Earlier this week, I participated in an exchange of emails with Tory MP Stephen Mosley. We were responding to the question ‘Is the so-called ‘bedroom tax’ a fair way to tackle under-occupancy and rising welfare spending?’ Our exchange was initially published in the House Magazine, but I have re-produced it in full below.
FROM: STEPHEN MOSLEY; SENT: 10 MARCH 2014 19:02
Labour was once a party who claimed to believe in fairness, but their opposition to removing the Spare Room Subsidy shows that this is no longer the case.
It is only fair that Housing Benefit should be based on someone’s housing need. If you need a larger house you should receive more Housing Benefit than if you need a smaller house. But the Spare Room Subsidy meant that the larger your house, the more money you got, irrespective of whether you needed that larger house or not!
A system that simply pays out more for a larger house, irrespective of need, is simply unfair. It is unfair for those people who are forced to live in overcrowded conditions because they can’t afford to live in a larger house or because there are no larger houses available. And it is also unfair on the taxpayers who pay for our welfare system.
People should have a choice in housing and if they want to live in a house larger than they need then I have no objection to them paying a little extra towards a larger house.
The Labour Party used to think so too, which is why they introduced the Local Housing Allowance in 2008 making Housing Benefit fair for private sector tenants. If the Local Housing Allowance is fair for taxpayers and tenants in the private housing sector, why is scrapping the Spare Room Subsidy unfair in the social housing sector?
FROM: SHEILA GILMORE; SENT: 12 MARCH 2014 11:03
The ‘bedroom tax’ combines casual callousness about individuals and crass ineffectiveness as a savings mechanism. There is a fundamental incoherence at the heart of this policy. In the Government’s budgets a saving is included which assumes that those affected remain in their homes and ‘pay the tax’. How that fits with the justification that the aim is to achieve better use of council and housing association properties is not clear. If everyone could ‘reshuffle’ into the ‘right’ size of house the saving would disappear.
Strangely your argument about the Local Housing Allowance was never mentioned when the Bill was being debated, and it is a last minute attempt to defend the indefensible. The Bedroom Tax applies to tenants in their existing homes who have their income reduced regardless of whether there is anywhere else to move to. Like my constituent made redundant a year ago at age 59 who has suddenly to find £12 per week from her £ 71pw Job Seeker’s Allowance.
In contrast when LHA started in 2008 it applied to new claims and to existing claimants only if they moved. Before 2008 individual rents were checked for eligibility for benefit, which took size of property into account. The main change in 2008 to a standard area payment for each size of property was quite different in its impact on claimants.
FROM: STEPHEN MOSLEY; SENT: 12 MARCH 2014 14:13
Thank you for your reply, although I must say it was a typical politicians’ response – not answering the question!
We can all draw on the cases of constituents. Before the removal of the Spare Room Subsidy I frequently heard from families living in overcrowded conditions who were desperate to find suitable larger accommodation. With the increased availability of larger houses, this is now becoming much less of a problem.
You raise concerns about your own constituent; however she does have a choice. She is not being forced to live in a house larger than she needs. She can choose to spend her money on a larger house, or save money and downsize. This is the reality for everyone in the private sector, and this should be the reality for those in social housing too. We are ensuring that there is a level playing field and that fairness is restored to our welfare state.
For those who do want to downsize we have launched Home Swapper Direct, to make the process of downsizing (or upsizing!) easier than ever before.
However, it is important to remember that this is not a blanket measure. There are exemptions, as is the case with Labour’s Local Housing Allowance. Disabled people, who require an extra bedroom for medical equipment or their conditions are either exempt or can claim Discretionary Housing Payments. Pensioners, who may have lived in the same house for their entire lives, are also exempt. This seems to be a fair and balanced implementation.
It is also interesting to note that you call the removal of the spare room subsidy a ‘bedroom tax’. We all know that this is misleading. Removing the Spare Room Subsidy simply makes Housing Benefit based upon need rather than the size of your house. Fair for tenants, taxpayers and people on Housing Lists too.
FROM: SHEILA GILMORE; SENT: 14 MARCH 2014 08:46
My constituent (one of 3500 in the city) doesn’t have a real choice. This week only 20 one bedroomed properties were advertised for let across all the city’s council and housing association properties. Of these 5 were in sheltered housing. The number is falling, between 25 and 30 last year, and now most weeks being below 25. Turnover is greater in the private rented sector. But if my constituents swap their two bed council flats for one bed private lets the cost to housing benefit would be £115.37 per week instead of £92.97.
Landlords try to help with exchanges, but getting a suitable match is difficult. Most one bed properties are already occupied by single people.
Seventy per cent of homeless applicants are single or childless couples. Last year that was 3051households, also chasing one bedroom properties. Even if all the ‘ones’ go to ‘downsizers’ it will take years to move them and that leaves the homeless applicants in much more expensive private lets or even more expensive temporary accommodation for longer. In the meantime the ‘underoccupiers’ are still having to pay the ‘tax’. Not much of a choice for someone on £71pw!
Other areas face different pressures. The policy wasn’t researched or modelled. Spare rooms in Newcastle won’t help overcrowded families with jobs in London. There is little evidence that this is easing overcrowding.
Among the disabled only those with a disabled child unable to share a bedroom or with a non resident overnight carer are exempt. Others can apply for DHPs but not all get it, especially where Disability Living Allowance is seen as income from which payment can be made. Then there is the need to keep reapplying and the uncertainty that brings. Your Government won’t even exempt all those with homes adapted to their needs or severe conditions!
FROM STEPHEN MOSLEY; SENT: 14 MARCH 2014 17:13
In previous emails I have outlined how removing the Spare Room Subsidy is fair for people living in overcrowded conditions and I have shown how it is fair on the taxpayer, remodelling the welfare system so it costs less and is directed at those in need.
Every step of the way, this policy has confounded Labour’s expectations. Let’s not forget what the opposition said about this policy. They said it would lead to an increase in rent arrears, when rent arrears have fallen over the past year.
They claimed it would lead to an increase in social problems, when a greater focus on early intervention has helped tackle social problems more effectively.
And they claimed that there simply wouldn’t be the homes for people to live in. But we now know that housing providers have started to build more one and two bedroom properties.
When this Government came in to office, the housing benefit bill had ballooned while it was serving the interests of fewer families. If we were going to fill the monstrous financial black hole left behind by the last Labour Government and deliver a welfare system that worked for people, that had to change.
Because of this Government’s actions and in spite of scaremongering by the opposition, things have changed. Our welfare bill is falling and thousands of people who were once living in overcrowded homes now have a home that fits their needs.
I will leave the last word to Beveridge, who wrote “In establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and family.” Removing the Spare Room Subsidy is a step on the way to realising Beveridge’s vision.
FROM SHEILA GILMORE; SENT: 16 MARCH 2014 22:37
The National Housing Federation research on the experience of housing associations shows that, although arrears fell in the first three months of 2013, in the six months from April 2013 there was an 11% increase. Only 6% of tenants downsized by transfer or exchange. In six Scottish councils covering half of affected Scottish tenants, at 31st March 37% of affected tenants had arrears, but by 30th September this was 68%.
This is an inefficient way of ‘saving’ public spending. As well as the cost of DHPs , councils are bearing the expense of administering so many claims. On average housing associations each spent £73,250 on additional advice and help in the year to April 2013 and expect to spend £109,000 each this year.
I agree that the total housing benefit bill is too high, but, sorry Stephen, the ‘bill’ isn’t reducing. The DWP’s original forecast was for a cut in real terms from £24.4bn in 2012/13 to £21.6bn by 2014/15. Now revised projections are showing £24.3bn for 2014/15 and £26bn by 2018/19.
Much of the increased cost is in the private rented sector, where the gainers are landlords not tenants. We need a real shift to building substantial numbers of new homes at affordable rents (not the 80% of market rents your Government is insisting on, another recipe for rising benefit bills).
The irony is that despite real financial loss and upset caused to many (like my constituent faced with less money every week while trying to find somewhere else, as well as leaving the home she and her late husband invested in, or the woman who has just got a wheelchair accessible home after waiting four years in a second floor flat), the savings claimed aren’t happening.
I stick by my original description – a policy both harsh and pointless.