Monday, 23 September 2013

Bunk up or bunk off?

Cameron and Clegg’s bedroom tax is a classic example of a policy which, superficially, looks logical but, in practice, is pernicious.

Many councils and housing associations had schemes which encouraged and sensitively enabled people to move to smaller accommodation when they were ready to do so. But now the carrots have been thrown away and been replaced by a tax stick.

If the alleged justification for the bedroom tax is principled – ‘we shouldn’t be subsidising a spare room’ – you only have to ask why the policy doesn’t apply to pensioners to see that that line doesn’t stack up.

The government has been desperate to present an image of those being hit by the tax as single idlers rattling around in large houses. The truth is very different. 416,000 of the 660,000 households being hit have a resident with a disability, including more than 75,000 in Yorkshire and Humberside and the East Midlands.

The other argument for the bedroom tax is that it will free up accommodation for other families. Except that in most areas there simply isn’t smaller accommodation that can be offered. And now we’re healing squeals from Conservative MPs saying that rural areas should be exempt from the bedroom tax because there is little alternative accommodation – but that’s no less true in urban areas.

Where there is some accommodation, it is mostly in the private sector with higher rents than the property being vacated, which defeats the government’s objective of saving money. In fact, there is now a real risk that the bedroom tax will end up costing more than it saves. The National Audit Office says that the government has got its sums wrong.

The real cost of the bedroom tax is overwhelmingly going to be paid by households containing households with disabilities. On average, they will lose £720 a year. Most of the small minority who can move will have to shell out a small fortune in removal and re-settlement costs. But there’s a lot more pain than just the cost. The Chief Executive of the National Housing Federation has described the policy as “an unfair, ill-planned disaster that is hurting our poorest families.”

The best way of tackling the growing housing crisis is to build more affordable homes to buy and to let, not by penalising those households who have the least choice.