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Bedroom Tax Tories: What they said and why they were wrong

13 Wednesday Nov 2013

Posted by Mike Sivier in Bedroom Tax, Benefits, Cost of living, People, Politics, Poverty, Tax, UK

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adapt, Anne Main, banker, bankster, bedroom tax, build, Conservative, council tax reduction scheme, debate, deficit, disability, discretionary housing payment, Eric Pickles, fairies, financial crisis, Heather Wheeler, house, housing benefit, Iain Duncan Smith, IDS, Katy Clark, Labour, Matt Hancock, Mike Sivier, mikesivier, minimum wage, modern, opposition day, overcrowd, Parliament, Philip Davies, Poll Tax, private sector, Rachel Reeves, rent, returned to unit, Roger Williams, RTU, save, saving, spare room subsidy, Stephen Twigg, Steve Webb, surplus, tax, threshold, Tobias Ellwood, Tories, Tory, under occupation charge, unicorn, Vox Political


Demonstrating for justice: Campaigners against the Bedroom Tax gathered outside Parliament while MPs debated it inside.

Demonstrating for justice: Campaigners against the Bedroom Tax gathered outside Parliament while MPs debated it inside.

“I’m amazed Labour have chosen to spend their allotted day in Parliament arguing for more unfunded spending on housing benefit.” That’s what Matt Hancock, Conservative MP for West Sussex, had to say about the Opposition Day debate on the Bedroom Tax in the House of Commons on November 12.

Hancock is, it seems, author of a book entitled Masters of Nothing, which sums up his understanding of the situation rather well. He clearly has not mastered the fact that the State Under-Occupation Charge will not save money. He has not mastered the fact that emptying dwellings of their current owners will not make them available to new familes as these people are afraid they will themselves be tipped onto the street when their circumstances change – instead the premises will be left empty, at huge cost to social landlords; and he has not mastered the fact that anyone evicted because of the tax will become a burden on local authorities, who have a duty to rehouse them in bed and breakfast accommodation, even though the money provided to them for this purpose by the government is ludicrously inadequate to the task.

Hancock is not alone in having misconceptions about the Bedroom Tax. Most, if not all, of the Conservatives who spoke during the debate uttered howlers – and the purpose of this article is to name them and explain why they should be ashamed of their words.

Please take the opportunity, Dear Reader, to look for your own MP in the catalogue of calamity that follows, then use it to attack them in their own consituency. Let’s make them realise that actions have consequences.

If you don’t have a Tory MP, feel free to use what follows in order to make sure you never have to put up with one.

We begin with Tobias Ellwood (Bournemouth East) who asked of Rachel Reeves: “What does she say to the almost 400,000 families who are living in overcrowded situations when they look over their shoulders at the almost one million spare bedrooms in Britain?”

The Shadow Work and Pensions Secretary responded without hesitation: “I say that instead of presiding over the lowest rate of house building since the 1920s, this Government should get on and build some houses.”

This is the fact of the matter. Conservatives throughout the debate berated Labour for building too little social housing, while ignoring their own abysmal record. In the 2012-13 financial year, only 135, 117 new homes were completed – the lowest number on the books.

The Minister of State, Steve Webb, came back to this point later, saying: “Who was doing the house building for 13 years?” Well, we all know who hasn’t been doing it for the last three.

Mr Ellwood said the Tax was brought in because the cost of housing benefit was rising alarmingly: “After 13 years of Labour the cost of housing benefit doubled to £21 billion. That is unacceptable. The cost to taxpayers was £900 per household. The system was getting out of control.” His failure is that he refused to accept the explanation offered by Labour’s Katy Clark – that this was due to the rising cost of rent in the private sector (private rents have indeed been rising massively and the government refuses to take action because this would interfere with the market. Bizarrely, the Conservative-led Coalition seems to believe it is acceptable to pay huge gobs of housing benefit to private landlords – who make unreasonable demands – and then blame social renting tenants for it). He also, by inference, rejected the evidence that the Bedroom Tax will not save any money.

Mr Ellwood also referred to the deficit run by the Labour government of 1997-2010. He said: “Labour lived beyond its means. In 2002-03, it spent £26 billion beyond its means. Four years later that rose to £33 billion. In its final year of office, the deficit rose to £156 billion. That always accumulates.”

This is disingenuous. As he must know, not only did Labour run a lower deficit than the Conservative governments of both Thatcher and Major (average 41 per cent of gross domestic product) from 1997 to 2007, it also made a surplus in the 2000-2001 financial year – something that the previous Conservative governments never did. This means Labour actually paid off some of the debts that had been accumulating. With that pedigree, even the 43 per cent deficit of 2008 looks respectable. The higher deficits of 2009 and 2010 were entirely caused by the bankster-instigated financial crisis, when the actions taken by Labour were entirely supported by the Conservative Party.

He went on to condemn Labour for voting against £83 billion of welfare savings; if the reasoning for them was as shaky as that for the Bedroom Tax (and it was; see previous VP articles) then Labour was quite right to do so!

It should be noted that the Secretary of State for Work and Pensions, Iain Duncan Smith, was not present at the debate. RTU (as we like to call him) was woofing it up in Paris, rather than accounting for his misbehaviour to the taxpayer.

Mrs Anne Main (St Albans) echoed a comment by Mr Webb, but did it in such an inept way that we’ll look at her words rather than his. Following Labour’s Stephen Twigg, she referred to the too-low allocation of Discretionary Housing Payment to families having to cope with the Bedroom Tax: “Perhaps he would like to speak to his Labour-run Liverpool council and ask why, when it received £892,000 in discretionary housing payments last year, it actually sent back £337,000.”

Mr Twigg put her straight: “Does she accept that the figures that she has given are from before the bedroom tax was introduced? This year, Liverpool city council will certainly spend the entire discretionary housing pot.”

His words echoed fellow Labour MP Lucy Powell, who had previously berated Mr Webb: “The Minister incorrectly gave figures for last year—the bedroom tax was introduced only in April. I was talking about money that will come back this year. I can guarantee that the Minister will not be getting any money back from Manchester this year — the year of the bedroom tax.”

Referring to the 400,000 disabled people affected by the Bedroom Tax, Mrs Reeves said 100,000 disabled people live in properties specially adapted for their disability, but the average grant issued by local authorities for adaptations to homes [when they are forced to move out by the Bedroom Tax] stands at £6,000. The total cost of doing the adaptations all over again could run into tens of millions of pounds.

At this moment, Heather Wheeler (South Derbyshire), said while seated: “They’re exempt.”

The response: “The hon. Lady said from a sedentary position that disabled people are exempt, but she would not say it when she was on her feet because she knows it is not true.” In Vox Political‘s home constituency, at least one disabled person has already been evicted because of the Bedroom Tax.

Philip Davies (also known as ‘Stupid of Shipley’) weighed in with a shocking error, in an attempt to attack his local housing association and its director, a Labour MP: “Does the Minister agree that the spare room subsidy is one reason why we do not have the right mix of housing? Social housing providers could build houses as big as they wanted, knowing that the Government would cover the full bill irrespectively. In that respect, does he deplore the social housing provider in my area, of which a Labour MP is a director? It complains on the one hand that it has too many three-bedroom houses—”

That’s as far as he got, and just as well. Let’s go through this one more time: The ‘spare room subsidy’ is a fiction. It never existed and therefore could never have been abolished by the Conservative-led Coalition government. Being entirely make-believe, it could never have affected the decisions of social housing providers. This is just one of the many reasons why Mr Davies is rightly considered to be one of the biggest twits in the Tory Party (among hefty competition). Another might be his claim that disabled people should work for less than the minimum wage.

David TC Davies (Monmouth) complained: “Opposition Members… do not want to talk about the fact that they introduced a measure like this for the private sector.”

He was among many Tories who complained about this apparent double-standard. Labour members reminded them that the Bedroom Tax is retrospective (affecting people currently in social housing) while the private-sector measure was for new tenants only. One may also ask why, if these Conservatives were so disturbed by the apparent discrepancy, they were not calling for this earlier measure to be scrapped as well.

George Hollingbery (Meon Valley) said: “We need to pose ourselves a question: what is dealing with the spare room subsidy about? Is it about reducing the housing benefit bill? Yes, of course it is. The Government propose a £500 million saving, which is important.”

It is important, because Conservatives seemed confused throughout the debate about whether they were trying to sort out overcrowding by putting people into appropriate accommodation, or trying to save money. The two are mutually exclusive. The only way to make money on the policy is for people to remain locked in housing that, thanks to the Bedroom Tax, is now too expensive for them – but this cannot last because they will soon be evicted for non-payment of rent. Moving people around, so that nobody is under-occupying, will result in a higher housing benefit bill because more people will be claiming – the original tenants in their new properties (which, if they are run by private landlords, will be more expensive) and the new tenants who will be occupying to the limit of a property’s capability and therefore may claim the full amount of housing benefit. Either way, Mr Hollingberry’s claim of a £500 million saving is pie-in-the-sky.

Margot James (Stourbridge) made a proper fool of herself. She said: “The Opposition… want to position the end of the subsidy and the creation of a level playing field between all recipients of social housing support as a modern day poll tax.” This is the least of her mistakes as some Labour members may have suggested such a thing; in fact it is Eric Pickles’ Council Tax Reduction Scheme that is the modern-day Poll Tax, because every household must now towards it.

Margot James went on to deny that the Bedroom Tax is a tax, saying: “A tax is a government levy on somebody’s income, whereas we are clearly talking about reducing a subsidy.” This is wrong on two counts. Firstly, there has been no subsidy to reduce – unless she was referring to housing benefit in its entirety. The spare room subsidy is, as already mentioned, as mythical as the “unicorns and fairies” to which Anne Main referred when she tried to dismiss the existence of the under-occupation charge as a tax on bedrooms. Both ladies are wrong, because a tax may also be defined as a government levy on property owned or used by a citizen (such as, say, a bedroom). So – not quite as mythical as unicorns and fairies. One has to wonder why Mrs Main mentioned these, as she has clearly been away with the fairies herself.

Kwasi Kwarteng (Spelthorne) breezed in from another committee to provide the benefit of his own ignorance. He asked: “Is it fair that someone on a low income who is in privately rented accommodation should pay taxes in order to subsidise someone else’s spare room? Is it fair to raise taxation from low-paid workers to subsidise other people’s accommodation?”

The answer, of course, is yes. It is fair. In fact, it is a principle of our system of taxation. Everybody pays into the national treasury, in order to allow the state to provide services – such as housing – for those in need. This may be a detail that current Tories have missed, considering the government’s vigorous attempts to write the highest earners out of taxation altogether. If he wanted to help low-waged people in private rented housing, the answer to that is also simple: cap their rents.

And doesn’t he know that the very low-paid have been lifted out of taxation by his own government, as the Coalition has been raising the threshold for payment of income tax every year, aiming to reach a target of £10,000 income per annum by 2015.

At the end of the day, the motion to scrap the Bedroom Tax was lost by 26 votes. Some have already said that Labour could have won it if all members had been present, but that was never really on the cards; the government has the numbers, even if some Liberal Democrats (like VP‘s own MP, Roger Williams) abstained.

So what are we to make of it all? Simply this: The Conservatives do not have a credible narrative to describe what the Bedroom Tax is about. It doesn’t save money; it won’t put people into appropriate accommodation; and it certainly won’t cut homelessness!

Work out what it’s really about, and you will understand why they are so desperate to keep it.

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‘Slimy’ minister talks up unfunded housing scheme while 50,000 face eviction

09 Wednesday Oct 2013

Posted by Mike Sivier in Conservative Party, Housing, Politics

≈ 14 Comments

Tags

AAA, alistair darling, bedroom tax, bubble, building, Channel 4, Coalition, Conservative, credit rating, crisis, David Cameron, debt, deficit, equity loan scheme, evict, George Osborne, government, help to buy, housing, interest rate, Johnny Void, Keighley, Kris Hopkins, Michael Meacher, Mike Sivier, mikesivier, mortgage guarantee, Nadine Dorries, nastiest, nasty, Northampton, people, Philip Davies, politics, price, slimiest, slimy, Tories, Tory, under occupation charge, unfunded, Vox Political


'Slimy' Tory mouthpiece? Kris Hopkins (left), the Coalition's new housing minister, takes tea with David Cameron on a Northampton housing estate while talking a lot of nonsense about Help to Buy.

‘Slimy’ Tory mouthpiece? Kris Hopkins (left), the Coalition’s new housing minister, takes tea with David Cameron on a Northampton housing estate while talking a lot of nonsense about Help to Buy. [Picture: WPA Pool/Getty Images Europe]

One of Parliament’s “slimiest, nastiest MPs” has got stuck into his new job, putting out a press release on how the hideously ill-judged ‘Help to Buy’ housing scheme is “surging ahead”.

Kris Hopkins, the Conservative MP for Keighley whose only previous claims to fame were allegations that “gangs of Muslim men were going around raping white kids” (thanks to Johnny Void for that one) and a Twitter spat with the odious Philip Davies, said the equity loan scheme had driven up the rate of house building and captured the public imagination with more than 15,000 reservations for new-build homes in its first six months.

Reality check: House building is at its lowest level since the 1920s. In the 2012-13 financial year, only 135,117 new homes were completed – the lowest number on record.

Earlier this year, Hopkins called for Conservatives to unite behind David Cameron – to which Nadine Dorries responded, “pass the sick bag”. Yesterday, he at least was united behind Cameron – as they toured a Northampton housing development.

According to the press release, he said government action to restore confidence to the housing market was working, with over a third of a million new homes built over the last 3 years, including 150,000 affordable homes.

Reality check: That is a lower number than any period on record prior to the current Coalition government. It is not an achievement. It is a disaster.

Under the equity loan scheme, buyers can get mortgages on new build homes with a five per cent deposit, with the rest provided by an equity loan from the government of up to 20 per cent on properties with a value of £600,000 or less.

Yesterday (October 8), Cameron and his Chancellor, George Osborne, launched the second part of Help to Buy – the mortgage guarantee – which will also be available on existing properties worth £600,000 or less. Lenders will be able to offer a 95 per cent loan-to-value mortgage, made possible by a government guarantee to the lender of up to 15 per cent of the value of the property.

Reality check: In English, this means the taxpayer is underwriting people’s mortgages. Osborne reckons he has put aside £12 billion for this part of the scheme but – as former Chancellor Alistair Darling recently noted  – the source is unidentified. “Strange that when Labour makes promises, the Tories claim it will mean more borrowing, yet it’s fine for them to make unfunded promises,” Mr Darling wrote.

Back to the press release: “Housebuilding is growing at its fastest rate for 10 years,” it says.

Reality check: The Channel 4 article, quoted above, warns us to “take the proclamations we are getting from the government about high rates of growth in housebuilding with a hefty pinch of salt. Housebuilding completions are starting from modern record lows; the rates of growth are bound to be high.”

What does Kris Hopkins have to say about this? Not a lot, in fact. He blathers that the equity loan has “captured the imagination of the public and is boosting the supply of new homes across the country”.

Reality check: Back to Channel 4 – “The levels… show that something went wrong in 12/13. Turning the corner means going from abysmal to terrible.”

“Our policies on housing are working,” said Hopkins in the press release. “Housebuilding is growing at its fastest rate for 10 years, and the tough decisions we’ve taken to tackle the deficit have kept interest rates low and are now delivering real help to hardworking people.”

Reality check: We’ve already covered the speed at which house building is growing; he should not be pretending this is a huge success when the number of new houses being built has fallen to a record low. As for the policy on the deficit keeping interest rates low – Vox Political blew that out of the water months ago. For clarity: A government can always service its debt, if that debt is in its own currency. Our debt is in UK pounds and we can always service it. Our creditors know that, so they remain happy to continue financing it. Otherwise, with Osborne borrowing 75 per cent more than he said he would in 2010, and with the UK’s ‘AAA’ credit rating gone in a puff of agency doubt earlier this year, Osborne would have been up a certain creek without an economic lever (to mix a metaphor or two).

“I’m delighted we’ve launched the second part of Help to Buy, the mortgage guarantee, which will strengthen the package of measures that have already done so much to restore confidence in the housing market,” Hopkins concluded.

Final reality check: Michael Meacher is one of many who believe that ‘Help to Buy’ will do nothing more than create another housing price ‘bubble’, most likely leading to another debt crisis. “Even [George Osborne’s] Tory supporters believe [this] will throw oil on the fire of the already overheated surge in house prices,” he wrote.

Meanwhile, at the other end of Britain’s housing market, 50,000 people are facing eviction because of the Bedroom Tax.

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