2013 December

There’s not much to like about the bedroom tax.

Ed Miliband, ever-desperate to engineer a connection with a bored and far-from-convinced electorate, will not only freeze energy prices but has promised that a future Labour government will abolish the hated bedroom tax too. It has already had a terrible impact on what welfare reform’s paternalist critics routinely describe as the ‘vulnerable’. The ‘under-occupancy penalty’ or ‘abolition of the spare room subsidy’ to housing benefit for those living in social housing – like the community charge before it the sort-of-official names for this non-tax never caught on – isn’t easy to defend, even for those of us with more than a little sympathy for the reforms.

Those deemed to have more than their allotted number of rooms will find their benefit cut by 14% for one ‘spare’ room; and by 25% if they have more than one spare room. Of the reported 660,000 households affected, 220,000 are families and 440,000 include people with disabilities. A group of charities have written to the prime minister expressing theiroutrage at his misleading statements to the effect that disabled people are exempt. For all but a few this is simply not the case. But this is less a case of Tory nastiness, as most of the critics seem to think, than it is to do with the incompetency of the reformers. Arguably the bedroom tax is not nearly discriminating enough. Expecting people like the sick brother of an MP to pay – a man whose kidney dialysis machine occupies a ‘spare’ room according to the witless officials responsible for administering his housing benefit – makes no sense.

So yes, the bedroom tax is mean-spirited. The children of benefit claimants are, under the new rules, forced to sleep in the same bedroom; and separated parents are expected to make do with a sofa for their visiting kids at weekends. But it is also mad even in its own terms. The ‘tax’ was imposed on the dubious grounds that an alleged one million spare bedrooms, when freed up, would magically become new homes for half of the two million or so people on the social housing waiting list. Instead a severe shortage of two-bedroom homes into which ‘under-occupiers’ might otherwise have moved has resulted in misery all around. Those that can move are forced into more expensive accommodation in the private sector, costing the taxpayer even more in housing benefit; and increasingly leaving those larger homes that nobody can afford standing empty and at risk of being demolished. Most will have to cough-up and put-up with an even more miserable existence than that they were enduring before the ‘tax’.

And yet … despite the understandable worry and anger of those affected and the over-emoting of their supposed sympathisers in the left-liberal commentariat, there is something amiss with the reaction of the latter to what is an indisputably awful policy. While they point to the lack of affordable housing as the real culprit they don’t call for the one thing that might solve the problem – a mass housebuidling programme. The sort of thing governments used to take on in the first half of the twentieth century. That there are ‘375,000 families living in cramped, overcrowded accommodation’, as employment minister Esther McVey announced recently, is the best argument in favour of pursuing such a policy. Instead it is used to justify forcing people to shuffle along to make room in the existing inadequate stock. This is despite the number of homes being built year-on-year being nowhere near enough to meet the demand of an increasing population. The housebuilding rate continues to fall from an already inadequate 21st Century peak of 223,530 in 2007/08 to a pitiful 124,720 in 2012/13. This represented a fall in the number of houses built of 8% on the previous year. But even more to the point, there is no criticism at all of the very welfare state that is both crippling the public finances and putting-up a large minority of the population in state-subsidised accommodation that they can’t afford themselves; or at least cannot scrape enough together for from their own meagre incomes.

This can’t go on. It is not enough to fret about the lack of ‘affordable’ housing or to call on the UN to protect the human rights of ‘the vulnerable’. There are three things that can be done to solve the problem and without resorting to the victim-politics to which the anti-cuts and anti-welfare reform lobby have become all too accustomed. There isn’t nearly enough housing being built of any kind whoever eventually moves in, or whatever their alleged capacity to cope with the semi-withdrawal of state support. Making housing affordable will best be achieved by building much more of it. Instead of devoting their energies to patronising the workless, they should be campaigning for the government to create the economic conditions – through, for instance, strategic investments in infrastructure including the housing stock – that will generate more and better paid jobs. And if they really care about the downtrodden, rather than continually shouting it down, they should be supporting – albeit critically especially when it comes to the likes of this ‘tax’ – the need for urgent and more far-reaching reform of the welfare state.

First published in Huffington Post

The following is an edited version of a speech given by David Clements as part of ‘Cuts, cuts, cuts: what, where and why?’, a debate at the recent Battle of Ideas festival.

I’m not a big fan of ‘the cuts’. They may be necessary, given the parlous condition of government finances, but they are hardly going to make public services any better. With the possible exception of the police, where a fall in crime has continued despite recent cuts, the services we receive are likely to get worse. Moreover, such cuts won’t solve the economic crisis.

Take local government. In the past few years, local government has been at the forefront of UK public-spending cuts. The funding that councils receive from central government accounts for around a quarter of public spending. Councils have already seen their funding cut by somewhere between just over a quarter and a third, depending on who you ask; and there will be another 10 per cent cut in 2015. The chair of the Local Government Association has described councils as the ‘hardest hit’ organisations in the public sector. Critics say that councils can draw on their reserves, raise council tax and – most controversially – increase various charges, fees and penalties for everything from car parking and speeding to planning applications and licensing.

And yet the arguments against the cuts are so objectionable that I’m almost tempted to wield the axe myself. It’s not simply the fact that some services – like health and education – have been ‘ring-fenced’, though I do think we should be asking searching questions about why the National Health Service should receive special protection. (Rather than insulating this mythically ‘cherished’ service from cuts, it should be exposed to a wide-ranging debate about its current performance and future role.)

No, the biggest problem I have with anti-cuts lobbyists is that they insist that everybody is ‘vulnerable’ and won’t be able to cope if the state isn’t there with a safety net.

So, like the representatives of local government, people with disabilities (once a bolshie bunch that would tie themselves to railings to publicise a political issue), or at least those campaigning in their name, routinely describe themselves as the ‘hardest hit’ by cuts to local services and welfare reform. Women, too, once championed by equally bolshie groups of feminists, have been turned into special victims by today’s campaigners. Indeed, the police and domestic-violence campaigners, not satisfied that a fall in crime in general, and in domestic violence in particular, is a good thing, have joined forces to claim otherwise. So under the headline ‘Police referrals of domestic-violence cases drop 13 per cent’, we learn that this is not at all welcome but is in fact ‘alarming’. Obligingly, the shadow home secretary blames spending cuts for this outrageous failure to find more alleged abusers to haul before the courts.

There is a lengthy queue of groups claiming to be the worst-hit by government cuts. The British Medical Association claims cutbacks are increasing child poverty, making familiarly dubious claims about children’s wellbeing and concluding that if we were ‘failing our most vulnerable children’ before, we certainly are now that we’re cutting welfare and children’s social care.

Another claim is that cuts to school breakfast clubs mean that parents are unable to feed their children before they go to school – which makes you wonder what parents did before breakfast clubs first appeared in the 1990s.

The Organisation for Economic Cooperation and Development (OECD), basically an international club for the world’s developed countries, claims that the cuts will widen inequality. Here, the OECD joins a long line of organisations and commentators taking a swipe at old people, who it claims have largely escaped the hardships so far. In contrast with all the victim-talk for other groups, we are reminded that nearly half the money spent on benefits goes on the state pension, and there is a cross-party consensus that pensioner benefits will be means-tested after the next election.

The Department for Work and Pensions (DWP) budget, accounting for nearly a quarter of all public spending (£166 billion per year is spent on benefits) certainly has a lot to answer for. The DWP is undermining all of the cutting going on in local-government and central-government departmental budgets by doing too little to trim the benefits bill. Housing benefit is the second most costly of all benefits after the state pension – it has risen to £24 billion this year. The government aims to cut this by £500 million per year. There is a benefit up-rating cap of one per cent in place until 2015/16 aimed at saving £3.1 billion in working-age benefits. And the introduction of Universal Credit (to replace many of those working-age benefits) is supposed to save £38 billion by 2023. There are clearly attempts to solve the problem, but they don’t look like being anywhere near enough.

So you might expect that there would already be a battle of ideas happening about the welfare state and how we go about making it affordable, if we choose to keep it at all; but no such debate is taking place. Instead, there is a lot of noise about how ‘vulnerable’ claimants won’t be able to cope with the benefit cap, Universal Credit, the ‘bedroom tax’ and the demands of the Work Programme. There is no discussion of the idea that it might be unfair to expect a life on benefits to be more rewarding (financially at least) than being in work. Or that people shouldn’t be subsidised by the state to live in houses that are too big for them or that they can ill afford. Or that young people not in education, employment or training shouldn’t be living off benefits. Apparently, they too are vulnerable. According to opponents of the Tory proposal to cut benefits to the under-25s – one I happen to agree with – 18- to 24-year-olds in receipt of benefits tend to come from broken families or might be abused if they go back to live with their parents.

Despite the often hysterical claims, these sorts of policies, in my view, are worth supporting. But there are no easy solutions to what is a complex and long-standing problem. The public sector is still far too big, with public spending currently equivalent to 44 per cent of UK economic output. Nevertheless, there are trends which mean that the state will inevitably have to grow further in order to accommodate the increasing care needs of an ageing population. The only cap planned for social care will be on how much individuals have to pay for it before the state steps in. To ease the pressure on housing and housing benefit we need hundreds of thousands, if not millions more homes to replace an inadequate, ageing housing stock. And if we do get back in the business of building things, the anti-free school lobby – while wrong about free schools themselves – are probably right about the need to build more primary schools. With these pressures for increasing state expenditure, surely we need to think about what might be cut elsewhere?

To conclude, we have the peculiar situation of the government doing a lot of cutting in some areas, only to see spending getting out of control elsewhere. And at the same time, we have this hysterical over-reaction on the part of the self-appointed defenders of ‘the vulnerable’ who, apparently oblivious to how serious the fiscal situation has become, think the cuts have already gone too far. There is a grown-up debate to be had about public services and the welfare state, and we urgently need to have it.

First published in sp!ked

Archives for December 2013

I don’t like the bedroom tax either, but …

We can cope without the state