Monday, 4 March 2013

The Bedroom Tax - Why Labour MP's oppose a pernicous policy

Joint article on the bedroom tax
March 2013

By Liam Byrne, Shadow Secretary of State for Work and Pensions, Margaret Curran, Shadow Secretary of State for Scotland, and Owen Smith Shadow Secretary of State for Wales, for Politics Home

The Bedroom Tax is in chaos. Yet Ministers bury their heads in the sand.

Imagine a government so incompetent that it designed a tax that hit soldiers but not prisoners; or a Department so useless it punished foster parents for the crime of giving a home to a child in need. Imagine ministers so out of touch they had to be told by others their plans hurt tens of thousands of pensioners - because they didn't know.

Welcome to today's Department for Work and Pensions. From the crack team that gave us a Work Programme that is officially worse than doing nothing, we now have a Bedroom Tax that we suspect may cost more than it saves.

Labour supports sensible welfare reform but the bedroom tax is crazy. Ministers claim they are trying to solve under-occupancy but David Cameron and Iain Duncan Smith have been forced to admit that it is impossible for their plans to work because there aren’t enough smaller homes for families to move to.

It is in black and white in their own impact assessment – they know this policy won’t work. So all the Bedroom Tax will achieve is making some of the poorest and most vulnerable people in society event poorer. Two thirds of these families, by the way, are home to someone with a disability and the National Housing Federation say 200,000 are receiving Disability Living Allowance.

From the Guardian to the Sun, everyone is warning the government that this policy is a mess, but Ministers are burying their heads in the sand.

In fact the department is in such a shambles that DWP press officers were forced to slap down their own Secretary of State after he told the six o’clock news he was looking at making changes. The whole thing is descending into farce.

The scheme is now so chaotic it could actually end up costing more than it saves in many parts of the country. If families are made homeless or pushed into expensive private rented accommodation the tax payer could actually be left with a higher bill – and still the problem of under occupancy will not be solved.

In Hull, for example, the City Council says that 4,700 tenants will be affected by the policy, but that it has only 73 one and two bedroom properties available to let. In Newport in South Wales there are 1,800 families set to be hit but the city’s housing options website lists just 24 one and two bed properties for rent.

In Scotland the situation is just as bad –100,000 Scots will be worse off when the bedroom tax comes into force. 40,000 are likely to face rent arrears. And thousands could end up homeless.

For families in Scotland there is no sign of any help - they are trapped between two Governments that have their priorities all wrong.  While the UK Government cuts, the Scottish Government seems content to promise change tomorrow, but nothing for people who need help today. The SNP has done nothing for those at risk and they haven’t even provided local authorities with any advice about how to handle the cuts.

The Welsh Labour Government, in contrast, has conducted a through analysis of the impact of the policy on Wales and is focussing its efforts on advice and financial inclusion, but it’s facing an uphill battle as the Welsh will be hit harder than any other part of the UK. 40,000 households are facing the bedroom tax - nearly half of all working age social tenants who get help paying their rent because of their low income. In Torfaen it could actually cost the tax payer £25 a week more to move residents into the smaller private properties available. No wonder the Chief Executive of the housing association in Torfaen labelled the Bedroom Tax a ‘hurricane’ - yet still there’s no evidence that the invisible Secretary of State for Wales has lifted a finger. Once again Wales is being let down by a cheerleader for chaotic government policies when what we need is a strong voice in the Cabinet standing up Wales.  

Neither the Scottish nor Welsh Secretary can run away from this. The bedroom tax will come into force in a matter of weeks and both must face up to the impact it’s going to have on their communities.

The tragedy is this government’s plans won’t even succeed on their own terms. Everyone agrees the welfare bill needs to come down, but this government is now expected to spend £13bn more than planned because of they are totally failing to get Britain moving again.

The best way to bring down the benefits bill is to get people into jobs. That’s why Labour is calling for a tough but fair compulsory jobs guarantee. We would offer anyone who has been out of work for more than two years a real job – one that they would be required to take, no ifs and no buts.

Britain needs real welfare reform that is tough, fair and that works, not more chaos and confusion from this government.

The Bedroom Tax is now in total disarray. Ministers must now admit they have got this horribly wrong and think again – before it’s too late.