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Bedroom tax will be costly disaster, says housing chief

999 replies

vivizone · 31/03/2013 06:51

I don't understand how they can implement it. When a council tenant signs the tenancy agreement, if bedroom tax is not mentioned, is it not illegal to implement it at a later date?

I don't see how it is enforceable. Let's say a tenant refuses to pay/can't pay. They then get evicted - wouldn't the council still be obliged to house them after eviction, especially if they have children?

The whole thing is a mess. Why so many changes all at the same time?!

www.guardian.co.uk/society/2013/mar/30/bedroom-tax-disaster-housing-chief

Cost-cutting policy will push up benefit bill, cause social disruption and create widespread misery, say critics

Ministers came under new fire over benefit cuts last night as the independent body representing 1,200 English housing associations described the controversial bedroom tax as bad policy and bad economics that risks pushing up the £23bn annual housing benefit bill.

David Orr, chief executive of the National Housing Federation, said the tax would harm the lives of hundreds of thousands of people. It comes into force this week alongside a range of other tax and benefit changes.

"The bedroom tax is one of these once-in-a-generation decisions that is wrong in every respect," he said. "It's bad policy, it's bad economics, it's bad for hundreds of thousands of ordinary people whose lives will be made difficult for no benefit ? and I think it's about to become profoundly bad politics."

His intervention came as opponents launched nationwide protests against the tax, which will hit 660,000 households with each losing an estimated average of £14 a week.

Crowds gathered in London's Trafalgar Square yesterday to protest against the measure, and simultaneous protests were being held in towns and cities across the UK. One protester, Sue Carter, 58, from Waltham Forest, told the Observer: "I'm a working single parent with a tiny boxroom and now I'm faced with the choice between food, heat or paying the bedroom tax. People have looked after their homes, improved them ? why should they be turfed out?"

Under the scheme, which is introduced tomorrow, people in social housing with one spare bedroom will have their housing benefit cut by 14%, while those with two or more unoccupied rooms will see it slashed by 25%.

Ministers say the tax, which David Cameron calls the "spare room subsidy", will encourage people to move to smaller properties and save around £480m a year from the spiralling housing benefit bill. But critics such as the National Housing Federation (NHF) argue that as well as causing social disruption, the move risks increasing costs to taxpayers because a shortage of smaller social housing properties may force many people to downsize into the more expensive private rented sector.

The federation's warnings came as charities said the combination of benefit cuts and tax rises coming in from this week will amount to a £2.3bn hit on family finances.

Labour said analysis of official figures showed average families would be £891 worse off in the new tax year as the changes ? including those to tax credits and housing benefits ? begin to bite.

Research by the NHF says that while there are currently 180,000 households that are "underoccupying two-bedroom homes", there are far fewer smaller properties in the social housing sector available to move into. Last year only 85,000 one-bedroom homes became available. The federation has calculated that if all those available places were taken up by people moving as a result of the "bedroom tax", the remaining 95,000 households would be faced with the choice of staying put and taking a cut in income, or renting a home in the private sector.

If all 95,000 moved into the private sector, it says the cost of housing benefit would increase by £143m, and by millions more if others among the remaining 480,000 affected chose to rent privately.

As well as the move on spare bedrooms, council tax benefit will be replaced from this week by a new system that will be run by English local authorities but on 10% less funding. Pensioners will be protected under the changes but, as a result, it is feared there will be a bigger burden on poor working-age adults. Restrictions on the uprating of a number of welfare payments will also hit millions of households, homelessness charity Crisis has warned.

Chief executive Leslie Morphy said: "Our poorest households face a bleak April as they struggle to budget for all these cuts coming at once. People are already cutting back on the essentials of food and heating but there is only so much they can do.

"The result will be misery ? cold rooms, longer queues at food banks, broken families, missed rent payments and yet more people facing homelessness ? devastating for those directly affected, but bad for us all."

A Department for Work and Pensions spokesman said: "Our welfare reforms will improve the lives of some of the poorest families in our communities, with universal credit simplifying the complex myriad of benefits and making three million people better off. And by next year, we will have taken two million of the lowest earners out of paying tax altogether."

Crisis argues that homelessness is set to rise dramatically. This winter has already seen a rise of 31% in the numbers of rough sleepers across the country and a 20% rise in people seeking help with homelessness from their local authority in the past two years, according to Crisis.

ChartiesCharities are also concerned that the government-funded network of homelessness advisers in England is to be scrapped. The team of regional advisers and rough sleeper and youth specialists which have provided councils with expert guidance on meeting statutory homelessness duties since 2007 will be disbanded just as the bedroom tax comes in. Also being scrapped are the crisis loans and community care grants which provided a lifeline for people in financial crisis who needed essentials when moving to a new home.

Shadow chancellor Ed Balls said: "This is the week when the whole country will see whose side David Cameron and George Osborne are really on and who is paying the price for their economic failure."

OP posts:
lottieandmia · 01/04/2013 13:03

Of course he can't take in a lodger - that is against housing association rules.

expatinscotland · 01/04/2013 13:04

'Can he not take in a lodger?'

Have you read the thread? Many HAs and council forbid taking in lodgers! Ours does. It is a breach of your tenancy agreement.

lottieandmia · 01/04/2013 13:05

David Cameron seems to think that everyone has parents who have a big house their children can live in for however long and also that everyone's parents are willing to let their children do this.

expatinscotland · 01/04/2013 13:06

'David Cameron seems to think that everyone has parents who have a big house their children can live in for however long and also that everyone's parents are willing to let their children do this. '

Of course he does! The man has never had to live off his own graft in his entire life!

FasterStronger · 01/04/2013 13:07

expat www.newcastle.gov.uk/benefits-and-council-tax/welfare-rights-and-money-advice/housing-benefit-and-local-housing-allowance

this link shows a room rate of £55pw and a 1 bed rate of £86pw.

so isn't the £55pw for under 35s (shared house) and the £86pw for over 35s?

which is quite different than a total cap of £55pw for all single people.

or do you have a better link?

skinnywitch · 01/04/2013 13:09

Bit like Tony Bliar then, Expat? Or Ed Millionaireband. Anyone who thinks Labour are the party of the poor and disenfranchised needs their bumps felt.

FreedomOfTheTess · 01/04/2013 13:10

Fred's HA are very strict on the lodger thing.

He did inquire if there was some way they could make an exception for him, if there was a process he could go through, and they said no.

Horrible situation.

FasterStronger · 01/04/2013 13:12

on the story of Fred - most people know have had to move to find work, live with parents, stay on friends floors etc.

nondisabled 26 year olds need to be able to look after themselves, otherwise, we, as a country, are completely screwed.

skinnywitch · 01/04/2013 13:14

We had lodgers for the first ten years of our married lives, as did many of our friends. It was the only way to make ends meet when interest rates were at 15 % ish.

Mrsdavidcaruso · 01/04/2013 13:14

And what if Fred decided to get another job therefore being able to pay rent and come off HB or at 26 being young and presumably not disabled ( or poster would have mentioned it) moving to where the job are.

Plenty of people do that its no use saying he wants to live where his family are of course he does - so did I but had to move away to be able to afford to buy a home, also due to a football club affiliation I have dozens of friends from Cornwall and Devon who have had to leave the area to find work.

Viviennemary · 01/04/2013 13:15

I agree with skinnywitch. Milliband has no more of a clue about ordinary folk than Cameron has. That is why he always sounds so insincere. In my opinion anyway.

skinnywitch · 01/04/2013 13:18

We do need real politicians on all political sides who are from all walks of life. Most are now high;y educated career politicians and no more.

skinnywitch · 01/04/2013 13:20

Agreed mrsdavid .Most of our professional friends have moved many miles several times. It's perfectly normal in some circles to have to move away from home. It seems that it really is only the poor who have enjoyed the privilege of not having to do so until now.

skinnywitch · 01/04/2013 13:25

What I struggle to sympathise with is that some people have been protected for many years from the realities of life for the rest of us.

Most of us have children who share rooms.

Most of us have to pay council tax of at least £80 -£200 a month .

Most of us have to move to find work.

Most of us have NO spare bedrooms.

Most of us have to budget from one months end to the next.

Most of us have had to pay stamp duty which is THOUSANDS of pounds in one lump.

Most of us have to pay hundreds of pounds a month for our homes by OURSELVES.

Most of us are continually hit for tax and NI and do not enjoy free anything bar NHS and education.

In fact, writing all this down makes you wonder who are really the hard done by!

Tasmania · 01/04/2013 13:25

Dawndonna - You did not get your economics right, I'm afraid. I can tell that by you assuming that Germany is in a similar position to the UK. Seriously? Compared to Germany, the UK is a second-rate European economy. Germany is the economic powerhouse of the EU. Almost every single country getting into trouble seems to expect Germany to bail it out!

I do know quite a bit about Germany, considering one of my passports says I sort of belong to that country, too. Germany has a sound economic foundation these days, and have quality products due to good engineering, etc. which the UK lacks. People there are also more prudent - are likely to save rather than spend, and monthly rolling credit cards are not the norm there... people tend to to pay them off each month. This prudent attitude also resulted in the German banking system not being hit quite as hard as others by the Lehman fiasco (they made a big deal about the few small banks that made terrible mistakes - but those mistakes where nowhere near as bad as the ones seen here in the UK), and hence, the German government did not have to spend as much money as the UK to bail out German banks.

What people often seem to forget when comparing the UK to Germany is that Germany went through a rough economic period in the 90s and the first half of the 2000s - partly due to the reunification. The unemployment rate shot through the roof (over 10%), and apart from a few fluctuations, it remained there for a good decade. For the past two decades, the UK unemployment rate seems to have had a negative correlation with that of Germany - while unemployment in Germany rose, it dropped over here, and when UK unemployment began to rise, it dropped dramatically in Germany. Whenever I visited Germany over the last few years, it felt like it was completely detached from the UK (which I guess, geographically, it is) - news reporters over here talked about rising unemployment, and in Germany, they had the lowest unemployment rates for nearly two decades. It was a very odd feeling.

Anyway, apart from its economic power, and all those other things the UK does not have, Germany fares better than the UK at the moment because it already went through a period of austerity well before this whole crisis even happened (due to what has been mentioned in the above paragraph). The German economic recovery relied heavily on strong wage moderation, and unit labour cost fell by around 20% since the mid-90s compared to its major trading partners.

However, the rising cost of social security contributions and other welfare benefits still impacted industry a lot, which responded by underinvesting, making more people redundant, and even relocating operations overseas. In view of low wage rises, fear of unemployment and doubts about the sustainability of the welfare system, domestic consumers who were already naturally prudent simply did not want to spend. With industry and consumers both disinclined to kick-start a demand-led recovery, the economy remained stuck in a low-growth-low expectations trap until well into 2005 ? despite labour being competitively priced.

As a consequence, the government deficit rose above the ?3% of GDP? ceiling set in the Stability and Growth Pact, meaning Germany was placed in the ?excessive deficit procedure? for four consecutive years (2002-2005). The government ended up cutting back spending (as we are now doing in the UK).

In 2003-2005 the German government implemented social security reforms, designed to strengthen incentives for hiring and taking up work. Does that sound familiar?

As you can see... having done all these changes BEFORE the financial crisis happened, resulted in Germany being a lot better positioned than other countries, and the UK is just arriving late to the game. Germans were complaining about these measures previously, too, but obviously, some of it seems to have helped...

retrorita · 01/04/2013 13:27

No labour didn't provide affordable long term tennancies or a NMW that people could on.

I don't see the point of the question though.

Just because previous governments have failed to do this doesn't mean we should stop talking about it and offering it as a sensible solution.

And just because Labour didn't do these things, doesn't mean the tories are right for making these cuts.

retrorita · 01/04/2013 13:27

Excuse typos - typing fast on phone.

Tasmania · 01/04/2013 13:28

Personally, I like Merkel - she is not as flamboyant Grin as UK politicians, but she has common sense, and her ego is in the right place!

lottieandmia · 01/04/2013 13:31

skinnywitch, your argument seems to be that you have to be poor yourself to believe in collective responsibility. Which makes no sense. Tony Blair was a socialist at university - being privileged does not render you incapable of understanding that not everyone is as fortunate as you. Not everyone has YOUR set of circumstances.

Whatever you say, Labour never shat on the most vulnerable people in society from a great height, leaving them with nowhere to turn. Or do you have evidence to the contrary?

If you are in a position to support yourself entirely as you say, then good for you. But are you really so shortsighted that you cannot see that some people are not able to get jobs, are not able to get work because they are disabled or having caring responsibilities?? Life is not black and white.

skinnywitch · 01/04/2013 13:32

8retrorita* then why all the banging on about " rich" tories etc? They are all the same! Except that the coalition is the only Govt. with the guts to tackle the bloated and out of control welfare state.

Anyway, it all begins today so we will all simply have to wait and see how it all pans out, won't we?

lottieandmia · 01/04/2013 13:36

The welfare state has never been 'bloated' and out of control. Have you ever lived on benefits yourself? It is certainly not easy.

FasterStronger · 01/04/2013 13:38

round 1 begins today. note the welfare bill is still increasing. so there will be more waves of cuts.

if I were dependent on state support, I would do anything I could (and I appreciate that disability can prevent this) to not rely on the state. it is a very vulnerable place to be & I would not waste my efforts trying to swim against the tide.

retrorita · 01/04/2013 13:39

I never mentioned 'rich tories' in any of my posts skinnywitch.

I mentioned landlords getting rich off the back of housing benefit. But I don't think all these landlords are Tories. I don't think I even implied that.

And the government isn't tackling the problems of the welfare state. It's simply creating problems for the future. As is being pointed out by so many different organisations.

And the changes they are bringing about will save such a small amount of money that after the money has been spent to implement them (new computer systems etc) its hardly likely to save any money at all.

skinnywitch · 01/04/2013 13:40

So you reckon £200 bn a year which is more than the entire income tax take up is not bloated? Shock

Tasmania · 01/04/2013 13:40

I agree with skinnywitch.

Most people who work and NEED a job will move to find one, even if that means moving countries! Kids sharing rooms is not a BAD THING. Whoever complained about one of her kids having insomnia or what not - well, what would that person do, if she HAD to earn her living, and can't afford anything but a 2-bed flat?!? Seriously, someone with that sort of "issue" obviously does not know how the working population just has to cope...

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