compensation for victims, both Libyans and foreigners. When they do, we will have something to offer from our experience in Northern Ireland, and we will of course also push for the inclusion of Gaddafi’s UK victims in any compensation scheme.

11.28 am

Jim Fitzpatrick: I am grateful for this opportunity to wind up the debate. I am grateful to the Minister for his comments, and I am grateful for the attendance of a number of colleagues, including my former colleague

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from Thurrock, Andrew MacKinlay, who has been supporting the victims for many years. I am grateful to the Minister for supplying new information on the £9.5 billion in frozen assets—that figure was not previously clear to me. I hope that information is of assistance to the Northern Ireland Affairs Committee.

I did not expect today’s debate to provide a conclusion; I sought another little piece of the jigsaw to create a bigger picture and to help the Northern Ireland Affairs Committee to produce a report that will get the Government to a position where, hopefully, they can bring the matter to a satisfactory conclusion. The victims have been waiting too long, and it is time to bring the matter to a satisfactory conclusion. This debate has not concluded the matter, but I hope it is another step towards a conclusion.

Question put and agreed to.

11.29 am

Sitting suspended.

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Community Pharmacies

[Mr Gary Streeter in the Chair]

2.30 pm

Derek Thomas (St Ives) (Con): I beg to move,

That this House has considered community pharmacies.

It is a pleasure to serve under your chairmanship, Mr Streeter. In a letter to community pharmacies on 17 December, the Department of Health discussed the potential for far greater use of community pharmacies and pharmacists. The letter refers to the role of community pharmacists in preventive health, support for healthy living, support for self-care for minor ailments and long-term conditions and medication reviews in care homes, and as part of a more integrated local care model. That is exactly the right direction. As an MP representing a Cornish seat where every effort is being made to integrate health and social care, I see community pharmacists as essential players in a new national health service equipped to meet the demands placed on it by modern society.

Westminster Hall debates are rarely secured in order to praise the Government and celebrate all that is good. I would love to be able to do so, but—wait for it—in the same letter to which I just referred, the Department set out its plans to reduce its funding commitment to community pharmacists by £170 million. Therein lies the problem. We have a front-line NHS service that is valued and depended on and able to embrace new clinical responsibilities and meet the demands of an ageing population, but it is unsure about its future.

Tom Brake (Carshalton and Wallington) (LD): Does the hon. Gentleman share my concern? As Members of Parliament, we all, I suspect, refer constituents to pharmacy services, because we know the impact that that has on reducing the pressure on the NHS. If we cannot refer them to smoking cessation services, cholesterol testing and blood pressure testing, the NHS and hospitals will have to pick up the burden.

Derek Thomas: I welcome that intervention. That is exactly the point that I hope to make, particularly for independent pharmacists in rural areas, where it is much more difficult to access acute services and GP practices.

Mr John Spellar (Warley) (Lab): The hon. Gentleman ought to see that that is true across the whole country. In urban areas, people are finding it more and more difficult to get appointments with their GPs and are going to accident and emergency. The best way to relieve that pressure is to encourage more people to go to our well-resourced local community pharmacies, maybe even rather than chain pharmacies.

Derek Thomas: That is absolutely right. The community pharmacist is part of the solution, not part of the problem, in what we want to do for the NHS. I hope to make the point in my speech that we need to do all we can to support the development of community pharmacists rather than take away money that they need.

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Andy Slaughter (Hammersmith) (Lab): Urban and rural areas share those problems. It is because people will only wait for so long for GP appointments—my hospital has exceeded waiting times for more than a year—that there is pressure is on community pharmacists. They are stepping up to the plate. Does the hon. Gentleman agree that they are being let down by this cut, when they are trying to do their best?

Derek Thomas: I hope to make the point that we need clarity about how the money will be found, if it must be found. I believe that there are other ways to save money, particularly involving the use and waste of drugs.

Community pharmacists are unsure about their future and unclear what support they can expect from the Government. The letter sets out the £170 million reduction in support for community pharmacists and asks them to prepare for the cut, but gives little detail about where the money will be cut, who will lose and what services can no longer be funded.

Paula Sherriff (Dewsbury) (Lab): Does the hon. Gentleman agree that local pharmacies are part of the fabric of local communities? That is particularly the case for independent pharmacies, which are embedded in communities and whose owners and staff often come from those communities. Perhaps the Minister can tell us what impact assessments have been undertaken in terms of health and economic and social wellbeing by individual constituency.

Derek Thomas: I welcome that intervention, but I am concerned that the hon. Lady might have read my speech, and I have not yet put it on my Facebook page. In my constituency, I have several community pharmacists, and I am not sure that I have too many. It is simply that my patch is large and includes areas of social deprivation, which has an inherent impact on health. A car journey from the north to the south of my constituency takes an hour. The journey from the most westerly point to the most southerly point takes an hour and nine minutes. In a rural area such as mine, community pharmacists provide invaluable access to the NHS and invaluable support to vulnerable people.

To follow on from the hon. Lady’s helpful intervention, over and above their obvious healthcare roles, I see community pharmacies’ input into society as comparable to that of post offices, police community support officers, libraries, local churches or chapels, local pubs, village shops and our postmen and women. They all play an important part in local communities. They are the glue that holds communities together, the people and organisations that know when things are not as they should be, and the people who look out for our elderly, the sick and the vulnerable. Although it is difficult to put a price on the work they do, without those people and institutions, society would be a poorer place and the added strain on public services would be significant. It is perverse that we judge reducing support for services such as community pharmacists to be a saving.

Nic Dakin (Scunthorpe) (Lab): I congratulate the hon. Gentleman on securing this timely debate. It is a pleasure to serve under your chairmanship, Mr Streeter. The loss of pharmacists’ expertise and experience and their knowledge of the people who come in and out

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could be enormous if pharmacies such as the Whitworth family pharmacy in my constituency are forced to close as a result of this initiative.

Derek Thomas: I think we all share those concerns. I am pleased to have secured this debate, so as to give people an opportunity to share their experiences in their own constituencies.

Reform of community pharmacies is not something that we can afford to get wrong. Many of the community pharmacies in my constituency are independent businesses that have been established for decades. A wrong move by the Government now might make those community resources unviable. We all know that community pharmacists provide important services, including the safe dispensing of medicines. They are often the first port of call for people with minor ailments and health concerns, and are a key support for elderly and vulnerable patients in the community.

Alex Chalk (Cheltenham) (Con): General practitioners in my constituency are under significant strain. Although no one is against sensible savings, does my hon. Friend agree that nothing should be done to undermine the excellent job done by community pharmacists in diverting patients from primary care, or to add to the burden on hard-pressed GPs?

Derek Thomas: That is absolutely superb—my next line is: “Community pharmacies have a vital role in giving advice and in diverting patients from GPs and emergency departments,” exactly as my hon. Friend said. In tourist areas such as Cornwall, they take their share of the extra demand during the height of the season. Most recently, my local community pharmacists administered flu jabs to increase uptake. Pharmacies regularly get prescriptions to patients out of hours when no alternative is otherwise available, and Cornwall has led the way, with ground-breaking work in enhanced services. That is an example of how community pharmacists are very much part of the solution to integrated community health provision.

Healthwatch Cornwall recently surveyed Cornish residents about access to community pharmacies. Some 69% of participants said that they regularly visit their pharmacy, and 74% of those felt comfortable talking to the pharmacist about their health, while 78% felt well informed by their pharmacists when taking new drugs and 93% said that the pharmacist was polite and helpful.

One constituent of mine, a retired doctor, Professor Dancy, wrote to me as follows:

“I am a warm supporter of Nigel, our local pharmacist, and proud to be so. He is always ready to help when I forget (as one does at the age of 95) to re-order a medicament, and when my doctor is unavailable, or just pushed for time, I do not hesitate to ask Nigel for advice, which I follow with a confidence that is always rewarded.”

Community Pharmacists are highly trained and trusted healthcare professionals, qualified to masters level and beyond. Their knowledge base covers far more than just drugs, making them the ideal healthcare professionals to relieve pressure on GPs and other areas of the NHS. Equally importantly—perhaps even more importantly—community pharmacists are welcoming change and embracing new clinical opportunities.

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However, the proposed funding cut will not sustain the transition from a supply-based service to the more clinically focused service that the Government desire and our patients deserve. Cuts will discourage progress and can only result in small, independent and much-loved businesses failing, at the expense of patients, the public and the wider NHS.

Rachael Maskell (York Central) (Lab/Co-op): In York, the local authority has made cuts to smoking cessation services, as well as NHS health checks, and the community pharmacists I have spoken to have said that they see their future role as filling some of those gaps. However, with further cuts to community pharmacy itself, where are people meant to go—back to queues in GP surgeries?

Derek Thomas: I thank the hon. Lady for that intervention. That is exactly why we are having this debate. I want the Government to examine the value of community pharmacists and to consider how they can do some of the work—in fact, a large part of the work—that would save money for NHS acute services.

I am well aware that there is a need to secure better value for money in areas of the NHS. Over the weekend, I met four community pharmacists and they all talked of the opportunities to make savings that they have identified. They are willing and able to see more patients. Pharmacists give free, over-the-counter advice to thousands of people every day, promoting self-care and diverting patients from GP and urgent care services. However, it is estimated that £2 billion-worth of GP consultations a year are still being taken by patients with symptoms that pharmacists could treat.

Pharmacists want to have a greater role in prescribing drugs, so as to reduce waste. Last year in Cornwall alone, £2 million-worth of unused drugs were returned to community pharmacists to be destroyed. Pharmacists are best placed to reduce this waste. They want to do more to support people with mental illnesses; they are keen to provide continued care of people with diabetes and other long-term conditions; and my local community pharmacists want to work with the Department of Health to improve services, engage in health and social care integration, reduce drug waste and improve access to records, in order to support the giving of prescriptions.

Peter Dowd (Bootle) (Lab): On that point, does the hon. Gentleman agree that what is needed is a joint, co-ordinated approach to planning investment and implementing change, in partnership with national and community pharmacy bodies, rather than pushing things through at a great pace?

Derek Thomas: I thank the hon. Gentleman for that intervention. In my experience so far of looking at this subject, I have found that those in the pharmacist community do not feel that they have been properly consulted or engaged with. Pharmacists believe that they have many of the solutions that the Government wish to see.

Before I conclude, I will read one final letter that I received on Monday from a GP in my constituency. Dr Rebecca Osbourne writes:

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“As you will no doubt be aware, General Practice is facing a crisis with too few GPs managing an ever-growing demand. Demand for appointments outstrips availability of doctors and allied surgery staff, and patient needs are increasingly complex with an ageing population with multi-morbidity.

A good Pharmacist helps to take some of the pressure off a local surgery—offering advice about self-limiting conditions, and prescribing over the counter medications for presentations that do not need to be taken as ‘on the day’ appointments with a GP; patients who are on complex medications can receive education and advice from their pharmacist regarding their regime, including the importance of compliance, which can further reduce the burden elsewhere in the system; vulnerable patients, whether elderly or experiencing mental ill-health, have an extra professional keeping watch over them, and a pharmacist may be better placed than a GP”—

it was a GP who wrote this—

“to see a trend developing or a change that requires further attention.”

Tom Brake: I do not know whether the hon. Gentleman is aware from the conversations he has had with pharmacists that they often do things that are outside the terms of their contract. A couple of examples were cited to me. First, a pharmacist was involved in spotting someone who was having a cardiac arrest in their pharmacy, and then in helping someone else who had fallen outside the pharmacy and damaged their face quite severely. If we lost pharmacists and their extra input, that would have a significant impact on patients in a way that has really not been explained so far.

Derek Thomas: I thank the right hon. Gentleman for that intervention. What I have learned from many patients and from the pharmacists themselves is that patients see pharmacists as the first port of call for health, so there is no doubt that there will be times when pharmacists are picking up things that otherwise would have to be picked up in A&E.

Oliver Colvile (Plymouth, Sutton and Devonport) (Con): Does my hon. Friend agree that it is important not to confuse the role of pharmacists with the number of pharmacies? It is vital that we protect the pharmacists, who are very important in delivering in the national health service.

Derek Thomas: That is exactly right: it is pharmacists’ skills that we must be careful to maintain and develop.

I know that you have concerns about this matter as well, Mr Streeter, especially concerning the pharmacy in Modbury in your constituency, so I appreciate your support on this issue and the way you are chairing this wonderful Westminster Hall debate.

David Simpson (Upper Bann) (DUP): I congratulate the hon. Gentleman on securing this debate. The letter that he read out hits a lot of the points. Removing the funding will make waiting lists longer, when GPs are already under pressure; in fact, we are losing hundreds of GPs every year, as they go to other countries. Pharmacies can see people at the point in time that they would usually see GPs; sometimes people have to wait two or three weeks to get an appointment with the GP. So this proposed cut seems to defeat the purpose of the planned change.

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Derek Thomas: I am pleased that we are so supportive of the community of pharmacists, and hopefully we will get a good result from this debate.

I have three straightforward questions and a personal plea to put to the Minister, if you will bear with me, Mr Speaker—[Interruption.] Sorry, Mr Gary Streeter. [Laughter.]

Mr Gary Streeter (in the Chair): It is okay, I will let you off.

Derek Thomas: Have the Government made any impact assessment in relation to their position of reducing community pharmacy numbers and the impact that this change might have on the health, and economic and social wellbeing of people living in our area? What assessment have the Government made of the impact that such a reduction would have on the workload of GPs, those in A&E and those providing out-of-hours services, if patients cannot access their regular pharmacy and then visit these other services?

Caroline Ansell (Eastbourne) (Con): I congratulate my hon. Friend on securing this timely debate on an important issue that could have far-reaching consequences, should the decision go through. Equally, I join him in urging the Minister to ensure that during the consultation—we understand that there is still to be consultation with patient groups—we will take, to echo a comment by a former Member, a constituency-by-constituency approach. I am sure that everybody will bring to the fore the particular characteristics of their own constituency. My constituency has the record number of octogenarians in the country and the fastest growing town in the south-east, and it routinely hosts tourism-driven events such as Airbourne, when 600,000 people come into the town. Pharmacies are a sometimes uncelebrated and unseen force that we rely on.

Mr Gary Streeter (in the Chair): Order. Interventions should be brief.

Derek Thomas: I thank my hon. Friend for her intervention and she is absolutely right to say that in a tourist area, where the population increases dramatically at times, we need to be careful that the core services are available for everyone who needs them.

My second question is: what assurances can the Government give to independent community pharmacists? The third question is: what consultation has been conducted with pharmacy patients, and what would their concerns be if community pharmacies were to close?

My personal plea to the Minister is please not to write pharmacies off until they have been given the resources to realise their full potential in society. I feel excited about the potential opportunity that exists for the NHS through the proper use of community pharmacists. While reforms to NHS services are essential and the way that community pharmacists are utilised needs to be reviewed, a blanket removal of funds to pharmacies will only hinder progress and limit this opportunity.

Several hon. Members rose—

Mr Gary Streeter (in the Chair): Order. We have six colleagues trying to catch my eye and roughly 40 minutes. If they could show self-restraint and limit themselves to seven minutes each, that should see us through.