COMMONS

Scottish Government should meet all bedroom tax charges

13 February 2014

The Scottish Affiars Committee met with councils and local housing groups to discuss the impact of the bedroom tax and ways to best mitigate it.

Chair's comments

Ian Davidson MP, Chair of the Committee, said:

"Having heard last week that the Scottish Government could have dealt with the bedroom tax fully at any time since its introduction, we have today heard the real impact, to date and going forward, of their failure to do so.

Many of the problems stem from the fact that there is just not enough one and two bed housing for all those being penalised for having a so called  ‘surplus’ room in their home. There is therefore no choice but to pay the bedroom tax. 

As West Lothian Council told us, 500 households have tried to downsize to avoid the bedroom tax but only a small number of those have been successfully moved. Because of this shortage of suitable housing, at the present rate of transfer, it could take 10-15 years to allow all the tenants who wished to downsize to do so.

Many people of course do not want to leave their home at all – which may have been adapted for disabilities  - or their area, family  and support networks, and what’s more many simply do not have the capital for a move.

The Committee has heard how many tenants are being effectively fined by the bedroom tax, because the deduction in housing benefit is more than the rent differential on a ‘surplus’ room.

The private sector has some smaller housing, but with higher rents. The public purse bears this higher costs and  people are faced with the “welfare trap”, whereby they cannot afford to take paid work, only to lose their benefits and be left paying a much higher private sector rent. This is a huge disincentive to work.

The obvious net result of all of this is an increase in the welfare bill but a decrease in people’s personal welfare.

We heard that close to 50% of council tenants are in arrears in West Lothian.  With the recent Scottish Government admission that they have the money  - and we know they have, and have always had, all the powers they need – to mitigate the entire cost of the bedroom tax, West Lothian Council is looking to write off rent debts as well as stop further costs. But what about the “moral hazard”  of  penalising those who did not go into debt but instead scrimped and scraped, suffered hardship, borrowed money, or used up savings to pay the extra costs?

The witnesses we heard said the only fair, equitable way forward would be to reimburse all the bedroom tax that has been paid.

All of these problems have been created by the Scottish Government’s delay  - we now know that they could have addressed this at any time since the bedroom tax was introduced but as they did not, households and councils have been have been left to deal with it at great personal and administrative expense.

The Scottish Government has the power and the money to resolve this mess. The only question is why they haven’t. They should now announce a scheme to meet all the bedroom tax charges for Scottish tenants, write off all the arrears, and refund all the payments that have been made."

Further information

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