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Coffee House

Webb vs Byrne on the ‘bedroom tax’

28 January 2013

5:48 PM

28 January 2013

5:48 PM

One of the most frustrating things about being a policymaker must surely be when something that sounds so very sensible and straightforward in your ivory tower ends up being a bit messy in practice. Take the ‘bedroom tax’: it’s not actually a tax, but Labour enjoy calling anything they don’t like a ‘tax’ (odd, given their own penchant for taxation). This is a housing benefit cut for social tenants living in homes with more bedrooms than they need. It was announced in the 2010 emergency budget and comes into effect from April. Very sensible, you might think, especially when private tenants don’t get extra housing benefit for spare rooms. The policy is in theory a no-brainer.

The only spanner in the works is that by the department’s own estimates, there aren’t enough smaller homes for these 660,000 social tenants to downsize into once their housing benefit is cut to cover only the rooms they need. This is what the department’s impact assessment said:

‘According to estimates from DCLG there is a surplus of three bedroom properties, based on the profile of existing working age tenants in receipt of Housing Benefit, and a lack of one bedroom accommodation in the social sector. In many areas this mismatch could mean that there are insufficient properties to enable tenants to move to accommodation of an appropriate size even if tenants wished to move and landlords were able to facilitate this movement.’

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This leaves them in a bit of a pickle. It’s something Liam Byrne decided to pick up as his question for Steve Webb today at Work and Pensions Questions in the Commons, although he damaged a perfectly good question by warbling on about real taxes, saying ‘people in social housing will face a £14 a week extra bill when those on a million a year face a £2,000 a week tax cut’. Webb’s response was rather wittier than his normal offering (he also managed to tell a Labour MP during the same session that a claim she had made was ‘simply not necessarily the case!’). He told Byrne:

‘Quite why today’s millionaires would rather have our 45p rate than his 40p, or our 28% capital gains tax rather than his 18% is beyond me.’

Webb said households would respond to a range of ways to the cut by taking on a lodger or working a few more hours to cover the shortfall, with discretionary payments for those most in need. The things on this list might well be the magical solution, but the advent of the bedroom tax is starting to attract the attention of Tory MPs as problems appear in their postbag, too.

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