Duncan Smith has created a ticking social time bomb - and we'll pick up the bill

Pushing the poorest people to borrow money to pay their rent, and far beyond their means, forces our social problems under the carpet.

Last week, in its annual assessment of major government projects, the Cabinet Office sounded a warning to the Department for Work and Pensions over its flagship policies: Universal Credit and the £500 cap on benefits. No wonder; evidence against the policy is mounting up.

In Ashton, Greater Manchester - the only area where the government’s fated Universal Credit welfare system has already been rolled out - personal debt is rising, leaving families in a precarious position as welfare reform kicks in.

New Charter Housing Trust, which manages social housing within the pilot area, reports a 29 per cent rise in the number of people contacting its financial support team in the last year. More worryingly, it also records a 19 per cent rise in the total amount of debt held by tenants contacting them for support. On average, tenants who ask for help come to them owing £8,400.

This is not housing debt; it is not rent arrears. It is consumer debt: credit cards; loans; pay day lending; ‘emergency cash’ provided by high street money shops.

Although the trend for rising debt began before the start of the welfare reform pilot, New Charter says it is on an upward curve.

Meanwhile there has been an explosion in the number of high cost ‘money shop’ lenders opening on our high streets.. Planning changes which came into force this week mean that high street premises can be turned over to payday lenders without a public consultation or a change in planning permissions. As the bad times roll, easy money has never been more widely available to the poorest and most vulnerable people in our society..

When the bedroom tax kicks in and benefits are capped, tenants struggling to make ends meet will prioritise food and rent over other costs, and at any lengths. Despite support from local food banks (Oxfam revealed this week that almost half a million people in the UK are now depending on handouts for survival - most of them working), sometimes the money just doesn’t go far enough.

Tenants who have never missed a rental payment in their life now risk building up arrears - with the threat of eviction from their home - or turning to the proliferation of under-regulated high street and online money to plug the gap. Many, out of pride and desperation, will take the latter route.

Pushing the poorest people to borrow money to pay their rent, and far beyond their means, forces our social problems under the carpet only for the bulge to rise up and burst forth - at great expense to the taxpayer - later.

And so to housing debt. At the end of last month law firm Winckworth Sherwood did a few quick calculations, estimating the rise in arrears after the roll out of welfare reform. It claims Universal Credit will lead to an average increase in arrears of £180 per tenant.

Rent arrears, and the associated threat of eviction, are complex problems for society. Housing associations can only afford to develop much-needed new homes by borrowing against their income streams, historically guaranteed by payment of housing benefit. Now their income is plummeting.

Some social landlords have decided to risk their own balance sheets to protect their residents, finding ways around the ‘bedroom tax’ by reclassifying bedrooms as box rooms or cupboards. Others have made a commitment not to evict over arrears caused by welfare reform.

But not every social housing provider can afford to do this, and private landlords will not be so understanding. Welfare reform will lead to arrears followed by eviction - costly legal procedures in themselves - and finally an exorbitant rescue package including emergency housing, crisis payments and the cost of supporting vulnerable children.

If you think this is a hyperbolic vision of the future, just look to Oxford, where the council’s emergency housing department is already so stretched that it is placing families in a local Travelodge until temporary accommodation can be found.

This is the paradox: tenants will either find a way to cover their rent, or they won’t. And either way we have a ticking social time bomb just waiting to go off, at vast cost to the public purse.

Work is underway to prevent this social meltdown. In Lewisham, the local housing organisation has set up a relationship with the credit union which means as soon as a tenant falls into arrears they are contacted and offered help by the union, before they have time to seek other more expensive financing. Yet these relationships are rare; it’s a postcode lottery.

The lifetime cost of welfare reform won’t be understood for decades, as children made homeless during their education fail to find stability and families now racking up huge personal debts plunge towards a lifetime of poverty and dependency. No doubt Iain Duncan Smith will be praying for a Labour victory by 2015 as the impact of his policies unravel our communities.

Work and Pensions Secretary Iain Duncan Smith arrives to attend the government's weekly cabinet meeting at Number 10 Downing Street. Photograph: Getty Images.

Hannah Fearn is contributing editor of the Guardian local government, housing and public leaders networks

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In defence of the metropolitan elite

Railing against low-paid academics will not solve Britain's inequality problem. 

It’s a measure of how topsy-turvy our political culture has become that Theresa May, a Conservative, Oxford-educated prime minister, can claim to be on the side of "ordinary working-class people" against a sneering "elite". But while Brexit has made this division central to our political culture, we’ve been heading in this direction for a while. 

Earlier this year, I was watching a heated exchange between centrist Labour MP Alan Johnson and Left Unity’s Simon Hardy on the Daily Politics show. At one point, Johnson bellowed across the table: "You’re a middle-class intellectual!" So this is now a stand-alone insult, I thought to myself, and took to Twitter to share my indignation. A friend immediately replied: "He means you." And she’s right. I am indeed a middle-class intellectual, a member of the metropolitan elite. Given the prevalence of post-Brexit elite-bashing, I’m loath to stick my head above the parapet. But as my liberal intellectual English lecturers used to say, these terms need unpacking. 

The right-wing anti-elitism that we are seeing all around us co-opts the left’s opposition to financial and corporate dominance and converts it into opposition to those who are educated. To listen to Tory speeches now it’s as if the top 1 per cent didn’t own half the world’s wealth, as if the sales of individual global corporations hadn’t overtaken many national economies, as if CEOs didn’t earn 300 times the salary of the average worker. No, it’s the liberal, metropolitan elite that’s the real menace – those mighty "experts" and "commentators". As Michael Gove, another Oxford-educated Tory, declared during the EU referendum: "People in this country have had enough of experts." 
Anti-elitism conflates political office and cultural and educational distinction on the one hand, with social privilege on the other. But there’s no intrinsic reason why there should be a homogenous "political class", or that those with expertise or artistic judgement should necessarily be rich. In 1979, 16 per cent of MPs had a background in manual work; in 2010 the proportion had dropped to 4 per cent. The history of the Worker’s Educational Association and the Open University reveals a lively tradition of working-class intellectualism. It’s true that, right now, political and cultural capital are appallingly centralised, and there is a revolving door between ministerial office and business. The range of people entering the arts and higher education has been narrowed by the removal of social security and block grants.

Today's anti-elitism, far from empowering the disenfranchised, covertly promotes neoliberal economics. High standards are equated with having the upper hand. Attacks on "cosmopolitan elites" - i.e. those who benefited from affordable education - entrench inequality, put the left on the back foot and protect the real elites – all this while producing a culture that’s bland, dumbed-down and apologetic.
This manoeuvre is everywhere. Brexit is a surreal pageant of inverted protest - May’s use of the royal prerogative supposedly represents the will of the people. The beneficiaries of the PM's grammar school "revolution", she claims, will be "the hidden disadvantaged children". Those who question the evidence base for this are simply metropolitan snobs. ‘This is post-referendum politics’, the BBC’s education editor reminded us tellingly on Today, ‘where the symbolic status of grammar schools as a chance to better yourself has trumped the expert consensus’.
The higher education bill currently going through Parliament brandishes the downtrodden student consumer as a stick with which to beat academics. According to the business-friendly University Alliance, academia’s reluctance to emphasise "employability" carries "more than a whiff of snobbery". Top-down curation is out; impact, feedback and engagement the new mantra. With their worth constantly weighed against the most pressing social priorities, cultural organisations no longer seem convinced by their own right to exist.
The "democratisation" of education, media and culture must be recognised for what it is -  a proxy for real democracy and any attempt to tackle social and economic inequality. Just as the redistributive work of politics is shunted onto embattled and underfunded sectors, the same anti-elitist pressure weakens politics itself. Democracy is thoroughly distorted by economic forces. But the solution is not, as right-wing populists do, to attack the system itself - it’s the only means we have of creating a fairer world. 
This anti-political sentiment is aimed disproportionately at the left, at do-gooding idealists and defenders of the "patronising" welfare state. Stricken with anxiety about being out of touch with its former heartlands, Labour is unable to strategise, put up a credible leader, or confidently articulate its principles. Unless it can tell a positive story about informed debate, political institutions and – yes – political authority, the left will remain vulnerable to whatever Ukip contorts into next.

It’s time to stand up proudly for good elitism – for professional judgement, cultural excellence and enlightenment values. Once, conservatives championed political authority and high art. But now that they’ve become scorched-earth modernisers, it’s time for progressives to carry the torch. Otherwise, disparities of wealth will become ever sharper, while the things that give our lives meaning dissolve into mediocrity.



Eliane Glaser is a senior lecturer at Bath Spa University and author of Get Real: How to See Through the Hype, Spin and Lies of Modern Life.