Oct 2010 28

Housing Benefit6

Last night, I went on Channel 4 to talk about the changes to Housing Benefit.  You can see the debate here:

We should look after families who need somewhere to live but can't afford it.  That will be easier if we reform planning regulations so more homes are built, but some people who aren't able to work or face sudden changes in their circumstances are likely to need support.

The Government have proposed two key changes.  The first says that you can't live on housing benefit in a property that the ordinary taxpayers who finance all these benefit cheques couldn't possibly afford.  New limits will be put in place ranging from £250 a week for a one bedroom property to £400 a week for a four bedroom property.  The second says that someone who is unemployed for a prolonged period will have the amount they are paid reduced a bit.  If you are going to depend entirely on these benefits for a long time you will need to adjust your expectations about what you can afford.  There are also some changes to the way rates are calculated designed to make the benefit more affordable.

None of that is so unreasonable but the housing issue is a sensitive one so it has provoked a furious political debate.  There may be some circumstances where it is worth giving people a break, and special funds are in place to help when that happens.  But fundamentally families on benefits are just facing some of the same pressures working taxpayers face all the time.  Here are a few things that working families, on moderate incomes and not receiving any benefits, have to do day in, day out:

  • Live somewhere they can afford.  Inner London is expensive.  It is madness to spend billions trying to use Housing Benefit for social engineering to keep a mix of incomes in each area.  This is trying to deny the basic reality that it will tend to be richer people living in more expensive areas, we can't all live in Knightsbridge!
  • Move.  If someone is unemployed they might not be able to permanently afford to live in Islington for example, particularly if they have a large family.  Families not on Housing Benefit often have to move either because they need somewhere they can afford more space or they get a job in a different town.
  • Commute to work.  This BBC story from 2003 reported that the average commute to work took 45 minutes.  Few of us live on the doorstep of our job and it is absolutely normal for people working in the centre of London, in particular, to travel in from the rest of London or the suburbs.

Unfortunately, it seems like some of the defenders of the status quo expect taxpayers to support benefit claimants to live in places they couldn't afford themselves.  Some of the frightening figures they come out with ignore people's ability to adapt to these changes by prioritising space or location and the likelihood that some of the pain will be borne by landlords who make significant profits out of Housing Benefit.  They are well intentioned but need to be more realistic.

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  • andy craig

    i live in the midlands and bought my house in 1999 so was lucky not to pay an arm and a leg for it but it still costs me £390 per month. not bad you might say, but its a 2 up 2 down end terrace and i’ve never had so much a 1 penny in state help in 25 years of work. dont get me wrong i’m glad it’s there and i wont criticize anybody on state help aslong as they are looking for a way off benefits, but my income as a lorry driver after starting at 4am most morning’s, doing at least 12 hour’s everday (mon-fri) and cycling to work aswell, well my income after tax and N.I was £400.00 p.w, the same as what the maximum amount of housing benefit will be and people are complaining that they will have to move because it isn’t enough…. sorry you need to get a grip and move home because your rent is to high.. landlords have for a long time set rents too high knowing it will be paid by the state and people have chosen to live in area’s they know they would never have a change of living in if it wasn’t for the state picking up the rent. well the gravy train is coming to and end and not a moment too soon,even at a limit of £400 per week thats an annual rent of £20.800 ( my take home pay) it is overly generous. If you can’t find a suitable home to live in even in the london area for £400 p.w then you dont need help you need a lottery cheque and the state dont provide those either

  • Robert D

    How anyone can serously object to this eminently sensible proposalis strange!

  • Heechee

    Sorry Matthew but building more homes while still allowing the population to rise, mainly through immigration, is madness and will never solve the problem of soaring housing costs for both buyers and renters.
    By lowering demand we lessen the pressure on the system and create a housing environment where housing costs are more in-line with income. This then has the desired effect of lowing housing benefit costs across the board.

  • Tony Stewart

    As far as I am aware there are many council houses available for the long term “unemployed” to make use of. An 8-bedroomed mansion in the centre of London costing over £1,000,000 per annum is not the place to put a single mother and her children. and as for the recently popular argument about the “unemployed couple with 2 children” being forced out of their home in London, here is a very simple question – if they are both unemployed, why do they need to STAY in London?

  • PM

    This is an (admittedly unrepresentative) extract from Polly Toynbee’s Oct 25th Guardian piece on housing benefit changes:
    “Who will do the cleaning, caring and catering in expensive places once low earners are cleared away?”
    Now we know one of the more pragmatic reasons why liberals value the poor in their midst, will we also begin to hear the truth from the landlords who are the real beneficiaries of uncapped housing benefit?

  • Trev2

    I believe that the rents are artificially inflated because most rents are paid by benefits, if we cut the benefits, we’ll reduce rents and perhaps free some former ‘buy to lets’ for home ownership.
    You could ask why unemployed people need to live in London but most of them are keeping the black economy going by doing low paid jobs as well!
    It isn’t doing the real low earners any favours.