More than 8,000 people in Devon and Cornwall have been hit by the so-called “bedroom tax” since it came into effect six months ago, official figures have revealed.
The controversial welfare reform sees housing benefit cut if someone living in social housing is deemed to have an extra bedroom in their property.
Housing associations, opposition politicians and charities have all condemned under-occupancy penalty, which they say penalises some of the most vulnerable people in society.
The Government argues the penalty – called a spare room subsidy by proponents – is supposed to encourage people with additional rooms to move to a smaller property.
However, critics say a shortage of suitable housing means many people are trapped in larger properties and have no choice but to run up huge debts as their housing benefit will no longer cover the full cost of their rent.
A Labour motion in the House of Commons to abolish the policy was defeated by 252 votes to 226 on Tuesday.
In the debate, Andrew George, Liberal Democrat MP for St Ives, said the policy was “immoral” and “Dickensian”.
And Alison Seabeck, Labour MP for Plymouth Moor View, said the “diabolical” bedroom tax was causing “untold misery” in the city.
Around 8,200 have been hit by the tax in Devon and Cornwall.
In Cornwall 2,833 people have been affected, in Devon 2,877, Plymouth 1,938 and Torbay 549.
Welfare Reform Minister Lord Freud said: “With 2.1 million households currently on the social housing waiting list due to a shortage of suitable properties, we believed this was unfair and the system had to be changed to help those families who were crammed into accommodation that was too small.”
He said although the changes have already led to a reduction in the housing benefit bill, it will be next year before it begins to free up enough homes to help those trapped in accommodation that is too small.
In August, an estimated 3,328 social householders in Cornwall were estimated to be hit – but there were only 65 one or two-bedroom council properties vacant in the area.
In the Commons, Mr George told MPs the bedroom tax was “Dickensian in its social divisiveness”. “It is an immoral policy,” he said, adding: “The ghettos of the future will be built as a result of this policy.”
Housing benefit will be cut by 14% for those deemed to have an extra bedroom and 25% for claimants with two or more spare bedrooms.
Ms Seabeck said: “People in my constituency are borrowing money from relatives, from payday lenders and from loan sharks, but now they are finding that the money has run out. Mum and Dad cannot afford to sub them any more, the payday lenders want their money back plus 100%, and the loan sharks want their pound of flesh.”