Why the bedroom tax has cost more than it has saved – IDS go figure!

Iain Duncan Smith has knowingly and deliberately lied to parliament.  He is a liar as can so easily be proven.  I make no bones either about calling him a liar and a deliberate and knowing one and I refuse to use euphemisms such as being economical with the truth and the like – he is a liar as the figures below highlight and in just a simple 10 minute blog using official figures that he produces!!

He lied over the bedroom tax as Hansard recalls from yesterday in the following question and answer:

Under-occupancy Penalty

Mr John Leech (Manchester, Withington) (LD): What estimate he made of the potential savings to the public purse that would arise from implementation of the under-occupancy penalty; and what estimate he has made of the amount saved to date by that implementation. [906482]

The Secretary of State for Work and Pensions (Mr Iain Duncan Smith): Before our reforms, the taxpayer had been paying for 820,000 spare rooms. To date, the policy has saved about £830 million from the housing benefit bill, and the estimated savings remain the same: approximately £500 million a year in 2013-14 and 2014-15. Those figures have been ratified by the Office for Budget Responsibility.

The bedroom tax (alleged) saving.

The bedroom tax has official figures published by the Secretary of State Work & Pensions – yes that’s IDS himself who publishes the official figures every quarter.  The most recent figures were published in November 2014 and cover the period up to August 2014 and this official data says:

1. (a) How many households are affected (471,887), and
2. (b) What the average weekly bedroom tax figure is (£14.92), and
3. (c) There are 52.18 weeks in every year (365.25 days divided by 7)

So when we multiiply (a) 471,887 households at (b) £14.92 per week and then by (c) 52.18 we get the ABSOLUTE THEORETICAL MAXIMUM SAVING and that figure is (a) x (b) x (c) =

£368.114 million in a full year or £7.079 million per week.

IDS claims A saving of £830m so far as at yesterday. The absolute maximum (see below) is £615.87 million so IDS has stated a figure AT LEAST 35% MORE THAN IS THE MAXIMUM POSSIBLE

IDS claims the full first two years saving to be £1 billion.  Yet the absolute maximum saving is £736.228 million and again 35% MORE THAN IS THE MAXIMUM POSSIBLE

Comment

Take away the DHP costs which for the first two years for bedroom tax are £115 million and we see the maximum possible saving is £621m over two full years (£736m – £115m)

So IDS has told parliament that the ‘saving’ is 61 PER CENT HIGHER THAN IT CAN POSSIBLY BE

Yes he is lying and knowingly lying through his teeth.

Note for absolute clarity if many social housing tenants have left and their place taken by private tenants it could be possible to save housing benefit in this way.  Yet so few have been able to downsize and even if they are all private tenants moving into social housing and thus saving on the HB bill then just the legal costs IDS has paid out to take the recent Upper Tribunal case more than outweigh any savings alone.

Then we have so many other expenditure costs associated with the bedroom tax such as increased homelessness and increased number of bedroom tax appeals each one will cost about £1500 to the MoJ bill that government pays out and so many other expenditure costs.  But let’s forget all that complexity as to whether the additional costs are borne by local government and instead keep this so simple that even a lying buffoon like IDS can understand them.

The simple way to look at it.

IDS says the bedroom tax has saved the HB bill £830m so you would think that would have to be reflected in the overall HB bill and that would be ceteris paribus £830 million lower today than in April 2013 when the bedroom tax began.

The HB bill at April 2013 was £23.698 billion.  The HB bill at August 2014 was £23.937 billion or £239 million MORE than when the bedroom tax began.

Note well here that in April 2013 there were 132,000 fewer claimants too at 5.062 million compared with 4.930 million at August.

IF the same number of claimants were claiming HB as at April 2013 the HB bill would be a further £641 million more per year so – all things being equal – the overall HB bill on a like for like basis is £879 million MORE and not £830 million less as IDS claims.

Even allowing for rent inflation the real HB bill is over £250 million per year more at the latest August 2014 figure than it was when the bedroom tax began in April 2013.

Yes IDS is a liar and a known liar and has deliberately and knowingly lied to parliament over the savings of the bedroom tax which we can say are at least MINUS £250 million and have cost the public purse more and not saved a penny.

Those simple figures above just focus on the bedroom tax and show at least a £250 million increase to the overall HB bill.  Yet those simple figures do NOT include the alleged savings from the benefit cap, the savings from the LHA caps and the savings from the Shared Accommodation Rate or SAR and all of these are supposed to reduce the overall HB bill as well.

Therefore the bedroom tax, benefit cap, LHA cap and the SAR cap – all of the welfare reform policies put together and all intended to reduce the Housing Benefit bill – has seen that HB bill INCREASE by £250 million per year and not decrease at all!

Oh dear, IDS truly is a liar and a known liar isn’t he and ALL of the welfare reforms policies aimed at reducing the HB bill have actually increased that bill.

Is there anyone left on Planet Earth who believes the bedroom tax has saved money?