In a weeks time George Osborne will give his Autumn Statement (think mini budget) and speculation is rife that (a) Housing Benefit will face further cuts as (b) Osborne will abandon his Tax Credit cuts the Lords rejected and needs to find those savings.
Firstly, this is all speculation….though every day since 8 May 2015 is one of speculation as to further ‘welfare’ cuts so no change there!
Over the weekend the Sunday Times said (a) and (b) above and wrapped up in IDS won Osborne lost language or in lay terms disingenuous bull. Today the rest of the mainstream press picks this up and the Daily Mirror (as is its want) goes hyperbolic in its speculation and as also usual misses the point and is best ignored though it has caused a storm on social media sites such as Facebook.
I do wish anti-bedroom tax groups would stop and think rather than create hysteria and anger over whatever bedroom tax bullshit the tabloids produce as it is wasted energy.
A much more informative and considered take on this is given by Jules Birch at Inside Housing here (no paywall on this) and is required reading and in line with the highly speculated “£2bn” HB cuts Jules looks at some options:
It is rare I disagree with Jules and as rare as hen’s teeth for me to be critical of his analysis yet the highlighted section above is a long way short of his usual very high standards of analysis ….as he has missed the bedroom tax dimension of the 90% max HB posit and that will have huge further repercussions.
The maximum 90% HB issue – this is an old idea previously rejected by the coalition but then so was pay MORE to stay and at much higher income level of firstly £100k then £60k on a voluntary basis and now £30k / £40k on a statutory basis! In short old Tory ideas put off or abandoned in coalition are now becoming policy intentions for real hence the maximum amount of HB any tenant can receive being 90% may well feature next week in the Autumn Statement.
Social landlords receive £15.31 billion per year in Housing Benefit and so limiting HB to 90% saves 10% of this and cuts a minimum £1.531 billion from the HB bill just from social tenants. It will also cut a much smaller amount from private tenants yet impossible to estimate so I assume this will be equal to the pensioner being exempted in social housing.
Additionally the maximum 90% of rent HB issue hugely increases the bedroom tax HB cut. The 14% for one ‘spare bedroom’ and 25% cut for two ‘spare bedrooms’ are a % deduction from the maximum eligible rent which now is the full rent in social housing. Yet with the 90% maximum HB policy those 14% and 25% deductions rise hugely and the simple example below explains.
Rent £100 per week and 1 “spare bedroom” equals a £14 HB cut (14%) so the tenant has to make up £14 per week. This changes to become a 14% reduction on the maximum HB of £90 per week meaning that only £77.40 per week HB is paid and the social tenant has to make up £22.60 per week – or in other words the 14% bedroom tax deduction increases to 22.6%
The same £100 rent and 90% max HB but with 2 “spare bedrooms” sees just £67.50 paid in HB leaving the tenant with a £32.50 per week shortfall – or the 25% bedroom tax reduction increases to 32.5%
Oh shit goes the cry from tenants and social landlords as this is a huge issue for social tenant and social landlord. The numbers make even worse reading.
The current bedroom tax HB cut is £357.4 million and this will increase to £543.8m so an additional £186.4 million of bedroom tax is levied which is a 52% increase.
[That projection is based on 81% of bedroom tax households having 1 “spare bedroom” which was the original impact assessment estimate from DWP.]
What is perhaps more scary is that often LHA – the private rented version of HB – covers 90% of the actual rent or even less so I can see Osborne selling this as being fair and IDS selling this as fair and an incentive to get employment.
There are very strong arguments against both those posits yet since when has that stopped the Tory spin machine with the bedroom tax and despite polls regularly showing the majority of the general public are against the policy!
In summary this is speculation yet the last paragraph above and the figures this means in terms of cuts (and the not so small matter of abject misery and poverty to social tenants!) gives real cause for genuine alarm. As does this 90% maximum HB to rent issue being a rehashed policy just like pay MORE to stay.
A 52% increase to bedroom tax will rightly see horror for tenants and landlords and local councils as evictions are bound to increase in number too. It is abject horror for communities and families too and increased horror as that is already what the existing bedroom tax does.
As you will see me write with increasing regularity, the need for the Tenant Campaign Group grows by the day just as the need to save the social housing model created in the Welfare State grows by the day. The demands on DHP budgets and homelessness costs will grow by the day too and the thinking of social landlords especially housing associations requires a total rethink too in light of this huge threat and however speculative it may appear today, this time next week I suspect it will be a reality.
So just one more challenge and fight for the TCG to add to the privatisation issue which will happen sooner rather than later unless we see that dark threat off. The areas of mutual tenant and landlord interest for the TCG grow by the day.