Campaigners protest against the bedroom tax in Trafalgar Square before marching to Downing Street on 30 March 2013. Photograph: Getty Images.
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Bedroom tax survey poses headaches for the Tories and Labour

Just 6% of tenants affected have moved but the measure is saving money.

When the government introduced the bedroom tax a year ago, it justified the policy on the basis that it would encourage families to downsize to more "appropriately sized" accommodation. Critics responded by warning of the lack of one bedroom houses available. In England, for instance, there are 180,000 social tenants "under-occupying" two bedroom houses but just 85,000 one bedroom properties available. Unable to move, poor and vulnerable tenants would simply be hit by yet another welfare cut (housing benefit is reduced by 14 per cent for those deemed to have one "spare room" and by 25 per cent for those with two or more). 

New research out today from the BBC vindicates these warnings. In the first year of the policy, just six per cent of social housing tenants affected have moved house, while 28 per cent have fallen into rent arrears for the first time. But while failing to achieve the behavioural change they wanted, ministers claim that the measure is saving £1m a day. As Prof Rebecca Tunstall, director of the centre for housing policy at the University of York, notes: "There were two major aims to this policy - one was to encourage people to move, and the other was to save money for the government in housing benefit payments. But those two aims are mutually exclusive. The government has achieved one to a greater extent and the other to a lesser extent."

While the policy is also costing money, by increasing homelessness and pushing some tenants into the private sector, where rents are higher (inflating the housing benefit bill), it seems likely that there is a net saving. For Labour, which has pledged to abolish the measure if it comes to power, this is a headache. It was the likelihood that the change would cost money (up to £465m) to introduce that meant some shadow cabinet ministers, such as Ed Balls (who is focused on ensuring fiscal discipline), were sceptical of the commitment. In the end, while noting that the bedroom tax could end up costing more than it saves (and it still may), Labour promised to fund its abolition by reversing the £150m tax cut for hedge funds announced in the 2013 Budget, abolishing George Osborne's "shares for rights" scheme, which businesses have been using to avoid capital gains tax (shares sold at a profit are exempt) and which the OBR has forecast could cost up to £1bn, and preventing construction firms avoiding tax by falsely listing workers as self-employed. 

But as coalition ministers have repeatedly pointed out this week, Osborne's new cap on welfare spending, which includes the bedroom tax, means that Labour will have to decide which benefits it would cut in order to remain within the £119bn limit. At present, the only welfare cut planned by Labour is the removal of Winter Fuel Payments from the wealthiest 5 per cent of pensioners, a change that would raise just £100m a year. While the party rightly argues that the measures it plans to increase housebuilding and to expand use of the living wage will reduce the benefits bill (by increasing tax revenue and reducing welfare payments) these savings will not be achieved immediately. Until Labour can say how it would scrap the bedroom tax without breaching the welfare cap, it faces exactly the kind of "black hole" that Balls is desperate to avoid. 

George Eaton is political editor of the New Statesman.

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Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle