Wednesday, 3 April 2013

What connects the "bedroom tax", "tax cuts for millionaires" and student loans?

The link between the last two will be known to most students of UK politics: they are Thatcher/Major ideas which were accepted by Labour in government for twelve years, then used as a stick to beat the coalition with.

But the bedroom tax/spare room subsidy abolition? Surely that is a ConDem idea? Well, only in relation to social housing (council and housing association tenancies). It's actually been in force nationally for private lessees since April 2008 and in pilot areas for several years before that. Labour introduced the concept of the Local Housing Allowance with the aim of pushing people who received housing benefit into the cheapest available accommodation. Hector the government inspector would decide how many rooms a private tenant needed.

It looks as if Labour was intending to extend LHA to social tenancies eventually. Consider the following interchange in the House of Commons in 2004 (LHA had been tried out for a couple of years in "Pathfinder" authorities):

Mr. Clifton-Brown: To ask the Secretary of State for Work and Pensions for what reasons the local housing allowance applies only to the de-regulated private sector. [R] [146691]
Malcolm Wicks: We hope to implement a flat rate housing benefit system in the social sector, similar to that anticipated in the private rented sector to enable people in that sector to benefit from the choice and flexibility that the reforms can provide. We aim to extend our reforms to the social rented sector as soon as rent restructuring and increased choice have created an improved market.
Mr. Clifton-Brown: To ask the Secretary of State for Work and Pensions (1) how the rent of those tenants whose rent is higher than the local housing allowance will be paid; [R] [146692]
    (2) whether there will be a hardship payment to prevent the eviction of those tenants whose rent is higher than the new local housing allowance. [R] [146693]
Malcolm Wicks: Tenants whose rent is higher than their local housing allowance will be expected to make good the difference with their landlord. This is no different to what happens under existing rules. During the Pathfinder stage, no claimant will be worse off financially at the point of change as they will be covered by a form of transitional protection.
There will not be a hardship payment to tenants whose rent is higher than their local housing allowance. Tenants will have the choice to shop around and look for a cheaper property in such circumstances.

So the coalition is levelling the playing-field, as it were. Labour were as prepared to price private tenants out of too-large accommodation as they accuse the government of being in respect of council tenants.

Would Labour repeal the new arrangements? Some back-benchers seem keen, but the official spokespeople have been equivocal. Both should address the situation of private tenants.

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