Link to this page: https://www.socialistparty.org.uk/issue/645/10556
Housing: Rent caps, not benefit caps
'NO-ONE should ever be worse off working than they would be on benefits'. This is the carefully chosen mantra repeated time and again by Cameron, Osborne, Clegg and the rest of the Con-Dem wrecking crew to justify housing spending cuts.
North London public sector worker
This soundbite, along with the other lies being put forward by the government, will no doubt have some resonance for individuals and families working long hours on low pay and struggling to pay the bills.
However, the latest wave of government attacks on housing benefit (HB) is not designed to deliver 'fairness' but is an attempt to force workers into a spiral of lower paid jobs, economic insecurity, longer working hours and squalid housing. These attacks began under New Labour and are being accelerated by the latest incarnation of 'free market' government.
Since April 2008 the local housing allowance (LHA) has replaced housing benefit for people renting from a private landlord. Existing claimants that move house or break their claim are shifted from HB to LHA.
LHA rates are calculated using the broad rental market areas (BRMA) formula which uses average rental rates in a particular zone.
From October 2010, LHA rates have been reduced - on average by about £60 a week for a two bedroom flat in central London. However, the comprehensive spending review dealt an even more devastating blow to families living on benefits in high rent areas. The maximum LHA for a two bedroom flat has now been set at a full £190 a week below the average cost of such properties in central London.
Even for those living in parts of outer London the gap is as high as £80 a week. For larger families needing three or four bedrooms the difference becomes astronomical, they will be expected to magic up £600 a week on top of their benefits to remain in central parts of the capital such as Westminster.
It will become impossible for individuals or families on benefits to live in private rented accommodation in 70% of the capital. Figures show that in central London boroughs only 7% of accommodation - undoubtedly the worst housing - will be affordable under the new benefit rates.
The newspapers have been full of stories about families in London receiving £40,000+ benefits but it's not the claimants who gain. They receive the same or less benefits than people in other parts of the country - it's the greedy landlords who actually receive the money.
Taken on top of the plans to introduce an 80% market threshold for rents in social housing and the already acute shortage of new social housing stock, these measures amount to social engineering and spell the end of social housing in the city over the next ten years.
Socialists, trade unionists and community organisations must explain the impact that these attacks are going to have on our communities and develop movements of resistance in our working class neighbourhoods.
Campaigners must demand rent caps not benefit caps and a programme of affordable, decent house building. Organising rent strikes when families are faced with eviction should be discussed.
Such struggles should be linked to the wider cuts movement. Socialists understand that capitalism can only maintain itself on the bones of the working class and we must fight to stop this disastrous route being used.
- Housing budget slashed by nearly 50% from £8.4 billion to £4.4 billion over next four years. Housing Benefit (HB) will be cut by £2.5 billion.
- Rents for social housing will be increased up to 80% of the market rate.
- The HB bill has grown because rents rose by 63% between 1997 and 2008.
- In high rent areas new tenants moving into, for example, three-bedroom social housing will have to earn £54,000 to get off HB and be better off in work according to the National Housing Federation.
- A study by Cambridge University, commissioned by the housing charity Shelter, found that rent on most two bedroom properties in London would exceed the government's new HB cap.
- Inner London councils are block-booking bed and breakfast accommodation outside the capital to house tens of thousands of low income families forced to move - as far away as Hastings - because of the HB cap.
- Westminster council has lobbied the government to reduce its obligation to support families made homeless through the HB cap.
- Contrary to widespread media reports only 22% of HB claimants receive Jobseekers Allowance (JSA). The majority of claimants are low paid workers, pensioners and people with disabilities.
- An estimated 202,000 people are at risk of becoming homeless as a result of the 10% cut in HB for those on JSA for over 12 months.
- According to the Trades Union Congress, 49% of private renters and 66% of people renting social housing will face financial difficulties through a cut in HB.
- Chancellor George Osborne's additional £7 billion cut in welfare payments announced in October's spending review is equivalent to the sum which financial dealers in the City of London will get in a bonus pot this year.
In The Socialist 3 November 2010:
Socialist Party editorial
Socialist Party news and analysis
Socialist Party youth and students
Socialist Party workplace news
International socialist news and analysis