Bedroom tax crisis: Ed Miliband commits to abolition of controversial benefit cut - if Labour win next election

Archbishop of Canterbury joins chorus of voices condemning ‘vicious’ policy

Protesters have been very vocal about the so-called 'bedroom tax'; here pictured outside the LibDem conference (PA)

Ed Miliband pledged to abolish the Coalition’s “vicious and iniquitous bedroom tax” if Labour is returned to power at the next election.

In a keynote announcement at the start of his party’s Brighton conference, Mr Miliband said the next manifesto would include a commitment to scrap the benefit cut – which has been condemned for plunging thousands of council tenants into rent arrears.

Mr Miliband said Labour would make up for the £470m the spare room subsidy is meant to save by reversing some of the Government’s tax cuts for businesses and George Osborne’s “shares for rights” scheme. The pledge opens up a clear policy divide between Labour and its Conservative and Liberal Democrat opponents and is likely to be a major issue at the next election. While Mr Miliband is nervous about committing Labour to reversing other Coalition benefit restrictions, he believes he can win the public argument over the “bedroom tax” because of its perceived unfairness.

A new survey suggests that nearly 60 per cent of people believe the policy should be abandoned entirely – and the Archbishop of Canterbury has also joined in the criticism.

The Independent revealed earlier this week that around 50,000 people who have lost out under the benefit change have now fallen behind on their rent and could face eviction.

Under the new rules, tenants face a housing benefit reduction of up to 25 per cent if they have a “spare” bedroom. However, campaigners argue that many of those affected do not have an option to move because there are no smaller properties available.

Ministers say that Labour introduced a similar policy when it was in power by restricting housing benefit for those in under-occupied private sector properties.

In a speech at the conference on Saturday, Mr Miliband will link abolishing the bedroom tax with his “One Nation Labour” philosophy.

“The bedroom tax – not what the Tories call the spare room subsidy – the bedroom tax is a symbol of an out-of-touch, uncaring Tory Government that stands up for the privileged few,” he is expected to say.

“So we will scrap the bedroom tax [and pay for it by] abolishing the shady schemes of tax loopholes for the privileged few which the Tories keep inventing. Tax cuts for hedge funds, the billion-pound black hole created with a scheme for workers to sell their rights for shares, and by tackling scams which cheat the taxpayer in construction. That’s what a One Nation Labour government will do. That’s a party that will fight for you.”

Labour’s shadow Work and Pensions Secretary Liam Byrne said research suggested that councils did not have suitable properties for 90 per cent of those affected by the bedroom tax to move into.

“We have to show where the money will come from in order to reverse this iniquitous and vicious tax and we have to prove that it is costing more than it saves,” he said.

The Labour announcement came as the Archbishop of Canterbury, Justin Welby, also lined up to attack the penalty. Insisting he was “not making a party political point”, the Archbishop said that the benefits shake-up was likely to mean a rise in debts to housing associations.

“When a series of other things are combined, notably reductions in benefit to take account of what is seen as excess house space – the so-called bedroom tax – higher costs for energy, and for many the fact that short-term lenders can take money direct from an account within hours of it coming in, suddenly the problem and possibility of growing a large-scale arrears becomes very serious,” he said.

Sajid Javid, Economic Secretary to the Treasury, condemned Mr Miliband’s move. “Labour’s first policy commitment, after three years of waiting, is more spending on housing benefit, funded by a tax on pensions and more borrowing,” he said.

“That sums up Labour’s record in office and shows it’s still the same old Labour. Hardworking people would pay the price through higher taxes and higher mortgage rates.”