Housing Benefit partial rethink
The trouble the government is facing over the Housing Benefit changes is only the first sign that being tough on welfare isn’t the political free ride some politicians may have imagined.
Ed Miliband’s decision to concentrate on the forthcoming Housing Benefit changes at Prime Minister’s Questions succeeded in in focusing everyone’s attention. Boris Johnson’s catchy characterisation of the changes as “Kosovo-like” has kept the pot boiling too. The Select Committee has just announced an inquiry, the Commons will debate the changes tonight. Conservative MPs like Mark Field and Liberal Democrats like Bob Russell are worried.
The Prime Minister insists the policy is here to stay, but at the same time the government is looking for ways to soften the blow. Apparently, IDS has told Tory MPs he is “open to suggestions” and Councils are going to be given an extra £10 million to manage the process. Boris Johnson’s office is said to be working on a scheme to help carers and children at special needs schools to stay in their homes.
This episode is a good illustration of how welfare populism can be a risky strategy. This must have seemed like an easy hit to Ministers – for a year or more the newspapers have been full of stories about asylum seekers in million pound houses paid for by HB and complaining they aren’t big enough. The opinion polls showed people favouring benefit cuts as the best way to deal with the deficitand every MP has been harangued by voters who want them to deal with ‘scroungers’.
But ‘fairness’ is a tricky issue. Polls will produce different results, depending on how questions are framed; and when people see there’s another side to the issue, their views can change quickly. We have been arguing against the HB changes since the day they were announced, and the arguments we have made have been entirely reasonable. Bear in mind what is going to happen:
- From October 2011, the Local Housing Allowance (the way HB for private rented accomodation is calculated) will be set at a level equal to the bottom 30 per cent of local rents (currently 50 per cent).
- From April LHA will pay no more than £250 for one bedroom, £290 for two, £340 for three and £400 a week for four.
- It will then be uprated by the Consumer Price Index, even if rents actually rise faster.
- From April 2013 people who have been unemployed over a year will have 10 per cent cut from their HB, whatever happens to their rent and regardless of how hard they have been trying to find work.
- At present, if you are under 25, the maximum HB you can claim is equal to the rent for a room in a shared flat; the Spending Review announced that this age limit will be raised to 35.
- And don’t forget the fact that rents in new social housing will be raised to 80 per cent of the market rate.
These changes won’t just force people out of their homes in London and other areas where housing is expensive, exiling them from communities where they have lived their whole lives. They will disrupt children’s schooling, break up families and push people away from jobs. Child and other poverty will increase and so will debt and homelessness. Disabled people and lone parents who are being moved on to Jobseeker’s Allowance by other benefit reforms will be especially be likely to be hit by the 10 per cent cut for the long-term unemployed.
Benefits reform is always a ‘slow burn’ issue – what seems like a great populist move when its being thought up can look not so clever a bit later. These measures look likely to regain for the Tories their name as the ‘nasty party’ – and the Liberal Democrats must worry that, for the first time, it will be a title they have to share.