Five reasons why cutting housing support for young people is a bad move
8:55 am - June 26th 2012
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contribution by Nicola Hughes
I watched David Cameron’s major speech on welfare reform yesterday. In case you missed it, he is proposing that housing benefit should no longer be available to under 25s.
It’s already kicked off a wealth of comment, with Conservative Home asking whether this a bold way to cut down a burgeoning benefits bill, or a political gamble that could ‘re-toxify’ the Conservative brand.
Here are five good reasons why cutting off this support could hold back young people who are trying hard to do the right thing:
1. Benefits work as a temporary safety net
The truth is that most under 25s claiming housing benefit do so for a short time, to help them through a drop in income.
Imagine if you lost your job tomorrow. Suddenly you have no way of paying the rent and you need a safety net to get you through a temporary glitch while you find new employment. You’ve paid into the system through tax and national insurance, and now you need some support to help you get back on your feet. Phew. That’s exactly what the welfare state can do, right? No need to go through the upheaval of moving back into your childhood bedroom.
Under the Prime Minister’s proposals, a young person living in a shared house in London would instead have to move back in with their family if they were made redundant. Not so good if your family live in a small house in Cornwall, a costly and lengthy train ride away from many job opportunities.
Good safety nets support aspiration and independence, they help you maintain a stable home while you try and get back to paid employment and become self-reliant. No safety net at all can take you further and further away from work and responsibility.
2. Not everyone can rely on their parents
Politics aside, there are some major practical problems here. Thankfully the government has conceded that this proposal just won’t work for those who have left care or a violent household. But the problem goes wider. What if your parents moved abroad? Divorced and each moved into a small one bed flat? Downsized? Then it’s potentially years of sofa-surfing before you can afford your own place. That’s not great for your self-esteem or your love life, but most of all it limits your (already limited) opportunities to find and keep a job.
3. And those who can will feel the strain…
Now I’m sure all parents want to support their kids. But it can also be a huge strain having them around for such a long time. One report suggested that so-called ‘boomerang’ children can put a real strain on parental finances. Having grown-up kids back at home can put pressure on family relationships, particularly if a partner and grandkids are in tow too. That this is considered the new normal way of living should send alarm bells ringing about the state of the housing market.
4. Housing benefit supports work
A much under-reported fact is that the majority of new housing benefit claimants do in fact work. They have to rely on benefits as a bridge between spiralling rents and poorly paid jobs. So the argument that cutting it off entirely will somehow get more people into work and out of poverty just doesn’t stack up.
5. It’s a political tightrope
It’s often said that younger people are easier to attack in politics; bluntly put they vote less. But the proposal could well anger a much broader group of constituents – including landlords, small businesses, and children’s charities. Most significantly, more and more parents and grandparents are starting to worry about their children’s future and how they will be able to live independent lives.
The Prime Minister is right to say that it’s tough for all young people to keep up with high rents. I was struck by one part of his speech which accords with what we hear at Shelter all the time. He describes a young woman who would
love to get her own place with a friend – but with high rents in her area, the petrol to get to work and all the bills, she just can’t afford it.
Cutting back on benefits won’t solve this underlying problem: the exorbitant cost of housing. If the Government wants to be truly radical, it must turn its attention to the housing market.
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Nicola Hughes is a Senior Policy Officer at the charity Shelter. This post was first published at the Shelter Blog
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Reader comments
Like a lot of what this government proposes – this is just very bad for business.
yes it is easy to attack young people (the tories are glossing over why a 40 year old can’t move back in with his or her parents, or why a 66 year old can’t move in with his or her kids)
yes it plays well to the tory bedrock (old people) constituent to put forward policies that ammount to ‘kids today huh, they don’t kn0ow they’re born’.
But this will drive down mobility or drive up wages among people in need of experience and training in work. Can’t move from Burnley to Birmingham for a low paid job if you can’t afford the rent. Can’t keep your job if your other half leaves you cos you can’t afford rent and have to move ‘home’ 130 miles away. Can’t pay your landlord because your factory has cancelled all overtime for the next six months?
This new version of the tories who seem to look down on business as lower trades people – simply don’t think about business when spouting their dog-whistle rubbish. Which would be fine if they did so when generating legislation – but they don’t listen then either.
“What if your parents moved abroad? Divorced and each moved into a small one bed flat? Downsized?”
Or, indeed, what if you just don’t get on with your parents and they won’t have you? The policy seems to assume that everyone has a healthy relationship with affluent parents who have a spare room.
“Then it’s potentially years of sofa-surfing before you can afford your own place. That’s not great for your self-esteem or your love life”
Hadn’t considered this till just now, but one side effect of this policy could be effectively forcing young people to move in with a lover before they’re ready, which isn’t good for anyone.
This idea of the evil Tory Party is Age Discrimination.
It is now apparent that the Tories have no respect for anyone outside of their bubble except the wealthy.
What is Nick Clegg saying about this particular idea ?
What is Nick Clegg actually saying about all these Tory ideas that only have the objective of inflicting massive misery to the most vulnerable in society.
Apart from being Age Discrimination what about the poorer University students that need to live away from home to do a particular course.
Housing benefits drive up rents. For everyone.
If a landlord knows that everyone who can’t afford the rent will get tax-payer-funded subsidies, he or she will raise the rent. Tenant won’t mind as long as the government pays.
For those of us who have to pay rent themselves, rents become to high. Just one reason why I am leaving London: http://andreasmoser.wordpress.com/2012/06/18/moving-to-lithuania/
@ 3 Mr Grunt
“What is Nick Clegg saying about this particular idea ?”
Well, Cameron said they can’t actually bring these reforms in unless they outright win the next election, because the Libs will block them. So apparently Clegg is saying exactly what you want him to say.
“What is Nick Clegg actually saying about all these Tory ideas that only have the objective of inflicting massive misery to the most vulnerable in society.”
Don’t be ridiculous. Cameron isn’t sat in No. 10 stroking a white cat and saying “Now I will ruin more people’s lives! Bwahahaha!” The objective of the reforms is to save money and show that Cameron is prepared to put the interests of the affluent above those of the poor. That isn’t actually the same as causing misery for the sake of it.
Chaise Guevara @ 6
Thank You.
I guess the Tories have forgotten that there’s no legal requirement for parents to house their adult children. Plus I’ve met far too many young gay men who found themselves on the streets after coming out to their parents.
I suppose the big society best start donating to the YMCA unless we want to see young homeless figures to explode.
Andreas
That’s rather simplisticly nice idealistic stuff – but so is communism in theory. In reality it doesn’t work.
The reason for this is that we are talking about a marginal part of a much wider market. The market is housing – in in that there is owner-occupier housing – social housing – sheltered accomodation – student halls of residence – council housing – private renting – housing associations – part-ownership.
The bit you are talking about is private rented housing that accepts housing benefit claimants. This is a tiny proportion of the housing market – and thus has very little influence on the cost of housing – with all of the different parts of the sector having a much bigger impact.
As evidenced by Grant Shapps argument with NEwham Council – his staff found 900 rented properties being advertised within the government’s new housing benefit cap – in or arround Newham (the boroughs immediately adjacent and Newham have a population of about 1million people) – Newham contacted those landlords and about 17 said they would take housing benefit claimants.
It is a tiny tiny proportion of the housing market. It thus has no impact on rental prices
Chaise
What Clegg is actually saying behind the scenes is
‘OK – you say this stuff for your hardline support – and I’ll say this other stuff for the last dreggs of my support – and we can claim that we are distinct and not one party – even though we are on most stuff.’
@ Chaise
The objective of the reforms is to save money and show that Cameron is prepared to put the interests of the affluent above those of the poor.
Not quite.
The objective of the reforms is to save money and put the interests of those who earn money above those who do not earn money, by redistributing less of the money that is earned and taxed.
Perhaps it could also be argued that part of the objective is to begin to correct the distortion in the housing market caused by Housing Benefit, which has seen hard earned taxpayers money squandered in a massive monthly subsidy to feckless, buy to let landlords.
Now the tories have had what they wanted from the Lie Dems (reduced house of commons, boundary changes privatised NHS, cuts for the poor, and tax cuts for the rich etc etc) they can now just embarrass them on a daily basis. Last week it was Gove, on education, this week Cameron on housing benefits for the young.
The tories are going to humiliate the lie dems, they are going to give them the giant extended middle finger. Hey suckers, we fucked you over. You got nothing, and we got everything. No doubt George will be along in a while to be ever so serious, and complain about my use of the term Lie Dems.
Never mind, George can look forward to Cleggs memoirs. Titled “How I destroyed a political party in 2 years.”
Every analysis of electoral turnout that I have seen puts the youngest voters at the bottom. That helps to make them a ‘soft’ target.
By contrast, Cameron is much more wary of attacking pensioners as this group of people does vote in high numbers.
By getting out to vote in all elections, younger people can help make themselves less of a target for bullies like Cameron.
@ 10 m4e
“What Clegg is actually saying behind the scenes is
‘OK – you say this stuff for your hardline support – and I’ll say this other stuff for the last dreggs of my support – and we can claim that we are distinct and not one party – even though we are on most stuff.’”
Quite possibly. But it appears he’s doing what we want him to do and blocking the policy. You can always speculate about people’s motives. Real-world action matters more.
@ 11 pagar
“Not quite.
The objective of the reforms is to save money and put the interests of those who earn money above those who do not earn money, by redistributing less of the money that is earned and taxed.”
Same thing phrased differently. Positive spin to my negative spin.
And “help the rich at the expense of the poor” is a broad Coalition policy. Not that they call it that; it’s what they mean whenever they whitter about the “squeezed middle”.
Perhaps it could also be argued that part of the objective is to begin to correct the distortion in the housing market caused by Housing Benefit, which has seen hard earned taxpayers money squandered in a massive monthly subsidy to feckless, buy to let landlords.
If that was the intention why attack the under-25s?
And why not tackle the landlords directly?
The whole speech was incoherent, contradictory drivel designed to appeal to Daily Mail reading Neanderthals in a desperate attempt by the balding podgemeister to recover the initiative after the omnishambles budget, Gove’s sudden display of activity and the reports of tax dodgers creeping closer to the Conservatives and even Cameron’s family. An excellent post here http://johnnyvoid.wordpress.com/2012/06/23/universal-credit-self-employment-and-the-minimum-wage/ shows what the low paid will have to look forward to if Magrathea ever builds Smith’s computer.
Housing Benefit is not a benefit: it is a subsidy to landlords, whether they are private, third or public sector. I work for a housing association, and I can assure you that we would have to cut our rents if HB awards were less generous.
Shatterface @ 16:
“…why not tackle the landlords directly?”
Because the surest way to reduce the amount of housing available for rent is to introduce rent controls.
@ 15 Chaise
“And “help the rich at the expense of the poor” is a broad Coalition policy”
Maybe it is a coalition policy, but a better phrasing would be “help the poor less to reduce the burden on the rich”
@ 17 TONE
“Housing Benefit is not a benefit: it is a subsidy to landlords, whether they are private, third or public sector”
False dichotomy; it’s a benefit that also acts as a de facto landlord subsidy. Off the top of my head I can’t see any way of removing the latter without killing the former.
The elephant in the living room successive governments have failed to address: except by ill-thought out gimmicks like this, is that there is a shortage of housing in this country and, crucially, the private sector is not meeting this—and has no intention of so doing.
In the Guardian recently Polly Toynbee quoted a builder as saying that he could build twice as much, but if he did (and, presumably, everyone else did) his margins would drop by half, and his profits probably further as he would have additional costs. So he wasn’t going to.
This is a classic example of market failure: there is unsatisfied demand because it is not in the builders interests to satisfy it. The Conservatives and the Blair/Brown axis cannot accept this because they have totally bought into the “efficient market” theory.
Only the state—by a policy of building houses, initially for rent— can solve this problem. I’ve always liked Jane Jacob’s proposal (in “The Life and Death of Great American Cities”) of building blocks of flats for rent, rent linked to income, and converted to mortgage when the rent equals the equivalent mortgage payment.
Chaise
I’d agree – but this isn’t real world action. It’s a lot of nice words for the party faithful. It isn’t a policy – it isn’t legislation – it isn’t going to happen. It’s just spin at its most base.
To people claiming that housing benefit distorts the housing market…
…please try studying economics as a whole – and housing markets in particular – before making fatuous catch-all vague declarations of economic impact. It is generally best not to comment on such things without a reasonable grasp of economic theory at least, and better still some actual education in it, as it makes you look stupid to people like me who actually have studied economics.
There are examples of markets in which substitution impacts on prices. The housing market, with regards to housing benefit, is not one.
Be it rent controls in the States, Council Housing in the UK, or the many varied models of affordable housing provision across Western Europe – there has never been a significant (that’s a statistical term) corrolation between the value of such models, and the cost of housing to the wider public.
So try learning instead of spouting nonsense!
@ 18 Fungus
“Maybe it is a coalition policy, but a better phrasing would be “help the poor less to reduce the burden on the rich””
Like I said @15, my original phrasing did have something of the spin about it.
@ Mark
This is a classic example of market failure: there is unsatisfied demand because it is not in the builders interests to satisfy it. The Conservatives and the Blair/Brown axis cannot accept this because they have totally bought into the “efficient market” theory.
Only the state—by a policy of building houses, initially for rent— can solve this problem.
Nonsense.
The market in housing would work perfectly if it were not for the interventions by government in protecting green belt and refusing planning permissions. It is not some builders cartel that makes new housing expensive, it is the cost of land you are allowed to build on.
The only way the state could solve the housing crisis would be to keep out of the process by which houses are built.
@ M4E
…please try studying economics as a whole – and housing markets in particular – before making fatuous catch-all vague declarations of economic impact. It is generally best not to comment on such things without a reasonable grasp of economic theory at least, and better still some actual education in it, as it makes you look stupid to people like me who actually have studied economics.
Congratulations on this years “how to be a pompous prick in one paragraph award”.
And if you really think housing benefit does not distort the market, you are also a significant (that’s not a statistical term) idiot.
@ 20 Mark
“I’ve always liked Jane Jacob’s proposal (in “The Life and Death of Great American Cities”) of building blocks of flats for rent, rent linked to income, and converted to mortgage when the rent equals the equivalent mortgage payment.”
Not sure you’d even need to link rents to income (not that I’m against that, but I can imagine people making economic objections).
One alternative is to make the flats cheap ‘n’ cheerful, so they’re great for young people making their way in the world, but not so attractive to middle-earners.
@ 21 m4e
“I’d agree – but this isn’t real world action. It’s a lot of nice words for the party faithful. It isn’t a policy – it isn’t legislation – it isn’t going to happen. It’s just spin at its most base.”
Well, what I’m hearing is that this only isn’t policy *because the Lib Dems oppose it*. Preventing a real-world action is a form of real-world action.
Acid test: if the Tories had a majority, or could convince the LDs to go along with it, would they introduce this policy? I assume yes.
The tory flagship policy of flogging off council houses has now come home to roost. All the so called savings that the sell off was supposed to achieve has been more than off set with the rise of housing benefit.
So the next tory step is to wack the poor. How typical.
Chaise Guevara: “Don’t be ridiculous. Cameron isn’t sat in No. 10 stroking a white cat and saying “Now I will ruin more people’s lives! Bwahahaha!”
Indeed he doesn’t. I believe Larry is more tabby than white.
(sorry, couldn’t resist)
But actually I do think many of the Tories really are partially motivated by hostility to poor people, although that probably doesn’t extend to Cameron himself. The level of glee with which even the broadest of benefit cuts are greeted by Tory supporters doesn’t seem to fit many other explanations.
I simply don’t buy that they think people freed of the “oppression” of benefits will benefit because they will suddenly rediscover a work ethic (it’s not like laziness was unheard of pre-1945), get a job (all at once! full employment!) and become wealthy just like them. So no benefits, no more poor people… so all those poor people you thought you spotted in India? Figment of your imagination, mate.
It just doesn’t make sense at the most basic level.
I suspect it’s just that they think benefits are injustice – it’s stealing resources that are rightfully theirs according to the market God and giving them to other people. Bad people. If they were good, the market God would have rewarded them already, because the market has been proven to always create the best outcome.
The economic, practical and humanitarian arguments for welfare are brushed aside as minor issues or the siren calls of communists, and the idea that the market’s idea of “the best outcome” might not match up with what humanity needs or wants is flat-out heresy.
Another problem is that the government’s left hand doesn’t seem to know what its right hand is doing. Aren’t social tenants being required to move to smaller properties when their children move out? If so, how can they also be expected to keep a spare bedroom available for them to move back into at any time?
Essentially the same problem applies to low-income private tenants too: presumably your housing benefit entitlement falls when your kids leave home, meaning (again) you have to downsize and won’t have room for boomerang kids.
And the proposal *seriously* that even under-25s with kids won’t be entitled to housing benefit? If this policy had been in place in 1997, my wife would have had to drop out of her degree course in order to follow me back to my parents’ house with our two kids while I looked for work. What would that have achieved, exactly? For the sake of saving £3000 or so in housing benefit payments, the government would have thrown away the whole cost of her degree up to that point and probably tens of thousands of pounds in lost tax revenue due to the probable reduction in her lifetime earnings.
It’s a prime example of a policy that falls apart as soon as you think about how it would work in the real world.
People have been forced to downsize, and British homes are the smallest in Europe. There just isn’t room, and with many newbuild bedrooms smaller than prison cells, it’s no wonder young people run screaming away from unemployment hotspots and move to where there is work.
@ 29 jungle
“But actually I do think many of the Tories really are partially motivated by hostility to poor people, although that probably doesn’t extend to Cameron himself. The level of glee with which even the broadest of benefit cuts are greeted by Tory supporters doesn’t seem to fit many other explanations.”
Oh, certainly – it’s just there’s still a difference between that and creating misery for its own sake. The right (generalising here) frame the needy as the baddies, demonising them in the process and therefore disliking them, so if someone has to suffer from a policy, they’re glad it’s them. And some probably do shiver with glee at the thought of the perceived worst groups (e.g. unemployed spongers) suffering. I just suspect the general attitude of “poor people suffering, wahey” is rare to non-existent.
Goes the other way, too. Some on the left hate a lot of rich people; some hate all rich people; some like the idea of especially callous and greedy individuals going bankrupt. But I doubt many of us would find the idea of a moderately affluent household falling into financial problems to be an inherently good thing.
“I suspect it’s just that they think benefits are injustice – it’s stealing resources that are rightfully theirs according to the market God and giving them to other people. Bad people. If they were good, the market God would have rewarded them already, because the market has been proven to always create the best outcome.”
That’s my guess too. It’s certainly the attitude of many of LC’s right-wing regulars, and the constant subtext behind tabloid stories about benefit claimants.
Then rent. Get together with your mates, rent a place, and work hard. It’s what we all had to do. If it’s too expensive, go somewhere cheaper. Like grown ups have to.
The state is not there to provide lifestyles for people.
CG @ 19:
“False dichotomy; it’s a benefit that also acts as a de facto landlord subsidy.”
I disagree about it being a false dichotomy, because arguably HB does not benefit a claimant directly, only indirectly. The beneficiary is the landlord, who keeps rents higher than they would otherwise be because of the subsidy from HB. However, let’s not get stuck in arguing about words again. For my part, I’d happily say that HB is primarily a landlord subsidy and only secondarily a benefit to a claimant.
M4E @ 9:
“The bit you are talking about is private rented housing that accepts housing benefit claimants.”
Why do you think that housing associations, social housing and other landlords do not set their rents to take account of HB? Of course, they do: I know, because we do it in the housing association I work for, and it’s common practice in the sector. It is not only the wicked private sector landlords who benefit who respond to rent subsidies. And if you subsidise x, you will get more or higher x. If you keep the price of x artificailly low, there will be less of x available.
Pagar
I’d rather be pompous than ignorant. But you can choose the alternative if you like.
Chaise
I suspect – and always have – that were the Lib Dems not in government – Cameron would have to be much more moderate in a lot of his language because he couldn’t be seen to be playing to his hardline support.
TONE
Thanks to legislation in 2002 – Social housing rents have been set according to a national formula based on proportions of average income and with adjustments to bring all values into line with others of their size and value (effectively standardising so that two houses in an area of similar values and with the same facilities and number of rooms – don’t cost significantly different rents).
There is no provision under law that facilitates adjusting rents for housing benefit. As such your housing association is breaking the law. You should, if you are smart, bring your allegation that your housing association is behaving illegally to the attention of your legal director.
That way you will be covered if they are found out and the legal director did nothing.
@ 34 TONE
“I disagree about it being a false dichotomy, because arguably HB does not benefit a claimant directly, only indirectly. The beneficiary is the landlord, who keeps rents higher than they would otherwise be because of the subsidy from HB. However, let’s not get stuck in arguing about words again. For my part, I’d happily say that HB is primarily a landlord subsidy and only secondarily a benefit to a claimant.”
Fair enough; I admit don’t know enough on the subject to be able to judge whether you’re right or wrong. However, I think I can safely assume that, regardless of the long-term effect on rates, removing HB now would leave a lot of current claimants without a leg to stand on. And if HB is so bad, why are we only removing it for the under-25s?
Finally, even if the short-term harm is worth the long-term pay-off, what are we going to do about people who can’t afford housing once the dust has settled?
@ 36 m4e
“I suspect – and always have – that were the Lib Dems not in government – Cameron would have to be much more moderate in a lot of his language because he couldn’t be seen to be playing to his hardline support.”
In *language* maybe, but in policy? I find it hard to see how a coalition party to the left of the Tories could push them further right in terms of actual actions.
M4E @ 37:
Yes, I know of the legislation and the formula; but with the appropriate derogation rents can still be increased dramatically if you have a business case. (We had a 25%+ increase a couple of years ago in the HA I work for, and the amount of local HB approvals was one factor in setting rents).
Moreover, there’s scope for transferring items from the ineligibles to the eligibles, so as to load items onto HB – particularly when housing-related support benefits (ie Supporting People) are reduced – or simply upping the eligibles and blinding the HB officers with the complexity of the breakdown. Furthermore, if HB awards were cut or dramatically capped, the HA I work for would surely respond by cutting rents.
CG @ 38: “…even if the short-term harm is worth the long-term pay-off, what are we going to do about people who can’t afford housing once the dust has settled?”
I don’t know; but clearly some help is necessary. I’d be a lot more comfortable with a housing allowance paid only to the tenant (social landlords receive the HB direct – the tenant never sees it) and that could not be influenced by what landlords try to charge.
@ 40 TONE
Sounds sensible to me. I also like the suggestion @20.
Chaise
Depends on how you see the “pull to the centre” in British politics.
Cameron worked hard to shift the tories to the moderate centre ground in order to win the 2010 election. It worked to an extent – and that served to keep his hardline right wing under wraps to an extent. They couldn’t really push too far knowing they would not get into power in 2014 if they unleashed properly.
With the Lib Dems there – that argument has stopped. Cameron has instead used the line “we have to accept the Lib Dem compromise” instead of the line “we need to win wider support on the centre ground”.
Hence the tories end up sounding a lot more right wing – because they can be free to come out and be hardline right wing – and resent the lib dems for not allowing them to act.
It isn’t a grown up approach for the good of the party long term – but it does seem to be what is happening.
@24. pagar
@ Mark
This is a classic example of market failure: there is unsatisfied demand because it is not in the builders interests to satisfy it. The Conservatives and the Blair/Brown axis cannot accept this because they have totally bought into the “efficient market” theory.
Only the state—by a policy of building houses, initially for rent— can solve this problem.
Nonsense.
The market in housing would work perfectly if it were not for the interventions by government in protecting green belt and refusing planning permissions. It is not some builders cartel that makes new housing expensive, it is the cost of land you are allowed to build on.
The only way the state could solve the housing crisis would be to keep out of the process by which houses are built.
Garbage. This can only be believed by someone who subscribes to the “efficient market” theory, which has consistently been disproved. If the markets were efficient GIVEN THAT WE KNOW THERE ARE FEWER HOUSES BEING BUILT THAN NEEDED, why are they (the builders) sitting on land-banks (land for which they have planning permission but are not building on)? Further somewhat near 90% of all planning applications succeed, so this is hardly a hindrance to an efficient market. In general, it is only executive housing in rural villages which have much likelihood of not getting planning permission, not the mass housing we need.
No the problem is that builders are going for a quiet, profitable market: keeping supply down and prices up. Market failure. They can make more money selling houses into a scarcity market than in to a satiated one.
TONE
I don’t miss the HA language of eligibles and ineligibles. Always felt too inhuman.
Listen, there are some marginal adjustements that housing associations can make. But the massive shortage in social housing, the formulas in place for unifying prices, and the tiny number of people directly impacted on by this proposal mean that the impact on the wider market will be very minimal.
As CG says – if HB was so bad, why take the biggoted route of attacking 25 and under? Why not all people? (Old people can live with their kids, 40 year olds can move in with parents).
Not that there is any evidence this would have an impact on the wider housing market and so on living costs. Across the develped world there is no evidence of prices even marginally tracking the value of social housing schemes and benefits. But it begs the question, if the “its OK because it will impact on prices” line is the chief mitigation for the hardship being proposed, why do it to such a small number of people whose pricing power is so low?
Mark Austin
It is of course highly unlikely that any market would ever work perfectly under any conditions – let alone one involving such specialist knowledge and high costs as housing.
That has nothing to do with government intervention. It is just that one should never assume perfect knowledge in a market where consumers are unlikely to know the 7013 different things that might influence their decisions over buying or renting a property, and especially not in a market when pressing time constraints often apply to the acquisition of the product or service.
The government should build more social housing. If they do so on a large scale this would have 2 effects:
1) Stimulate the economy by creating jobs in construction
2) Increase the supply of lower rented properties thereby driving rents down.
Both measures would reduce the benefits bill. Ok we would need to borrow to do this but at the moment labor is relatively cheap and investors are currently willing to pay the government to borrow (interest rates below inflation). Also we should not just think of what is being borrowed but the asset (in housing) that is created for the future along with the reduction in costs (housing benefit). We could borrow to create new assets for the country or we could do as the current government is doing and borrow to stagnate the economy.
I don’t think we need to give reasons why this is a bad move, it’s self-evident.
I think many people believe that right-wingers are just like them but just have a difference of opinion but I don’t think they understand who they are dealing with. I think they are underestimating the role sadism plays in the Tory psyche. Most of the right-wingers I’ve met in person and come across online seemed to really enjoy hurting people, and loved the thought of them being completely destroyed. Believing what they believe and seeing the world through a right-wing prism, seems to turn them into individuals that strongly resemble sociopaths. In my opinion sadism is at the heart of the right-wing psyche and informs much of what they do, along with greed, heartlessness and pathological selfishness.
In *language* maybe, but in policy? I find it hard to see how a coalition party to the left of the Tories could push them further right in terms of actual actions.
Well that depends on just how left to the Tories the lib dems are, which is no doubt a variable per particular issue. The orange book for example puts them to the right of the Tory party in regards to NHS privatisation. Plus the drop in lib dem support after the tuition fees debacle, the abject failure of electoral reform that few (even them) wanted, and the abstaining on the Jeremy Hunt vote (those are the first three that come to mind) has kind of made them somewhat beholden to Tories policies in the main, because success allows them to claim some of the glory while they must surely know that failure will be completely shifted onto their shoulders regardless of how much or little influence they actually had on policy.
In short having the lib dems in coalition allows the Tory head bangers to dispense with self awareness altogether.
M4E @ 44:
I wasn’t talking about this proposal as such but about HB in general. You assure me that there are reliable studies that show that reform of HB would have minimal impact on market rents (at least I think that this what you are saying underneath the jargon). I beg to differ – partly on my experience in a housing association where I have seen rents ‘rigged’ quite legally and as a private sector landlord myself where HB enables me to get very generous rents. However, if you can supply links, I’ll certainly consider your evidence…
R32 @ 48:
Sure, there are some right-wingers who despise those who have differing economic interests and political views. But I am afraid that there are also left-wingers who similarly despise their opponents. I’m right-wing, and I’ve been told by left-wing sociopaths that my blood will run in the gutter come the revolution (because I crossed a picket line) or that I’m evil and selfish for suggesting that the welfare state is bloated, inefficient and creates dependency…. Yet I can see that most left-wingers are not sociopaths: indeed, I enjoy engaging with my left-wing friends.
My advice to you is to engage with the issues, not with the labels; and you might be pleasantly surprised, and even learn something – if only how to hone and present your own arguments to unsympathetic people. As you appear at present, I fear you exemplify the cliche – in which there is some truth – that left wingers think right-wingers are wicked, while right-wingers merely think left-wingers are mistaken.
Finally, I would point out that most people who do wicked things do them unintentionally and through ignorance. (The philosopher, Mary Midgley, elaborates this simple point very well in her book ‘Wickedness’. Short, readable and highly recommended.) Civilised political discourse surely requires us to bear this in mind…
@35 M4E
I’d rather be pompous than ignorant.
The two are not mutually exclusive.
It’s possible to be both……….
This is why I hate Tory cunts. They are simply to stuck up themselves to understand basic history.
The social housing did not spring out of the ground like wheat. Quarter of a million homes where being built by Tories, not to deprive the private sector buyers for the massive post war housing boom, but to serve a very real need. To read the Tory fuckwits here, you would think that the post War British were being dragged out of their luxury, privately owned, palatial homes, kicking and screaming and forced to live in these State owned houses as some kind of socail engineering experiment. These house were badly needed and guess what? The private sector were not prodiving low paid people with them any time soon, either.
Housing benefit did not just ‘arrive’ on our doorstep unannounced and snuck into statute books without anyone noticing. Housing benefit was designed to ameliorate the high cost of private sector rents for people on low incomes. High rents were not some imagined phenomena created by Socialists. Waiting lists were actually straining to cope with people requiring affordable housing. The Tories buttressed housing benefits to meet a specific need when Local authority public sector housing was ‘lost’. I say lost but we know that these houses where sold off at highly reduced prices, again not by accident, but by idealogical design.
It may shock people today, but when we were building local authority housing, the Country was not full of people people saying ‘State housing? Why bother when the private sector are already building more housing than we know what to do with’, nor were people straining to understand the concept of housing benefit. Surprisingly enough, it may shock you to know that competition did not push down rents and place low paid people in houses. Homeless families where forced to live in Bed and Breakfasts al over the Country.
You see, we already have seen the ‘future’, but it looks very much the past we might have had, post the Second World War if you cunts had got your way. None of the problems that these solutions have went away, all that has happened is the ruling classes have changed their outlook. The Tory party of that era where ‘one nation’, decent (if misguided in my view) people and have been replaced with the socially backward scum and sociopaths we know and ‘love’ today.
“The market in housing would work perfectly if it were not for the interventions by government in protecting green belt and refusing planning permissions”
ahhhh libertarian.
“The market in housing would work perfectly if it were not for the interventions by government in protecting green belt and refusing planning permissions”
ahhhh libertarian.
Yep.
And correct.
@ Jim 53,
I’m not going to argue with everything you say there, but the private sector used to build far more homes than the state could manage. Here are figures on small houses built by A – local authorities and B – the private sector
1925 A – 20,624 B – 116,265
1935 A – 41,593 B – 287,413
1939 A – 101,744 B – 230,616
(no figures for the war years)
1946 A- 741 B – 2,570
1947 A – 27,159 B – 32,044
1948 A – 105,980 B – 28,430
These are from the Government Statistical Abstract, and they show how, until WWII the private sector massively outstripped the state sector, but afterwards, the private sector never got back off the ground, and this was due to government intervention.
(I got those figures from a book by Ernest Benn called ‘The State, The Enemy’, btw)
Pagar
they can be combined – but in this instance one stems from a lack of the other. You have the ignorance, and that brings out my pomposity because I don’t.
pagar: “The market in housing would work perfectly if it were not for the interventions by government in protecting green belt and refusing planning permissions”
There are plenty of countries in the world without state intervention (or at least without any functioning form of state intervention) in the property market. Including the UK, in the past.
They tend to suffer massive levels of overcrowding and slums. They also have really crap infrastructure – if you can’t influence where people build things which consume water and produce sewage, then you’re inevitably not going to have a very good system for either.
I don’t rule out that this may be an economically optimal scenario, of course (though I doubt it, given the public health problems which can result), but I don’t think it’s what most people want.
TONE
I fear you have asked me to find a study showing a negative. I’m just not adept enough with Google to do it and for the life of me I can’t remember the papers I read before (ten years or more now since I worked in housing, thankfully).
Sorry
@TT #56:
[but after World War II] the private sector never got back off the ground, and this was due to government intervention
Can you justify this claim?
TT @ 53
I do not dispute your figures and I wonder if you have miss interpreted my assertion. I am not suggesting that the private sector were incapable or unwilling to build houses. Of course whether the State could have actually built had the political need/will had been there is a far different question. How many of those houses were bought by the unemployed and the low paid workforce in 1933?
However, come the 1950′s when housing was in greatest need it wasn’t the private sector that built affordable housing for poor and lower income families, it was the Government that built those houses to tackle a multitude of problems. Irrespective of whether or not you agree with the solution, millions of people who could not otherwise have been housed, where given the keys to houses. To argue that the private sector would have built people housing who could not afford you would need to delude yourself. The problem of how to house people who could not afford to take on a mortgage was still there in the eighties.
Selling those social houses did not mean that those people could magically afford to take out mortgages after selling of council houses. Housing benefit was bolstered to keep the poor with a roof over their heads. American banking crisis nearly brought the World’s economy to its knees by trying to impose a market solution to something that clearly required a social solution. What poor Americans needed was not access to ruinous credit but affordable, comfortable housing.
Removing social housing and housing benefit will leave hundreds of thousands of people homeless. Any more than removing incapacity benefits suddenly meant that people became cured. We will see the rise of shanty towns that blight other cities in what would call the ‘developing World’.
@ 61 Robin Levett
It depends on how TT defines “after the war”
SuperMac started his rise by increasing housebuilding by over 50% to more than 300,000 per annum through his “bonfire of controls” and in the 50s, private sector building moderately exceeded public sector building, but under Attlee most housebuilding was prefabs which had to be replaced in the 50s, delaying replacement of Victorian slums (yes, 10-year-old prefabs were widely reckoned to be worse than 90-year-old Victorian back-to-backs – I had friends living in each).
@ 62 Jim
I was around in the 1950s. The large majority of the houses were built by the private sector and very few of them were built for the rich: there weren’t enough rich people (and most of them lived in draughty castles and shivered all winter)’; in the early 60s local authority housing built to Parker-Morris standards cost more than private-sector housing built for sale. I could also point out that houses built by the local authority “direct labour force” cost more than identical ones built by Wimpey.
The biggest need for housing was in the 1940s (the newsreels all show the London Blitz but vast numbers of homes around the country were destroyed by bombs that missed strategic targets). Instead of dealing with this the Attlee government introduced NIMBY planning controls.
“Quarter of a million homes” – try learning to do mental arithmetic and you will have a chance of getting the decimal point in the right place. The Tories built roughly 3 million homes in the 50s.
All of this is irrelevant to the question of housing benefit for the under-25s, so why lie about it?
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