'Bedroom tax' will mean 1,000 fewer affordable homes. Devolve welfare to Wales!

The moral and ethical arguments against the ‘bedroom tax’ have always been weak. While ideology may lead you to divide between the ‘deserving’ and the ‘undeserving’ poor, ideology cannot deny the evidence, and it is ultimately evidence which should dictate government policy.

Since the ‘bedroom tax’ was introduced just over six months ago, we see a double whammy affecting the housing supply crisis. Arrears from the ‘bedroom tax’ have exceeded £1m and a rise in the number of void properties has meant that over 700 homes in the sector are empty. Just 3% of the 22,000 housing association tenants affected have been successfully downsized. We have always argued that there are simply not enough one and two bed properties to move people to. With an estimated 90,000 on social housing waiting lists, how can we justify a policy that sees Wales losing out on 1,000 affordable homes?

Of course, the effect on housing associations is only half the story. Tenants are already struggling to afford the basics, the use of food banks is increasing, energy companies are increasing their prices and we are seeing a surge in the use of high interest lenders and loan sharks. Some payday lenders are reported to be planning to treble their business on the back of so-called welfare 'reform’, people are being pushed further into poverty and the threat of losing their home is very real.

Landlords are faced with tough choices. We note what’s been happening around Wales with various protests, often the landlord getting the blame. Tenant groups and some politicians have campaigned for a ‘no bedroom tax evictions’ policy, but landlords can’t continue to subsidise the extra costs brought about by welfare reform which would impact on the potential reduction in services for other tenants who pay their rent.

This divisive measure threatens social justice and cohesion, turning tenant against tenant, tenant against landlord and vice versa. We need to stand back and realise that the only solution is to take power closer to the people.

As a sector we have been doing all we can to mitigate against the reforms. We’ve launched the ‘Your Benefits Are Changing’ campaign to raise awareness and have set up an advice line to provide free independent advice to those affected. We’ve also supported the expansion of Moneyline Cymru, a not for profit organisation set up and part funded by Welsh housing associations for people largely ignored by mainstream lenders. Moneyline Cymru branches have issued over 13,000 loans to the value of more than £6m since it was set up in 2009. Customers are also encouraged to open a savings account with nearly a third opting to do so, collectively saving a total of £900k.

Last week the Labour Party tabled a motion in the House of Commons to repel the ‘bedroom tax’, and the vote was lost by only 26 votes. So if robust statistical evidence which shows that this policy is failing is not enough for the UK Government to axe this pernicious policy, what can we do? The solution is for Welfare Reform to be devolved to Wales.

In an asymmetric union, we can now look to Northern Ireland and see them use their powers in welfare policy to do something different. They have legislated to stop the ‘bedroom tax’ affecting existing tenants. Like Wales, it is affected to a far greater degree than England and Scotland, but their devolution settlement has allowed them to protect the people of Northern Ireland from the policy, and also to adapt the upcoming changes to Universal Credit and Direct Payments to fit the needs of Northern Irish tenants. With the Silk Commission due to report on further powers for the Assembly in the New Year, what chance they listen to CHC’s recommendation that Wales is given parity with Northern Ireland on welfare powers?


Nick Bennett
Group Chief Executive, CHC Group


You can read the full press release on CHC's 'bedroom tax' research here.