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12 November 2013

Why all MPs should vote against the indefensible bedroom tax

The punitive penalty presents appalling dilemmas for vulnerable families. Ministers should finally accept that they have lost the argument.

By Rachel Reeves

Today Labour is calling time on David Cameron’s hated Bedroom Tax with a vote in parliament for its immediate repeal. The tenuous case for the policy now lies in tatters, with mounting evidence that it is not only flagrantly unfair but also counterproductive as a way of controlling benefit costs.

The 660,000 families affected include 400,000 disabled people and 375,000 children. Through no fault of their own, some of Britain’s hardest-pressed low-income households are expected to find, on average, an extra £720 a year – or face losing their home.

This punitive penalty presents appalling dilemmas for vulnerable families already struggling to survive at the sharp end of David Cameron’s cost-of-living crisis. The loss of income is equivalent to losing all child benefit paid for a second or subsequent child – or more than the average cost of a daily school meal. The result has been more people resorting to Food Banks, according to the Trussell Trust, as well as expanding opportunities for payday lenders.

Surveys suggest that as many as half of those affected are already behind with their rent – the mounting arrears further destabilising the precarious finances of local housing providers. And the costs of evicting those who can’t pay, and dealing with the resulting homelessness, could be astronomical.

Many of those who do move are ending up in smaller but more expensive properties in the private sector – which means the housing benefit bill footed by the taxpayer is higher, not lower. Analysis by York University’s Centre for Housing Policy suggests the government has underestimated the costs by £160m a year.

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Meanwhile, because overcrowding and “under-occupation” do not neatly match up within areas, the affordable social homes deemed too large for them are often left empty or even marked for demolition. All this at a time when housebuilding is at its lowest level since the 1920s.

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The chair of the Lochaber Housing Association, a Mr Di Alexander, put the point perfectly when he said the Bedroom Tax is “particularly unfair in that it penalises both our tenants and ourselves for not being able to magic up a supply of smaller properties, particularly those with only one bedroom, when we have been funded by the Government since our inception to build nothing smaller than two-bedroom flats and houses.” It’s just a shame that his son, the Liberal Democrat Chief Secretary to the Treasury, doesn’t seem to understand.

Meanwhile, DWP ministers have tied themselves in knots trying to defend the indefensible. Lord Freud has said that if “substantial” numbers were expected to move into the private sector “we would not be implementing this change”, but has also conceded that that “over the past decade, the social rented sector has built virtually no single bedrooms”.

Esther McVey has suggested that three-bedroom properties should be “modified into one and two-bedroom houses”– leaving some to wonder if those affected by the Bedroom Tax should be getting out their sledgehammers to avoid paying it.

Today, MPs on all sides of the House have an opportunity to dissociate themselves from this dog’s breakfast of a policy. We have identified funds that could be used to cover any costs of reversing it today, by reversing tax cuts which will benefit the wealthiest and promote avoidance, and addressing the tax loss from disguised employment in construction. And if this incompetent and out-of-touch government won’t accept it has lost the argument and repeal this ineffective and iniquitous measure today, the British people will soon have an opportunity to elect a Labour government that will.

Rachel Reeves is shadow work and pensions secretary