Why Labour will consign the Bedroom Tax to the dustbin of history

For the vast majority of those affected, there is nowhere smaller to move to, leaving vulnerable people hit with extra costs through no fault of their own.

We Britons are proud of our national characteristics. Others might see them as foibles but we see them as qualities – doughtiness, support of the underdog, keeping a cool head in sticky situations. But our greatest quality is a sense of fair play. That’s the reason why the British people get so angry about the Bedroom Tax.

The Bedroom Tax is cruel and unfair. For those in social housing whom the government thinks have an extra room, it means paying up or moving house. But for the vast majority of those affected, there is nowhere smaller to move to, leaving vulnerable people hit with extra costs through no fault of their own. In my city of Edinburgh, vacant one bedroom flats are attracting over 200 applications each week.  The average family will lose £720 a year.

Families are facing a cost of living crisis. They’ve seen prices raise faster than wages for the last three years. They are on average £1,500 worse off under this government than under the last Labour government. This is something David Cameron and his out of touch ministers just can’t get their heads around. Even worse the Bedroom Tax hits over 400,000 disabled people hard. It's not just Labour politicians or campaigners who don’t like it, housing experts across the board condemn it. The Chief Executive of the National Housing Federation has described the policy as "an unfair, ill-planned disaster that is hurting our poorest families."

So it hurts people, but surely you’d think, at least it will bring in some extra revenue to the Treasury and help bring down this government’s borrowing? Well, you’d be wrong. It’s becoming more and more apparent that the Bedroom Tax could cost more money than it saves. The National Housing Federation have said the savings claimed by the government are "highly questionable", partly because those forced to move to the private rented sector will end up costing more in Housing Benefit. Housing Associations say that tens of millions are likely to be lost through the build up of arrears. And the National Audit Office have said that the government’s costing does not take account of the full scale of potential impacts and does not include the additional costs faced by local authorities.

Ed Miliband is crystal clear. The next Labour government will repeal the unfair and cruel Bedroom Tax. So how can this be funded? We need to do this by following our principles – a One Nation approach. David Cameron has cut tax for those who earn over £150,000 a year while raising it for everyone else. A classic example of him standing up for the wrong people.

We’ve been clear that we can’t borrow more to pay for social security changes. And we’ll take tough choices where necessary, including cutting Winter Fuel Payments for the wealthiest pensioners, and not reversing the cuts to child benefit for those on the highest incomes. But we’ll fund this change by getting rid of George Osborne’s tax loopholes, including the extraordinary tax cut for hedge funds announced in the 2013 Budget. We will also reverse his shares for rights schemem, which has been rejected by businesses and has, according to the Office for Budget Responsibility, opened up a tax loophole of up to £1bn. And we’ll tackle tax scams in the construction industry. These changes will fully fund the cost of repealing the Bedroom Tax.

This is about taking a One Nation approach to deliver and run an economy that works in the interests of all the people, not just a narrow minority.
The Bedroom Tax is cruel, unjust, uneconomical and offends our sense of natural justice. The next Labour government will consign it to the dustbin of history.

Sheila Gilmore is Labour MP for Edinburgh East

Demonstrators hold placards as they gather to protest against the bedroom tax outside the High Court. Photograph: Getty Images.

Sheila Gilmore is Labour MP for Edinburgh East

Photo: Getty
Show Hide image

Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

0800 7318496