THE Government’s removal of the spare room subsidy – known as the bedroom tax by critics – is saving North-East taxpayers more than £25 a year, it is claimed.

Ministers say almost 37,600 social housing tenants in the region faced a reduction in their housing benefit because they had spare rooms in November last year.

However, this was a nine per cent fall compared to a month after the policy was introduced in April 2013.

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The Government said the reduction in housing benefit payments had saved £490m in 2013/14 nationally and £25m in the North-East.

A year on from the introduction of the policy, Secretary of State for Work and Pensions, Iain Duncan Smith, said: “It was absolutely necessary that we fixed the broken system which just a year ago allowed the taxpayer to cover the £1m daily cost of spare rooms in social housing.

“We have taken action to help the hundreds of thousands of people living in cramped, overcrowded accommodation and to control the spiralling Housing Benefit bill, as part of the Government’s long-term economic plan.

“Our reforms ensure we can sustain a strong welfare safety net, and we are providing an extra £165m next year to support the most vulnerable claimants.”

The so-called bedroom tax was introduced in a bid to encourage households with spare rooms to move to smaller properties and free up their house for larger families.

The Government is standing by the policy despite figures highlighted last week by Labour which show only one in every 50 tenants hit affected by the changes in part of the region have moved to a smaller home.

Responding to the Government report, Louise Baldock, Stockton South’s Labour candidate, said: “David Cameron’s cruel Bedroom Tax continues to push families here in Stockton South and nearly 40,000 across the North-East - already facing a cost of living crisis - further into debt.

“For the vast majority of those affected, there is nowhere smaller to move to, hitting vulnerable people the most through no fault of their own.

“Under this government housing benefit bills are rising, not falling and the bedroom tax has forced thousands into rent arrears and to rely on food banks to survive."