Saturday 30 October 2010

Housing Benefit Cuts and Class

Not only is the deficit out of control, the monstrous and growing housing benefit bill threatens to devour us all in our beds. Or at least that's what the Tories and LibDems would have us believe. As far as I'm concerned that anyone has to have their housing subsidised by the state condemns British capitalism unfit for human habitation, but I digress.

The Tories find the growth of the housing benefit bill over the last 10 years unacceptable. They say it's unfair claimants can live it up in mansions and penthouses while the rest of us struggle to pay the rent or keep up with the mortgage. And they (justifiably) attack the Blair/Brown
ancien regime for allowing private landlords to gorge themselves on taxpayers' cash. But the Coalition's solutions - to cap housing benefit and reduce it by 10% for Jobseekers' Allowance claimants on the dole for more than a year - betrays their class instincts.

The Mail, backed with choice quotes from the Quiet Man, says housing benefit cuts means a £10 or £20 shortfall in rents for the low paid and unemployed who depend on them. Far from leading to a social cleansing of London and the South East - something even a buffoon like Boris Johnson recognises - the Tories and their press allies believe the market will adjust and rents will come down. It absolutely isn't an attempt to clear out people who are likely to vote Labour. No siree.

I have a hard time believing the Tories. If they were only interested in getting the housing benefit bill down surely it would make more sense to introduce a rent cap. Administratively it wouldn't be any more complex than the measures they're already seeking to implement. It would quickly adjust the market instead of waiting an age to correct itself. In a snap taxpayers would cease subsidising landlords, and most importantly no one runs the risk of losing a roof over their heads.

This option doesn't even appear to have been considered by the government. That should tell you all you need to know. This is their attempt to
do a Shirley under the guise of welfare reform.


LibertarianLou said...

It's not about money at all. They want to cut back the welfare state, and they've wanted it for a long time. Not even wrong in itself but you have to do these things gently, not just hacking money from people and kicking existing claimants from their homes. That's just 'cripple-kicking' and spitting on the poor. The conservatives do not care about liberating people from the state, personal freedom, or meritocracy.

also one final thing. I keep hearing this outrage about how one person is working so hard and couple never afford these fancy houses. Well, I'm one of those people, and not only do I count my lucky stars not to be dependent on the state, but I actually don't resent other people having what they get given. Would my house magically get better if they get booted out of theirs, and into worse conditions than me? No. So why should I wish that on them? It's verging on spiteful quite frankly.

Pieman said...

by your argument labour only permitted higher housing benefit was to fill London with their voters. This is not true people in nice houses live vote labour and people in council flats vote Tory.

Boffy said...


Not sure that either the Tories Benefit Cap proposals, OR a Rent Cap would not result in people losing the roof over their heads, for some of the reasons Livingstone alluded to on "This Week". That is that the housing shortage in London means that if the Benefit Cap leads to people moving out, there are probably plenty of people ready to move in. With house prices cratering seriously, I'd certainly rent in London rather than pay inflated house prices for now. The process of gentrification has already happened in other parts of London.

But, I'm not sure a Rent Cap would be any better. That same housing shortage means that in London there are still apparently enough "bigger fools", as the Stock Market traders refer to people who buy over priced stocks just because they are going up, prepared to buy London houses at bubble prices. Landlords, who bought the properties they rent, 5 or more years ago, are probably sitting on sizeable Capital Gains. Faced with a reduced rental income, and potentially catastrophic falls in property prices, they would have a powerful incentive to evict tenants, and sell up.

The real problem as you began by saying is the inability of capitalism to provide people either with affordable houses, or alternatively high enough wages. It is the problem of an unplanned system that leads to massive structural imbalances and disproprtions such as the concentration of employment and population in London, and the problems such as this which then follow from it.

That's one reason we need more planned Co-operative production that is combined with the development of planned Co-operative housing, estates, and services that meet the needs of the workers within such communties.

max said...

A rent cap would damage the building industry, or so it looked to be doing when introduced in Canada some years ago.
The structural problem to address is the lack of social housing to rent, unless something is done there it's all just tempering with a system that's so badly designed that there's no way to fix it.
Already under the current system tenants are moved to the peripheries by incresing rents and considering that a considerable amount of the upward trend of rents is down to the housing benefits system then left alone this system is not leading to any desirable place.

It's worth noticing that the very same policy was in the Labour Party Manifesto at last elections.

Phil said...

Not at all, Pieman. By allowing the state to pay out unlimited housing benefit, this gave landlords the green light to increase rents however they saw fit. 10 years ago New Labour might have called this "business facing". But it also signalled they had no problem with spiralling house prices and conceded it wasn't their place to bring the lunacy under some form of control.

Phil said...

Max, I don't think a rent cap would damage house building at all - as long as it went along with a programme for social housing construction, which is something I also support.

Phil said...

Btw Pieman, coming from a working class Tory family I know all about that sort of thing thank you very much. But it is also true support for Labourist, socialist, and social democratic ideas tend to be stronger among the working class than the rich. Why do you think that is?