Lord David Fraud – sorry, Freud. That was a Freudian slip – the man who said “People who are poorer should be prepared to take the biggest risks; they’ve got least to lose”, has been at it again.
According to Inside Housing this man, whose principles allowed him to take Labour’s money and provide that government with his duff advice before running off to join the Tories as soon as it looked as though they would be in office after the 2010 election, wants to bully councils out of an entirely legal way to help their tenants avoid paying the punitive and unfair bedroom tax.
The tax, as we all should know by now, affects people living in social rented accommodation with more bedrooms – as defined by the rent agreement (if I recall correctly) – than the government last year arbitarily decided they need. The options are to give up 14 per cent of your housing benefit if you have one ‘extra’ bedroom, 25 per cent if you’ve got two – or move to smaller accommodation which does not, in the vast majority of cases, exist.
Out of 600,000 affected families, 582,000 have nowhere else to go. So this is a thinly-veiled robbery, from people who can do nothing to prevent it.
It is a tax that has offended many councillors in local authorities across the UK, and some came up with the novel idea that rooms within the properties they own may be reclassified as offices or ‘non-designated’ rooms, thereby avoiding the need to pay the tax. After all, a room is just an enclosed space within a building, right? If it doesn’t have a bed in it, why should it be classified as a bedroom?
Lord Fraud – sorry! Freud – doesn’t see it that way. He wants that cash and couldn’t care less that people in social housing need it to keep a roof over their heads. He has been spending the last month or so (since the councils started re-classifying) trying to put a stop to it and now, it seems, he thinks he has found a way.
In a letter to council chief executives yesterday (Thursday), he has said redesignating properties without reducing their rent to reflect the loss of a bedroom creates an inconsistency for housing benefit and rent purposes.
“Blanket redesignations without a clear and justifiable reason and without reductions in rent, are inappropriate and do not fall within the spirit of the policy,” his letter states [italics mine].
“If it is shown properties are being redesignated inappropriately this will be viewed very seriously.” Meaning: The DWP will commission an independent audit to “ascertain whether correct and appropriate procedures have been followed”. Redesignation without reducing rent would lead to incorrect housing benefit subsidy claims being submitted to the DWP, he stated, adding, “Where it is found that a local authority has redesignated properties without reasonable grounds and without reducing rents, my department would consider either restricting or not paying their housing benefit subsidy.”
The flaw, of course, is this: The size of these properties will have remained the same, therefore so should the rent. But a room without a bed in it is not a bedroom.
Let’s move on to another tax avoidance issue. Since we’re discussing actions that are “inappropriate and do not fall within the spirit of the policy“, what about tax avoidance schemes that are used by very rich individuals, in order to avoid paying the full amount they owe to the UK Treasury?
This has been going on for more years than any of us can remember and the total currently parked offshore, where the tax inspector can’t get at it, is estimated at £21 trillion (it might actually be dollars, but either way it’s a heckuva lot of money).
If the turncoat Lord Freud’s new Conservative friends had been quick off the mark in dealing with this aspect of tax avoidance, he might have been justified in his own hasty behaviour, but they haven’t. Even now, there is no guarantee that the Treasury will get anything back from the tax havens, despite all its posturing and sabre-rattling. There’s just no interest. And by the time anyone gets around to actually taking action, the offenders will have had plenty of opportunity to move their capital elsewhere.
But the actions of the individual taxpayers who have chosen to put their money out of HMRC’s reach is no closer to the spirit of UK tax policy than the actions of the councils who have chosen to protect their tenants.
The difference is that one set of individuals is acting in selfish self-interest, while the other is taking action to help others.
Freud, by his own actions, has shown us all exactly where his loyalties lie. He’s not against tax avoidance, as long as it’s his kind of people doing it. And he loves to bully the little people. He really gets a kick out of threatening them, and he’s not above bending – or changing – the law to do it.
That’s why I say any new government coming into office after 2015 needs to enact a law that criminalises abuse of power – being any legislation or act by a government member that unfairly punishes any named individual or group within British society.
So for example here, it could be applied because Freud wants to penalise hundreds of thousands of people with a tax they can’t pay, when there is no alternative because they have nowhere else to go (except to be thrown out onto the streets, and then the question to be asked is, who takes over the properties after they have gone?) – and is now threatening to punish any attempt legally to avoid paying that unfair tax with another unfair punishment, because others who also legally avoid paying a – fair – tax are being allowed to do so.
As a criminal offence it should involve the sternest penalties possible – stripping the guilty of any titles and privileges, and all property, alongside a lengthy prison sentence involving the hardest labour to which prisoners may be put. Anyone who is willing to deprive the defenceless of everything they own should be made to lose everything as well.
So Lord Freud, for example, would have to kiss goodbye to his luxury mansion in Kent, and everything in it. When he finally came out of clink, he’d be living in council accommodation – and if nowhere could be found that didn’t have more bedrooms than he needed, he’d have to pay his own bedroom tax which would be poetic justice.
I know. It will never happen. Politicians look after their own.
But it should – and you know it.