ED Miliband: Labour will SCRAP the Bedroom Tax


6:15 pm - September 20th 2013

by Newswire    


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The leader of the Labour Party will tomorrow commit the next Labour government to repealing David Cameron’s bedroom tax, and announce he and Ed Balls have already earmarked funds to pay for it.

Speaking in Brighton at the start of the Labour Party conference, ED Miliband will say the Bedroom Tax has become a symbol of an out of touch government standing up only for the interests of a privileged few.

He will describe how two-thirds of the 660,000 people affected are disabled and the vast majority do not have the option of moving to smaller accommodation.

Although both the National Housing Federation and the National Audit Office have questioned whether the Bedroom Tax will raise all, or even any, of the £470 million claimed by the Treasury, Miliband will reiterate that One Nation Labour will not pay for promises on social security with extra borrowing.

Instead, he will say money is being earmarked to pay for the repeal of the bedroom tax by closing boardroom loophole schemes and tax scams.

· Reversing George Osborne’s £150 million tax cut for hedge funds announced in Budget 2013.

· Scrapping George Osborne’s “shares for rights” scheme which has been rejected by businesses and has opened up a tax loophole of up to £1 billion.

· Tackling tax scams in the construction industry which is costing £500million in lost revenue.

He will say in his speech:

The bedroom tax – not what the Tories call the spare room subsidy – the bedroom tax: a symbol of an out of touch, uncaring Tory government that stands up for the privileged few – but never for you.

So we will scrap that tax. And what’s more I can tell you how.

We’ll scrap the bedroom tax by abolishing the shady schemes of tax loopholes for the privileged few which the Tories keep inventing. Tax cuts for hedge funds, the billion pound black hole created with a scheme for workers to sell their rights for shares, and by tackling scams which cheat the taxpayer in construction.

That’s what a One Nation Labour government will do. That’s a party that will fight for you.

The Labour party conference starts officially on Sunday and ends up Wednesday.

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Reader comments


George Osborne’s £150 million tax cut for hedge funds

I was not aware of this, can someone link me to the details of this tax break specifically given to hedge funds, thank you.

About time too Ed.

This was always a very silly impost. Don’t fail to advertise the evictions when the benefits cap bites in about November/December. Come on Ed an open goal here. Just slot the ball between the sticks.

Get your researchers to calculate how much the bed and breakfast will cost in the name of localism.

Well, getting rid of something the Labour Party piloted in the first place?

Back to square one for the new Tories.

@ Collective
Try gov.uk Budget 2013
@ douglas clark
When and where?

Cheers.

Ending the stamp duty reserve tax, is estimated to save hedge funds and other money managers a total of £145 million per year. The stamp duty required asset managers to pay 0.5% when investors sold units in their funds.

Sounds like a small price to pay to make the UK competitive, hedge funds are nothing but a value to the country. As for the bedroom tax, scrap it.

Not so much a tax on the managers, more a tax on pension funds and other investors. Did this serve to level the taxes on various investment methods?

If it’s true, as opponents had argued, that the tax would actually end up costing the government more, then this had to be done. It’s a sign of how desperate we are to see change that this small gesture has such significance. So, Labour, two cheers as your conference approaches but many of us expect more if you want us to vote at all.

@3 douglas clark

I think you misunderstand. Certainly from the Housing Act 1988 maximum local housing allowance (LHA)was set by reference to family size as set out in the appropriate Statutory Instrument and interpreted by Housing Benefit Officers.

From April 2008 the maximum LHA was set at the 50th percentile as calculated by the Valuation Office Agency (VOA). This was changed to the 30th percentile when Grant Schapps was Housing Minister. Now say you were a single and LHA was £433 pcm you could live in a two or more bedroom property upto that sum.

The form of tenure in the social rented sector (SRS) is different to the private rented sector (PRS). There is little if any equivalence.

This had been a very open secret on the Left for months. We had all expected it to be in the Leader’s Speech.

That ought still to include a promise to force a Commons vote on it and thus challenge the Lib Dems, a promise to enable and require councils to build houses, a promise to restore the Agricultural Wages Board that the Lib Dems have abolished, a promise to reverse the dismantlement of England’s NHS by Shirley Williams and other Lib Dems, a promise to reverse any privatisation of the Royal Mail and thus stop it because no buyer would take the risk, and a promise to renationalise the railways for free over the course of a Parliament by simply taking back each franchise as it came up for renewal.

Plus a demand for a straight In-Out EU referendum on the day of next year’s European Elections, which only the Coalition could deliver, since it will still be the Government on that day. Another Commons vote beckons, this time challenging both Coalition parties.

Ed Miliband, over to you.

Who pays this “hedge fund” tax?
The investors.

Who are the investors?
Pension funds.

Still, who cares about them?

11. Psychological Mind Games

With hope the United Nations will embarrass this evil Tory Led Coalition into reversing this evil policy :

http://www.theguardian.com/society/2013/sep/12/bedroom-tax-reaction-united-nations

If not, I hope that it will be before the Court of Human Rights in the very near future.

12. Mike Killingworth

No one has any objection to social landlords making the best use of scarce accommodation. I have a spare room in my flat, and I’d be quite happy to trade down if there was a smaller flat available locally. But there isn’t, so my landlord doesn’t make the offer. (I think I’m on the mutual exchange list FWIW.)

A better move for Labour would be to say that Councils can re-instate the “bedroom tax” once they’ve satisfied the Homes & Community Agency that affected households have suitable smaller flats to move to. And then watch how many Tory Councils even bother…

However, it’s really irrelevant. An outright Tory victory at the next election is pretty much nailed on.

So…

…Ed Failiband will maintain the spare room subsidy, increase or maintain handouts, try to return to the failed price (and probably income) regulation policies of the 60s and 70s, ignore the deficit, and will load costs on to an increasingly mobile wealth-creating sector.

This will not work…for obvious reasons: the geese that lay the golden eggs will go elsewhere, and the deficit will not decrease…

14. Barry, Ipswich

Milliband’s bluster about the so-called bed-room tax might please the activists who somehow believe the bedroom tax as politically akin to the poll-tax.
It isn’t.
If the bedroom tax releases housing stock for larger family units it will have served its purpose – a number of families will be disadvantaged by the removal whilst the same number of families will get accommodation more suitable to their needs. There’s a net benefit here.
Those that prefer to pay the tax can clearly afford it or they’d move too.
The country is broke and getting more broke by the day. There’s nothing in what labour have to offer that’ll change this. There is no money to build new public sector housing whatever the need – we’ll all have to get used to living with our parents or in-laws.

@10. cjcj

“Who pays this “hedge fund” tax? The investors. Who are the investors? Pension funds. Still, who cares about them?”

In 2011 who donated £3.3m to the Conservative party (25% of their income that year). In 2012 which chancellor gave hedge funds £165m a year tax cut? Who cares that the Tories are giving away hundreds of millions of pounds of our money each year in return for a few million in donations?

@ 13 TONE

Yet more useless prattle from you.

I remember you putting the case for a ‘man’ who is an adulterer and who talks to plants and may be the head of the Church of England and exists by massive state funded BEDROOM TAX.

Go into a dark room and put your organ up your rectal orifice and enjoy.

Barry, Ipswich

I must remind you these threads are intended for constructive discussion. Should you have affinity with TONE may I respectfully suggest you use another site for your mutual stimulation.

Should this not be to your satisfaction I will suggest Central Office who will help. I understand there many there who will find appropriate your need for joint gratification.

18. Barry, Ipswich

Pandora
I don’t get your point.
If we could imagine that we agree that there is an housing crisis, then to suggest a policy that better uses a limited public sector housing stock appears to be constructive to me.
I guess you might prefer that I constructively suggest a policy that better uses the sixty percent of housing in the private sector too. So just to demonstrate this point I suggest we tax the incomes of single men, single women, and couples beyond there productive years that happen to be living in their, under used, owner occupied homes. There’s loads of widows and widowers living on their own homes that are much more under used than any public sector properties.
Both policies can be justified from any sort of socialist perspective.
These homes are already there. Both policies have the advantage that we don’t have to borrow money from foriegn money lenders to build new housing stock.
What is wrong with this?

19. Barry, Ipswich

Barry,Ipswich

You understand. On such a nice day too.

Give your innovative and vote losing ideas to Grant, (IDS of Perugia University) and Mark Prisk. Kindly give me the result of their deliberations. These will be illuminating.

The relationship you have with TONE is a private matter insofar it is in a private place. I have advised you to speak to your Central Office who will no doubt do their best to help.

Should you wish to discuss matters in respect of housing you will be welcome. Until that time may I suggest any orifice to which you can have access should be assisted by Central Office. I hope my transparency in this matter will help.

You need help from Central Orifice. TONE and you are of the same persuasion.

I wish both of you well.

21. douglas clark

Just trolling the Trolls.

@TONE #13:

the spare room subsidy

A family of four – two parents and twins, a boy and a girl aged 9yrs 9 months, in a three bedroom house, have a “spare” bedroom. Their HB is reduced by 14%

A family of four, two boys aged 11 and 15, ditto.

On the other hand, a widow/widower in a four-bedroom house drawing state pension, the last of whose children moved out a decade ago, is exempt – s/he gets full HB. Oh, and also gets full CTB, whereas the couples above don’t.

In the meantime, policy stokes up housing demand while actively discouraging local authority housebuilding and restricting PRP housebuilding; so (i) prices go up, and (ii) social landlords don’t have any smaller property to move those affected by the bedroom tax into.

The bedroom tax would be simply shifting the deckchairs on the Titanic even if it accomplished its stated aim of freeing up larger property. The problem is in housing supply. Thatcher’s government essentially stopped local authority building (and Blair’s didn’t help either). There was some increase in RSL/PRP building – but the private sector is quite happy to continue building at lower than historic levels. If they built more, prices would come down and they’d make less profit – they’d need to build more houses, incurring greater cost, to maintain the same income.

The charts here tell a story:

http://www.savills.co.uk/research_articles/141718/145054-0

@23 Robin Levett

Good post to which I agree in entirety.

In Yorkshire and Humberside HAs that have one bed properties have over 1000 applicants per property.

Grant Schapps told HAs to utilise their balance which means bond issues or PFIs. At the same time IDS attacks revenue stream with bedroom tax and end of direct payment of rent to RSLs.

Mark Prisk has recently told HAs they face another cut in grant income which helps fund special needs housing. I effect RSLs will stop doing what they were established to do.

I’m not making this up. Honest !!.

21. douglas clark
So, where and when did Labour pilot the scheme that the Tories introduced?
Are you of the opinion that a 100% HB should be available for all rental properties irrespective of the number of bedrooms per person?

26. Robin Levett

@Taxy DeMe #25:

Are you aware of the process by which social housing is allocated?

@ Robin Levett 26
No, I’m not fully aware of the process.
My post #25 was in response to douglas clark’s comment and link to the International Socialist article. The IS piece mentions that Labour had placed limits of HB payments for properties rented privately. My knowledge on the subject is far from expert but I think that there has always been a limit of how much the DSS, and formerly DHSS, met by way of rent. If there was no legal limit set, an unemployed person could rent a town house in Regents Park and get full payment from the State.

Taxy DeMe

Read the post @8.

The IS is partly right as usual. Do not worry. This subject is complicated. Mark Prisk and Jack Dromey seem to be mentally challenged by this too. Nice salary and expenses. Nice work. I suggest IS investigate what professional bodies Mr Prisk is a member of and who will determine what ‘affordable’ rent is for the purpose of HB.

However the world moves on. The DWP are on the wrong end of Tribunal decisions in Scotland, (different jurisdiction). The issue for determination was what constitutes a bedroom. I have not checked but from memory the wording of the law is the same in England and Wales. It will need primary legislation to change this so the DWP will appeal. Supreme Court here we come.

29. Robin Levett

@Taxy DeMe #27:

I was responding to your comment:

Are you of the opinion that a 100% HB should be available for all rental properties irrespective of the number of bedrooms per person?

The bedroom tax is levied on those in social housing. Firstly, social housing is allocated acording to need – there is no prospect of anyone in social housing choosing to go into property more extensive than that required at the time.

Secondly, I wouldn’t say that a family with two teenaged boys (aged 10-15) with 3 bedrooms between 4 people has an inordinate number of bedrooms per person. That family, however, is docked 14% of HB.

@Robin Levett #29
Yes, the bedroom tax is a disgrace. Tell me something new.
All that I wanted from douglas clark was proof (comment #3) that the Labour party piloted the scheme.

Taxy DeMe

We have a number of Tory trolls operating to get us off thread.

douglas clark is wrong. The change in April 2008 was to the 50th percentile. In no sense can this be described as a pilot. Other than the forgoing the regulations were essentially as before.

Robin Levett I think makes a honest mistake. The 14% HB reduction to which he refers is 14% of eligible rent. somewhat different. Quite a shock if you are a HB claimant who is in work as 60% of HB claimants are. We have a government who want to make work pay so they say.

Any half decent lawyer can see this. Now can you explain why Liam Byrne and Jack Dromey (sorry, Mr Harriet Harman) are so spineless.

@Pandora #31:

Robin Levett I think makes a honest mistake. The 14% HB reduction to which he refers is 14% of eligible rent. somewhat different. Quite a shock if you are a HB claimant who is in work as 60% of HB claimants are. We have a government who want to make work pay so they say.

True; for those on full HB, the reduction in HB paid is 14% or 25% as the case may be; for those on less than full HB, the reduction expressed as a precentage of HB received is proportionately greater. And, unlike the benefit cap, working doesn’t get you exemption.


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