Bedroom tax: Attacking the poor

In the relatively short time I’ve been reporting on the social housing sector- around four years- there has been one issue that has stood out above all others in its ability to get people wound up.

The bedroom tax - and yes I am calling it a tax, because the impact on those who have little choice but pay it is the same as that of a levy- has united the sector in anger.

Originally the technical discussions in the House of Lords about the introduction of the ‘social housing size criteria’, as the government then referred to it, attracted little media attention, beyond Inside Housing of course. But as the impact of the penalty became clear in the run up to its introduction last year the issue burst into the mainstream. The bedroom tax, along with house prices, is one of the few housing issues non-housing people mention when I tell them what I do for a living.

In this week’s magazine we have had a look at the impact of the penalty in its first year. Landlords largely appear to have avoided the arrears hit many predicted in their business plans in 2013/14. This could be partly because of the slower than expected roll out of universal credit, but it also suggests more tenants are covering the shortfall in their benefit resulting from the tax than expected. This suggests good news for landlords, but I’m not convinced it necessarily is.

The problem is we don’t know how tenants are covering the bedroom tax. They could be borrowing from loan sharks or going without meals, for instance. This was illustrated this week by the Real Life Reform report showing tenants are £52 per week more in debt than they they were in October. An average £14 per week tax, for people who by definition are the poorest in society, is going to have a serious impact. It could be the case the apocalyptic arrears predictions of many will come in subsequent years.  The policy is also failing to achieve the government’s stated aim of freeing up larger  homes. A survey by auditor BakerTilly shows as of January only 5 per cent of affected tenants had requested a move.

The bedroom tax is a straightforward attack on the incomes of the poorest in society, many of whom have no realistic option other than to try and pay. The policy should be scrapped as it risks undermining the government’s wider welfare reform agenda, which when it comes to universal credit and direct payment of benefit to tenants at least, has much to recommend it.