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John
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Housing benefit cuts defeated by House of Lords in welfare reform vote<

Peers, including 13 Lib Dems and one Tory, voted by 258 to 190 to limit coalition's proposed penalties for social housing tenants

The government suffered the first of what may be a series of heavy defeats over the welfare reform bill when peers threw out plans to dock housing benefit from people who have spare bedrooms.

Ministers had proposed that social housing tenants deemed to have one extra bedroom would lose £12 a week and people with two or more extra bedrooms £22 a week.

But peers voted by 258 to 190 to limit the penalties to only those households with two or more spare bedrooms and those with one extra room who have been offered suitable alternative accommodation.

The cost of the rebellion is put at £500m, but the government will overturn the vote when the bill returns to the Commons in the New Year.

As many as 13 Liberal Democrats rebelled and one Tory peer, the former welfare minister Lord Newton. Not a single crossbencher backed the government.

With respected figures such as Lady Hollis, the former Labour social security minister, working with crossbenchers and peers on other amendments, the government now faces the real prospect of further defeats. It has already avoided two further defeats over cuts to disability funds by one vote.

In a bid to head off Wednesday's rebellion, Lord Freud, the welfare minister, promised an additional £30m a year on discretionary housing payments to help some of those who could be hardest hit.

He said bringing in the under-occupation rules, which would be introduced from April 2013, was "essential to reduce housing benefit expenditure which, without reform, would reach £25bn in cash terms by 2014-15".

Defending the proposals, Freud told peers: "We have had to make some hard choices here in order to make the necessary savings as part of the deficit reduction plan," he said.

"The size criteria measure will only affect working-aged housing benefit claimants in the social rented sector who are underoccupying their accommodation."

He said the cuts in benefit would be 14% for people with one spare bedroom – an average of £12 a week – and 25% for people with two or more spare bedrooms – an average of £22 per week.

"In England approximately 420,000 households in the social rented sector underoccupy their accommodation by two bedrooms or more while over a quarter of a million households are overcrowded," he said.

Liberal Democrat Lord Kirkwood, a former spocial security spokesman for his party told his colleagues "If you don't vote for it you are just going to have to live with the consequences."

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Welfare Reform Bill: Report stage day two

The Welfare Reform Bill entered its second day of report stage yesterday (Wednesday 14 December) with further line by line examination in the House of Lords.

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Yesterday saw a government defeat in the House of Lords when Amendment 12 moved by Lord Best< (Crossbench) challenged housing costs set out in the bill.

The amendment, grouped with 14 and 49 of a similar theme, covers the new 'bedroom tax' with an underoccupation penalty for council and housing association tenants. The amendment was also backed by organisations like the National Housing Federation and Shelter.

Lord Best outlined: 'The bill paves the way for a much tougher test than at present, with a hefty underoccupation penalty - a cut to the housing benefit - for those whose accommodation fails the new test. Currently...a household in council housing or a housing association home is deemed to be underoccupying only if it has two or more bedrooms above the basic bedroom standard. One spare room is permitted. Under the Department for Work and Pensions' proposed new definition, one so-called spare room would not be allowed.'

He argued that under the new test, many families would have to downsize to somewhere smaller: 'Under the fierce new test, a family would be counted as underoccupying if, for example, two teenage girls were not sharing the same room, or if an older couple, one of whom is below pension age, have a two-bedroom flat. If they do not, even if there is simply nowhere smaller for them to move to, then they must pay the new penalty. Six hundred and seventy thousand households receiving housing benefit will be caught in this trap, rising to some 740,000 in the years ahead.'

In the division (vote), the amendment was 'agreed' (won) by a healthy majority in the House of Lords (258 Members were 'content' and 190 were 'not content').

Catch up on day one of the report stage (Monday 12 December)

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  • Read the Lords Hansard transcript<
  •  

    Welfare Reform Bill: Key areas

    The bill  introduces Personal Independence Payments to replace the current Disability Living Allowance:

    • It restricts Housing Benefit entitlement for social housing tenants whose accommodation is larger than needed.
    • It will up-rate Local Housing Allowance rates by the Consumer Price Index.
    • It amends the forthcoming statutory child maintenance scheme.
    • Payment of contributory Employment and Support Allowance is limited to a 12-month period.
    • The total amount of benefit that can be claimed will be capped.

    Catch up on the Welfare Reform Bill

    What is the report stage?

    Report stage in the Chamber gives all Members of the Lords further opportunity to consider all amendments (proposals for change) to a bill. It usually starts 14 days after committee stage. It can be spread over several days (but usually fewer days than at committee stage).

    Before report stage takes place

    • The day before report stage starts, amendments are published in a Marshalled List – in which all the amendments are placed in order.
    • On the day, amendments on related subjects are grouped together and a list (“groupings of amendments”) is published.

    What happens at report stage?

    • Detailed line by line examination of the bill continues.
    • Votes can take place and any Member can take part.

    What happens after report stage?

    • If the bill is amended it is reprinted to include all the agreed amendments.
    • The bill moves to third reading for the final chance for the Lords to debate and amend the bill.

    More about the report stage<

    Further information

    Detailed line by line examination of the separate parts (clauses and schedules) of a bill takes place during report stage.

    Find out more about watching House of Lords debates.

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    DWP anger at defeat of bedroom tax<

    A Department for Work and Pensions source reacted angrily to the government’s shock House of Lords defeat over welfare reform.

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    Peers on Wednesday< voted by 258 to 190 to water down proposals for a ‘bedroom tax’ for tenants underoccupying their homes. The government had been hoping to cut £500 million a year from the housing benefit bill by restricting payments to working age households in social housing with one spare room.

    Wednesday’s amendment, tabled by crossbencher Lord Richard Best, will see households be able to keep a spare room without having to pay the tax if there is no suitable accommodation available.

    A DWP source said the amendment will mean the state will lose around £300 million of the savings to the housing benefit bill it was hoping to make.

    He said: ‘We are staggered - as will the thousands of families on waiting lists for housing be - by the decision of peers to exclude one-bedroom under-occupiers from the social sector size criteria measures.

    ‘They are short sighted and out of touch and it won’t help to solve the problem of overcrowding in this country.’

    The government can seek to overturn the amendment when the bill returns to the House of Commons in the new year. If the amendment is not overturned the government will be left with a £300 million shortfall in its benefit reduction plans.

    Housing organisations, which feared the government’s plans would have unfairly penalised tenants due to a lack of smaller homes for them to move in to, welcomed the government defeat.

    The National Housing Federation described the government defeat as a ‘victory for fairness’. Andy Tate, policy officer, at the NHF, said: ‘Cutting the deficit on the backs of the poor and vulnerable in this way is unacceptable - and that is the message peers have chosen to send ministers today.’

    Mary Taylor, chief executive of the Scottish Federation of Housing Associations, said: ‘This vote gives all Scottish housing associations and their tenants renewed hope of seeing a fairer outcome from the welfare reform bill than we had feared.’

    Lord David Freud, welfare reform minister, on Wednesday announced £30 million of extra funding through discretionary housing payments, which are administered through councils on a case-by-case basis, to enable disabled tenants who have had their homes significantly adapted to stay and to help families who foster children.

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    Work and Pensions Minister commits to review of connection between CPI and rent levels<

    If local allowance rates and rents are out of step they 'will' be reconsidered, says Lord Freud

     

    19 December, 2011

     

    Work and Pensions Minister Lord Freud has committed the government to carrying out a periodic review of the connection between the Consumer Prices Index (CPI) and rent levels.

    NB - the government is planning to limit increases in the local housing allowance by reference to the CPI index from April 2013, with the aim of exerting downward pressure on rents while looking at rent levels in local markets. The limit will apply in areas where local market rent increases, at the 30th percentile, exceed the annual rate of CPI inflation.

    Lord Freud was responding to an amendment to the Welfare Reform Bill put forward by Baroness Hollis of Heigham in the Lords last week -

    'This amendment calls for periodic reviews of the interconnection between CPI and rent levels ... Housing benefit (HB) to cover your rent up to the 30th percentile will rise only by CPI, not by the actual increase in private sector rents. Yet ... rents are rising at the moment by more than 7 per cent a year, and CPI is only half of that ....

    So whereas now your HB may theoretically cover 30 per cent of available rents, in three years' time it may cover only 20 per cent, and in five years only 15 per cent.

    In response, Lord Freud said that the government is committed to making savings from the measure up to 2014/2015, but that if it then becomes apparent that local allowance rates and rents are out of step, they can be reconsidered.

    However, with Baroness Hollis having invited the Minister to change 'can be reconsidered' to 'will be reconsidered', Lord Freud said that -

    'On the basis that the noble Baroness is going to be incredibly helpful to me in all the consequent amendments in the Bill, I will change the word from "can" to "will'.'

    More information on the amendment moved by Baroness Hollis of Heigham< is available form Hansard.

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