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Lib Dem bedroom tax U-turn slammed

Liberal Democrats have faced accusations of hypocrisy after dramatically withdrawing support for the so-called "bedroom tax", one of the coalition Government's most controversial welfare reforms.

Treasury Chief Secretary Danny Alexander said significant changes were needed to the policy and Deputy Prime Minister Nick Clegg claimed the Tories did not want it to be fixed.

The U-turn - which caught David Cameron by surprise - was dismissed by the Conservatives, who insisted they remained committed to the policy, while Labour accused the Lib Dems of "unbelievable hypocrisy".

Under the welfare reform, social tenants deemed to have more bedrooms than they need have had their housing benefit reduced, to tackle what the Government calls a "spare room subsidy".

But an internal government review published this week showed almost 60% of households affected by the housing benefit changes were in arrears as a result and a shortage of smaller properties meant just 4.5% of tenants had been able to downsize to avoid it.

Mr Alexander said no-one should face a cut in state help if there was no suitable smaller property available and all disabled claimants should be exempt.

He said it was the evidence in the report which triggered the shift in the Lib Dem position rather than the hope of a popularity boost with voters after months of poor poll ratings for the party.

He said: "The reason for doing it now is we had a debate at our party conference last September, we said then that we would look at the official evaluation, there is a detailed evaluation being carried out of this policy.

"That evaluation was published two days ago and that confirmed some of the issues that our party had been raising.

"That's the reason for the timing, it's off the back of the detailed evidence of some of the impacts."

Mr Clegg has been under pressure to join Labour in opposing the policy since the Lib Dem conference voted overwhelmingly to commit the party to the review of what activists called a "reprehensible and evil" move.

Mr Alexander defended the principle of the reforms, but said they needed to be "significantly adjusted".

He said: "We think that it's only really fair to reduce somebody's housing benefit if they have been offered a smaller property and refused it.

"Clearly, where people need an extra room for medical reasons that needs to be taken into account.

"At the moment a lot of those issues are being dealt with through quite high levels of discretionary housing payments, so many millions of pounds extra are being paid out by local authorities to manage some of these problems.

"It's much more sensible to accommodate it within the rules of the scheme.

"And we would also put a new duty on social landlords, on councils and housing associations, to reduce under-occupancy so that over time you will see under-occupancy coming down but in a way that is fairer and more in keeping with the evidence that we have seen."

He said the issue would be raised with the Tories ahead of George Osborne's autumn statement b ut if the Lib Dems are not able to secure agreement within Government it will be "one of the key things in our election manifesto".

He rejected the accusation of hypocrisy, saying: " We are part of the Government and the principle is the right one, which is that people should be paid housing benefit according to the number of rooms that they need.

"This is about how that policy is applied in practice, it's about listening to the evidence and significantly adjusting the policy in the light of that evidence."

Shadow work and pensions secretary Rachel Reeves said: "This is unbelievable hypocrisy from Nick Clegg.

"The Lib Dems voted for the bedroom tax. There wouldn't be a bedroom tax if it wasn't for the Lib Dems. And in February when Labour tabled a bill to scrap the bedroom tax, the Lib Dems were nowhere to be seen.

"It is clear the only way to cancel the bedroom tax is to elect a Labour government next year."

The study, published by the Department for Work and Pensions on the day of the reshuffle, found that there was widespread concern that those affected were "making cuts to household essentials" or incurring credit card or payday loan debts to make up the shortfall.

The report found 522,905 households were affected by the policy in August 2013, which equates to 11.1% of social tenancies.

Mr Clegg told LBC radio it was "complete baloney" for the Conservatives to claim that they were surprised by the Lib Dem announcement: "I've been constantly badgering away within Government with the Department for Work and Pensions (DWP) to try to make sure we really stress-test this properly.

"We have constantly said that we want to look at how this policy is working in practice."

He added: "I want to fix this. The Conservatives apparently don't - they just want to carry on making the same mistakes. Labour don't even want to deal with the problem."

But Mr Cameron's official spokesman said that the Lib Dem policy shift had not been discussed with the Prime Minister or the Chancellor of the Exchequer.

The PM's spokesman said: "At the end of the day, there has not been a change in policy. It is open for parties (in the coalition) to make commitments for their manifestos, but the Government policy hasn't changed and won't be changing.

"The Prime Minister's view hasn't changed and it won't change."

Asked how Mr Cameron would characterise the new Lib Dem policy, the PM's spokesman said: "He would probably describe it as 'Something he read in the newspapers'."

The spokesman pointed out that Liberal Democrat ministers have until recently been publicly defending the spare room subsidy policy.

Asked whether Mr Clegg was right to say he had been "constantly badgering" about the need for a rethink, the PM's spokesman said: "In terms of what has been raised today, I don't believe it is something that has ever been raised with the Prime Minister or the Chancellor."

A DWP spokesman said: "We spend around £24 billion a year on housing benefit so we have a safety net in place.

"However, it was simply wrong that the taxpayer was paying for social housing tenants to have spare bedrooms when around 300,000 people were living in overcrowded homes and around 1.7 million were on social housing waiting lists in England alone when the policy came into force.

"Especially because this rule already applies to housing benefit claimants in the private sector - introduced by the previous government.

"We have made £345 million available to councils to help vulnerable people with the changes - including disabled people."

Mr Alexander said the Lib Dems would continue to push for reform of the policy within the Coalition, and even suggested that he hoped it could feature in Chancellor George Osborne's Autumn Statement.

"We'll have debates over the course of the autumn and we'll certainly be pushing these changes within government," Mr Alexander told BBC Radio 4's World At One. "I know that my Conservative colleagues do not want to make a change.

"Let's wait and see. There's a lot of discussions to be had in Government in the run-up to the Autumn Statement later this year, and no doubt there will be lots of ideas that both partners in the Coalition want to push at that stage. This is one of the ideas that we'll be pushing.

"I don't think you should assume that nothing is going to change, but the outcome of that process will be known in due course."

However, a senior Lib Dem source acknowledged that the party had little expectation of a change of heart among the Tories by the time of the Autumn Statement.

The source dismissed suggestions that the Lib Dems had failed to raise concerns about the bedroom tax with the Tories, though he acknowledged that they had not forewarned their coalition partners about the announcement of their manifesto pledge.

"We've repeatedly raised this with them at every single level in government, including at the level of Deputy Prime Minister to Prime Minister," said the source. "We also passed a motion on this in public on the floor of our conference, which was then published on the internet last year.

"When we make a manifesto announcement, it's a Liberal Democrat manifesto announcement and we don't clear them with the Conservatives, and nor should we."


From Belfast Telegraph