Mine’s a bedroom, yours is a mansion

There was a letter to one of the papers last week – the same week that a ComRes poll for the National Housing Federation revealed that 59% of adults agree that the Bedroom Tax should be abandoned entirely, rising to 79% of people who intend to vote Labour – which said that the Bedroom Tax was a great idea, but it should be rolled out to the private sector as well as affecting houses provided by the State. There were, it pointed out mischievously, lots of under-occupied houses in private hands, including, it said, a rather big one at the end of the Mall. The message was clear: downsize to help deal with the housing crisis, or pay up.

It wasn’t because of that that I spent much of last week thinking about taxes. I just did. And I came to a conclusion that will probably be scoffed at on all sides.

The Bedroom Tax, it has been pointed out by its supporters, has a very strange name which doesn’t actually reflect what it is at all, not least because it isn’t a tax but the removal of a subsidy – and one, moreover, which can easily be shown to make logical sense: how can it be fair that people who need housing to be provided by government cannot get living space big enough when other people with housing provided by government are in houses which are too big for their needs? If you’re one of the families crowded into a small house and there’s someone with a house big enough to accommodate a family which has now flown the nest, it must seem iniquitous – particularly given that the house is provided by the State.

Meanwhile, another tax with a very strange name is the Mansion Tax, support for which probably matches the numbers in opposition to the Bedroom Tax given above. Regular readers of this blog will know that I hate it, one reason for which can be illustrated by opening this week’s property section of The Week, which includes (straddling pages 38 and 39) the most enormous and impressive-looking pile (12 beds, 5 reception rooms, Grade II listed) which is on the market (in Yorkshire) for the same as a one-bed flat in Kensington (that’s £895,000). If we are in due course to have a Mansion Tax, we should call it what it is; and given that it quite patently does not tax mansions (in Yorkshire) but does tax shoeboxes (in Kensington), a Geography Tax it should be.

But my real problem with both these taxes (costs, levies, subsidy removals – call them what you will) is not their mis-naming, but that the effect of their application is that some people will be forced to move out of houses that they have lived in for most of their lives; not just houses, then, but homes.

All the debate around these issues has focused, as debate does, on the extremes. But you don’t need to believe that everyone hit by the Bedroom Tax needs a spare room to accommodate an occasional carer, nor maintain that many wealthy people can cope with the cost of a Mansion Tax, without changing the principle. Government action to create ‘fairness’ will in some instances force one set of people who attract jealousy from another set of people (for one reason or another and justifiably or not, depending on your viewpoint), to move.

I can see that the bases on which people come to live in those homes in the first place are different. I can see the argument which says that one has been striven for (even if by a long-dead relative), and the other not; just as I can that one family given a place by the State may end up living in greater comfort than another not given one, whose members all have to work to live comparably. All this I understand. But what I’m struggling to reconcile is how the principle that says that at some point you have to make a judgment and add cost (by creating a tax or removing a subsidy) in order to try to equalise something can hold true at one end of the wealth scale and not at the other. In short, how are the questions that these taxes raise different?

Let’s not be side-tracked by constantly rising house prices, as if they are doing any home-owners in London a favour. They might briefly have been a source of delight for non-thinkers looking for dinner-party chat, but in reality they benefit no-one other than investors (not to say ‘speculators). Sure, my grandmother’s house in Kensal Rise which was sold for £70,000 in 1994 is now on the market for £950,000, but who that helps is anyone’s guess. The sellers are likely to be moving up to a larger place which will have risen by a commensurate percentage (which is to say a greater cash sum); and given that the chances are that they’re moving because they now have kids (who they will know have not the first chance in hell of buying in the area in the future) any short-term satisfaction will soon turn to gloom. Supply and demand are way out of kilter not just because the former is limited (as we keep hearing), but because the latter is boosted by the attraction to overseas investors that is the combination of British Rule of Law, the ever-weakening pound, and the country’s position (both geographically and as regards world trade). Having to compete for your home with the whole planet is not a positive, but we do nothing about it. The Australians – with fewer of those investment advantages – limit the purchase of new-builds to residents; we don’t, and we wonder why people can’t find anywhere to live.

Let’s not be distracted, either, at the other end of the scale. If the aim of the Bedroom Tax is to encourage poor families to have more children than they can reasonably afford – a policy which would make it the reverse of the re-vamped benefits system, and anathema to most on the Right – then it couldn’t be better conceived: the best way to ensure that your house isn’t too big for the number of people living in it is surely to add more people to it.

But neither of these issues if the point. The point is that whether you were lucky enough to get your big home because you inherited it or because the State gave it to you; whether it is big or small; whether it has a view or it doesn’t, has nice neighbours or not – isn’t the key question whether it is right, after you have lived in it for twenty years, that you should be forced out of it as a result of a Government edict that changes your finances dramatically overnight? Surely you either have to take the view that it is wrong to adopt policies which in some instances will force people out of their long-inhabited homes; or you take the view that it isn’t.

Where you stand on luck, and how much (if at all) the State should attempt to redistribute it where it relates to birthplace (in both geographical and pecking-order terms), will obviously determine your politics. But surely we need to be consistent? I can’t see how it is possible to support one of these taxes while opposing the other, without relying on an arbitrary distinction of where you think people are entitled to the luck of the draw and where they aren’t. Either you are in favour of both a Bedroom Tax and a Mansion Tax in the interests of redistribution, or you’re against them. I don’t see how you can pick and choose.