In the second of two articles on the Tory/LibDem Bedroom Tax, Edinburgh Greens Policy Officer Peter Mountford-Smith looks at what can be done. You can find the first article on why the government want the tax, and why it is unfair, here.
These changes will come about in April. What can be done, and by whom?
Government ministers advise that if they don’t want to move, people should find work for a couple of hours a week to pay the charge. But it’s not a question of a couple of hours, even if the work was available. Depending on circumstances, it could be a lot more. Affinity Sutton housing association have calculated that someone working 16 hours a week on minimum wage could have to work a 48-hour week to escape the effects of the bedroom tax, because of the way benefits reduce when income increases. In another example, someone on a 35 hour week would need to do a 76-hour week to escape the effects of the tax.
They also say people can take in lodgers. Is there a reserve army of would-be lodgers out there? Will families be happy to have a stranger forced on them? This isn’t like friends flat-sharing for a year or so.
The Government point to the hardship fund, which allows people to apply for discretionary, time-limited help with the cost of making up the missing housing benefit. But as the National Housing Federation has shown, this is quite inadequate. The small size of the funding pot means most people cannot have the missing benefit made up.
There are many protests taking place around the country, as well as petitions and lobbying MPs. It seems the Government doesn’t wish to back down any further, despite recent last-minute concessions. So apart from protest, what else could be done?
Apart from the Appeal Court finding regarding disabled children sharing bedrooms which the Government has now decided not to contest, there are some further legal challenges being worked on. There have also been court cases on the bedroom rules in private rented housing which show that the Government cannot rely on this patchy, inadequate, discretionary and time-limited assistance to justify its actions. More cases will follow.
Some tenants will look to landlords not to enforce the tax. That would involve accepting some loss of rent. In Edinburgh, Green councillors have urged the council not to evict for arrears caused by the bedroom tax. Dundee Council have already agreed this. This would be a welcome step, but the debt would remain, and could be pursued by means other than eviction, so it doesn’t remove the problem. The debt could be written off, but there’s a cost to that.
The definition of a “bedroom” is down to the landlord. Some landlords have looked at reclassifying properties, so that for example a three-bed is designated as a two-bed property. However, there are problems with this. The landlord could lose rental income, with a lower rent for a notionally smaller property. If the rent was reduced, the housing benefit department might review whether too much rent had been charged previously.
The value of the housing stock could be affected by widespread reclassification, and for some housing associations that could cause problems with loan covenants with lenders, potentially triggering a renegotiation of loans, ending in paying much higher interest. If the reclassification was temporary, the market value of the property shouldn’t be affected, which might be a way round this. So it’s not straightforward, and may not work in all cases, but it is surely something that should be explored by social landlords.
One housing association was reported to be planning to pay tenants the amount they will lose through bedroom tax, in return for attending courses or doing minor tidying. This might have unintended consequences though, and could be a problem.
Some tenants might be happy to move. Others won’t find that possible. As well as hoping the legal challenges work, and supporting the protests, tenants will want councils and other social landlords to look for ways of helping, rather than just accept all this as inevitable.
Social landlords, like tenants, fear these changes. They will drive up rent arrears and create pointless conflict, with landlords considering eviction of people they know can’t afford to pay this tax. This policy is the product of a determination to undermine social housing, demonise people on benefits, and push people into the private rented sector. Private landlords will gain, and lawyers will get more work. Everyone else, probably including the Treasury, will lose. It is madness, and we must stop it. The very limited concessions recently made show that progress can be made. However, the act of making these small concessions is meant to signal that no further ground will be given. It’s going to be a fight.