Housing Benefits (October 201)

Letter in Evening Standard 26 October 2010

Margaret Hodge (reported by Nicholas Cecil) and Sam Leith (25 October) are right to point out how the coalition’s proposals on housing benefit and rents would tear communities and families to bits in Central and Inner London and also cause hideous tensions in outer London and towns in the wider region as low- and middle-income Londoners are forced outwards.

The argument advanced in justification of this barbarity, ‘…that it is not fair that unemployed people on housing benefit are living in better homes than working people can afford…’ is complete rubbish and should be exposed as such. Local councils only put people into expensive private lets because there are not enough council homes to go round and that is the fault of successive governments of all parties which have intentionally shrunk the social housing stock. Most of those on housing benefit are working people whose wages are too low to cover the rents charged by private landlords or housing associations. Even among council tenants, where rents are lower, many employed tenants need housing benefit to top up low wages. Thus housing benefits, and the continued existence of social housing, are subsidies to London’s employers. London’s retailers, hotels, hospitals and universities can get away with paying minimum wages because their staff get this help with their housing costs.

No doubt there are fanatical believers in ‘free market’ economics who expect wages in London to rise as housing costs of the poor are pushed up – just as they have recently been asserting that the capping of housing benefits will force landlords to accept lower rents. Some hope. If it happened at all it would probably take 30 years and require a ban on migration from other regions. By then the civilised city we love will have been destroyed by segregation, impoverishment, social tensions and probably growing mental illness.

[ Finally, what became of the the welfare regime as a kind of insurance: I pay taxes all my working life but if and when I get ill or am made redundant the community will take care of me? Ministers have forgotten about this and prefer us to think all benefit recipients are ‘scroungers’.

For the time being the turkeys have voted for Christmas and brought all this misery on themselves. Sooner or later people surely have to come to their senses and choose a more civilised kind of society. Margaret Hodge and Sam Leith need to push even harder. ] They didn’t print the bits in red.

Yours , Michael Edwards

In response to:    News, 25 October
THE centre of London will become a “middle-class ghetto” as the suburbs
descend into social unrest under housing reforms, an MP warned today.
Margaret Hodge condemned major changes to social housing and benefits
which she fears could divide the capital. Ms Hodge, chairman of the Commons
public accounts committee, said the reforms could turn “neighbour against
neighbour” in areas such as her Barking constituency.
Central London councils are looking at relocating housing claimants to the
suburbs and towns such as Hastings, Slough, Luton, Watford and Reading
where rents are cheaper.
“One of the great strengths of London is our mixed communities,” she said.
Condemning the Lib-Con coalition’s plans for housing, she added: “We are
going to create middle-class ghettos in the centre of London just like
Paris.”
Labour MP Mrs Hodge highlighted estimates that up to 80,000 poorer people
could be forced to move out of central boroughs such as Westminster due to
a cap on housing benefit of £400 a week and rises in social rents to up to
80 per cent of the market rate. She believes such an exodus would make it
harder for local residents to find affordable homes in outer boroughs
including Barking and Dagenham, where there have been claims that
immigrants were being favoured for social housing.
“People don’t feel they have had a fair deal. This will make things worse.
That turns neighbour against neighbour,” she added. “There will be great
anger which the extreme Right will seek to exploit.”
Ministers have defended the changes, insisting that it is not fair that
unemployed people on housing benefit are living in better homes than
working people can afford. They believe that many voters will agree with
their reforms and that more social homes can be built by increasing rents.
Lib-Dem deputy leader Simon Hughes warned that the Coalition will struggle
to get some of the changes through Parliament. The Bermondsey and Old
Southwark MP has spoken out against cutting housing benefit by 10 per cent
from 2013 for people who had been on jobseeker’s allowance for more than 12
months.
“The current proposals are not the best set of proposals, whatever the
financial constraints,” he said. “There are better ways of doing it.”

The poor must not be shunted out of London, Sam Leith, 25 October
Time was when the words “inner-city” and “deprivation” went together like
Katy Perry and Russell Brand. It was near-on axiomatic that the extremes of
poverty were to be found in the heart of the city, and that – Millionaires’
Row aside – wealth fled to the commutable fringes. That may be being
reversed.
According to a report yesterday, up to 200,000 of the poorest Londoners
will be forced out of the capital by the coalition’s cuts to housing
benefit. Landlords, with rents buoyant thanks to the number of young
professionals who can’t afford to buy property, needn’t cut their rates to
accommodate those tenants who can no longer pay the price. London councils
are already block-booking accommodation in cheap parts of Hastings, Reading
and Luton.
Housing people in bed-and-breakfasts is no sort of solution but what else
to do? There’s fat chance of building more affordable houses. At the same
time as housing benefit is being capped, the social housing budget has been
cut by more than half – a shortfall that, staggeringly, the coalition
proposes to offset by hiking rents for new tenants to 80 per cent of market
rates.
Perhaps, some will argue, the invisible hand will in the long run scoop
these people up and set them on their feet. Perhaps a mass exodus of the
poor means an epidemic of inner-city gentrification will help set London’s
economy back on track. Perhaps it’s a lifeline for struggling B&B owners,
and an influx of valuable labour for Hastings and Luton. Perhaps, perhaps,
perhaps.
Murky as the economics may be, though, the human side of it is as clear as
day. Shelter is a basic physical necessity but it is more than that. Home
is not just a roof over your head: it is your place in the community, your
place in the world. If the predicted exodus comes to pass, families will be
wrenched from that place.
Children will leave schools and schoolfriends. Established connections
with all manner of social services will
be severed, as will the informal support networks that – in any sort of Big
Society worth the name – make daily life
possible: the neighbours who’ll take the kids for a few hours, the friends
who’ll check on the lame and the halt and the lonely.
That is a lot to sacrifice to an idea. It will cost us something of our
sense of ourselves as a city; and something of our sense of ourselves as
place where basic decency obtains.
Not long ago HMRC let Vodafone off a £6 billion tax bill. Now George
Osborne will let 200,000 of the poorest Londoners be ousted from their
homes. Not what I’d call fairness.
There’s a world of difference between getting on Iain Duncan Smith’s bus
and being bundled into it with your belongings in a bin-bag.
Councils plan for exodus of poor families from London, Observer, 25
October
Ministers were accused last night of deliberately driving poor people out
of wealthy inner cities as London councils revealed they were preparing a
mass exodus of low-income families from the capital because of coalition
benefit cuts.
Representatives of London boroughs told a meeting of MPs last week that
councils have already block-booked bed and breakfasts and other private
accommodation outside the capital – from Hastings, on the south coast, to
Reading to the west and Luton to the north – to house those who will be
priced out of the London market.
Councils in the capital are warning that 82,000 families – more than
200,000 people – face losing their homes because private landlords,
enjoying a healthy rental market buoyed by young professionals who cannot
afford to buy, will not cut their rents to the level of caps imposed by
ministers.
The controversy follows comment last week by Iain Duncan Smith, the work
and pensions secretary, who said the unemployed should “get on the bus” and
look for work. Another unnamed minister said the benefit changes would
usher in a phenomenon similar to the Highland Clearances in the late 18th
and early 19th centuries, when landlords evicted thousands of tenants from
their homes in the north of Scotland.
In a sign that housing benefit cuts are fast becoming the most sensitive
political issue for the coalition, Jon Cruddas, the Labour MP for Dagenham,
last night accused the government of deliberate social engineering.
“It is an exercise in social and economic cleansing,” he said, claiming
that families would be thrown into turmoil, with children having to move
school and those in work having to travel long distances to their jobs. “It
is tantamount to cleansing the poor out of rich areas – a brutal and
shocking piece of social engineering,” Cruddas added.
The National Housing Federation’s chief executive, David Orr, described the
housing benefit cuts as “truly shocking”. He said: “Unless ministers
urgently reconsider these punitive cuts, we could see more people sleeping
rough than at any stage during the last 30 years.”
The issue is fuelling tension inside the coalition. Simon Hughes, the
Liberal Democrat deputy leader, said last night he would table amendments
to change housing benefit rules. He said: “I would fully expect to be one
of those putting forward proposals for changes in the housing benefit
rules, particularly for London.”
Under a clampdown on housing benefit, the chancellor, George Osborne,
announced that housing benefit will be capped from April next year at £400
a week for a four-bedroom house, £340 for a three-bedroom property, £290
for two bedrooms and £250 for a one-bedroom property. In addition, from
October 2011 payments will be capped at 30% of average local rents.
At a meeting of the Commons work and pensions select committee last
Wednesday, the day Osborne announced £81bn of cuts in the spending review,
MPs were told by London council chiefs that the housing benefit cuts could
have devastating results.
Nigel Minto, head of sustainable communities at London Councils, who works
closely with the capital’s housing directors, told the committee that since
June London councils had been “procuring bed and breakfast accommodation”
in outer London and beyond. The committee was told similar problems would
occur in other cities with high-priced property such as Brighton and
Oxford.
Jeremy Swain, chief executive of the homelessness charity Thames Reach,
said he was particularly worried about the impact on numbers sleeping rough
in London. “We have reduced rough sleeping dramatically and we have a
target of zero rough sleeping in London by 2012. For the first time I’m
thinking that we will not achieve that,” he said.
Karen Buck, shadow minister for work and pensions, said: “The sheer scale
and extremity of the coalition proposals means almost a million households
are affected across the country.”
In today’s Observer, Labour leader Ed Miliband says last week’s spending
review took Britain back to the 80s. “This was the week that took the
compassion out of David Cameron’s claim to compassionate Conservatism,” he
writes, accusing the Tories of displaying “arrogant ideological swagger”.
But last night Cameron insisted the cuts were tough but fair. “Departments
have to make savings. I don’t underestimate how difficult this will be. But
we are doing what we are doing because it is the right thing to do – right
by our economy, right for our country.”
A DWP spokesperson said: “The current way that it [housing benefit] is
administered is unfair. It’s not right that some families on benefits have
been able to live in homes that most working families could not afford.
However, we are absolutely committed to supporting the most vulnerable
families and have tripled our discretionary housing payments to provide a
safety net for those who need it.”

Later (January 27 2011). Some good material on this issue went in to the London Plan EiP in December, along with other final challenges, here. There is a useful report from Alex Fenton in  Cambridge and a mass of other material.

Maps from Fenton 2011

Image of maps from Fentons report 2011
Image of maps from Fenton’s report 2011
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