Ritchie on the bedroom tax

If homeowners in debt arrears who know that this gives the right to forfeiture can’t be evicted in Spain what right has our government got to evict because of arbitrary rules on which room a person sleeps in?

Someone\’s going to have to point out the link to me here. Laws about eviction as a result of the non-payment of a mortgage are rather different from laws about the non-payment of housing benefit aren\’t they? Or maybe it\’s me that has this wrong. Because as far as I understand it the \”bedroom tax\” doesn\’t actually evict anyone at all. It simply reduces the housing subsidy to those in houses larger than some arbitrarily defined \”need\” doesn\’t it?

22 thoughts on “Ritchie on the bedroom tax”

  1. I’m not on the internet right now so I can’t look up about this “bedroom tax”, but surely if it’s a cut in housing benefit it’s not a tax? Is it? Am I missing something here?

  2. No, you’re not. “Bedroom Tax” is a misnomer. This is why IDS has been touring radio and TV studios accusing the BBC of bias in adopting Labour’s term.

  3. It’s not a tax, and you can’t be evicted.

    The response should be:

    People in private rented accommodation, and indeed in their own houses, are paying more to live in smaller houses.

    In the public rented sector, we currently have families of five living in two bedroomed flats and single people living in three bedroomed houses. That cannot be right.

    Nothing more to be said.

  4. The section of the FT article which he quotes to support the proposition that those in arrears “cannot be evicted” does not say they cannot be evicted. Copied and pasted from his article, with emphasis added:

    “The decision by the European Court of Justice *will give Spanish courts new powers to delay or freeze the eviction* of home buyers who have fallen behind on their mortgage payments.”

    Courts can (and often do) “delay or freeze” repossessions in the UK. Not the same as “cannot be evicted.”

  5. I think it’s a cut in housing benefit, and so the headline rent will stay the same but there will be less benefit money to subsidise it.

    So what people will be evicted for (if they are; it’s a very long and difficult process to evict protected tenants) is non-payment of rent.

    http://www.housing.org.uk/policy/welfare_reform/%E2%80%98under-occupation%E2%80%99_penalty.aspx

    But I don’t understand why Spain not doing something means that the British government has no “right” to do it. The Czechs don’t levy higher rate income tax – does that mean that the British government has no “right” to do so?

  6. The current system works by limiting the amount of benefit you can claim to a target rent, based on average rents in your area for the accommodation that a family of your size ‘needs’.

    But that doesn’t work with social housing, because the rents are lower than market rents (because the initial construction was heavily subsidised).

    As an example, if you have no income, your family should ‘need’ a 2-bed flat and rent for private sector 2-bed flats in your area is £500. Housing benefit will pay your rent up to £500 (it’s a bit more complicated, but that’s close enough). But if ‘social housing’ (council or housing association) rents in your area are £400 for a 2-bed flat and £500 for a 3-bed house, then you may as well have the 3-bed house – it doesn’t cost you any more.

    Hence the “under-occupancy penalty” which actually reduces your housing benefit by a percentage (14% if you have 1 ‘spare’ bedroom, 25% if you have 2), even if it’s under the target rent.

  7. The better answer (although still short of the really radical benefits reform that we still need) would have been to work out the average rent (I think they use 30th centile) for the size of property that each claimant ‘needs’, and then just pay them that – irrespective of what rent they’re actually paying.

    Then the claimant can choose whether to rent something for the amount of the benefit, or something cheaper and save a bit of cash, or something more expensive and have to find a bit more money.

    You know, rather like the decisions that everyone else has to make about income and expenditure.

    It’ll also give market pressure to drive down rents. Currently there’s no real pressure because most housing benefit tenants don’t benefit much from lower rents (if the rent is lowered, so is the housing benefit).

    You’d need two average rent calculations, one for private tenants and a lower one for ‘social’ tenants to reflect the subsidy.

    And do the averaging on a much broader geographic area than the current one. There currently seem to be around 160 Broad Rental Market Areas, but the 37 NUTS2 regions (but merging inner & outer London) should be plenty.

  8. I can’t help but feel that a “bedroom tax” sounds like a flimsy plot device in one of those 1970s sex comedies that were neither sexy nor comedic. It would be called something like “Accountant On The Job”.

    “I’m from the ministry of bedrooms and I’ve come to look at your bottom line missus. Is there anything I need to take down? Come on, let’s see your particulars! Ooer!”

  9. Mr. Murphy, if he said that about Spain, really hasn’t got a clue and he should have the grace to keep his fingers away from the key board.

    With the new ruling judges can delay eviction if there is suspicion of abusive clauses in the mortgage. Until now you were put out of your house, legally and after you could go to court if you considered the agreement abusive. Judges can now use their discretion. But, if you don’t pay and the agreement is ok, your house is repossessed.

  10. Ian B,

    It’s a bit dystopian for that. Maybe if someone mixed up a 70s sex comedy with sci-fi actioner Equilibrium, and we could have Confessions of a Grammaton Cleric.

  11. In the public rented sector every part of the housing market, we currently have families of five living in two bedroomed flats and single people living in three bedroomed houses. That cannot be right.

    Fixed that one for you. Relatedly, LVT.

  12. Bah, Tim doesn’t allow strikethrough tags. Use the incredible power of imagination to assume “public rented sector” is crossed out in the comment above.

  13. To each according to his need, john b? Not particularly surprising but missing the point.

    If somebody chooses to pay for it from their own money – it’s up to them. That 2 bed flat might be home to a keen family of surfers, golfers or football lunatics and right next to their ideal spot. Ditto the 3 bed house – might be the historic family home that they are emotionally attached to.

    It’s when the public (purse) is subsidising them, that’s when we get we get the right to do something other than whine.

  14. ‘ what right has our government got to evict because of arbitrary rules on which room a person sleeps in?’

    As far as I know, the government couldn’t care less who sleeps where. They merely observe that you can’t sleep in two bedrooms at once, and thus won’t pay for empty rooms.

    JohnB – The difference between me (single person living in a 3 bed house) and those getting their housing benefits reduced is who pays. I pay for my house (which was one of the cheapest houses in town anyway), while for my neighbors down the street, the state (oh, me again!) pays.

    I don’t much care what people who own or rent their own houses do with them (One of my spare rooms became my study/office, I have a lodger moving in the other after easter), but when I’m paying through the tax system, I don’t see why I should be subsidizing peope to live in houses bigger than they need… social security and the like should be a safety net, not a massive attempt at redistribution.

  15. Others have pointed out the very obvious reason why you’re a dickhead, JohnB, so I won’t bother.

  16. social security and the like should be a safety net, not a massive attempt at redistribution.

    What a wonderful yet practically unachievable aspiration. I believe Lord Woodhouselee first expounded the principle.

  17. SE – quite agree. If we have any social security at-all, by it’s nature it’s re-distibutive.

    However, if we are going to have some social security (and while others disagree, I’m willing to accept the point – I’m well aware than in the sort of job I do, I’m probably only one forklift truck accident or similar bad mistake away from unemployment – I’ve seen such things happen to others), then it should be to job of those who administer it to do their best to restrict it to genuine needs (e.g. food, water, roof over your head) rather than what people might like (sky+, 5 bedroom house in Chelsea, etc etc).

    Restricting HB to paying for the number of bedrooms needed seems to be an ideal example of such administration being sensibly applied.

    Part of the problem is that various well meaning people have completely stuffed up the markets in some areas, which makes knowing actual costs difficult – housing in particular suffers from a combination of the difficulty of getting planning permission and the presence of a huge subsidized rental sector run by local authority housing associations.

    If planning restrictions were eased, housing association properties were privatized to be rented at market rents, and housing benefit was payed to claimants at some percentage of local market rents the whole system would work better, and probably work out cheaper. I think the main effect of housing benefit is to inflate rents to the benefit of landlords, because planning constraints mean that the market can’t increase supply in response to clear price signals.

  18. You’re going about this exactly the wrong way. There’s a bizarre libertarian-right hypocrisy when it comes to state handouts, when those handouts are indirect and go to people who aren’t poor.

    If Bob bought a house for 500 quid in 1950, Sam inherited a house that his dad bought for 500 quid in 1950, and Dave lives in a council house that he moved into in 1950, there’s hardly any difference between the three.

    They’ve all acquired the use of a several-hundred-thousand pound asset for fuck all, at the expense of people who haven’t. The only distinction is that Dave doesn’t have the right to sell the asset, only to keep on using it (although right-to-buy partially offsets that).

    Dave didn’t pay the initial capital sum, but then he’s paid more than 500 quid in rent over the years, so it all evens out.

    The beneficiaries from the state-created housing shortage are people like Bob and Sam, who have been given massive wealth for free by the state at the expense of non-homeowners.

    Ignoring right-to-buy, Dave is in exactly the same situation that he would be if there was neither a state-created housing shortage nor a subsidy to council rents. Right-to-buy means he’s in a slightly better situation than that.

    All this wealth is created directly at the expense of Ian, who either has to save and borrow several hundred thousand quid to hand over to Bob or Sam if he wants to buy a place to live, or to hand several hundred quid a week to Bob or Sam if he wants to rent a place to live.

    The people who you think are getting state handouts are neither gaining nor losing; they’re passive non-participants in the game of robbing Ian to pay Bob and Sam.

  19. In your scenario I am Sam. How, exactly, have I robbed Ian – or robbed anyone – to get where I am?

  20. ‘The people who you think are getting state handouts are neither gaining nor losing; they’re passive non-participants in the game of robbing Ian to pay Bob and Sam.’

    IanB – that’s more or less what I just said.

    ‘I think the main effect of housing benefit is to inflate rents to the benefit of landlords, because planning constraints mean that the market can’t increase supply in response to clear price signals.’

    The reason that I can with a clear conscience complain about housing benefit payments it’s its pretty obvious they don’t benefit the poor – they benefit the landlords by further increasing the amount of money that is chasing the same amount of housing, thanks to planning rules.

    All us right wingers have been also been complaining bitterly about the process of robbing Ian to pay Bob and Sam via the planning system… haven’t you noticed? If you can explain exactly where my position is hypocritical, I’d love to hear it.

  21. Peter S: the government has artificially created land scarcity in order to increase the value of the asset that you own.

    theProle: your position isn’t hypocritical, because you acknowledge that HB claimants aren’t benefiting at the taxpayer’s expense, and you support reform of the planning system to end the rort.

    You aren’t the only person commenting though, and there are plenty of people upthread who clearly think that HB claimants *are* benefitting at their expense.

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