‘The deeper implications of the Bedroom Tax’ 

By Paul Leinster Monday 8th APRIL 2013 

The government’s new under-occupancy penalty or “bedroom tax” is almost universally despised in Scotland.

Dubbed by many as the new poll tax, the cut in housing benefit for those living in social housing, amounts to 14% for one extra bedroom and 25% for two or more.

The tax came into effect a week ago and like many of the Tory-led, Westminster government’s heartless cuts, it is the most vulnerable who will be affected the most.  The up front implications of the bedroom tax have been much spoken about but the consequences will have a profound effect upon local authorities and housing associations and their ability to carry on building social housing.

The initial implications are obvious.  Social housing tenants, many already struggling to make ends meet, will see their finances dealt a further blow as their housing benefit is cut.  Arrears could build up and the fear of eviction and homelessness could become very real possibilities.

While pensioners are exempt, Scottish Government figures show that around 80% of those who will be affected in Scotland are disabled and although the government has made money available to help certain disabled people with the tax, the application process is likely to lead to additional stress, upset and uncertainty for thousands of people.  You only need to look at the way disabled people have already been treated by this government to guess what the outcome is likely to be of thousands of appeals for exemption.

Various proposed solutions have been put forward by Labour and the SNP to help people with the benefit cut.  Speaking at the SNP’s spring conference in Inverness last month, Alex Salmond promised that local authorities controlled by his party would not to evict anyone who builds up arrears as a result of the bedroom tax.

On the face of it, this sounds like a bold and noble move and tenants can sleep easier at night, knowing that even if they build up rent arrears, they will not end up on the street.  But it is in the interest of the local authority not to evict anyone over this.  No council wants the torrent of negative publicity which would come from evicting families who were unable to pay their rent.

It would also cause more work for housing departments as Scottish housing law would then require the local authority to find accommodation for the homeless family, in either emergency accommodation or a bed and breakfast.

The next proposed solution is one which several local authorities in England have already put in place – reclassifying homes.  A three bedroom house could become a two bedroom with a box room. However, the situation then arises where two adjacent, identical properties are classified differently.

In one property the tenants are required to pay bedroom tax, in the other they are not.  Without any structural change having been made to the house, there is nothing to stop the neighbour putting in a claim for their house to also be reclassified and the rent decreased.  This claim could then be backdated and as word spreads, local authorities and housing associations could face vast payouts in backdated overpayment of rent claims.

Scottish Labour has been calling on the SNP to use existing powers held at Holyrood to provide money to local authorities to cover the cost of the bedroom tax.  In an ideal world this could be a sensible solution, but where is this huge sum of money going to come from?  Which vital public services does the Labour opposition suggest the government cuts?

In Scotland right now, as well as in the UK as a whole, there is a chronic shortage of social housing. This makes the government’s justification for the bedroom tax, that it will allow larger families who are currently living in overcrowd conditions to move into larger homes which are currently “under occupied”, fall at the first hurdle.

Glasgow Housing Association has come up with a quick fix, buying 300 one bedroom houses on the open market.  Even based on the lowest possible price for a one bedroom flat in Glasgow, the housing association is still looking at an £8 million bill.

So why not just build more social housing?  The Scottish Government contributes £30,000 toward the building cost of each social house.  It is then up to the local authority or housing association to borrow the rest to make up the difference, usually around another £80,000.  Payment plans are put in place, and like any loan, the money is gradually paid back.

However, as rent arrears are very soon going to start building up, social landlords are going to be out of pocket.  Current loan payment plans will need to be amended and extended and taking on further debt to build new homes will become harder and more expensive, leading to a decline in the number being built.

At a time when there is already a housing shortage, the government has brought in this cruel tax which affects the whole social housing industry so profoundly that every part of it will suffer.

There are only really two solutions.  The first is that the Westminster government scraps the tax.  This is almost certainly not going to happen before the 2015 general election. 

The coalition government has enacted the biggest assault upon the poor since the welfare state was founded and they are proud of it. 

Unionists cling on to the hope that a Labour government returned to Westminster in 2015 will right all the wrongs this government has inflicted but given the increasingly right wing rhetoric coming from the Labour Party, especially with regard to welfare, it seems unlikely that the party would reverse the policy.

This leaves just one viable option.  A ‘yes’ vote in 2014 will give Scotland the power to get rid of this tax.  The SNP has already promised to repeal it and Scottish Labour has been far more vocal about their opposition to it than their English colleagues.

Only through independence can we ensure that Scotland will never again have a government we did not elect, enforce cruel, divisive and harmful policies upon us. 

Newsnet Scotland

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Scottish independence is fast becoming the only option Posted on January 22, 2013

Glasgow’s poor put every politician to shame Posted on December 10, 2012