Housing benefits and the Olympics

How housing benefit caps exacerbate the effects of the Olympics.

When the Government announced its cap on housing benefits, it dismissed critics who said that this would lead to increased social segregation and a displacement of the poor from inner city housing. Nothing of the sort would happen, but instead, the size of the welfare bill would go down and there would be lower rents for poor people renting from a private landlord. In reality, the critics were right: the poor are driven out of their communities, and rents continue to rise as fewer and fewer people can afford to buy. Nowhere can this be better observed than in the Olympic boroughs, where high-speed gentrification meets the benefit cap.

Hardly anyone expected that the Olympic Games would leave the population of Hackney, Newham and Tower Hamlets unchanged. The billions of pounds that poured into three of the most deprived boroughs in England led to upgraded infrastructure and housing stock and brought new shopping and leisure facilities. Many people on higher incomes will consider moving there where few would have done so before. Consequently, housing values and rents are on the up. Post-Olympics, the poor would have always found it hard to find affordable accommodation, and people on housing benefits would have struggled to find a private landlord willing to rent to them rather than a more affluent tenant.

But the housing benefit cap is massively exacerbating this development. Housing benefit is paid in the form of the Local Housing Allowance (LHA) to people on low incomes who rent from a private landlord (as opposed to a social landlord, such as a housing association).  Prior to the reform, the maximum amount was pegged at the median level of a given rental market area, meaning that private landlords would get a similar rent than if they let out their property to a more affluent tenant. The newly introduced cap limits the LHA to the 30th percentile, and also specifies an absolute cap, for example £250 per week for a one bedroom property. This may appear high – but in London, it is not an unusual price.

Since the introduction of the cap, landlords in East London quickly realised that they can charge the same or much higher rents in the open market rather than renting to LHA recipients. It is very tempting even for the most socially inclined of private landlords to do so, given that the system is fraught with complications: payments are made in arrears, and often arrive late. LHA recipients whose income level crosses and recrosses the eligibility threshold have their benefit payments stopped and restarted, making the system even more unreliable. The general demonisation of LHA recipients (or benefit recipients in general) does not help. The result: a shortage of housing for the poor. As a Guardian investigation has shown, there are hundreds of properties within the limits of the housing cap in Newham, but many of these are not available to people on LHA. Queue the exodus of LHA recipients. Newham Council has already asked a housing association in Stoke if they could take on 500 families for which the council has been unable to find properties. The legacy of the Games will be a homogenous island of wealth interspersed with remnants of social housing rather than the mix of rich and poor that is still the norm in most parts of London.

The developments here are a sign of the shape of things to come across the country – at different times, at different speeds, but it will happen elsewhere, as the rental market is rapidly overheating: people cannot afford to buy anymore and renting ceases to be the preserve of the poor. Landlords can chose who to let to, and unsurprisingly will chose richer tenants. It was always a complete folly to introduce price controls on a small segment of an overheating market – it simply means that this market segment will not be served. What is happening in the Olympic boroughs should act as a warning to the rest of the country: if we don't want ghettos of rich and poor, the cap has to be repealed. If we don't want to spend increasing amounts of money on housing the poor, we have to reform the whole of the housing market, not just that part that is meant to serve the vulnerable (and that serves them badly already). At the moment, it is barely working for most, and it isn't working for the poor at all.

Photograph: Getty Images

Veronika Thiel is a researcher and writer in the field of social economics and health policy. She tweets from @veronikathiel.

Photo: Getty
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Empty highs: why throwaway plastic goes hand in hand with bankrupt consumerism

We are in the throes of a terrible addiction to stuff.

A University of California study revealed this week that mankind has produced more than nine billion tonnes of plastic since the 1950s, with almost all of it ending up in landfill or the ocean. With the terrible effects of our decades-long addiction to throwaway packaging becoming increasingly apparent, it’s clear that a fresh approach is needed.

In April 2010, David Cameron set out his vision for Britain in the Conservative Party’s manifesto. Keen to show that the Tories had turned away from the "I’m Alright Jack" individualism of the 1980s, Cameron sought to fashion a softer, more inclusive brand.

The good society, Cameron argued, embraced much higher levels of personal, professional, civic and corporate responsibility. There was such a thing as society, and we’d all do well to talk to our neighbours a bit more. The Big Society, however, was roundly derided as a smokescreen for an aggressive tightening of the Government purse strings. And on the advice of his 2015 election fixer Lynton Crosby, Cameron later dropped it in favour of well-worn lines about economic security and jobs.   

While most would argue that the Big Society failed to amount to much, Cameron was at least right about one thing. We are happiest when we are part of something bigger than ourselves. No matter how much the credit card companies try to convince us otherwise, mindless individualism won’t make us nearly as contented as we’re led to believe by big conglomerates.

By any measure, we are in the throes of a terrible addiction to stuff. As a nation, we have run up unsecured debts of more than £350bn, which works out at £13,000 per household. Fuelled by a toxic mix of readily available credit and interest rates at historic lows, we cripple ourselves financially to feel the empty high derived from acquiring yet more stuff.

Purchasing has become a leisure pursuit, ensuring the rate at which we acquire new stuff exceeds the rate at which we can find somewhere to put it. Burdened with ever increasing amounts of stuff, consumers are forced to outsource their storage. The UK didn’t have a self-storage industry 30 years ago, but now it is the largest in Europe.

With the personal debt mountain soaring, we’d all do well to realise that we will never have enough of something we don’t need.

The growth of rampant consumerism has coincided with an explosion in demand for single-use plastic. Like the superfluous possessions we acquire, throwaway plastic packaging helps satisfy our desire to get exactly what we want without having any thought for the long-term consequences. Plastic packaging is easy and convenient, but ultimately, will do us immense harm.

In 1950, close to 1.5 million tonnes of plastic was produced globally. Today, the figure stands at more than 320 million tonnes. The vast majority of our plastic waste either ends up in landfill or the ocean, and our failure to kick the plastic habit has put is in the ludicrous position where there is set to be more plastic than fish in global seas by 2050.

There is also growing evidence that our penchant for endless throwaway plastic might be storing up serious health problems for our children later down the line. According to a University of Ghent study published earlier this year, British seafood eaters risk ingesting up to 11,000 pieces of plastic each year. The report followed UN warnings last year that cancer-causing chemicals from plastic are becoming increasingly present in the food chain.

Something must give. Unsustainable as our reliance on fast credit to finance ever more stuff, our addiction to plastic packaging is storing up serious problems for future generations. The instant gratification society, high on the dopamine rush that fades so quickly after acquiring yet another material asset, is doomed unless decisive action is forthcoming.

So what is to be done? The 2016 US documentary Minimalism points to a smarter way forward. Minimalism follows the lives of ordinary people who have shunned the rat race in favour of a simpler life with less stuff and less stress. The most poignant bit of the film features ex-broker AJ Leon recounting how he chose to forgo the glamour and riches of Wall Street for a simpler life. After a meteoric rise to the top of his profession, Leon decided to jack it all in for a more fulfilling existence.

While challenging the view that to be a citizen is to be a consumer is easier said than done, there are small changes that we can enact today that will make a huge difference. We simply have no choice but to dramatically reduce the amount of plastic that we can consume. If we don’t, we may soon have to contend with the ocean being home to more plastic than fish.

Like plastic, our bloated consumer culture is a disaster waiting to happen. There must be a better way.

Sian Sutherland is co-founder of campaign group A Plastic Planet which is campaigning for a plastic free-aisle in supermarkets.