The Government’s selective truth-telling on housing benefit

As revealed in the press yesterday, and confirmed today, as part of their latest round of ideas to cut the welfare bill the Government are floating the idea of restrict housing benefit to those who are over 25. If you follow me on twitter, you may have noticed a mini-breakdown I had over this yesterday afternoon. I’ve taken a day to think it over and approach it in a more rational way, but even discounting the idea of benefits being linked to age – are people under 25 going to get a tax rebate because they’re potentially entitled to less? – and the implication this has for the concept of a universal welfare state, I’m still finding this to be a really flawed idea.

It was announced with some typically Cameron-esque bluster and hot air. From the first Guardian piece linked above:

“We are spending nearly £2bn on housing benefit for under-25s – a fortune. We need a bigger debate about welfare and what we expect of people. The system currently sends the signal you are better off not working, or working less.

”A couple will say, ‘We are engaged, we are both living with our parents, we are trying to save before we get married and have children and be good parents. But how does it make us feel, Mr Cameron, when we see someone who goes ahead, has the child, gets the council home, gets the help that isn’t available to us?”

“One is trapped in a welfare system that discourages them from working, the other is doing the right thing and getting no help.”

This is pretty much classic Cameron; it’s got an almost laser-precision but incredibly shallow populist sentiment attached to it (gotta stop scroungers, nrrrrrr), but at the same time it takes aim at the kind of social stereotypes that his political base dislike. But, like a lot of what he says, it’s also really disingenuous.

To start with, as highlighted by George Eaton’s excellent New Statesman piece today, only one-in-eight of those who claim housing benefit are actually unemployed, and a huge majority of new claims in the last few years have been from households with at least one working adult.

Personal anecdote time! I had a flatmate a few years ago who, for no fault of her own, lost her job. She claimed housing benefit for a period until she found new employment. She was able to do this reasonably quickly given the circumstances, as we lived in London, and a big city like London is  a great place to find a job suitable for your personal skills base. Her mother lived in a mid-sized commuter town an hour or so from the city. They, generally speaking, are not such great places to find work matched to your skills. Would my flatmate have been able to find work there, had she been denied that housing benefit and and been forced to move back in with her mother? Probably, but not nearly as quickly or in a way that was as efficient as it was.

Cities are economic engines and a fundamental part of labour markets. They allow workers to match their skills to demand from employers, and they’re incredibly efficient places at doing that. This is very basic economics. There’s also been a pretty solid trend in migration patterns over the past two decades that, after several decades of sustained decline, people have returned to living in cities. Generally speaking, where this has happened it has been the young who have done this, a city still being seen by many as an undesirable place to raise a family. Taking a position of economic efficiency it makes almost no sense to restrict independent living for the young like this. If you’re actively trying to get people to work, why remove the safety net so vital given the precarious nature of many jobs in the current economic situation?

He’s also, rather oddly, conflating social housing with housing benefit in the above quote. What does this fictional mother getting a council house have to do with the spend on housing benefit? Authority-owned housing has rents far below market levels. It almost sounds like he’s arguing in favour of broadening the catchment of social housing to more than just the choice of last resort. Is he implying that this fictional young couple deserve some kind of state-subsidised housing, but they can’t because there’s not enough of it to cater for those priced out of the private market?

A mention is also made that victims of domestic violence will be exempted, which is ever so terribly nice and all (again, precision sharp but shallow populism), but far from problem-free. There’s a good reader from the CPS on the issues surrounding domestic violence here, but to summarise; women aged 16-24 are at the most risk of domestic violence, it takes – and I’m staggered by this – around thirty five instances of violence before a woman reports it, and conviction rates are poor. I’m not clever or learned enough to discuss why this is (but I’ll hazard a guess at both outright fear and social stigma), but it’s deeply troubling in light of this policy. Is a “victim” someone who successfully obtains a conviction, or someone who makes a report? How many reports? How long would an investigation take? It can take long enough as it is to pry housing benefit out of the system. How long will it take if you’ve first got to be rubber-stamped in some way as a victim of an awful crime?

You won’t get me to disagree that spending billions of pounds of public money on  housing benefit is a good thing, because it isn’t. But does it not make more sense to look at where this money is ultimately going, and why we have to spend it in this way in the first place?

If those who receive it are mostly in work, they’re getting it for one the following reasons; either their rent is too high, or their wages are too low. This isn’t a new issue. Part of the problems with the slum clearance programmes in 19th century Edinburgh, for instance, was that there was no way for those at the bottom of the economic ladder to afford the rent on any dwellings that weren’t slums.

Governments have never seriously tried to tackle the issue of the lowest level of wages being below the basic minimum cost of housing (cf, the ongoing difference between a minimum and a living wage), and have generally always decided to tackle the issue in the form of housing subsidies. But we’ve spent thirty years selling off our social housing stock and not replacing it, so today this equates to direct provision of housing for only the most needy, and the state directly subsidising private rents via housing benefit for the rest.

Really, the Prime Minister is right – this is a situation that has to stop. Public money shouldn’t be used to subsidise the mortgages of private landlords, and the state shouldn’t be spending vast sums propping up the arguably unreasonable levels that market rents have risen to in some parts of the country.

But constructing a straw man argument to further kick those at the bottom is simply not the way to do it. What we need is for a Government that is willing to instead look again at policies on directly constructing new homes, and widening the scope of social housing beyond the most needy to those on the bottom rungs of the economic ladder. Sound familiar? This is essentially the function that social housing used to fulfill, and by doing that David Cameron could not only help his fictitious family who work and struggling to afford a home, but he’d also create a few jobs in the process. Tell me we don’t need those right now?


One response to “The Government’s selective truth-telling on housing benefit

  1. Nice and very informative post. Thanks for sharing.

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