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In 2013, Margaret Thatcher and Nelson Mandela died. Prince George was born. Peter Capaldi became Doctor Who. Germany won the World Cup, Sam Bailey won X Factor, and Eleanor Cotton won the Booker Prize. Frozen was released at the cinema. Pharrell Williams was topping the hit parade.

That same year, a welfare reform was introduced, officially called the Under Occupancy Penalty. It changed the rules for those in social housing with a spare bedroom and whose rent was paid by Housing Benefit. The cut was an average of £15 a week – although it was only applied to those of working age. Critics of the policy termed it the “Bedroom Tax”. I called it “cutting the spare room subsidy”. David Cameron picked up on my phrase at Prime Minister’s Question when challenged on the policy by Ed Miliband. Language matters and much of the debate was taken up with the proper label for the policy. The Left won the linguistic battle. While the term “Bedroom Tax” was thoroughly dishonest, it was strong and pithy enough to resonate. More generally, opponents of the policy got plenty of coverage for individual cases where the policy was portrayed as causing hardship, for instance for the disabled. Often these reports turned out to be misleading, but by then the TV crews had moved on.

The point was that the change was about fairness. Why should a family in overcrowded conditions in the private rented sector, subsidise a household in social housing, which has a spare room? It was also about prompting a change in behaviour. The family with a spare room that faced a shortfall in paying the rent could swap with an overcrowded household. They could take in a lodger. That has sometimes happened. But the main impact has been to reward work. By taking a job, or increasing the number of hours worked, many have recouped the loss in Housing Benefit. Or come off Housing Benefit altogether.

A measure of the success of the policy is that the number of households being affected has fallen sharply. When it was introduced 660,000 households had their benefits cut. The latest figures show that has fallen to 381,000.

What about rent arrears? The claim was made that they would increase. That claim has proved false.

The Home and Communities Agency collect some figures from housing associations. In 2009/10, when Ed Miliband was sitting around the cabinet table, housing associations evicted 7,535 tenants for rent arrears. In the year ending 31st March 2018 it was 6,914.

So far as council tenants are concerned the latest returns from local authorities state:

“In 2016-17 local authorities reported that 5,800 evictions were carried out by court bailiffs, a decrease of ten per cent compared to 2015-16.”

For 2012/13 the figure was 6,140. Not all evictions are for rent arrears, of course. But it is the principal cause. In any case, rent arrears as a percentage of the total rent due has also fallen. For 2016/17, the latest figure available, it was 4.2 per cent. For 2012/13, before the spare room subsidy cut came in, it was 4.6 per cent.

Another measurement is by the English Housing Survey. This only included a “social rented sector report” in 2014/15. In that year it found that 14.1 per cent of tenants in social housing said they were in arrears with their rent. The most recent figures, for 2016/17, found that had fallen to 12.1 per cent.

Perhaps given all these figures, it is not surprising the issue has lost political “traction”. The BBC has diminished the airtime it gives to indignant attacks on the policy. The Labour Party has given up organising angry demos about it.

The upshot is that the policy has been vindicated. It has rewarded work and as a result it has contributed to a reduction to those stuck on welfare. The policy is fair to the taxpayer and those who are in overcrowded conditions.

Yes, yes. I know what you are going to say: “Post hoc, ergo propter hoc.” I don’t claim that all the reduction in welfare dependency has due to the cut in spare room subsidy. But I do think it is overwhelmingly likely that it helped.

Will any of its critics offer a word of contrition? Will any correction be given by those from the charitable and housing “sectors” who gave such emphatic predictions that rent arrears would increase? Perhaps some of the Labour MPs who cast aspersions on the morality of Iain Duncan Smith will write to him to apologise for questioning his motives? Don’t hold your breath…

12 comments for: Five years on, cutting the spare room subsidy has been vindicated

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