28 March 2014

Esther McVey flounders as bedroom tax failure becomes clear

Conservative minister says policy was "never all about saving money" but just six per cent of tenants have downsized.

(Photo By Esther McVey poses for pictures outside 10 Downing Street during the 2013 ministerial reshuffle. Photograph: Getty Images.)

After the publication of today’s BBC study showing that the bedroom tax has resulted in just 6 per cent of affected tenants moving house, while pushing 28 per cent into rent arrears, it was left to Esther McVey to defend the government this morning. While failing to achieve the behavioural change they wanted (owing to the lack of smaller properties for tenants to move to), ministers boast that the measure is saving £1m a day (housing benefit is reduced by 14 per cent for those deemed to have one “spare room” and by 25 per cent for those with two or more).

But when McVey, the Conservative employment minister, was asked on Radio 5 Live how much money the government had saved, she replied: “But it was never all about saving money…”, a line of argument entirely at odds with that deployed by her department.

McVey went on to explain that the policy was “about using the stock, the housing much better”. But the problem is that the lack of one bedroom properties means there isn’t enough housing to use “better”. In England, for instance, there are 180,000 social tenants “under-occupying” two bedroom houses but just 85,000 one bedroom properties available.

It’s for this reason that the DWP now prefers to emphasise the money it expects the policy to save (while challenging Labour to say how it would pay for its reversal and also remain within the new welfare spending cap). Iain Duncan Smith said today: “It was absolutely necessary that we fixed the broken system which just a year ago allowed the taxpayer to cover the £1m daily cost of spare rooms in social housing.”

While the policy is also costing money, by increasing homelessness and pushing some tenants into the private sector, where rents are higher (inflating the housing benefit bill), it seems likely that there is a net saving. But if, as McVey suggests, the policy isn’t really about saving money, it’s not clear what the point of it is at all. As long as the government fails to build the houses required, most tenants will simply be left to endure yet another welfare cut.