Thursday, 27 April 2017

Under pressure

From: Inside edge

The government’s arguments for the bedroom tax are continuing to unravel under intense media and political scrutiny. Will the pressure finally tell?

For the first time in years that I can remember, a social housing issue led prime minister’s questions yesterday as Labour leader Ed Miliband used the plight of people facing the tax to put David Cameron on the spot.

‘This is not a tax; it is a benefit,’ said the prime minister. Strictly speaking, of course, he’s right – the under-occupation penalty is a reduction in benefit. However, that’s not stopped the bedroom tax becoming such common parlance in the media that even ministers and government press offices have begun to use it. Cameron was committing cardinal error number one at PMQs of repeating his opponent’s attack line.

His main argument in favour was that it’s only fair to people in the private rented sector. Cameron repeated this ‘basic argument of fairness’ several times, pointing out that Labour presided over size criteria for private tenants. He said: ‘If someone is in private rented housing and receives no housing benefit, they do not get money for an extra room, and if someone is in private housing and do get housing benefit, they do not get money for an extra room, so there is a basic argument of fairness. Why should we be doing more for people in social housing on housing benefit than for people in private housing on housing benefit?’

It’s true that private tenants have faced a similar bedroom tax before and after the introduction of the local housing allowance in 2008. However, the justification put forward by Labour ministers at the time was that the government had to act because ‘unlike social housing, the deregulated private rented sector is not subject to any internal rent controls’.

As Hilary Burkitt points out, the size criteria may be pretty much the same but the impact on private and social tenants will be very different. Cameron’s ‘fairness’ argument also raises the prospect of what many social landlords fear after the next election: the introduction of an LHA-style allowance for social tenants that becomes increasingly detached from actual rents.

Finally, there is another group of people who are far more likely to under-occupy their homes than either private or social tenants: home owners. However, there are no size criteria in the support for mortgage interest scheme. And, far from cutting it back, the government has just extended a temporary concession that makes mortgages up to £200,0000 eligible for support.

Next Cameron tried the argument that the government is making extra support available on a case by case basis. This was rather undermined by the fact that he put the total of discretionary housing payments at £50 million rather than the actual £30 million.

When he attacked Labour for opposing all the government’s attempts to cut benefits and reduce the deficit, Miliband responded that the bedroom tax could end up costing more if victims are forced into smaller private rented homes with higher rents. ‘How can it possibly make sense to force people into a situation where they cost the state more, not less, by moving into the private rented sector?’

Cameron did not exactly answer the question. ‘What this Government are doing is building more homes,’ he said. ‘If the right hon. Gentleman supports that, will he now support our changes to the planning system and the new homes bonus?

That enabled Miliband to come back with: ‘So today we discover that the Prime Minister has not even got a clue about his own policy, which he is introducing in April.’

There was just time for Cameron to accuse Miliband of coming up with ‘totally pathetic, pre-scripted rubbish’ and respond to some of his own before it was time for other MPs to ask their questions. Happily, there were three more on the bedroom tax and there was still time for Cameron to repeat his cardinal error as he told Labour’s Greg McClymont: ‘I do not accept that the bedroom tax is a tax.’ As Homer Simpson might put it: ‘Doh!’

Later the same day, the bedroom tax and the prospect of it costing more not less featured on Channel 4 News report featuring Wigan & Leigh Housing. Labour showed its determination to maintain the pressure by putting up shadow work and pensions secretary Liam Byrne. His opponent was not Iain Duncan Smith or a DWP minister but Tory work and pensions committee member Nigel Mills, who wriggled uncomfortably when asked why a tenant should be forced to move and cost the taxpayer more.

The government did at least field work and pensions minister Steve Webb on the Today programme this morning (listen from about 8.30). Its report quoted the case of 60 year old John who cares for his wife Diane, who has MS. ‘It looks like govt has it in for people who are disabled through no fault of their own,’ she said. ‘We’re not scroungers.’ They had two spare bedrooms but it sounded like one was taken up with a through-floor lift and Diane said John needs the other ‘for some respite from me’. Webb argued that discretionary housing payments were specifically intended for cases like theirs but it emerged that they had already been turned down by their local authority.

On the bedroom tax in general he said that it was not fair to pay for a million spare rooms while other tenants were overcrowded. However, questioned about the plight of separated fathers who have their kids to stay at weekends, he pointed out that over 100,000 of the people affected are in work. ‘They could, for example, work a bit more and simply pay the shortfall,’ he said. ‘We’re talking an average of £14-£15 a week, so three hours at the minimum wage would pay the shortfall then he can keep the spare bedroom and have someone to stay.’

If only things were so simple as working an extra shift or a bit of overtime. In fact, as Hilary Burkitt (again) points out, the rate at which people’s benefits are withdrawn as they earn more money makes it far harder to make up the shortfall than Webb made out. A divorced father who works full time and has his 10-year old son and 16-year-old daughter to stay at weekends in his three-bed home would actually have to work 76 hours a week – the equivalent of two full-time jobs – to escape the bedroom tax. 

That minister as knowledgeable as Steve Webb can get his own benefits system so completely wrong is a measure of how fast the policy is unravelling. The more that ministers are confronted with the effects of the bedroom tax on real people the harder it is to defend it and resist calls for extra concessions.

However, with just 53 days to go until tenants’ housing benefit is cut, is it unravelling fast enough?

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