From the TUC

Economic Injustice and the Disintegration of Mixed Communities

19 Oct 2010, by in Society & Welfare

The decision to cap housing benefit is a spectacular example of economic injustice. It continues decades of the disintegration of economically mixed communities, and hits the poorest households below the belt – while protecting the speculators and landlords who profit from high rents and therefore high housing benefit.

I was a Parish priest in a beautiful village in the Chiltern Hills from 1982 to 1999. Most people have seen it on television, where it is called Dibley. During that time, a combination of the sale of council houses and private speculation ended the mixed community of rich, middle class and poor. The right to buy led to the sale of council houses to sitting tenants for £25,000 they are now being sold on at around £250,000; the villagers’ rented cottages were bought by a speculator in the 1940s and sold off for a fortune every time a tenant died. You have to raise at least £400,000 to live in Dibleyland now unless you are a servant, a farm labourer or a vicar in tied houses.

The mixed community is also about destroyed in Westminster, where there are over four thousand households with rents above the housing benefit caps planned by the government. It is a vicious policy; an unemployed couple with two children will have to find any rent not paid by housing benefit out of unemployment benefits which are already over £4800 a year below the government’s poverty threshold (see table below). Councillors are already phoning the tenants and telling them they had better move now because they will be forced out in April.

How far unemployment benefits fall short of the poverty threshold, 2009, £ per week

Government poverty threshold Benefit entitlement Annual shortfall
Childless couple £199 £100.95 £5099
Single individual £116 £64.30 £2688
Couple one child £239 £174.36 £3361
Couple two children £323 £230.47 £4812
Lone parent one child £155 £137.71 £899
Lone parent two children £239 £193.82 £2349
Single adult 18-25 £116 £50.95 £3383
Source: House of Commons Library and DWP; government poverty threshold is 60% of median income for that family type after taking account of housing costs

Eviction, losing a job and divorce are as emotional, and very similar to, bereavement. UNICEF has reported that children in the UK are seriously at risk from lack of parental presence.  Some parents will be under pressure to move during the vital first years of education in primary school (when stability is all important).  The thoughtless and deliberate governmental creation of rent arrears ignores the evidence of debt related mental illness highlighted by the Government Office for Science; and the poverty and debt related costs of ill health in the NHS, the schools and the economy at large.

Going to, looking for or retaining work under threat of eviction will be difficult, to say the least.  For years, legal aid has been made inaccessible to vulnerable people and there is a shortage of solicitors with a housing contract with the Legal Services Commission; as a result, there have been many unrepresented evictions. Governmental policy is giving precedence to cutting costs over promoting justice. The Trust for London reported recently that poverty is already increasing in outer London and reducing in inner London: what are the long term social implications of dividing the population into a rich camp and a poor camp?

There should be a moratorium on the use of the word “fair” until a few stringent tests for its application have been devised. Fairness is being defined by wealthy people who will not carry the burden. To say “we” are all in it together cannot be true when there is a chasm between the interests of the property owners and those with no assets.  Something fair would be both reasonable and proportionate at the very least.

Is it reasonable to lower the capacity of the poorest families to pay the rent, resulting in their eviction, while allowing the landlord to continue to charge the same high rents to someone else because he owns a property which is in short supply? The 1979 government abolished lending regulations and rent controls; speculators and landlords exploited the lack of rules.  The 1997 government let it rip.

Where, in the rush to cuts to reduce the deficit, are the property speculators carrying the burden?  They borrowed heavily to engage in buying to let, thus enlarging the private rented sector, which has the highest rents, the worse conditions and the least security and the highest housing benefit payments. They have benefitted most from the sale of council houses and the growing shortage of affordable rented accommodation.

And where are the lenders and the banks? They lent massively and irresponsibly. They financed a house price boom that pushed up rents and housing benefit, inflated land values and landed millions in huge and unsustainable debt.

Is it reasonable that land, a vital factor in the production of housing, should have become a marketable commodity like toothpaste or saucepans? Or should land be treated as a special commodity to be used for the common good in the provision of homes – one of the two most basic human needs?

Should wealthy landlords in Westminster, some of whom have already paid for their land many times over with high rents and expensive leases, voluntarily reduce their rents, rather than evict a family who falls into rent arrears because of the housing benefit caps? Or if wealthy landlords will not behave fairly and honourably, should the government cap rents or tax land to reduce the housing benefit bill?

Or are we to continue to witness the disintegration of mixed communities forced on the nation by incoherent housing policies?

GUEST POST: Rev Paul Nicolson is Chairman of the Zacchaeus 2000 Trust (Z2K). He started his working life loading logs onto a train for a Lumber Company in Northern California. Then, after National Service, he spent 12 years in the wine trade selling champagne.  He was ordained into the Church of England as a worker priest in 1967 into ICI personnel and then as a TU official. In 1982 he joined the parochial ministry; he founded the Z2K Trust in the 1990s to work with vulnerable debtors as a response to the injustice of the poll tax. The trust now has three full time lawyers, an administrator and over 30 volunteers handling around seventy cases helping the poorest debtors tangled in the welfare system.

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