From the TUC

Mark Hoban’s new definition of fairness

25 Aug 2010, by in Society & Welfare

This morning’s Today interview with Financial Secretary Mark Hoban provided a revealing insight into the Government’s definition of fairness. In response to an IFS analysis (that is based on DWP figures of the impact of Housing Benefit cuts, and HMT’s figures for how social security changes – specifically indexing benefits with CPI – will affect poor households in 2013/14) he informed us that the IFS’s work, which in fact takes account of the majority of the third of social security changes that the Budget’s distributional analysis chose to exclude, is ‘selective’ as it ‘ignores the impacts of economic growth’.

If fairness and economic growth are the same thing, then Britain has been an increasingly fair society for the vast majority of the post-war period and the post-recession decade in 1980s  (when unemployment hit three million, and the number of children living in poverty rose from one and a half million to three million) saw a positive fairness rise. By this definition the Government need not even bother with policies on social mobility and and the child poverty targets might as well be scrapped – all that fairness will require is a non-recessionary economy.

Mark Hoban did have a few other arguments to make. He maintained that Housing Benefit cuts would not amount to a change in income as if people moved to cheaper properties they would have the same amount of money. The problem with this view is firstly that money to pay for housing costs is generally considered as part of people’s income (it is certainly considered by the Government when they leak stories to the press about the levels of benefit that families are entitled to), and secondly that around half of housing benefit claimants already have a shortfall in their entitlements, which means they have to use  income other than Housing Benefit to pay their rents. For these households benefit cuts will lead to real reductions in other income. In addition, the interview failed to discuss the full detail of the cuts in Housing Benefit that are being proposed – linking rents to CPI, limiting the amount that is payable to properties in the lowest percentiles of local rents and cutting the maximum number of rooms that families can claim for will have clear negative impacts for low income families: the DWP’s own analysis shows that these changes will ‘have an adverse impact on work to reduce child poverty’.

Mark Hoban also argued that the changes that are being proposed to Disability Living Allowance will change entitlements based on health conditions, not on income levels. But this misses the point. HMT’s own analysis shows that the changes the Government plan to introduce are expected to cut DLA for 20 per cent of claimants. We know that disabled people are over twice as likely as adults in the general population to be living in poverty – cuts in DLA will mean that poor people are worse off.

By any accepted measure of whether fairness is improving – for example change in levels or rates of poverty, change in rates of inequality or distributional changes in income – the Budget has failed. There is no way to maintain the pretence that these cuts are progressive.

5 Responses to Mark Hoban’s new definition of fairness

  1. Clare
    Aug 25th 2010, 12:22 pm

    Great response to Mark Hoban. But you’ve also missed his enormous display of ignorance about DLA, when he said there would be a change from payment according to income to payment according to level of (ill) health. DLA is only paid according to level of disability, it is not means tested. It is not income-related, and for that reason it is deeply progressive simply because it recognises that whatever your income, disability imposes extra costs which unfairly have to be borne by those with disabilities. It is a manifestation of a real understanding of disability as a structural barrier. No wonder the Tories hate it (neocons don’t believe in structural barriers as they see poverty as a moral failing), but that’s no excuse for them to be ignorant of the facts.

  2. JohnG
    Aug 25th 2010, 3:50 pm

    A small point perhaps, but Mark Hoban’s idea of moving to cheaper property to maintain the same level of income following housing benefit cuts distorts the truth.

    Moving costs money; especially when it’s within the private rented sector. You pay your landlord in advance, and then you fork out a fat fee to a letting agent. It can easily cost a couple of grand each time, even outside of London.

    It doesn’t end there, because once your letting agent (usually unregulated and greedy) has you by the short and curlys, they will probably increase their fees. You could always move again to avoid this situation and incur even more costs. What a set of choices! You might even find a fair landlord after a while – or not.

    Housing expenditure is not fixed, and apparently Mr Hoban lives in Teletubby land: a place where everything is simple and nothing really changes. He needs to speak to some real people for a change and wake up! Somehow I doubt that he will…

  3. IFS analysis is not selective: Treasury model only included two-thirds of benefit and tax credit changes | ToUChstone blog: A public policy blog from the TUC
    Aug 25th 2010, 5:54 pm

    […] Deputy Prime Minister has joined his Treasury colleague in maintaining that the IFS analysis of the distributional impact of the Budget is selective and […]

  4. The Squeeze
    Aug 26th 2010, 12:42 am

    JohnG, you’re right, the government should cough up whatever landlords demand.

    As for ditching the ‘child poverty’ targets – I live in hope!

  5. Nick Clegg responds to the IFS: another new definition of fairness | ToUChstone blog: A public policy blog from the TUC
    Aug 26th 2010, 1:51 pm

    […] line seems to have changed from yesterday (when the Financial Secretary to the Treasury equated fairness with growth), as the Deputy Prime Minister is now arguing that fairness is about more than a ‘purely […]