People outside of London who cannot afford to buy a home or meet their rent without help from the benefit system are missing out in the current debate on the capping of Housing Benefit.
The housing benefit bill doubled under Labour but it wasn’t because of an increase in claimants, it was because Labour failed to ensure enough regulated rent social housing was built for the increasing numbers of people who could not and cannot afford to buy.
The problem didn’t start under Labour; it began in the early 80’s. The ratio between wages and house prices rose at the same time as council housing stock was sold off at taxpayer funded discounts, but crucially not replaced with new stock. People who couldn’t afford to meet ever rising property prices turned to the rented sector. This increased demand was met by a growing private sector where rents are significantly higher than among housing associations that in turn have slightly higher rents than councils.
The issue that is dominating the news this last week was the government proposal to cap rents to reduce the housing benefit bill. The size of the bill is a national challenge, but capping is mostly a London issue where rents are highest. The numbers of my constituents likely to be affected can be counted on one hand.
It’s the other government proposals to cut Local Housing Allowance, cut Housing Benefit after 12 months unemployment, and restrict the level of benefit for 24 to 35 year olds that concern my constituents and could see one in every four households in Torbay lose up to £30 a week in support towards their housing costs. A massive hit to the local economy on top of the human misery it will cause.
The idea that cutting housing support for people will encourage them to look for cheaper rented accommodation is based on a number of false presumptions:
- There are cheaper rents available in the immediate area.
- People are rational beings with no emotional attachment to their current home.
- They have savings to meet the cost of removals.
- Their savings are substantial enough to afford a deposit on their new accommodation before their current deposit is or will be returned.
- They have no problem with meeting any increased transport costs of getting to work/child to school/other new journey consequential on their move.
As for cutting benefit on the basis of how long someone has been out of work there is an assumption of the existence of a vibrant local economy not dependent on low value insecure employment, while the age restrictions presuppose that the only reason young adults don’t share is the fact their benefit isn’t restricted. The reality in rural areas and many towns outside London and larger cities is the lack of similar aged adults to share with, or a medical or mental health problem forcing solitude upon the individual.
I don’t believe the consequences of reducing rent support have been properly thought through. As the debate continues more of the impact on low income working and non working households will come to light and more measures to lessen the damage will have to be considered. This last week alone has seen the Government promise an extra £70 million to mitigate against the impact of the changes since MPs started to speak out.
Reducing the housing benefit bill without hitting the poorest hardest requires a massive programme to secure more regulated rent social housing. Lib Dem Coalition Minister Andrew Stunell MP was able to announce that as a consequence of the recent Spending Review more social housing will be built over the next four years than over the entire 13 years of Labour. It sounds good, but in reality is nothing more than an example of just how bad the last Labour Government was when it came to meeting housing need and keeping public spending under control.