How Osborne disguised the truth about the rising housing benefit bill

Excessive rents and substandard wages are to blame for soaring housing benefit payments, not workshy 'scroungers'.

Rarely has there been a better example of a politician attacking the symptom, rather than the cause, than in the case of George Osborne and housing benefit. Addressing Morrisons workers earlier today, Osborne sought to terrify his audience with tales of families receiving "£100,000 a year" (just five did). It was such cases, he said, that prompted the government to cap housing benefit payments at £400 a week.

We can’t have a system that penalises you for going out to work and wanting to get on. So we’ve put a stop to those staggering payments and put a cap on housing benefit.

We’ve made sure that you can’t get more than £400 of Housing Benefit a week in this country. That’s still a pretty generous amount.

And yet when we did the pressure groups and welfare lobby attacked it as not enough.

They still say that people should get more than £400 a week housing benefit.

They don’t seem to realise that the money to pay these benefits comes from people who work hard, who pay their taxes, and many of whom can’t afford £400 a week in rent.

On one point the Chancellor is right: the housing benefit bill is too high. But what he chose not to tell his audience is that benefit payments have only soared because rents have. The bloated housing benefit bill (which will reach £23.8bn this year, more than a tenth of the welfare budget) is the result of a conscious choice by successive governments to subsidise private landlords, rather than invest in affordable social housing.

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. As a result, the number of working people forced to rely on welfare 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 are 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. It is excessive rents and substandard wages that are to blame for the inflated housing benefit budget, not workshy 'scroungers'. Even with the government's cuts, the bill is forecast to rise from £23.8bn this year to £25.9bn in 2017-18. 

But had Osborne chosen to tell his audience this, rather than launching another lazy assault on the welfare system, he might have been forced to explain why the government isn't building more homes. With 390,000 new families formed in 2012 but only 111,250 new homes built, rents have continued to soar as demand has outstripped supply. And as the OBR, among others, has noted, Osborne's new "Help To Buy" scheme is only likely to further drive up prices. But the government's response to the housing crisis too often remains to change the subject. In this case, by displacing public anger onto those who least deserve it: the poor and the vulnerable. 

Members of the public in north London walk past a poster informing of changes to the benefits and tax system that have come into force. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The 8 bits of good news about integration buried in the Casey Review

It's not all Trojan Horses.

The government-commissioned Casey Review on integration tackles serious subjects, from honour crimes to discrimination and hate crime.

It outlines how deprivation, discrimination, segregated schools and unenlightened traditions can drag certain British-Pakistani and Bangladeshi communities into isolation. 

It shines a light on nepotistic local politics, which only entrench religious and gender segregation. It also charts the hurdles faced by ethnic minorities from school, to university and the workplace. There is no doubt it makes uncomfortable reading. 

But at a time when the negative consequences of immigration are dominating headlines, it’s easy to miss some of the more optimistic trends the Casey Report uncovered:

1. You can always have more friends

For all the talk of segregation, 82 per cent of us socialise at least once a month with people from a different ethnic and religious background, according to the Citizenship Survey 2010-11.

More than half of first generation migrants had friends of a different ethnicity. As for their children, nearly three quarters were friends with people from other ethnic backgrounds. Younger people with higher levels of education and better wages are most likely to have close inter-ethnic friendships. 

Brits from Black African and Mixed ethnic backgrounds are the most sociable it seems, as they are most likely to have friends from outside their neighbourhood. White British and Irish ethnic groups, on the other hand, are least likely to have ethnically-mixed social networks. 

Moving away from home seemed to be a key factor in diversifying your friendship group –18 to 34s were the most ethnically integrated age group. 

2. Integrated schools help

The Casey Review tells the story of how schools can distort a community’s view of the world, such as the mostly Asian high school where pupils thought 90 per cent of Brits were Asian (the actual figure is 7 per cent), and the Trojan Horse affair, where hardline Muslims were accused of dominating the curriculum of a state school (the exact facts have never come to light). 

But on the other hand, schools that are integrated, can change a whole community’s perspective. A study in Oldham found that when two schools were merged to create a more balanced pupil population between White Brits and British Asians, the level of anxiety both groups felt diminished. 

3. And kids are doing better at school

The Casey Report notes: “In recent years there has been a general improvement in educational attainment in schools, with a narrowing in the gap between White pupils and pupils from Pakistani, Bangladeshi and African/Caribbean/Black ethnic backgrounds.”

A number of ethnic minority groups, including pupils of Chinese, Indian, Irish and Bangladeshi ethnicity, outperformed White British pupils (but not White Gypsy and Roma pupils, who had the lowest attainment levels of all). 

4. Most people feel part of a community

Despite the talk of a divided society, in 2015-16, 89 per cent of people thought their community was cohesive, according to the Community Life Survey, and agreed their local area is a place where people from different backgrounds get on well together. This feeling of cohesiveness is actually higher than in 2003, at the height of New Labour multiculturalism, when the figure stood at 80 per cent. 

5. Muslims are sticklers for the law

Much of the Casey Report dealt with the divisions between British Muslims and other communities, on matters of culture, religious extremism and equality. It also looked at the Islamophobia and discrimination Muslims face in the UK. 

However, while the cultural and ideological clashes may be real, a ComRes/BBC poll in 2015 found that 95 per cent of British Muslims felt loyal to Britain and 93 per cent believed Muslims in Britain should always obey British laws. 

6. Employment prospects are improving

The Casey Review rightly notes the discrimination faced by jobseekers, such as study which found CVs with white-sounding names had a better rate of reply. Brits from Black, Pakistani or Bangladeshi backgrounds are more likely to be unemployed than Whites. 

However, the employment gap between ethnic minorities and White Brits has narrowed over the last decade, from 15.6 per cent in 2004 to 12.8 per cent in 2015. 

In October 2015, public and private sector employers responsible for employing 1.8m people signed a pledge to operate recruitment on a “name blind” basis. 

7. Pretty much everyone understand this

According to the 2011 census, 91.6 per cent of adults in England and Wales had English as their main language. And 98.2 per cent of them could speak English. 

Since 2008-2009, most non-European migrants coming to the UK have to meet English requirements as part of the immigration process. 

8. Oh, and there’s a British Muslim Mayor ready to tackle integration head on

The Casey Review criticised British Asian community leaders in northern towns for preventing proper discussion of equality and in some cases preventing women from launching rival bids for a council seat.

But it also quoted Sadiq Khan, the Mayor of London, and a British Muslim. Khan criticised religious families that force children to adopt a certain lifestyle, and he concluded:

"There is no other city in the world where I would want to raise my daughters than London.

"They have rights, they have protection, the right to wear what they like, think what they like, to meet who they like, to study what they like, more than they would in any other country.”

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.