PMQs review: Cameron falls into Labour's "bedroom tax" trap

By repeatedly insisting that the "bedroom tax" was not a tax, the Prime Minister gave the phrase new life.

One of Ed Miliband's boldest decisions since becoming Labour leader has been to target the coalition's welfare cuts and today's PMQs saw an all-out assault on the "bedroom tax". For those unfamiliar with the term, it refers to the government's plan to cut housing benefit for those deemed to have more living space than they need, such as a spare bedroom. Social housing tenants with one extra room will lose 14 per cent of their benefit, while those with two or more will lose 25 per cent.  

The government argues that this is another necessary measure to reduce the ballooning housing benefit bill (which is largely due to extortionate rents and substandard wages) but Miliband highlighted the case of a mother with two sons in the army who would lose out while they were away "serving their country". He went on to warn that two-thirds of those affected are disabled (many of whom require an extra room due to their disability) and that it would encourage social housing tenants, "the most vulnerable", to move to the more expensive private sector, wiping out any savings from the policy as the housing benefit bill rises. Miliband also smartly contrasted the Tories' "bedroom tax" with their opposition to a "mansion tax", brandishing a letter from the party to Conservative donors asking them to contribute to a fighting fund against a "homes tax". 

Cameron gave little ground in response, pointing out that there was a £50m fund to deal with "difficullt cases" and bluntly asking why it was fair for social housing tenants to receive money for an extra room when private tenants did not. For a self-described "compassionate Conservative", it was a rather compassionless reply. As Cameron's answers became increasingly ill-tempered, Miliband deftly weaved in a reference to last night's vote on equal marriage: "He shouldn't get so het up. After all, he's got almost half his parliamentary party behind him." Unsurprisingly, the line went down well with both sides of the House. 

The PM's best moment came when he remarked of Miliband: "we know all the things he's against, we are beginning to wonder what on earth he's for?" If Labour is opposed to the "bedroom tax", the "strivers' tax", the "granny tax", the "toddler tax", how would it reduce public spending? Would it introduce a "mansion tax"? Miliband gave the stock reply that "the clue's in the title - Prime Minister's Questions - he's supposed to try and answer them". But this riposte, while acceptable in 2010, is less impressive halfway through the parliament, with Labour MPs increasingly troubled by the perceived lack of policy detail from their leader.

After Miliband had used up his six questions, Labour MPs continued to challenge Cameron over the "bedroom tax" in a well coordinated assault. An increasingly exasperated Cameron repeated that the "bedroom tax" was not a tax but, in doing so, he unwittingly repeated Labour's attack line. Whether the PM likes it or not, when voters hear him refer to the "bedroom tax" that is what they will call it. Across the floor, Miliband and Ed Balls smiled contentedly in response. Their work for the day was done. 

David Cameron leaves 10 Downing Street in London, on February 06, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Debunking Boris Johnson's claim that energy bills will be lower if we leave the EU

Why the Brexiteers' energy policy is less power to the people and more electric shock.

Boris Johnson and Michael Gove have promised that they will end VAT on domestic energy bills if the country votes to leave in the EU referendum. This would save Britain £2bn, or "over £60" per household, they claimed in The Sun this morning.

They are right that this is not something that could be done without leaving the Union. But is such a promise responsible? Might Brexit in fact cost us much more in increased energy bills than an end to VAT could ever hope to save? Quite probably.

Let’s do the maths...

In 2014, the latest year for which figures are available, the UK imported 46 per cent of our total energy supply. Over 20 other countries helped us keep our lights on, from Russian coal to Norwegian gas. And according to Energy Secretary Amber Rudd, this trend is only set to continue (regardless of the potential for domestic fracking), thanks to our declining reserves of North Sea gas and oil.


Click to enlarge.

The reliance on imports makes the UK highly vulnerable to fluctuations in the value of the pound: the lower its value, the more we have to pay for anything we import. This is a situation that could spell disaster in the case of a Brexit, with the Treasury estimating that a vote to leave could cause the pound to fall by 12 per cent.

So what does this mean for our energy bills? According to December’s figures from the Office of National Statistics, the average UK household spends £25.80 a week on gas, electricity and other fuels, which adds up to £35.7bn a year across the UK. And if roughly 45 per cent (£16.4bn) of that amount is based on imports, then a devaluation of the pound could cause their cost to rise 12 per cent – to £18.4bn.

This would represent a 5.6 per cent increase in our total spending on domestic energy, bringing the annual cost up to £37.7bn, and resulting in a £75 a year rise per average household. That’s £11 more than the Brexiteers have promised removing VAT would reduce bills by. 

This is a rough estimate – and adjustments would have to be made to account for the varying exchange rates of the countries we trade with, as well as the proportion of the energy imports that are allocated to domestic use – but it makes a start at holding Johnson and Gove’s latest figures to account.

Here are five other ways in which leaving the EU could risk soaring energy prices:

We would have less control over EU energy policy

A new report from Chatham House argues that the deeply integrated nature of the UK’s energy system means that we couldn’t simply switch-off the  relationship with the EU. “It would be neither possible nor desirable to ‘unplug’ the UK from Europe’s energy networks,” they argue. “A degree of continued adherence to EU market, environmental and governance rules would be inevitable.”

Exclusion from Europe’s Internal Energy Market could have a long-term negative impact

Secretary of State for Energy and Climate Change Amber Rudd said that a Brexit was likely to produce an “electric shock” for UK energy customers – with costs spiralling upwards “by at least half a billion pounds a year”. This claim was based on Vivid Economic’s report for the National Grid, which warned that if Britain was excluded from the IEM, the potential impact “could be up to £500m per year by the early 2020s”.

Brexit could make our energy supply less secure

Rudd has also stressed  the risks to energy security that a vote to Leave could entail. In a speech made last Thursday, she pointed her finger particularly in the direction of Vladamir Putin and his ability to bloc gas supplies to the UK: “As a bloc of 500 million people we have the power to force Putin’s hand. We can coordinate our response to a crisis.”

It could also choke investment into British energy infrastructure

£45bn was invested in Britain’s energy system from elsewhere in the EU in 2014. But the German industrial conglomerate Siemens, who makes hundreds of the turbines used the UK’s offshore windfarms, has warned that Brexit “could make the UK a less attractive place to do business”.

Petrol costs would also rise

The AA has warned that leaving the EU could cause petrol prices to rise by as much 19p a litre. That’s an extra £10 every time you fill up the family car. More cautious estimates, such as that from the RAC, still see pump prices rising by £2 per tank.

The EU is an invaluable ally in the fight against Climate Change

At a speech at a solar farm in Lincolnshire last Friday, Jeremy Corbyn argued that the need for co-orinated energy policy is now greater than ever “Climate change is one of the greatest fights of our generation and, at a time when the Government has scrapped funding for green projects, it is vital that we remain in the EU so we can keep accessing valuable funding streams to protect our environment.”

Corbyn’s statement builds upon those made by Green Party MEP, Keith Taylor, whose consultations with research groups have stressed the importance of maintaining the EU’s energy efficiency directive: “Outside the EU, the government’s zeal for deregulation will put a kibosh on the progress made on energy efficiency in Britain.”

India Bourke is the New Statesman's editorial assistant.