Back in October, we learned that Natwest had asked one of its buy-to-let customers to either evict her tenant, who was receiving housing benefit, or pay a draconian fee to switch her mortgage.
The bank’s terms and conditions prohibited customers from letting to tenants in receipt of housing benefit. Yet another example of a bank discriminating against low-income households and fuelling the “No DSS” culture. But this time, 62% of the bank is owned by the government, i.e. us.
The landlord has started a petition urging the government to stop this practice by high street banks, and it’s nearly at 5000 signatures.
This week, the Commons Work & Pensions Committee published correspondence with Natwest which revealed that it is reviewing the policy.
Tomorrow, our friends at ACORN, London Renters Union and Living Rent Scotland will be demonstrating at Natwest branches in 7 cities around the country.
We were appalled that the bank we spent so much money bailing out ten years ago would be discriminating against some of its own shareholders. For a start, the terms and conditions they shared with us last year contained no reference to state support.
Discrimination like this is potentially against the law. Recipients of housing benefit are more likely to be women or have disabilities, which mean that they should be protected as part of the Equality Act 2010.
It also adds to the burden on the state. When people cannot find a home in the rental market they might be accepted as homeless by local council who might only be able to find them temporary accommodation. This housing, which can include rooms charged by the night, costs much more than housing benefit would in the open market. In the last financial year temporary accommodation cost nearly £1bn.
The public’s shares in RBS – the parent company of Natwest – are held by UK Government Investment, an arm of the Treasury. We put all this to the body in an email, and asked if it would ask RBS to reconsider its housing benefit policy.
UKGI responded. Ultimately it isn't going to comment.
“UKGI does not have a role in the day-to-day management decisions of the firm and neither do we have any regulatory or investigatory powers to review your query… UKGI cannot comment on specific company policy or advise on any personal financial arrangements with RBS or its subsidiaries.”
It clearly has a role though. It says its “overarching objective is to manage the government’s shareholdings in financial institutions to create and protect value for the taxpayer as shareholder”. That must surely extend to value for the money we are spending to help people keep a roof over their heads – perhaps by not having policies that might force people into temporary accommodation.
Part of its role is “engaging actively with the Board and senior management on key strategic issues”. What could be more strategic than fixing the housing crisis?
On this basis, UKGI could well be applying pressure on RBS, but if it is, it's being unsurprisingly coy about it.
The Treasury Minister with responsibility for UKGI is John Glen. If Natwest digs its heels in after this weekend's protests, Mr Glen should step in and make sure UKGI and RBS aren't allowing unfair policies and practices in our name.