Work hard, do the right thing – and get screwed
Posted: July 9, 2015 Filed under: Budget, Housing benefit, Labour market, Tax credits, Universal credit | Tags: George Osborne 5 CommentsHow has George Osborne got away with a Budget that will hurt the very people he claims it will help most: hardworking families?
The headlines are all about One Nation, National Living Wage and tax cuts but, as the dust settles, the calculations that have emerged so far make clear that the poorest households are going to suffer significant cuts in income. While a series of cuts such as the lower benefit cap will hit out-of-work households hard, people in work face a series of technical changes to tax credits and benefits that will make many of them substantially worse off.
To give some idea, here are the three main cuts:
- A four-year freeze in working age benefits saving £4 billion by 2020/21. The Institute for Fiscal Studies estimates that this alone means that 13 million families will lose an average of £260 a year. Of those, 7.4 million are in work and will lose £280 a year. The freeze will also hit child benefit, which David Cameron promised to protect.
- £6 billion worth of cuts to tax credits (and subsequently universal credit) and associated housing allowances from April 2017. The IFS says new claimants will lose credit entitlement for more than two children, losing the average of £3,670 a year that currently goes to 872,000 families (548,000 in work). On top of that, the family element in credits for the first child will be cut for new claimants and housing allowances associated with both will be cut too. Kate Webb of Shelter calculates that just one change – the removal of the family premium, an allowance of earned income before housing benefit starts to be withdrawn for working families with children – could cost a single mother working 20 hours a week at the new national living wage £11 a week. That’s not much less than the bedroom tax.
- Cuts to work allowances that mean working households will lose tax credits/universal credit much more quickly than now. At the moment, credits start to be withdrawn once family earnings rise above £6,420. That will fall to just £3,850. This will cost 3 million working families just over £1,000 a year each. Credits will also be withdrawn at a faster rate once they hit that threshold.
Reconstructing Speenhamland
Posted: July 6, 2015 Filed under: Budget, Economics, Housing benefit, Labour market, Poverty, Tax credits | Tags: Speenhamland 1 CommentWhere 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.
Enemies of the state
Posted: July 5, 2015 Filed under: Home ownership, Housebuilding, Housing associations, Housing benefit, Right to buy | Tags: Conservatives, David Cameron, George Osborne Leave a commentOriginally posted on July 5 on Inside Edge 2, my blog for Inside Housing
Bring it on. We are determined take you on. Who do David Cameron and George Osborne have in mind?
If you haven’t seen it yet, you need to read their op-ed in Saturday’s Times on ‘Here’s how to build a homeowning Britain’. They mean England of course. You can read extracts on the Number 10 website but that only gives a flavour of the full article so I’ve posted it here.
Ahead of the Budget, they promise that ‘a shake-up of inheritance tax and crackdown on nimby councils will give young people a foothold on the property ladder’. It is not just an explicitly, distinctively Conservative vision for housing but also a declaration of war against anyone opposed to that vision. Here’s my take on the key points:
‘Having your own place is an important stake in our economy. It’s also one of the best expressions of the aspirational country we want to build, where hard work is rewarded.
‘It’s also about social justice. We don’t want this to be a country where if you’re rich you can buy a home, but if you’re less well off you can’t. We want it to be One Nation, where whoever you are, you can get on in life.’
‘Here’s how to build a home owning Britain’
Posted: July 5, 2015 Filed under: Affordable housing, Help to Buy, Home ownership, Housing associations, Housing benefit, Right to buy, Starter homes | Tags: David Cameron, George Osborne 1 CommentHere is the full text of the belligerent op-ed on housing by David Cameron and George Osborne in Saturday’s Times. My post on the implications is here.
Here’s how to build a home owning Britain
David Cameron and George Osborne
A shake-up of inheritance tax and crackdown on nimby councils will give young people a foothold on the property ladder
At a time of uncertainty abroad, here at home we will be delivering a budget next week with economic stability at its heart, offering security for working people.
Encouraging home ownership is central to that. Having your own place is an important stake in our economy. It’s also one of the best expressions of the aspirational country we want to build, where hard work is rewarded.
It’s also about social justice. We don’t want this to be a country where if you’re rich you can buy a home, but if you’re less well off you can’t. We want it to be One Nation, where whoever you are, you can get on in life.
Read the rest of this entry »
Blue skies: Part two
Posted: May 27, 2015 Filed under: Affordable housing, Bedroom tax, Benefit cap, Garden cities, Help to Buy, Home ownership, Housebuilding, Housing benefit, Local government, Planning, Starter homes, Welfare reform | Tags: Conservatives Leave a commentIs One Nation Conservatism anything more than PR puff? The conclusion of my blog sets out 12 tests of what it could and should mean in housing.
In the wake of the unexpected election result influential voices within the Conservative Party talked about the need for a new appeal to the aspirational working classes. Whether it’s called Blue Collar or One Nation Conservatism, the idea is to shake off the negativity of the nasty party, steal Labour’s clothes and lock in another majority for 2020.
Part one of this blog featured calls by people like Tim Montgomerie, David Green, Nick de Bois and Christian Guy not just for a radical new approach to housebuilding to spread the benefits of home ownership but also a new approach to housing to meet the needs of renters. Guy called housing ‘one of the social justice issues of our time’. There was more of this over the weekend, with Chris Walker of Policy Exchange calling housing ‘key to a Conservative vision for working people’.
But what does all this Tory philosophising amount to? The desire to appeal to aspirational workers (and for power in 2020) is certainly genuine enough but is the party really ready for its implications? The suspicion remains that this is as much about redefining the meaning of ‘One Nation’ as it is about changing course: one nation for those able to Work Hard and Do the Right Thing that looks the other way when it comes to those who cannot and ignores the fact that many of them will still not be able to pay their rent.
Housing at the hustings
Posted: April 21, 2015 Filed under: Affordable housing, Bedroom tax, Cornwall, Housing benefit, Second homes Leave a commentSo is housing finally cutting through as an issue at this election? Yesterday has convinced me that it is.
The day started with housing featuring as the election issue of the day on Today on Radio 4 – good news in itself but just an indication of the programme’s agenda. The report by John Humphrys was about Shepherd’s Bush and how it’s changed from the setting for Steptoe & Son to a place where a couple on a joint income of over £100,000 cannot afford a deposit, let alone a home, and foreign investors are buying new apartments eight at a time.
An interview with Brandon Lewis and Emma Reynolds followed (listen again here at about 8.30). But it quickly degenerated into bald men squabbling over a comb mode as they traded statistics about who has the worst record in government. Lewis trotted out the usual lines about Help to Buy while Reynolds repeated her better ones about Lyons. Maybe I’ve heard it too many times before, maybe they’ve said the same thing too many times before, but it hardly seemed like housing was at the centre of the election. Depressingly, the focus was entirely on first-time buyers. They do face huge problems but this is an indication I think that the main parties still see home ownership as the issue on which elections are won and lost. It’s a sense of aspiration, rather than housing as such, that is the real issue.
That was enough to lower my expectations for my local hustings. BBC Cornwall is organising them across the county and last night it was the turn of St Ives. The Lib Dems held off the Conservatives by just 1,700 votes in 2010 and it’s one of the 23 seats the Tories need to win to form an overall majority.
Heart, brain and Clegg
Posted: April 16, 2015 Filed under: Bedroom tax, Housebuilding, Housing benefit | Tags: Liberal Democrats Leave a commentWhat could housing expect from a government influenced by parties other than the Conservatives and Labour? Part 1: the Lib Dems.
Assuming the polls are right and there will be another hung parliament, any of the other five parties who took part in the first TV debate could have an influence. The SNP and Plaid Cymru would seek concessions for Scotland and Wales while demanding less austerity from a Labour government, especially on welfare [though later the SNP reached out to the rest of the UK with a call for 100,000 affordable homes]. However, most housing issues are devolved from Westminster, so I’ll concentrate in this two-part blog on the other three parties. Power may matter a lot more than policies, there are some hints in the Lib Dem, Green and UKIP manifestos of what might offer common ground with one of the bigger parties.
So first, the Lib Dems. Assuming enough of them keep their seats, they could be a coalition partner (or a less formal supporter) for either a Tory or Labour government and they are the only party with a track record in coalition at Westminster.
No surprises from Labour
Posted: April 13, 2015 Filed under: Affordable housing, Bedroom tax, Help to Buy, Housing benefit, Housing market, Local government | Tags: Labour Leave a commentIf you’re looking for anything new on housing in the Labour manifesto you’re going to have to search very hard for it.
The party’s priorities were clearly elsewhere in the document launched this morning and the housing sections are largely rehashes of Labour’s response to the Lyons Review and of previous statements on social security.
Housing gets a mention in the introduction but only in relation to housebuilding and home ownership:
‘We are not building the homes we need. Our sons and daughters have been shut out of the housing market and too often they are forced to leave the communities where they were brought up.’
Jules Birch 