Strivers and scroungers

In place of Labour’s ‘One Nation’, David Cameron today gave us two – with housing as the dividing line between them.

In an interview with Andrew Marr ahead of the opening of the Conservative conference he repeatedly pressed home the party’s appeal to ‘strivers’. ‘This week here in Birmingham you’re going to hear in huge detail how we get behind people who want to get on and want to make something of their lives,’ he said. ‘That’s what it’s about.’

He also signalled more cuts in welfare before the next election, despite ruling out the mansion tax that Nick Clegg has said will be the price of Lib Dem support for them. The most striking thing for me about the interview was the way that Cameron repeatedly used housing benefit as a proxy for the welfare system as a whole.

He confirmed there would have to be further austerity (£16 billion of spending reductions before 2015) and that the target had to be the working age welfare budget if we are to avoid cuts in things like hospitals and schools. ‘When we came in there were some families who were getting, £40-£50-£60,000 of housing benefit per family,’ he said. ‘Now we’ve stopped that, we’ve stopped it in the teeth of opposition from the Labour party, we’ve capped welfare but we need to further.’

I’ll ignore for the sake of space the facts that all of the housing benefit actually ends up with the landlord, not the tenant, and that the benefit cap itself does not come into effect until April 2013. The key word here is the last one. As I suggested last week, Liam Byrne and Labour’s dalliance with regional caps is leaving the door open for the Conservatives to go ‘further’.

When Marr asked him what he meant (about 41 minutes in), Cameron said this:

‘We do need to look at choices we make in this country. Take young people, if you leave school, you go to college, you work hard, you get a job, you don’t have any chance of having housing benefit, living at home with mum and dad often into your 30s. If you take a different path, don’t go to college, sign on, get housing benefit, get a flat, then of course if you get a job you’ll probably lose the housing benefit on the flat. So I think we want to look at the signals we send in welfare and I think we should recognise the welfare cap we put in place, showing that no family should be better off on welfare than in work, that was an extremely powerful and sensible and very popular actually thing to do.’

This idea first surfaced in April, with reports that Downing Street and the Department for Work and Pensions were working on a plan to remove housing benefit from the under-25s. As I blogged at the time, it completely ignored what happened the last time a Conservative government tried something similar in the late 1980s. Then, following a series of leaks about welfare cuts, including possible regional benefit caps, Cameron made a speech in June about the ‘damaging signals’ sent by the welfare system ‘that it pays not to work, that you are owed something for nothing’. The most widely trailed idea was to save £2 billion a year in housing benefit that was going to 210,000 people under 25. The many problems with that were widely pointed out at the time – see Nicola Hughes of Shelter here, for a good example – but it is obviously still high on Cameron’s personal agenda.

However, Cameron is doing more than just highlight a problem with the welfare system or a barrier to aspiration here. He is deliberately creating a binary world of strivers (those who go to college, get a job and have to live at home) – and shirkers (those who do not go to college, sign on, get housing benefit and get a flat). It’s a black and white world that bears no relation to the shades of grey to be found in the real one.

In the real world, there are many people who go to college who do not find a job afterwards. There are some who would like to go to college but are put off by the fees. There are many who don’t go to college but do get a job. Many people are not lucky enough to have a parental home to move back to: they may not have a mum or dad, they may have fallen out with them, they may have been victims of abuse. And what about people under 25 who are parents themselves?

If there is a parental home, what if the mum or dad is on benefit themselves? Their home may not be big enough, and this problem is about to get a whole lot worse from April 2013 as a result of the bedroom tax on social tenants that could force many to downsize. If it is big enough, they will face the situation described by Cameron himself as ‘heartrending’ in June, a non-dependent deduction from their housing benefit that has just been increased by his own government.

What happens if someone needs to move from their home area to find a job? Most of the growth in housing benefit claims since the election has come from people in work who need help with their rent. Local housing allownce for the under-35s in the private rented sector is already restricted to the rate for a room in a shared house. Cutting it still further will make it much more difficult to get on their bike and look for work – and mean that if they lose their job they will also lose their home.

Above all, Cameron’s binary world ignores the real source of the problem: a housing system with sky-high prices and rents. A report for the Joseph Rowntree Foundation in June forecast that by 2020 young people under 30 will be ‘further marginalised with a badly functioning housing system’ with up to 1.3 million more priced out of home ownership into private renting and an extra 300,000 living with their parents.

The extra cuts in welfare he advocated today will penalise the victims of that without doing anything to address the underlying causes. They will also penalise the real ‘strivers’: the young people struggling to afford an expensive roof over their heads with no parental home or bank of mum and dad to fall back on.

But none of that matters back in the binary political world of David Cameron and the Conservatives. As with so much else this government has done since it took office this is a divide and rule world of ‘us’ and ‘them’.


4 Comments on “Strivers and scroungers”

  1. A nice summary of the issues Jules. I would add another group to your list: unemployed graduates, especially those who studied for construction and development-related degrees only to find that opportunities in the sector had disappeared by the time they graduated. How can the Government justify incentivising work at the expense of benefits when unemployment remains so high?

  2. julesbirch says:

    Good point Catherine – especially as one of the best ways to reduce unemployment, give them jobs and cut the benefit bill would be to build more homes

  3. Steven says:

    Great post Jules.

    The issues you mentioned, “In the real world, there are many people who go to college who do not find a job afterwards…”, seem to have been largely ignored by this knee-jerk policy.

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