Memo to Cameron: 93% of new housing benefit claimants are in work

The PM described it as a benefit for the unemployed. But most new claims are made by in-work households.

Is David Cameron a fool or a knave? Challenged by Today presenter James Naughtie on his plan to abolish housing benefit for the under-25s (including the 204,500 claimants with children), the Prime Minister implied that it could only be claimed by the unemployed. He said:

We should ask this question about housing benefit: if you're a young person and you work hard at college, you get a job, you're living at home with mum and dad, you can't move out, you can't access housing benefit.

And yet, actually, if you choose not to work, you can get housing benefit, you can get a flat. And having got that, you're unlikely then to want a job because you're in danger of losing your housing benefit and your flat. We have to look at the signals we send and I think we should have a system where we say 'you shouldn't be better off out of work than in work'. The system doesn't work today, so we need to reform it.

The truth, as I've noted before, is that just one in eight claimants is out of work, the remainder being employed, retired or registered disabled. Indeed, years of falling living standards mean that housing benefit is increasingly a subsidy for the working poor. Of new claims between 2010 and 2011, 93 per cent were made by households containing at least one employed adult.

If Cameron really wants to reduce the welfare bill, he should seek to lower rents and increase wages (when did you last hear him speak of a "living wage"?). Punitive cuts to housing benefit might win the Tories favourable headlines in the right-wing press, but this approach will do nothing to help "the strivers" that Cameron purports to support.

David Cameron listens to William Hague deliver his speech at the Conservative Party conference. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Brexit is the beginning of the end for Northern Ireland

The age-old bid for a unified Ireland is now wearing utilitarian clothes. 

Brexit has presented British politics with something akin to a "reverse West Lothian Question". Instead of worrying why Scots should get a vote on English laws, we now have English voters telling Scotland and Northern Ireland they must leave the European Union, despite the people in both small countries opting to stay. 

Sinn Fein could hardly believe its luck that 56 per cent of Northern Ireland’s voters chose to remain in the EU, but are nevertheless being forced out by the weight of English votes for Brexit. Their immediate call for a "border poll" on Irish unity is opportunistic and will, for now, go unheeded. 

What is different, though, is their age-old bid for Irish re-unification now comes wearing neutral, utilitarian colours, responding to a genuine, contemporary issue. Moreover, the threat of Brexit to Northern Ireland has seen the Irish establishment, in the shape of Irish Taoiseach Enda Kenny, and his opposite number, the Fianna Fail leader Micheál Martin, echo calls for an (eventual) poll on Irish unity.

Brexit is, indisputably, a game-changer. We are now plausibly witnessing the beginning of the end of Northern Ireland. Not least because the economics of leaving the EU are so utterly disastrous for it. 

Back in March, Northern Ireland’s Department of Enterprise, Trade and Investment calculated that the risks of Brexit would be much more serious for Northern Ireland than the rest of Britain. Whereas Britain’s economic losses will be measured in the region of 0.1-4 per cent of GDP, for Northern Ireland that increases to up to 5.6 per cent.

In short, if Britain catches a cold by leaving the EU, Northern Ireland will get flu. Even if Theresa May eventually manages to negotiate ongoing single market access, the loss of agricultural subsidies and regeneration cash will be an unmanageable burden for the fragile cross-community executive to deal with.  

Last year, the devolved assembly's enterprise committee commissioned a report that showed the province received £2.4bn from the EU between 2007-13, and that continued funding deals up to 2020 are "central to Northern Ireland[s] economic and innovation strategies".

The report's author, Dr Leslie Budd from the Open University, argued that as well as damaging Northern Ireland's attractiveness as an entry route into the single market, transaction costs for trading into the EU would "rise significantly" and inhibit economic co-operation with the neighbouring Irish Republic. 

This is important because the Northern Ireland Executive plans to harmonise corporation tax rates with it in 2018. It is hoped the move will make the North a leaner competitor to the South in the foreign investment stakes, however it will still fall short if the Republic remains in the single market and Northern Ireland does not. 

Worries about any deterioration in North-South relations and being cut-off from the EU are very real. The Northern Ireland Chambers of Commerce have recently signed a ‘formal affiliation’ with Chambers Ireland to bolster all-Ireland business co-operation "in the current period of uncertainty." 

Meanwhile, there has been a rush to apply for Irish passports, so much so, in fact, that it’s said Belfast’s post offices have run out of application forms. Indeed, no less a figure than Democratic Unionist MP, Ian Paisley Junior, suggested his constituents should think of applying for one. A genuine "through the looking glass moment" to hear that from a Paisley.

The obvious effect of Brexit-inspired instability in Northern Ireland is that it will become an even larger burden on the British Exchequer. Already, one in three works in the engorged public sector and its fiscal deficit is so large the Treasury has to pump in £9 billion a year. Will hard-pressed English taxpayers prove willing to continue to bail out a place of which they know and care little?

But this is only half the story. If these are the obvious pressures as a result of Northern Ireland leaving the EU, what, then, are the benefits of joining with the Irish Republic? 

A major US academic study by the University of British Columbia last year modelled various scenarios and concluded that Irish unity could drive out €36bn euros of value during the first eight years, with the benefits disproportionately felt in Northern Ireland. 

So a clear, existential economic problem has emerged and with it a convincing, evidence-based economic solution. The only snag with Northern Ireland, though, is the politics.

The principle of consent, that there can be no change in its constitutional status unless a majority wishes it, is hardwired into the Good Friday Agreement and there is, so far, precious little interest among unionists in joining the Irish Republic.

But as the old saying goes, unionists are not so much loyal to the Crown as the half-crown. Maybe they will look more positively on the idea after suffering the very real economic effects of Brexit for a few years. A decision Eurosceptical unionists voted for in large numbers.

And in a decade’s time, perhaps we will look back and see these past few weeks were the beginning of the end for Northern Ireland.
 

Kevin Meagher is associate editor of Labour Uncut and a former special adviser at the Northern Ireland office.