Why has the Bedroom Tax been such a disaster?

1st April, 2014 1:00 pm

Exactly a year ago David Cameron and Iain Duncan Smith proudly brought in a policy they called the ‘under-occupancy charge’ and everyone else called the Bedroom Tax. They promised it would be  ‘fair for everyone’. But, 12 months down the line, it’s clear to everyone outside Number 10 and the Department for Work and Pensions that this tax on bedrooms has been a complete disaster.

Charities, councillors and housing associations have opposed it. Last year Danny Alexander’s father criticised the policy. And last month even Norman Tebbit joined critics of the Bedroom Tax, saying ‘we introduced that rather without thinking it through very well, and I think that’s costing us.’
Why has the Bedroom Tax been such a disaster? Because it failed the hardship test, it failed fairness test and it failed the cost test.

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The Bedroom Tax has increased, not reduced, levels of hardship. Low-income households have been forced to find, on average, an extra £720 a year because of the Bedroom Tax. That has plunged thousands into debt and thousands more have been forced to rely on food banks to survive. If Iain Duncan Smith listened to the compelling evidence from charities like the Trussell Trust he would begin to understand the damage that the Bedroom Tax is doing. Thousands of vulnerable people have fallen deeper into poverty. Yet the Secretary of State has repeatedly refused to meet food bank charities, sticking his fingers in his ears to avoid hearing the evidence that Bedroom Tax is increasing, not reducing, hardship.

The Bedroom Tax is surely among the most unfair policies imposed on the country by David Cameron’s government. Half a million people have been hit by IT. The government’s own figures showed that two thirds of those affected are disabled. Many require space deemed by Ministers to be ‘spare rooms’ to store vital medical equipment. These are people like Tony from Manchester who I met in February. HE suffers from kidney disease, which means that he has to rely on a dialysis machine to keep him alive. But Tony’s medical condition means he falls foul of the Bedroom Tax. And he’s not alone. Across the country there are thousands of people who’ve been hit by the Bedroom Tax because they suffer from a serious condition which requires space for essential medical equipment, or a room for a carer to sleep in.

For months now, Ministers have boasted that the Bedroom Tax would reduce costs. Yet last week Tory minister Esther McVey admitted that the Bedroom Tax ‘was never all about saving money’. In fact, the policy threatens to cost taxpayers more than it saves, Despite pledges from ministers that the Bedroom Tax would enable them to get a grip on the benefits bill, we learned in the Budget that Housing Benefit bills are in fact set to rise by £1billion more than was planned in December, over the next five years. Because of bungling by ministers, the Bedroom Tax may see lead millions more of taxpayers’ money wasted because of a loophole they allowed in the legislation. The loophole has led to more than 20,000 people being wrongly charged the Bedroom Tax over the last year. This huge blunder by Iain Duncan Smith’s team has caused real distress to those wrongly charged the tax. It threatens to cost millions of pounds of taxpayers money to fix – cash which would be far better spent building new homes or getting people back to work. What a costly shambles.

It’s time to put an end to this costly and unfair levy which is leading to greater levels of hardship. Britain can’t afford another year of David Cameron and Nick Clegg’s tax on bedrooms. If they won’t listen to the country and scrap their hated Bedroom Tax, then a Labour government will.

Click here to help us scrap the Bedroom Tax

Rachel Reeves is the Shadow Secretary of State for Work and Pensions

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  • treborc1

    We had Flint saying that labour needed council houses for Police officer, nurses, and important people like some immigrants nurses, so labour felt that maybe people who had council; houses and did not work should be actually kicked out. Of course nurses teachers and police officers would not live in the council houses around me.

    Now you have the Tories basically looking at getting people out of houses so they can rehouse people who have kids which is great no problem at all, what you need to do first is build the flats and the bungalows first, but like most politician they think of something and then act then find it’s gone turtle up, but cannot then lose face .

    The bed room tax is affecting people who need help but it’s better to place these people into debt so they cannot then get social housing and then are on the streets.

    But labour have said they also need to find a cure for these houses so what would you do, you have said you need to cut the cost of housing welfare, a lot of it is in the private sector mind you after labour only built 3000 council houses in three terms open the doors to Millions of people without even bothering with the infrastructure.

    So what your cure for this.

  • charles.ward

    “The government’s own figures showed that two thirds of those affected are disabled.”

    The definition of disabled used in these figures is pretty broad, it includes people with dyslexia and OCD sufferers for example. I’m not belittling these complaints but not everyone who is “disabled” buy this definition is like Tony and needs a spare bedroom.

    • treborc1

      Well I know of nobody who is dyslexic getting a home or a house and it’s only of late it was said to be an actual learning issue. For example Dyslexia suffers are unable to take party in any disability sports or games as they are deemed to be able to work or take party in normal sports. I know of nobody who has gotten a house through dyslexia so really what a daft thing to state but not unexpected from you.

      • charles.ward

        “Well I know of nobody who is dyslexic getting a home or a house …”

        I never said they did. But, as I understand it, dyslexia is a disability as defined by the Disabilities Discrimination Act which is the criterion for defining disability used to get the figure of two thirds. I believe a person with a stammer would also count as disabled by this definition.

  • Monkey_Bach

    Funnily enough I recently heard Stephen Timms, Shadow Minister of State for Employment and one of Ms Reeves foremost assistants, state that he approved of the Bedroom Tax when charged to social tenants who had been offered smaller alternative accommodation and refused, for whatever reason, to move some smaller new address that the social landlord nominated. This confused me. I don’t know now if when Labour says the Bedroom Tax will go if Labour wins a majority and forms the next government or whether it will be given a retread, rebranded, and altered a tad so that it only hits social tenants who refused to downsize when their social landlord ordered it. In fairness it should be noted that Timms has spent a lot of time chewing the fat with murky private organisations like UNUM and so it’s difficult to tell what elements of Labour’s social policy are original to the party itself or bought in ready made from private sources with commercial interests in these sectors.

    Eeek.

  • Blank Reg

    As a trained economist, Reeves should know perfectly well that this is not a tax. She is lying on a really basic level here.

    • Monkey_Bach

      Technically a tax is: “A fee charged (“levied”) by a government on a product, income, or activity.” People hit by the Bedroom Tax can continue under-occupying to their heart’s content, for as long as they wish, if they pay any shortfall in rent levied because they have one or more spare bedrooms from personal monies available, e.g., wages or benefits. Which sounds pretty much like a tax on spare bedrooms levied against the poorest social tenants as far as I can see.

      Whatever nomenclature used the policy is cruel, ugly and unjust.

      Calling it a “subsidy” rather than a “tax” won’t change that.

      Eeek.

    • DaveAboard

      So why do the Tories and LibDems insist on calling the removal of the Council Tax Single Person Discount “Bridget Jones Tax”.?

    • MonkeyBot5000

      You say “trained economist” as if that’s some kind of respected qualification.

  • Theoderic Braun

    The President of the Liberal Democrats is on the brink of trying to distance his party from the Bedroom Tax; too late to prevent his party from being tarnished indelibly in my opinion.

    http://www.theguardian.com/politics/2014/apr/02/lib-dem-president-withdraw-party-support-bedroom-tax

    What do they say about bolting stable doors after the horse has bolted?

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