A guest post from 3p Steve.
Whatever you choose to call it, the UK Government’s “Bedroom Tax” (/spare room subsidy / under occupancy reduction) is one of the most controversial of its welfare reforms, especially in Scotland.
I don’t know if that’s because such a large proportion (almost 80%) of affected households contain a disabled tenant, or because there are so many different examples of the injustice of the measure, from separated parents, to service personnel to foster carers. But whatever the reason, there have been protests all over the UK, and both the Labour party and the SNP have come out strongly against it.
The Scottish Government, perhaps prompted by the Govan Law Centre and others, have written to councils and social landlords encouraging them to help where they can by reclassifying bedrooms and avoiding evictions. At council level, SNP-led Dundee council and Green-led Brighton and Hove council have both promised there will not be evictions resulting from arrears accrued due to the bedroom tax.
But the despite all of this, the UK Government remains firm, and will impose the bedroom tax from next month on 105,000 households in the social rented sector in Scotland, taking around £53 million out of the pockets of some of the poorest and most vulnerable.
Some have called on the SNP Government to stop the tax, who in turn have argued that the only way this can happen is with independence – they don’t have the powers, the means, or the money to stop it.
But now, thanks in part to George Osborne’s budget today, that’s simply not true.
The Scottish Government have been given enough extra money in today’s budget to undo the bedroom tax. By coincidence, as a result of Barnett consequentials, the Scottish Government will receive an extra £55 million in the next financial year. Now according to the Scottish Government’s own analysis, that’s almost exactly the same as the £53 million needed to reverse the bedroom tax in full. There is a technical issue around capital and revenue budgets but, without going into too much boring detail, that shouldn’t be an issue: the Scottish Government generally transfers money from their revenue budget into the capital budget so they have the wiggle room they need to transfer a bit back.
What about the powers? Benefits are mostly a reserved matter, however, as Ian Smart shows on his blog, councils have powers to help out the poorest, and what’s more there is a well known and loved precedent – free personal care for the elderly.
What about the mechanism? Well up until the introduction of universal credit (which may never happen!) housing benefit will be administered by councils. That basically means that between them, the Scottish councils have to keep a list of all the households affected by the bedroom tax – they will know exactly who is affected and by how much their housing benefit is to be cut. There is nothing to stop these councils either not applying the cut to housing benefit (and making an internal budget transfer to cover the difference), paying the amount to the relevant social landlords directly (in many cases this will be the council itself, so again simply an internal budget transfer is all that is required) or paying the money in cash to the tenants affected. All councils need from the Scottish Government is for them to pass on the Barnett consequential money.
So if we are serious about stopping the bedroom tax in Scotland it’s good to know that we have the cash, we have the power, and we have the means. The only question is, does the Scottish Government have the political will?
#1 by Peter A Bell on March 21, 2013 - 9:04 am
Is there some limit to the proportion of the Scottish budget which must be diverted to mitigating the impact of Westminster’s austerity fetish? The Barnett consequentials referred to do not represent a windfall that the Scottish Government can disburse as it pleases. At best, it is a small alleviation of swingeing budget cuts. It is certainly not “extra money”.
Any funds that are used to subsidise the implementation of the bedroom tax must inevitably be resources taken away from other areas of spending. There is no doubt that those being hit by the iniquitous bedroom tax are deserving. But it is likely that those being deprived are just as worthy of our sympathy. We can’t really tell. Because those who are coming up with all these schemes to facilitate this latest Tory scourge don’t tell us who is to be sacrificed in order to ensure the scourging runs smoothly.
#2 by Aidan on March 21, 2013 - 9:36 am
All government funding decisions are about the trade offs you describe, this is no different.
#3 by Peter A Bell on March 21, 2013 - 10:01 am
So what is the trade-off? Who suffers? Where is this money coming from to help implement the bedroom tax?
#4 by orkers on March 21, 2013 - 9:55 am
You’re barking to a Unionist tune Aidan and you certainly aren’t fooling me.
Westminster applies death by a thousand cuts and all you can do is mutter platitudes.
Vote ‘Yes’ for a better Scotland in 2014.
#5 by James on March 21, 2013 - 10:38 am
Er, Aidan didn’t write this. Steve did. And he’s not a Unionist last time I looked. But thanks for your contribution.
#6 by Alasdair Stirling on March 21, 2013 - 10:21 am
The Scottish Government can only transfer money from revenue to capital not the other way around. Therefore your idea is a non-starter as the transfer that you envisage is prohibited.
#7 by James on March 21, 2013 - 10:40 am
The point Steve’s making, as I get it, is they already transfer a lot from revenue to capital, so this would allow them to transfer less and use the money for revenue spend in the way he suggests.
#8 by Peter A Bell on March 21, 2013 - 11:38 am
So the question remains. Who is to be deprived in order to facilitate the UK Government’s bedroom tax? How can we assess whether the suggestion is viable or acceptable if we are not told the cost?
#9 by James on March 21, 2013 - 11:42 am
Personally I think the wrong it would do to the most vulnerable is well worth over-turning for a relatively small sum of money. Perhaps we could deprive the road-builders of some contracts, or the very rich by taxing the untaxed land they hold?
#10 by Peter A Bell on March 21, 2013 - 10:31 am
The UK Treasury reportedly estimates the Barnett consequentials from the budget at £20million, not £55million as claimed in the article (http://bit.ly/YtdroP). So, where is the balance to come from?
The last paragraph of this article reveals the true agenda. It is certainly not about “stopping the bedroom tax”. That is not what is being suggested. What is being advocated is that the Scottish Government should fund the bedroom tax by taking resources from elsewhere. That does nothing to stop the bedroom tax. If anything, it facilitates the bedroom tax at a cost to some as yet unidentified group.
This whole article is more about finding a way to use the bedroom tax as a stick to beat the Scottish Government than it is about fighting the imposition of this latest abuse by the British state.
#11 by James on March 21, 2013 - 10:40 am
Peter, that reminds me – your scoop-it thing generates a whole slew of emails for Better Nation editors every time you use one of our stories, and their service just looks like a way to slurp other people’s stories. Could I ask politely for you not to use it on Better Nation?
#12 by Peter A Bell on March 21, 2013 - 10:58 am
What emails? From whom?
Scoop.it is simply a curation service providing links to relevant news, blogs etc in an attractive an easily accessible format. The worst it can do is drive traffic to your site. It seems more than a little perverse to be complaining about that?
#13 by James on March 21, 2013 - 11:41 am
It generates a swarm of trackback emails through wordpress and appropriates the intro to our articles. I’d like to forgo the extra traffic if that’s ok, please.
#14 by Peter A Bell on March 21, 2013 - 12:07 pm
Your complaint makes little sense.
I will not accede to any restrictions on what I select for inclusion in my curated magazines. But you may take comfort in the fact that there is rarely anything here that I consider worth bringing to people’s attention. And I have a policy of avoiding sites where the moderation is, in my view, excessively heavy-handed.
So, to whatever extent there may be a genuine problem, it’s unlikely to be something that will crash your server.
#15 by James on March 21, 2013 - 12:13 pm
I’m just making a polite request – it doesn’t crash our server, of course, nor did I claim it did: it just generates a flood of irritating trackback emails. I obviously love people linking to us, but the way that service works is particularly intrusive and I would be most grateful if we could be excluded in future.
I am delighted, though, that your continued presence here can be taken as a vote of confidence in our comments policy. Thanks for that.
#16 by Haver on March 21, 2013 - 10:58 am
3p Steve wrote: “…both the Labour party and the SNP have come out strongly against it.”
It was labour who first introduced the Bedroom Tax (they probably thought people had forgotten that fact). Not for the first time do we have Labour in the strange situation of seemingly being opposed to one of their own policies. They certainly speak with forked tongue on this issue.
Now that it’s become a national issue they pretend (in Scotland) to oppose it, while in Westminster, Labour MP Helen Goodman who sits on the party’s National Policy Forum, admits Labour would keep the Bedroom Tax.
With regard to this tax; What few politicians mention is the amount of money it is taking out of the economy and the knock on effect it will have on business recovery. I’m sure I read that it will affect c 600,000 people across the UK. That 600,000 having, say, £20 per month less to spend is a helluva lot over the course of a year that is lost to the retail trade – which in turn will have a knock on effect on jobs in that sector.
#17 by Peter A Bell on March 21, 2013 - 12:11 pm
You make a very good point about the way these welfare “reforms” take money out of the economy. The bedroom tax alone is estimated to be likely to suck out some £53million from Scotland’s economy.
What is especially damaging is that this money is being taken out of the bottom end of the economy. Exactly the opposite of what is required to stimulate recovery. Putting a damper of non-discretionary spending is nothing short of economic vandalism in current conditions.
#18 by Craig Gallagher on March 21, 2013 - 1:27 pm
Aside from the technical fact already mentioned that capital funding cannot be reappropriated for revenue purposes, and even if accept that they can just earmark that money from elsewhere, the premise of this article is still wrong.
The disbursed cash is being used to underwrite capital expenditure projects that are already pitiable in size compared to what the Scottish Government on its own has planned. It is also specifically earmarked for private equity, that is, to underwrite Osborne’s new “Help to Buy” initiative to allow middle-class people to stay on the property ladder, and so can’t be disbursed any other way. Iain Macwhirter has more here: http://www.heraldscotland.com/comment/columnists/osborne-is-out-of-options-and-is-running-out-of-time.20568989
#19 by Craig on March 21, 2013 - 1:33 pm
Will that £55 million (if indeed it actually exists as someone else pointed out) be available in future years? Next year’s £55 million could already be ear-marked for another policy so this year’s £55 million is only available as a one-off – otherwise you’re simply delaying the pain by one year or facing cancellation of the other policy you planned to spend the money on next year.
It often seems that people are quick to propose ways to spend money this year without any consideration of whether it is sustainable in the long term.
#20 by Steve on March 22, 2013 - 7:55 am
There’s more money in the next two years. After that we’ve only got one more year until independence at which point we are told the bedroom tax will be scrapped.
#21 by Chris on March 22, 2013 - 10:05 am
It’s a case of priorities. We could put up council tax, remove free prescriptions from those that don’tneed it, put up income tax.
It’s a question of prioirities. But I expect with every politician focussed on 18 months ahead the poor will get stuffed again.
We don’t need independence to demonstrate our commitment to social justice and the refusal to do anything about this now shows how paper-thin the veil of left-leaning Scotland is. When it comes to the crunch of paying more taxes or paying for prescriptions we can afford then that takes prioirity over housing for the poorest.
And some people really believe that an Independent Scotland would be different. Even with the same people in charge (and I don’t mean just the SNP) as now and the same electorate we won’t do anything to protect people poorer than us. Social Justice seems to mean free prescriptions for all, but especially those who can afford them.