Thursday 3 January 2013

Housing Benefit Cuts and Social Engineering

This is a familiar story. Yesterday, Stoke's Sentinel reported that the City Council is having problems getting its tenants to "downsize" ahead of housing benefit cuts. For readers unfamiliar with the new rules due to come in, if you are, for example, a single person renting a two bed terrace, or a family living in a three bedroom house with a boy and a girl under the age of 10, you will be deemed to be "under-occupying" the property and get your housing benefit cut - hence it's being dubbed the "bedroom tax". As the Sentinel notes, there are significant difficulties because only 91 of the Council's 4,331 single bed and just 108 of the 7,446 two bedroom properties are currently vacant. There are 2,300 council tenants who fulfill the under-occupying criteria. The overwhelming majority of them will have to make good the cut themselves.

Another change on the way is the method of housing benefit payment. Contrary to popular belief (not at all willfully encouraged by IDS and the media), it is presently paid directly to the housing provider on a set date each month. This is due to change. The (reduced) benefit will now be paid to the recipient. This might not seem such a bad thing, but in some cases where you're dealing with vulnerable people in precarious situations it's a recipe for evictions and homelessness. Councils, housing associations and social landlords are trying to get around this by having direct debits that transfer the payment on the day it is paid directly to them. This is easier said than done as the government have moved the goal posts. A set payment day will be changed to relate it to the date the benefit was applied for. This will pile extra work onto housing providers.

There is more to these changes than the typical 'bash the poor' reflex of this government. It is a deeply ideological move that goes to the very core of Conservative thinking about policy and social security.

In the comings and goings of faddish political theories, 'nudging' commanded some attention for all of a fortnight nearly five years ago. A form of paternalism, its suggested way of doing policy is creating the sorts of conditions that would facilitate desired behaviours. For example, while stripping out employment rights and handing tax cuts to the rich are barking ideas, our LibDem-supported Conservative government really believes this will magically encourage job creation. And now that more jobs are being created, correlation in all likelihood will be taken for causation.

The same is true of the Tory attacks on social security generally, though 'shoving', not 'nudging' is a more appropriate metaphor. The idea that poverty is a personal, moral failing runs like an open sewer through this government's thinking, and its changes to housing benefit are part of an attempt that will, to its own satisfaction, divide the deserving from the undeserving poor.

By taking on average £14/week away from housing benefit recipients, the emphasis is on the provider and the tenant to find more suitable housing. None available on council or housing association waiting lists? Get something through the private rental market, or move in with a friend or relative. Or, better still, get a job (because all benefit recipients are out of work) and make up the difference out of your wages. If you do not or cannot do these things, it's only fair the taxpayer does not support your irresponsible residency "choice".

Direct housing benefit payments represents a more significant act of social engineering. Obviously, by paying the money directly to the recipient the responsibility devolves on them to ensure their rent is paid. In practice, some families on extremely low incomes - if not bound by a new tenancy agreement - may use it to plug other gaps in their finances. Victims of loan sharks, for instance, could use monies to pay them off as rent arrears are far less intimidating. And who can blame them? Vulnerable people with learning difficulties or severe mental health problems could be very adversely affected if they cannot, for whatever reason, access the sort of help they need to sort out new rent arrangements. And, of course, for substance abusers this is more money to feed their addictions - but as the 'evil poor', no one cares about them anyway.

The shove works its way from tenants to landlords. Social housing providers and larger landlords are already preparing themselves for what's coming, but in any inner city area there are plenty of 'rogue' landlords. More often than not the owners of cheap, substandard and decaying housing, they do not care about their tenants, the behaviour of their tenants to their neighbours, nor the quality of the accommodation they provide. As long as the taxpayer shelled out direct to them each month, they were happy. The benefit changes mean that even the most hands-off unscrupulous landlords will take notice as rent arrears mount. On paper, they will be elbowed into taking an interest in their responsibilities. In practice, their obligations are likely only to stretch to evicting tenants who fall behind in payments, and taking on new ones with a demonstrable ability to pay. The changes will not see rogue landlords refurbish their properties to attract a new market.

And what about evictees themselves? Many will go straight into B&B's, at extra cost to the public purse. Some will end up on the streets. And most will be added to council housing waiting lists, further ensuring that local authority properties are not the recipe for mixed communities and social cohesion - as they were originally intended to be - but as housing of the last resort. In short, the poor, the vulnerable, and the substance-dependent are set to be ghettoised, and whatever is left of post-war social housing aspirations is exorcised.

So next time IDS or his apologists protest their honestly-held views, remind them the path to this particular hell will be paved with their good intentions.


Boffy said...


The real problem, however, is that housing costs are too high, and wages/unemployment benefits are too low.

The former is true whether we are talking about housing to purchase or to rent. Both have the same cause, too little housing, particularly decent housing provided. There are various reasons for that, including the fact that in the 1980's (arguably this goes back to Reggie Maudling in 1960) the Tories started printing loads of money and deregulated financial markets. It caused inflated asset prices including property prices.

That pushed development land prices to ridiculous levels aided and abetted by the ridiculous opposition to building on Green Belt land. That pushes up the price of new build, because builders seek to make the average rate of profit on this inflated cost. Massively bubbled up property prices, particularly in London, then freed through into exorbitant rents.

If there were more housing, house prices would fall, speculation would collapse, land prices would fall and new build cost would fall with it, promoting further development. Rents would fall along with it. In that case Housing Benefit becomes mostly irrelevant.

But, likewise, if wages were higher housing costs would be more affordable, so again Housing Benefit becomes irrelevant for those in work. For those not in work, a decent level of unemployment benefit/pension is the answer. Incidentally, that is true of things like Winter Fuel payments which were only introduced in the first place as fudges because pensions had not been increased by decent amounts.

We need to create some workers construction co-ops, to begin building more housing to meet workers needs. That would also provide useful employment.

Chris said...

IDS is just an evil bastard, like the worst villian Dickens could ever dream of.

My sister is on tax credits, she works for House of Fraser and never misses a fucking day, they don't pay enough to live on. IDS wants people to believe they are all fraudulent, cheats, you can tell the circles he moves in! Too much time with bankers, he thinks everyone is a criminal! But really, he knows he is lying.

Now councils want to take benefits off obese people and say this is part of a health strategy! But why bring welfare into it, many people who are not on welfare are obese and bloated (look at Phillip Green). The right are just doing right wing gutter press populist wheelies, seeing how far they can go. It is just another public school game to these people and we are the pieces.

I just wonder how much people can take before we see all hell break loose.

Phil said...

Needless to say Boffy, I agree. In fact, this attack on housing benefit could be read as a very crude attempt to free up the supply of housing in the short-term by forcing more people to move in with each other. Ditto for the Tory kite flying around removing the benefit from under 25s.

Phil said...

I'm afraid Chris there is very likely to be more social unrest this year. After April with the changes to housing benefit, tax credits, council tax, and disability benefits due to come in there will be a lot of desperate people with very little to lose.

Anonymous said...

It's all part of the government's unaffordable housing programme. The logic is fairly simple - the balance sheets of Britain's zombie banks can't sustain a real drop in housing prices, so the government feels obliged to keep chucking in liquidity (0% cash injections), juicing the market with first time buyer loans, increasing shared ownership scams, 100% mortgages etc. All of this helps push up the value of property to unsustainable levels for most of the population. So the government responds by cutting housing benefit. The government want's to have it's cake (another housing bubble economy) and it eat (no more housing benefit).

The outcome is social cleansing, as the 'working poor' are forced out of towns like London and into the UK's post industrial hinterlands. It's a spatial reconfiguration of labour, but ironically not as the result of market dynamics, but simply as the result of state intervention into a declining housing market by the government.

The Tories - central planners and social engineers, but only on behalf of the Banksters.

Phil said...

I've just realised I was badly mistaken about the bedroom tax - is does not affect tenants in the private rented sector. Mea culpa.