Steve Webb and the Bedroom Tax

Steve Webb MP,
Liberal Democrat Minister,
DWP

Dear Steve,
Whilst I was in Glasgow I heard you and Nick both defend the so called ‘bedroom tax’. I agreed totally with your arguments about the principle of this. Why should the tax payer pay to rent surplus accommodation? You may be surprised to know that many hundreds of thousands of tenants also agree with this. They would love to move to a smaller, cheaper, more cost effective house and would do so tomorrow if there was one within their neighbourhood. The problem is however, that there aren’t any!”

We have to accept that for the past 3 decades and even longer Tory and Labour Governments reined in expenditure on social housing. They wrongly thought that over time all would be able to become property owners so that social housing would wither. This is clearly not the case. The under provision of accommodation nationwide has forced house prices up and made home ownership an unattainable dream for so many of our population.

I have great sympathy with you when you articulate a need to reduce the total pay out of both housing and other benefits. The way that you choose to do this is just plain wrong and does not even save the state money. The reduction is subsidy is hitting:
• Individuals who cannot move and are having reductions in already stretched marginal budgets. For those on benefits there is simply no slack to make up for this loss.
• Communities which, when properties are becoming available are losing tenants who often provide the backbone of community activity and neighbourliness.
• Housing providers who are:
o Spending a fortune on collecting large amounts of relatively small bills
o Not being able to squeeze blood out of a stone from people who have no money and are therefore running up arrears.
o Facing costs rocketing faster than their income
o Facing balance sheet problems caused by increased arrears which affects their ability to build new homes.
• Education establishments who are facing increased problems with children being forced to move often into unsatisfactory temporary accommodation thus reducing educational standards
• Health providers who lose track of vulnerable people

One set of people is benefiting from all this. Private landlords whose rents are going up far faster than costs and are making very good profits in current circumstances.

So the problem is for those on the ground that this measure simply does not save any money. It just forces expenditure to come from other budgets to make up for the problems that the measure costs. This is hardly joined up government!
So what can you do about this?

In the short-term you should place much more stringent caps on the rents that can be charged by the private sector. Despite what Mr. Cameron says the prices charged by the private sector are considerably more than either branch of the public sector and often are charged to people who are cherry picked for having the least problems

In the long-term we must build more homes and homes within neighbourhoods that reflect local need. These two measures are, of course, contained within the Housing policy paper which we agreed last year.

Although you were not in the Hall for the debate I am sure you know how it went. Not one speaker defended the change in subsidy. When it came to a vote there was no count but the vote appeared to be about 300 to 1 in favour of the critical resolution.

This was, of course, in theory only a call for a review. In practice it was a call for abolition. As a Liberal Democrat Minister you simply have no mandate for continuing this subsidy withdrawal after 2015 and I will be campaigning with others to ensure that the Party commits in its manifesto to not only reduce this bedroom tax but the one that was introduced for private sector tenants by the last Labour Government which is equally destructive in intent and practice.

I am, of course, always pleased to discuss this and other issues with you.

Yours sincerely,

Cllr Richard Kemp CBE,
Leader, Liverpool Liberal Democrats
Co-Chair Lib Dem Housing Policy Panel