Cuts, caps and goalposts

Originally posted on July 22 on Inside Edge 2, my blog for Inside Housing 

Looking to gauge the effects of the latest benefit cuts on housing? The official impact assessments are at best a starting point.

Documents published for the second reading of the Welfare Reform and Work Bill on Monday evening (available here) do give the Department for Work and Pensions’ (DWP) view on what to expect, but there are several reasons why it is a severely blinkered one.

First, they only cover what is actually in the Bill and many of the main housing benefit changes in the Budget do not require primary legislation.

So there is an impact assessment of the five-year freeze on most working age benefits but it does not include the freeze of the local housing allowance. Similarly, we do not get the DWP view on ending automatic entitlement to housing benefit for 18 to 21-year-olds because that will be done by regulation rather than primary legislation.

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Reconstructing Speenhamland

Where do the Conservatives really stand when it comes to supporting workers on low wages?

Are the Tories the One Nation ‘workers party’, cutting tax, increasing the minimum wage and reforming welfare to make sure that work always pays? Or are they the one that’s set to cut spending on tax credits by £5 billion and cost those same workers up to £1,690 per year?

Ahead of Wednesday’s Budget, the rhetoric and the reality simply do not match. In David Cameron’s ‘speech on opportunity’ in Runcorn last month, he contrasted the ‘right track’ of economic opportunity with the ‘wrong track’ of ‘people capable of work, written off to a lifetime on benefits’ and policies that ‘ignore the causes and simply treat the symptoms of the social and economic problems we face’. Rather than redistributing money through the benefits system we have to tackle the ‘real causes’ of child poverty. And our approach to low pay is complacent:

‘There is what I would call a merry-go-round. People working on the minimum wage having that money taxed by the government and then the government giving them that money back – and more – in welfare. Again, it’s dealing with the symptoms of the problem: topping up low pay rather than extending the drivers of opportunity – helping to create well paid jobs in the first place. So this is the change we need. We need to move from a low wage, high tax, high welfare society to a higher wage, lower tax, lower welfare society.’

Needless to say he did not explain how. The key Conservative policy of increasing the income tax threshold to the level of the minimum wage sounds like it benefits low-paid workers most. In fact, anyone paid below the current threshold of £10,600 a year will receive no benefit at all while most of the gains will go to people on higher earnings. It’s the same story with tax credits and housing benefit, both of which are essential to people who are in work but on low pay. All the tax cuts in the world do little to make up for the cuts in the last parliament and the cuts to come in this. As Gavin Kelly argues, the notion that higher wages will somehow fill the gap is fanciful.

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Two-way street

(Originally posted on June 30 on Inside Edge 2, my blog for Inside Housing)

What does the evidence say about the links between housing and poverty?

In an age of austerity, food banks and the bedroom tax, the links may seem obvious. A housing policy based on letting housing benefit take the strain – relying on private renting and rising affordable rents – at the same time as it is being cut looks like a pretty good mechanism for creating poverty.

But evidence emerging from the Joseph Rowntree Foundation’s housing and poverty research programme (see my summary here) shows a relationship that is both more complex and more troubling. The housing system can act as a defence against poverty and deprivation (as it has in the past through social housing, housing benefit and the homelessness safety net) but it can also be a cause of them (as it did before through high housing costs and poor conditions).

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The man with a plan who won’t tell us what it is

Question of the day: why won’t George Osborne say where he will find another £10 billion of cuts in welfare?

The obvious answer is that he doesn’t want us to find out before the election but there is a more immediate one too: because he can get away with it.

I found myself shouting at the radio twice today as interviewers failed to pin down first Osborne and then financial secretary David Gauke. The £10 billion figure is the so-far unexplained bit of the total £12 billion of welfare cuts Osborne is planning after the election. It matters both in its own right and because it enables him to deflect the Office for Budget Responsibility’s point about ‘rollercoaster’ cuts in public services.

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10 things about 2014: part 2

The final part of my look back at the issues I’ve been blogging about this year also looks forward to 2015.

6) Maybe to homes

If words were bricks the housing crisis would have been over long ago. Instead housebuilding continued to flatline in 2014 even as the political rhetoric soared.

In January I compared politicians arguing about who had the worst record since the 1920s to bald men squabbling over a comb. A month later Eric Pickles perfected his combover by claiming that in 2013 the coalition had built the most homes since 2007. He’d chosen to emphasise housing starts rather than housing completions. That was understandable but you can’t live in a start and completions were lower than in 2012, 2011, 2009 and 2008 and still less than half the level needed to meet demand.

-> Read the rest of this post on Inside Edge 2, my blog for Inside Housing


Beyond coping

Housing costs have already stretched many people to the limit. What will happen if and when they rise again?

That’s the question raised in two reports out today on the plight of home owners and renters who have found ways to cope with current costs but may not be able to for much longer. A third report shows how the poorest households are only coping with help from food banks.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


Housing 2040

Where are we heading on housing over the next 25 years? That’s the question posed by a new study – and the answer may make you may want to look away now.

The study for the Joseph Rowntree Foundation (JRF) takes existing trends in the relationship between housing and poverty between 1991 and 2008 and projects how it will change up to 2040.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing


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