Why has the Bedroom Tax been such a disaster?

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.

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