Bedroom Tax – The Tories new strategy – more known lies that Joe Public laps up

A significant shift in the bedroom tax happened over the weekend though many will have missed it while shouting at IDS on the Marr show on Sunday morning or at Grant Shapps on BBC radio on Sunday lunchtime.

Subsidy!

Subsidy and the labelling of social housing as being subsidised – which it is and I will come on to – is the latest Tory strategy in defending the pernicious bedroom tax.  IDS slipped in that social housing is subsidised by £900 per household (a lie as I will show) and Shapps the Tory Chairman and former Housing Minister referred to the bedroom tax as the “SPARE ROOM SUBSIDY” – A sure sign that the Tories know they have lost the deflection strategy of decrying it’s not a bedroom tax or a tax at all as they have been stating these past few weeks.

Subsidy.  Yes social housing is subsidised.  In fact it receives £1,200,000,000 per year from the taxpayer and doesn’t £1.2bn look a lot when its written that way? Yet the private rented sector receives £2,170,000,000 per year from the taxpayer – that’s £2.17bn and almost a billion pounds more per year from you, me and every other taxpayer in the UK.

Yet facts are pesky and as long as Joe Public believes social housing is subsidised (TRUE) which they do and is the only subsidised rented sector (FALSE) which they do; AND that the ONLY reason social housing rents which average £83 per week are lower than private rents which average £163 per week is BECAUSE they are subsidised (FALSE) then the Tories believe they are on to a winner with the subsidy strategy.

Time for some facts.

  1. Social housing receives £1.2bn per year in capital subsidy
  2. There are 3.8m social housing properties
  3. Therefore each social housing property receives £315.79 per year in subsidy
  4. This becomes a subsidy of £6.05 per social housing property per week
  5. Private rented housing receives £2.17bn per year in revenue subsidy
  6. This is because the average private rented property is paid £25.20pw MORE in Housing Benefit at £106.32pw compared with £81.12 in Housing Benefit for a social housing property as the official HB statistics reveal at Table 4
  7. There are 1,653.860 private rented properties in receipt of Housing Benefit (Table 5) so 1,653,860 lots of £25.20 is £2.17bn MORE in Housing Benefit paid to private landlords by you me and every UK taxpayer

Point 3 above shows that IDS was lying on the Marr Show when he slipped in that every social rented sector household is subsidised by £900.  In fact his figure is almost triple the correct amount.

Why doesn’t the public ask why is private rented housing £80pw on average more expensive than social housing when social housing receives just £6.05 per week in subsidy? (Point 4)

Why doesn’t Joe Public ask why if the Tories are so set on reducing the HB bill do they pay £2.17bn more per year in HB to private landlords for the same number of properties? (Point 5 and explained at 5 – 7)

This is especially bemusing to any taxpayer when the private rented property is on average a lesser quality product and lesser quality service than a social housing property!  Oh silly me social housing is only cheaper than private because its subsidised!!!!

Grant Shapps seeking to call the bedroom tax spare room SUBSIDY shows a consistent line and as I state above relies on the ignorance of Joe Public to the above facts.  As long as Joe Public has the clearly errant perception that it is ONLY social housing that is subsidised then Joe Public will likely believe this deliberately misleading perception spouted by the Dark Arts practitioners at Conservative Central Office.

Why social landlords and the Labour Party have not used such facts as above is baffling.  They prove the economic rationale for social housing and the bottom line argument that social housing is good for the country in economic terms.

But social housing is never seen in economic terms and rather only seen as a political throwback to the dinosaur socialist…except of course when Joe Public holds the view that social housing is ONLY cheaper than the (uber-efficient?) private rented sector which charges almost 100% more in rent at £163pw to £83pw.

Yet again social landlord’s silence is deafening in making a case for their own industry!!  Yet again Labour’s strategists come out with the bedroom tax is perverse – a good point and correct but not the right strategy.  Aside from the above economic basis there is also the point I made about social tenants being more harshly treated under the bedroom tax and indeed discriminated against than their private sector tenant counterpart here.  Then how about disabled social tenants being more harshly treated than private disabled tenants?  No let’s adopt a strategy that the bedroom tax is perverse instead!

On Wednesday this week dear reader I will update you on just how much more we taxpayers are forking out on Housing Benefit as the new figures will be released.  Will we see an increase on the £23.6bn overall bill that is £4.8bn higher than the Tories June 2010 target set at £18.8bn? Will the numbers of working tenants claiming HB finally reach the 1 million mark – it has risen from 650,000 in May 2010 to 930,000 in August 2012 the last published figures so rising at 10,000 low paid workers per month who need HB to subsidise their low pay employment!

Yes that’s the real subsidy with Housing Benefit dear reader!!

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7 thoughts on “Bedroom Tax – The Tories new strategy – more known lies that Joe Public laps up

  1. Paul Smith February 21, 2013 at 4:39 pm Reply

    Speye I think your selective use of statistics here undermines the quality of your arguments.

    1) You compare all social housing with private rented housing on which benefits are paid to make your comparison. To compare like with like surely you should either compare all properties or all properties where housing benefit is claimed.
    2) One of the big debates in housing has been the right balance between capital and revenue subsidy. You have completely ignored capital subsidy in social housing.

    • joehalewood February 21, 2013 at 6:58 pm Reply

      By all means correct my figures if you think they are wrong. Yet you would also need to factor in the savings produced by council / H housing to the treasury each year too as well as historical debt. At present if you took away the social housing subsidy then social rents would rise dramatically to at least the level of private rents in this unfettered and totally free market. 3.3m social housing rents increasing by £80pw is a huge cost. Even if they increased to or were just paid the LHA level of benefit you would see 3.3m lots of £25 or so per week increases to the HB bill – £83m or so per week increase or a yearly HB increase of £4.4bn or so as that is what the public purse saves from paying subsidy.

      The real point of my argument is to get away from the simplistic view that social rents are only cheaper than private because they are subsidised which is the naive general public perception – and specifically now given the claimed political rationale of the bedroom tax is to level the playing field. I could have pointed out that a leading right-wing economist who is said to have the ear of Cameron is advocating a massive social housebuilding exercise be undertaken to get the country out of recession – a remarkable Keynesian solution from a right wing economist and the exact opposite of what one would expect. In short the social housing model is a massive economic good for the country yet it is only seen as a political issue and even then one of a socialist dinosaur from 50 years ago!

  2. Mark Smith February 22, 2013 at 4:26 pm Reply

    Speye I am confused.about what you mean by ‘subsidy’.
    You say ‘capital subsidy’ in relation to social housing and ‘revenue subsidy’ in relation to private rented. Clearly the ‘revenue’ subsidy you refer to is Housing Benefit. What about the Housing Benefit paid to subsidies Social Housing?
    If the Housing Benefit bill stands at £30 billion and that is money paid for by the taxpayer to pay rents in the private & social rented sector then the annual subsidy for a social rented property must be higher than £315.79.
    Don’t get me wrong, I am totally opposed to the Bedroom Tax for many reasons and I loath Lord Fraud and IDS with a passion but the figures confuse me.

    • joehalewood February 22, 2013 at 4:40 pm Reply

      If you re-read what I said I call the added amounts a PRS landlord receives in HB payments the revenue subsidy – the diiference over and above what a social landlord receives is the £25.20 per week figure and so is the PRS revenue subsidy

  3. [...] Halewood has pointed out that the private rented sector is already more heavily subsidised than the public sector, receiving £2.17bn in capital subsidy compared with the public sector’s £1.2bn. [...]

  4. [...] Halewood has forked out that the private rented zone is already some-more heavily subsidised than a open sector, receiving £2.17bn in collateral funding compared with a open sector’s £1.2bn. Figures and [...]

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