The housing benefit bill is still rising under the coaliton

Even with the cap, in-work poverty means the bill has risen to £23bn.

Housing benefit is becoming the curse of the coalition. The Prime Minister promised to cut the benefit bill and back those who work hard. But the latest DWP data (19 July) shows that the number of housing benefit claimants continues to rise and is now well past the five million mark. The housing benefit bill is £23bn and rising, despite the welfare caps and cuts. Dig deeper and you see that by far the largest increase is among those in employment, most of them part-time workers  (the Smith Institute estimates that in-work poverty alone will add £1bn a year to the housing benefit bill).

Contrary to Conservative claims, it is the under-employed, not the unemployed, who are pushing up the cost of housing benefit. In-work claimants now account for nearly 90% of the net increase in overall housing benefit claims. The rise of in-work poverty belies Conservative propaganda about the "underserving poor" and benefit scroungers.  Low growth and falling real wages are pushing more people to the margins of the labour market, where pay is not enough to live on. In London, and other high housing demand areas, the problem is exacerbated by higher private rents.

But this is not a problem made by the recession and the coalition’s welfare reforms.  The housing benefit bill has been increasing since 2000, and doubled between 1997 and 2010. New Labour got hooked into a spiral of subsidising higher social rents. The number of housing benefit claimants stayed roughly the same between 2003-2007, but payments to landlords rose year-on-year.  As the recession hit, the situation got worse as the numbers of unemployed increased. Now we are in the third stage, with more claimants as a result of falling real wages and under-employment.

Social and private rents are still going up (social rents have increased by a fifth over the last five years), but they will arguably have less impact on the future housing benefit bill because of the cap. However, they are being offset by cost pressures because more people in work are claiming. This is evidenced by the fact that the gap between pay for the bottom 10% and their rents has widened significantly.

Rising rents, falling wages and benefit caps are a triple blow for low income households and will lead to higher levels of poverty. Labour can’t ignore the problem, which started on its watch. Part of the solution must be reversing the decline in real wages. But a future Labour government is also going to have to grapple with subsidies and the balance between revenue and capital subsidies for those who simply can’t afford to pay higher rents.

The housing benefit bill is £23bn and rising, despite the welfare caps and cuts. Photograph: Getty Images.

Paul Hackett is the director of The Smith Institute.

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There are two sides to the Muslim segregation story

White families must also be prepared to have Muslim neighbours. 

Dame Louise Casey finally published her review on social integration in Britain. Although it mentions all communities, there is a clear focus on Muslim communities. However, the issues she raises - religious conservatism, segregation in some areas and Muslim women experiencing inequalities -  are not new. In this case, they have been placed in one report and discussed in the context of hindering integration. If we are truly committed to addressing these issues, though, we have a duty of care to discuss the findings with nuance, not take them out of context, as some tabloids have already done.

The review, for example, highlights that in some areas Muslims make up 85 per cent of the local population. This should not be interpreted to mean that Muslims are choosing to isolate themselves and not integrate. For a start, the review makes it clear that there are also certain areas in Britain that are predominantly Sikh, Hindu or Jewish.

Secondly, when migrants arrive in the UK, it is not unreasonable for them to gravitate towards people from similar cultural and faith backgrounds.  Later, they may choose to remain in these same areas due to convenience, such as being able to buy their own food, accessing their place of worship or being near elderly relatives.

However, very little, if any, attention is given to the role played by white families in creating segregated communities. These families moved out of such areas after the arrival of ethnic minorities. This isn't necessarily due to racism, but because such families are able to afford to move up the housing ladder. And when they do move, perhaps they feel more comfortable living with people of a similar background to themselves. Again, this is understandable, but it highlights that segregation is a two-way street. Such a phenomenon cannot be prevented or reversed unless white families are also willing to have Muslim neighbours. Is the government also prepared to have these difficult conversations?

Casey also mentions inequalities that are holding some Muslim women back, inequalities driven by misogyny, cultural abuses, not being able to speak English and the high numbers of Muslim women who are economically inactive. It’s true that the English language is a strong enabler of integration. It can help women engage better with their children, have access to services and the jobs market, and be better informed about their rights.

Nevertheless, we should remember that first-generation Pakistani and Bangladeshi women, who could not speak English, have proved perfectly able to bring up children now employed in a vast range of professions including politics, medicine, and the law. The cultural abuses mentioned in the review such as forced marriage, honour-based violence and female genital mutilation, are already being tackled by government. It would be more valuable to see the government challenge the hate crimes and discrimination regularly faced by Muslim women when trying to access public services and the jobs market. 

The review recommends an "Oath of Integration with British Values and Society" for immigrants on arrival. This raises the perennial question of what "British Values" are. The Casey review uses the list from the government’s counter-extremism strategy. In reality, the vast majority of individuals, regardless of faith or ethnic background, would agree to sign up to them.  The key challenge for any integration strategy is to persuade all groups to practice these values every day, rather than just getting immigrants to read them out once. 

Shaista Gohir is the chair of Muslim Women's Network UK, and Sophie Garner is the general secretary and a barrister.