Labour will soon pledge to scrap the bedroom tax, says Scottish welfare spokesman

Jackie Baillie says "you can expect an announcement relatively soon" as Lib Dem Shirley Williams brands the policy "a big mistake".

To date, while stating that it would not have introduced the bedroom tax and condemning its effect on the vulnerable, Labour has stopped short of pledging to repeal the measure if elected. But as I recently reported, it will almost certainly promise to do so before 2015.

The clearest signal yet that an announcement is likely in the near future came today from the party's Scottish welfare spokesman Jackie Baillie. Asked on the BBC's Good Morning Scotland programme whether "a Westminster Labour government abolish the bedroom tax?", she replied:

We are very clear. Labour rejected this approach when it was put to them in government, for social landlords. We have campaigned for its abolition.

Yes we will abolish it. My understanding is that you can expect an announcement relatively soon.

In his recent speech on social security, Liam Byrne described the policy, which reduces housing benefit by 14% for those deemed to have one "spare room" and by 25% for those with two or more, as "the worst possible combination of incompetence and cruelty". He noted that "96% of those hit have nowhere to move to" (which means higher arrears and homelessness) and that it was "costing the public an extra £102.5 million to implement", concluding: "It should be dropped, and dropped now." If Labour can demonstrate that the policy is likely to cost more than it saves, it will be hard for the coalition to object to its potential reversal.

At the Lib Dem conference on Monday afternoon, delegates will debate a motion (Making Housing Benefit Work for Tenants in Social Housing) calling for "an immediate evaluation of the impact of the policy, establishing the extent to which larger homes are freed up, money saved, costs of implementation, the impact on vulnerable tenants, and the impact on the private rented sector." The motion also calls for "a redrafting of clear housing needs guidelines in association with those representing vulnerable groups including the disabled, elderly and children."

Until new guidelines are in place, it argues that there should be no withdrawal of housing benefit from those on the waiting list for social housing which meets the current guidelines and that there should be an exemption for those who "temporarily have a smaller housing need due to a change in their circumstances, but whose need will predictably return to a higher level (e.g. whose children will pass the age limits for separate rooms within that period)".

While Nick Clegg and other Lib Dems ministers have defended the measure on the grounds that it encourages tenants to downsize, freeing up houses for those in overcrowded accomodation (the problem being the severe shortage of one bedroom properties), delegates are likely to back the motion, with a significant number calling for the immediate abolition of the policy. On the fringe, Shirley Williams has just been greeted with thunderous applause after describing it as "a big mistake".

Campaigners protest against the bedroom tax in Trafalgar Square before marching to Downing Street on 30 March 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.