Cameron's housing benefit myths debunked
New report shows that the number of working people claiming housing benefit has risen by 86 per cent in three years.
By George Eaton Published 22 October 2012 8:48
David Cameron and George Osborne are fond of describing housing benefit as a payment for the unemployed. Recently challenged on his plan to abolish the benefit for the under-25s, Cameron 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 [emphasis mine].
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.
By portraying housing benefit as a payment for "the shirkers", not "the strivers", Cameron and Osborne aim to convince the public that their unprecedented welfare cuts are justified. But the truth is that the benefit is increasingly claimed by the working poor, the very group that Cameron purports to care so much about.
Today's report from the National Housing Federation, Home Truths, shows that the number of working people forced to rely on housing benefit to pay their rent has increased by 417,830 (86 per cent) in the last three years, a figure that is rising at a rate of nearly 10,000 a month. Ninety three per cent of new claims last year were made by households containing at least one employed adult. By 2015, a total of 1.2 million working people people will only be able to stay in their homes through state subsidy.
As the figures suggest, it is excessive rents and substandard wages that are to blame for the inflated housing benefit budget (which will reach £23.2bn this year), not workshy "scroungers". The cost of privately renting a home has increased by 37 per cent in the past five years, and is set to rise by a further 35 per cent over the next six years. With 390,000 new families formed in 2011, but only 111,250 new homes built, rents have inevitably soared as demand has outstripped supply.
Rather than making housing benefit ever more restrictive, Cameron should act to lower rents and increase wages (when did you last hear him speak of a "living wage"?). Punitive cuts to welfare might win the Tories favourable headlines in the right-wing press, but this approach will do nothing to help "the strivers".
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25 comments
It’s really quite simple, there has been far too much immigration from all over the world including the EU, immigration was good at some point and has produced some really good and gifted people, but as in many things there is a limit, nobody kept any sort of check on it, that’s the cause of a large amount of our problems, the welfare/NHS/housing have all been swamped.
Does not alter the fact that there are a huge number of people on housing benefit who do not work and his idea to stop people moving out from their parents and claiming without ever having worked is a good one. Why should taxpayers pay for peoples flats , or rooms in flats, when they have never worked? The welfare state needs to be cut back from the astronomical sums being paid and this is a good , and fair,way to continue that. And a fair living wage is a great idea too.
The so-called 'astronomical sums' you mention pale in comparison with legal tax avoidance and illegal tax evasion.
Most of the HB claimants are actually working, but govt. policy has held down wages so drastically for 30 years, they cannot afford the rents that are artificially high.
Believe me, I know, having experienced unemployment, very well paid jobs and very low paid jobs; I currently work in a job that pays significantly more than minimum wage, yet receive a small HB allowance because the rent on my COUNCIL house is so high.
Remember, an illness, accident or other tragedy could see you out of work and reliant on the benefits you advocate slashing, benefits most folk claim genuinely, the scroungers being a very small minority, despite govt. supporters in the media reporting otherwise.
Strange how we have foriegn claimants come to Manchester, seven kids and eager to make more - all off the state, and get £1400 a month rent allowance + free education+free benefits+free healthcare+free interpreter+free medicines which for conditions they had when paying £20,000 to get here and avoid another load of European countries, to get all that.
Remember most of the £20,000 these people pay is to human traffickers.
Most pensioners I know wish they had £20,000 to go to where they could get free benefit and housing. Trouble is they do not have that because they are paying those coming here to raid their funds.
Aren't you the Posh Tosh who made great capital out of the fact that you paid people the minimum wage and were proud of it?
I expect you will be advocating Workhouse and stocks next.
Please tell me why you think the Parents should subsidise their children forever ?
A parents task is to give them everything they need in life in order to be able to survive on their own when you are gone.
It is not their job to prop up the governments failing policies.
The living wage is the way forward at least to a large extent.
Why are we funding private landlords.
The options set out by MPs that claim double housing benefit, and sometimes let people rent their benefit claimant homes and then rent off another MP and get more state benefit,
Remember all MPs are State-benefit claimants!
They should all have been sacked.
If I fiddle my expenses and get caught, I have no excuse and cannot complain if I lose my job.
Cripes, what a luck chap! Grand Chapps, of course. Onward and upwards! Leaves his poor successor in a hell of a mess. Nevertheless, Grant has written a self-help book so that the cash strapped aspirational chap can make his million and stop being a drain on the state. A plus don't you think?
Landlords definitely sorry to see him go. They've been coining it ever since Grant took over. Build houses when we've got plenty of rooms available at taxpayers' expense.
Still, now we have to face up to the bleak reality of the housing market surely it's time a Rachman and a Rigsby made an appearance. Don't forget the Alsatian or the noisy neighbours.
Not the same since we had Rasputin in the sixties. Good Old Keefe Joseph! The Mad Monk. Knew all about construction did Keith. Family were builders. And his wife had a nice way with homeless people. Made them tea. Pity Keefe was a former public school boy. Such a tragedy, Mrs T was educated at a state grammar school and became a hussive.
Even invented a political ideology from Mrs T and named it 'Thatcherism'. Kind of 'home economics'.
Good Old Days
Cripes, what a luck chap! Grand Chapps, of course. Onward and upwards! Leaves his poor successor in a hell of a mess. Nevertheless, Grant has written a self-help book so that the cash strapped aspirational chap can make his million and stop being a drain on the state. A plus don't you think?
Landlords definitely sorry to see him go. They've been coining it ever since Grant took over. Build houses when we've got plenty of rooms available at taxpayers' expense.
Still, now we have to face up to the bleak reality of the housing market surely it's time a Rachman and a Rigsby made an appearance. Don't forget the Alsatian or the noisy neighbours.
Not the same since we had Rasputin in the sixties. Good Old Keefe Joseph! The Mad Monk. Knew all about construction did Keith. Family were builders. And his wife had a nice way with homeless people. Made them tea. Pity Keefe was a former public school boy. Such a tragedy, Mrs T was educated at a state grammar school and became a hussive.
Even invented a political ideology from Mrs T and named it 'Thatcherism'. Kind of 'home economics'.
Good Old Days
Should hard working people in the Midlands support someone who wishes to live in Kensington and Chelsea. We would all like to live there but can't afford it. That is the line we must draw in order to get elected.
We must support caps/limits otherwise we will really be the party of the shirkers, which we are not.
The state will not be able to pay for everything in the future, we will live in a country competing with extremely competitive and advanced countries like Singapore, Korea and China who will no longer use their surpluses to finance our debts. Hence once this QE financed bond bubble blows up expect debt to get very expensive. In the meantime we need to get our house in order.
Yet, if you never really liked where you live, then being forced to move elsewhere isn't as bad as it seems. Lmao. I'm moving to Australia, because the lifestyle is fairer. Their goverment is fairer and housing rent is way more cheap over in Aus. You could move there yourself. Just a thought. The housing really is cheaper over there though. Why bother being a tied down to a country that just keeps going downhill? Do you want that for your life?
Yet, if you never really liked where you live, then being forced to move elsewhere isn't as bad as it seems. Lmao. I'm moving to Australia, because the lifestyle is fairer. Their goverment is fairer and housing rent is way more cheap over in Aus. You could move there yourself. Just a thought. The housing really is cheaper over there though. Why bother being a tied down to a country that just keeps going downhill? Do you want that for your life?
What we see is Ricardo's Law of Rent in action. The solution: Land Value Tax. Its was all acurately described 130 years ago in Henry George's Progress and Poverty. Time to wise up!
Completely agree with the point above about looking at taxation being put on the almost one million empty homes across the UK. On the same day that we also hear about 1.5 million people who have second homes that they do live in, it's clear that much of the problem with inequality between housing supply and demand isn't caused by an over-generous housing benefit system at all.
George
Who's team are you on?
Ed Balls got boo-ed for saying jobs not pay rises, yet here you go saying the opposite.
Give everyone some money -- it increases demand for goods (and rents) so prices rise. Thats exactly what has happened. The market has been poisoned and the lowest paid are the ones that suffer.
Do you have a history degree? Do you have no real world experience of finance or basic economics ? You could be Labour's next economic genius Gordon.
In the spirit of openness, Indu, perhaps you's like to tell us your qualifications and experience.
And just so we can check, your real name too.
I've never boasted about my qualifications which not very good. I left school without finishing A levels. Leaving comprehensive was the best thing I've done.
This is a political commentary site not a dating site.
Ludicrus, you tell us your name and qualifications.
We still don't know which toilet Inastew uses.
Oh look its Fox the confirmed misogynists - woman place is in the home supporting hubby and all that. Leveling down women -- its not socialism its sexism.
There is no 'shortage of housing'.
The 'demand outstripping supply' is totally artificial.
Various figures point to about ONE MILLION empty residential properties in the UK - these are for the most part neglected 'assets' of individuals and companies who can't be bothered to rent them out, as they're not losing money on them sitting empty.
It's a pure taxation problem. One house - fine, two houses - luxury, three and more - ok but surely not if undertaxed in a way which makes it 'profitable' to leave them empty.
Many things need rethinking in these times, one of them is the purpose of houses - 'asset' vs. 'place to live'. I also despise the word 'housing ladder'. Where do you want to climb? Who are you leaving down below?
(But of course a sensible change in policy would bring rents and house prices right down, poor economy, poor people high on their ladders...)
It is the job of the left-wing press and Ed Miliband to highlight these facts and quash the Tory lies. Divide and rule is all Cameron and Osborne are good at.
Pity the only thing I've jeard Miliband saying is "We'd have cut too" instead of "We'd have started with the tax fiddlers"
This has been raised before in NS. Phase out Housing Benefit. Let everyone know that from this time next year it will be reduced from the current rate to zero, in equal increments, over the next five years. This is not to punish people claiming it but to force rents downwards. If it becomes clear to landlords that they cannot continue to push up rents, well over the rate of inflation, then they will have to re-assess their own position. If they have mortgages on multiple properties then they will have to extend them or consider selling them. In turn this may depress property prices overall; a good thing.
While they are at it, maybe members of parliament may like to assess their own position. Stop MPs having second homes that they can rent (or loan) out. Any MP that requires additional living space should have it supplied centrally; it should not become "theirs" to dispose of as they will. The taxpayer is paying for these properties but I understand that the MP takes the rent.
As the article says - how about demanding a living wage for employees and rent adjudication so that landlords have to justify rent increases. Or would that affect the market?
There is absolutely no guarantee that phasing out benefits will "force rents downwards" as you argue. And it will certainly not happen quickly enough to absorb the numbers of people forced out of their present homes when their benefits are reduced or eliminated.
Landlords may, indeed, "reassess their situation" eventually, but given the housing shortage, that's not likely to happen quickly. In the meantime, your experiment in letting the free market determine rents plays havoc with the lives of real people, and risks making many families homeless.
This free market nonsense has got us into the current housing crisis. What's needed is rent controls, a mechanism for forcing landlords to lower their rents back to reasonable levels, and massive state investment in building more affordable homes.