Welfare reform is needed but the bedroom tax will end badly

The ‘bedroom tax’ does little for either benefits claimants or the public purse and is likely to become the poll tax of 2013, by Dr Tom Manion

April Fools’ Day heralded the introduction of the ‘bedroom tax’, or as David Cameron prefers to call it, the spare room subsidy. Whatever the terminology, what difference will it make to relieving housing need and making savings on the UK’s £200bn welfare tab?

Clearly our welfare benefit system needs reforming. It bears little, if no resemblance, to the system envisaged by Aneurin Bevan and Sir William Beveridge. In real terms, costs in 1945 are estimated at about £11bn. Our current welfare system bill is almost 20 times that amount. Successive governments have subsumed all manner of benefits into a now overly complicated system. Take the single parent benefit. It’s almost impossible to understand and is riddled with hypocrisy, injustice and, in too many instances, shocking outcomes.

The welfare system, alongside the nationalisation of major industries, the birth of the NHS and a massive increase in public sector housebuilding, was designed as a contributory system of tax and national insurance contributions to create a just and fair society with safety nets, safeguards and better living conditions for UK citizens.

There are 180,000 households who will be docked up to 25% of their housing benefit if they have surplus bedrooms. But the policy will have little if no effect in terms of strategically managing the nation’s public sector housing. The real benefit to the exchequer will be miniscule if at all. With more than 600,000 people affected by the changes, of whom 70% are disabled, and with pensioners excluded too, it leaves little real money to be derived, especially if you take into account bureaucracy.

Over recent weeks, we have seen the coalition government backpedalling with concessions for foster parents, families of overseas service personnel now exempt – and many more could follow.

Many would jump at the opportunity of moving to a smaller home if one was available and just as much if their social, family health and educations needs could be satisfied. A large number of social housing providers already encourage people to downsize, and it’s not so long ago that the tenancy incentive scheme offered people £10,000 to move out of social housing and allow those with greater housing needs to move in.

There are many instances in our society of good ideas failing because of lack of common sense and sensitive implementation. The spare bedroom fiasco will end up in this category. If I were implementing this policy it wouldn’t be retrospective, but instead part of a future expectation and requirement that people live within the space standards that they require. If anybody wants to live in a big house that they don’t need, they have to pay for it. Benefit claimants should not be treated better or worse than taxpayers – there should simply be fair and equitable treatment.

The answer is to try to dismantle the welfare state, eliminate hypocrisy, excess and make work more financially attractive to people. There are alternative methods. If public sector sickness levels were at the same level that they are in my organisation (0.4%), if all social housing providers let their properties on the same day that they became available and minimised arrears as much as we do, then almost £18bn, nearly a quarter of the proposed public expenditure cuts, could be saved.

In this context, the bedroom tax must be seen as a trivial, draconian, unwieldy measure, which may well become the poll tax of 2013.

Dr Tom Manion is chief executive of Irwell Valley Housing Association