Margaret Thatcher, the 1983 election and the ‘bedroom tax’

by Stephen Tall on April 2, 2013

margaret-thatcherLike Caron, I spent more than a healthy amount of my Bank Holiday Monday watching BBC Parliament’s re-run of the 1983 general election.

It’s not an election I remember (I was 6). But the symmetry of yesterday’s hyperbolic Guardian (‘The day Britain changed’) front page and the televised reminder of Margaret Thatcher’s first landslide seemed calculated to confirm the left’s view that 1st April 2013 marked the ultimate victory of those on the right who wanted (and still want) to destruct the welfare state.

What Mrs T, Geoffrey Howe and Nigel Lawson started — the left exhorts — Dave, George Osborne and Nick Clegg are concluding. But at the risk of breaking up the right/left battle that’s brewing, the prospect of which both sides appear to relish, it’s a lot more complicated than that.

Let’s take the most controversial issue of all, the ‘bedroom tax’/’spare room subsidy’, the reduction in housing benefit paid to those who are said to have surplus rooms. It’s a classic case of a policy which is right in principle and wrong in practice.

There are currently two million households in England on housing waiting lists, 250,000 families living in over-crowded accommodation and one million bedrooms standing empty. Attempts over many years — including cash incentives and help with moving — have failed to re-allocate the stock of social housing efficiently.

Understandably social housing tenants do not want to move until they are offered at least as good an alternative new home. Who can blame them? But equally who can blame those in need on the waiting list forced to rent overcrowded sub-standard accommodation in the more expensive private sector from looking on aggrieved at families living in under-occupied houses bigger than they can hope to afford? Added to that private renters were hit by their own ‘bedroom tax’ when Labour introduced the Local Housing Allowance in 2008, calculated on the same basis as the Coalition’s ‘bedroom tax’.

The principle of the ‘bedroom tax’, then — to try and maximise the availability of social housing and reduce the chronic waiting lists — is a reasonable one. Where the policy clearly breaks down is on a human and practical level. Though the Coalition has responded to concerns raised by introducing exemptions for foster carers, military families and so on, it will not have covered every eventuality. The harsh reality is some people, some of the most vulnerable in society including the disabled, will be made poorer. It’s unlikely the transitional relief money that’s been made available will meet the needs of all these cases.

Worst of all, in some areas it’s unlikely those affected will have any choice available other than to see their meagre incomes reduced: there simply isn’t the choice of social housing available to allow them to downsize to fit the guidelines. As Inside Housing reported last year, one housing association with 2,500 tenants affected had only 16 one-bed properties in which to place them. Those impacted will have to accept the cuts, or find lodgers or work (if they can) to make up the difference.

I’m clear then that the ‘bedroom tax’/’spare room subsidy’ is a mistaken policy. But I’m equally clear there are no easy answers to this: without it, those on the waiting list will stay there for years.

The real problem once again is clear: the lack of housing in the UK, in particular social housing. Less social housing was built under the last Labour Government than under Margaret Thatcher’s. And — to come full circle — she started the process of selling off millions of council houses now in such need, a popular policy which helped her to a famous election victory… in 1983.

* Stephen Tall is Co-Editor of Liberal Democrat Voice, a Research Associate for the liberal think-tank CentreForum, and also writes at his own site, The Collected Stephen Tall.