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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Calum Kerr on Governing the Digital Economy

With the publication of the UK Digital Strategy we’ve seen another instalment in the UK Government’s ongoing effort to emphasise its digital credentials.

As the SNP’s Digital Spokesperson, there are moves here that are clearly welcome, especially in the area of skills and a recognition of the need for large scale investment in fibre infrastructure.

But for a government that wants Britain to become the “leading country for people to use digital” it should be doing far more to lead on the field that underpins so much of a prosperous digital economy: personal data.

If you want a picture of how government should not approach personal data, just look at the Concentrix scandal.

Last year my constituency office, like countless others across the country, was inundated by cases from distressed Tax Credit claimants, who found their payments had been stopped for spurious reasons.

This scandal had its roots in the UK’s current patchwork approach to personal data. As a private contractor, Concentrix had bought data on a commercial basis and then used it to try and find undeclared partners living with claimants.

In one particularly absurd case, a woman who lived in housing provided by the Joseph Rowntree Foundation had to resort to using a foodbank during the appeals process in order to prove that she did not live with Joseph Rowntree: the Quaker philanthropist who died in 1925.

In total some 45,000 claimants were affected and 86 per cent of the resulting appeals saw the initial decision overturned.

This shows just how badly things can go wrong if the right regulatory regimes are not in place.

In part this problem is a structural one. Just as the corporate world has elevated IT to board level and is beginning to re-configure the interface between digital skills and the wider workforce, government needs to emulate practices that put technology and innovation right at the heart of the operation.

To fully leverage the benefits of tech in government and to get a world-class data regime in place, we need to establish a set of foundational values about data rights and citizenship.

Sitting on the committee of the Digital Economy Bill, I couldn’t help but notice how the elements relating to data sharing, including with private companies, were rushed through.

The lack of informed consent within the Bill will almost certainly have to be looked at again as the Government moves towards implementing the EU’s General Data Protection Regulation.

This is an example of why we need democratic oversight and an open conversation, starting from first principles, about how a citizen’s data can be accessed.

Personally, I’d like Scotland and the UK to follow the example of the Republic of Estonia, by placing transparency and the rights of the citizen at the heart of the matter, so that anyone can access the data the government holds on them with ease.

This contrasts with the mentality exposed by the Concentrix scandal: all too often people who come into contact with the state are treated as service users or customers, rather than as citizens.

This paternalistic approach needs to change.  As we begin to move towards the transformative implementation of the internet of things and 5G, trust will be paramount.

Once we have that foundation, we can start to grapple with some of the most pressing and fascinating questions that the information age presents.

We’ll need that trust if we want smart cities that make urban living sustainable using big data, if the potential of AI is to be truly tapped into and if the benefits of digital healthcare are really going to be maximised.

Clearly getting accepted ethical codes of practice in place is of immense significance, but there’s a whole lot more that government could be doing to be proactive in this space.

Last month Denmark appointed the world’s first Digital Ambassador and I think there is a compelling case for an independent Department of Technology working across all government departments.

This kind of levelling-up really needs to be seen as a necessity, because one thing that we can all agree on is that that we’ve only just scratched the surface when it comes to developing the link between government and the data driven digital economy. 

In January, Hewlett Packard Enterprise and the New Statesman convened a discussion on this topic with parliamentarians from each of the three main political parties and other experts.  This article is one of a series from three of the MPs who took part, with an  introduction from James Johns of HPE, Labour MP, Angela Eagle’s view and Conservative MP, Matt Warman’s view

Calum Kerr is SNP Westminster Spokesperson for Digital