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To the devil with the details – axing the bedroom tax is the right decision

21 Saturday Sep 2013

Posted by Mike Sivier in Bedroom Tax, Benefits, Housing, Labour Party, Politics

≈ 23 Comments

Tags

accommodation, agreement, axe, BBC, bedroom tax, Coalition, Conservative, Democrat, Department, DWP, Ed Miliband, hedge fund, housing benefit, international, investigator, Labour, legal, Lib Dem, Liberal, Matthew Hancock, Mike Sivier, mikesivier, Pensions, private, rent, repeal, reverse, Sajid Javid, scrap, share, shares for rights, social, spare room subsidy, SPeye, tax, taxpayer, The Guardian, Tories, Tory, un, under occupation charge, unfair, united nations, Vox Political, work


Costed and credible: Ed Miliband announcing Labour's plan to end the bedroom tax. [Picture: BBC]

Costed and credible: Ed Miliband announcing Labour’s plan to end the bedroom tax. [Picture: BBC]

The SPeye blog makes a good point.

Labour doesn’t need to justify scrapping the bedroom tax beyond stating the fact that it is an unjust measure designed to inflict misery upon the lowest-earning citizens of the UK while conferring no discernible benefit on the state.

Therefore Ed Miliband’s insistence on pandering to the Coa-lamity government’s narrative by trying to say where he would find the money to make the move possible may be seen as a mistake; there is no evidence that the bedroom tax has saved a single penny and every reason to believe that it will be a greater burden on the taxpayer in the long run.

Labour failed to attack the claim that the bedroom tax was saving money and we should question the wisdom of Miliband’s advisors in omitting this detail.

He should have pointed out that the Coalition government’s claim – that the tax negates differences between social rented accommodation and the private sector – is nonsense and we should question the wisdom of Miliband’s advisors in omitting this detail.

And he should have pointed out that the Coalition’s claim – that the bedroom tax and other changes would cut the cost of Housing Benefit by £2 billion – is also nonsense; that bill was £20.8 billion in 2010 when the claim was made so, with the current cost at more than £23 billion, the bill is now £5 billion above the Coalition’s target without showing any signs of coming down. We should question the wisdom of Miliband’s advisors in omitting this detail, also.

Or rather, he should question their wisdom.

There will be a time for that, but this isn’t it.

Those arguments don’t matter right now.

The fact is that he said the bedroom tax is unfair and a Labour government would end it – and he said it after a United Nations investigator made exactly the same claim. Labour has brought itself in line with UN findings and now the Coalition has been cast as a rogue government, acting against legally-binding international agreements which Labour would uphold.

But let’s just have a look at that mistake again. Labour said it would be able to axe the bedroom tax because it would save money by other means – ending a tax break for hedge funds and cutting short the new shares-for-rights scheme currently being thrust at company employees by the Treasury.

These are things that Labour would do anyway. The bedroom tax is just an excuse – in the same way that the Conservatives and the Liberal Democrats put up an excuse for inflicting it on the poor, the sick and the disabled in the first place. It’s basically Miliband and the rest of the Labour Party offering the Conservatives and their little yellow friends a taste of their own medicine.

That gives them credibility.

And, if these measures really can boost public funds by £2 billion, then Labour will have found a way to do what the Coalition could not, because the bedroom tax was always likely to cost more money than it saved, for reasons well-discussed in the past.

Hedge funds are a rich seam of cash, ripe for mining by politicians because they aim to make money whether the market is moving up or down. The means by which they do this are extremely questionable and can artificially engineer collapses in company share prices, so it is right that a punitive tax regime should be imposed upon them.

That means that Labour’s plan really has been costed in a reasonable way. Costed and credible – just as Miliband claimed.

And the Treasury knows it. Look at its response – an unfounded, nonsense claim that Labour would tax pensions and borrow more money to fund the change.

Sajid Javid came out with this rubbish on the BBC’s news website. His credibility is already shaky and his claim has done nothing to improve that situation for him.

Business minister Matthew Hancock also got in the ring, but flailed wildly around with another nonsense claim that ending the bedroom tax would lead to higher taxes and higher mortgage rates.

He doesn’t matter. Javid doesn’t matter. A Department for Work and Pensions spokeswoman said something as well, but that doesn’t matter either because nobody believes a single word those people say.

The Guardian is currently running a poll asking members of the public to vote on whether the bedroom tax should be scrapped. A massive 91 per cent of voters want rid of it.

Labour has promised to get rid of it.

That is all that matters.

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