Over 20,000 of poorest to be hit by bedroom tax and council tax benefit changes in Newcastle

▪ Change takes effect next month, on the same day that millionaires see their taxes cut
▪ David Cameron refuses to say whether he will personally benefit

 

Chi asked the Prime Minister today whether he stood to gain personally from a raft of tax changes next month that will see millionaires get a tax cut as 20,000 of the poorest people in Newcastle will have to pay up to £125 a month more.

This comes on top of news this week that 1 in 10 people in Newcastle have borrowed money to pay for food.

Chi’s question to the Prime Minister was:

This week the CEBR reported that 1 in 10 people in Newcastle have borrowed money to pay for food. In April, 20,000 of our poorest households are going to be asked to find up to £125 per month to pay for the council tax benefit cut and the bedroom tax. So could the Prime Minister confirm whether at the same time, he personally, will benefit from the millionaires tax cut?

The Prime Minister responded by saying that there are large waiting lists for social housing in Newcastle but refused to confirm whether he stood to benefit personally from the change in the top rate of tax.

Afterwards, Chi said:

“At a time when people are cutting back on the bare essentials such as food, only a Prime Minister as out of touch as this one could think it right to introduce a bedroom tax and force over 20,000 of the poorest people in the city to start paying council tax.

“Whilst there is pressure on housing in Newcastle, it is being made worse by this Government. Their flagship housing policy has left Newcastle worse off than it would have been without it. And they are making it harder to get private sector empty homes back into use.”

 

Housing benefit and council tax benefit changes in Newcastle

Around 21,500 households will be affected by the changes to council tax benefit. Of these around 16,500 will pay council tax for the first time, and around 4,500 will pay more. Around 6,070 households will be affected by under occupation changes (“the bedroom tax”).

House building is down 11% nationally this year. The Government’s flagship housing policy, the new homes bonus, will grant an extra £3m of funding to Newcastle to build more homes. But that money is funded by top-slicing, and as a result of that top-slicing, Newcastle will lose £6.5 million. 

Under occupancy is a problem in housing, but is mostly caused by a lack of specialist housing for older people, forcing them to stay in homes larger than they need and often larger than they want. However pensioners are not affected by the bedroom tax so the policy is unlikely to have any major impact on housing waiting lists or overcrowding.

There is a lack of one bedroom properties in Newcastle which means that many people who need a one bedroom property have little choice but to take a larger one. There are over 3,000 of those under occupying at the moment who if they were to move would require a 1 bed property. Your Homes Newcastle estimate that if they were to rehouse no one else and they were given no choice it would take them over 8 years.

The Council is at risk of losing nearly £4 million rental income per year from the under occupation charge alone.

Impact: From information received from Revenues and Benefits at the City Council, Your Homes Newcastle believe that nearly 7,000 people living in YHN managed tenancies (including Leazes Homes and the Byker Trust) will be under occupying their homes by at least one bedroom. This poses a significant risk to the rental income of YHN and the City Council as well as the quality of life some tenants.

The Prime Minister said in his response that there were 9,000 people on social housing waiting lists in Newcastle. The up to date figure from Your Homes Newcastle is less than half that at around 4,000.

On April 6th 13,000 earning £1m a year will get a tax cut of at least £42,295 a year.

 

Some facts on food poverty in Newcastle and the North East

A report by the CEBR (Centre for Economic and Business Research) this week found that one in ten people in Newcastle (11 %) have borrowed money to pay for food. More figures for the city and the region are below:

Newcastle

  • 13 % have changed their eating habits for the worse because of financial constraints
  • One in ten (11 %) have borrowed money to pay for food
  • 38 % think the government should take steps to deal with food poverty
  • One in five (19 %) are concerned about the healthy balance of their diet

North east

  • 13 % have changed their eating habits for the worse because of financial constraints
  • 36 % think the government should take steps to deal with food poverty
  • One in four are concerned about the healthy balance of their diet
  • 16 % of people have skipped a meal as a result of a limited food budget
  • One in 10 have stopped buying as many fruit and vegetables
  • 7% of people have skipped meals so other members of their family have more to eat

 

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