Majority think Tory cuts ‘will make young homeless’


by Don Paskini    
10:07 am - October 8th 2012

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George Osborne is planning to announce a further £10 billion in welfare cuts, with his spin doctors briefing that ‘the first targets are likely to be housing benefit for the under 25s and restraint on the uprating of benefits’.

When David Cameron suggested ending housing benefit for under 25s earlier this year, 59% of people said that they thought this would lead to more young people sleeping rough.

The Guardian analysed the proposal and found that:

“If, as Cameron said, the proposal would affect 380,000 people, this would include over 200,000 people with children. The PM said that some would be exempt, such as youngsters leaving care, and those escaping domestic violence or abuse.

The PM suggested many youngsters do not really need to to live independently. He pointed out that 210,000 under 25′s were living in social housing – suggesting they did not need to be taking up a scarce resource.

But social landlords told us that tenants under the age of 25 tend have genuine social needs, such as homelessness or health issues. In many areas social housing is not an option – meaning that people had to find accomodation in the more expensive private rented sector.

Readers pointed out that housing benefit had been an essential temporary safety net to enable them to find work in place far from their family home, especially if the home was in an area where there were few jobs, or where they would be unable to pursue their chosen career.

Campaigners point out that around a sixth of under 25s on housing benefit are working, which reflects low wages and high rents. The Green party has pointed out that young people working full time on the mimimum wage won’t earn enough to pay for an affordable room in the average shared flat in any borough of London.

Cameron’s proposals to make the family play a larger role in welfare also appear to conflict with at least two existing policies which penalise tenants for keeping their older offspring at home.”

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About the author
Don Paskini is deputy-editor of LC. He also blogs at donpaskini. He is on twitter as @donpaskini
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Reader comments


Readers pointed out that housing benefit had been an essential temporary safety net to enable them to find work in place far from their family home.

Ah, so you are proposing that HB claims should be time limited.

For how long do you think people should be able to claim it?

“For how long do you think people should be able to claim it?”

Until they earn enough money that they don’t need it any more.

The CPS claims that 53% of households receive more in benefits and services than they pay in direct tax. Apparently, it could perhaps be 90% in Scotland…(And this takes no account of those households dependent on public sector wages and salaries.)

If this is anywhere near the truth, it cannot continue for much longer, as it is simply unsustainable! When will the ‘welfare’ lobby wake up?

4. alienfromzog

@3 Tone;

The CPS claims that 53% of households receive more in benefits and services than they pay in direct tax. Apparently, it could perhaps be 90% in Scotland…(And this takes no account of those households dependent on public sector wages and salaries.)

Hands up everyone who spotted the error in this? Yes? Yes, you at the back? That’s right…the poor pay a much higher proportion of indirect taxation…

“Apparently, it could perhaps be 90% in Scotland”

You just made that up didn’t you?

I notice he also has a plan for turkeys to vote for Christmas, by allowing employees to give up their rights in return for shares in their employer’s company. Quite how much benefit each individual worker will see from ‘allows owners to award shares worth up to £50,000 to their staff’ remains to be seen. Technically speaking 1 share each valued at 1P a piece fits into that definition.

zoggy @ 4:

“the poor pay a much higher proportion of indirect taxation”

OK, but so what? A gross non sequitur! Your proposition does not disprove the proposition that

’53% of households receive more in benefits and services than they pay in direct tax’

Almost every country in the world has been moving towards a flatter tax system – from memory, 49% of countries had a 60% tax on higher earners in 1980, but now it’s about 3%. And the higher % of indirect taxation paid by lower earners is an incentive to earn more…Just walked down my high street and almost every shop is advertising for workers…

8. Chaise Guevara

@ 7 TONE

“OK, but so what? A gross non sequitur! Your proposition does not disprove the proposition that

’53% of households receive more in benefits and services than they pay in direct tax’”

How are you supporting your own proposition that this is “unsustainable” given that it doesn’t cover all forms of tax?

PS @ 5:

“You just made that up didn’t you?”

Do keep up, dear boy:

http://www.dailymail.co.uk/news/article-2214477/Nine-Scottish-households-benefits-pay-tax.html

PS and remember my ‘apparently’ and ‘perhaps’….

tone @ 9

If you had the decency to read your own link you would have seen it was written by Ruth Davidson, not a real person, but just another lying Tory bastard who is throughly hated in her own Country, so not exactly a reliable source of information.

Isn’t funny that the vermin are all about ‘taking the poor out of tax’ on one thread, yet on another they are seen to complain about such a move. Which is it? Should the poor pay ‘more’ or ‘less’ income tax?

It depends on what crap they are trying to push.

Typical Tory lice.

@11 – Well, hurry up and vote for Independence then wee laddy and you can keep the natives on the buckfast and fried mars bars with your own tax instead of stealing from the English tax payers.

Dtp @ 12

We do not need to steal ‘English’ taxpayers money as we generate more than enough of our own; about a grand per capita more than we receive back from the ‘British’ (note: NOT English) treasury.

CG @ 7:

“How are you supporting your own proposition that this is “unsustainable” given that it doesn’t cover all forms of tax?”

Because benefits are a huge % of public expenditure and we have a huge deficit – with benefits not funded by tax receipts (let alone a sovereign wealth fund)?

socscot.bot @ 10: You must be computer-generated as your limited intelligence is clearly binary:-

“Isn’t funny that the vermin are all about ‘taking the poor out of tax’ on one thread, yet on another they are seen to complain about such a move. Which is it? Should the poor pay ‘more’ or ‘less’ income tax? ”

The poor should pay no or much less tax. And receive fewer or no benefits. Why should the state (as it does, at present) take money from the relatively poor, deduct an administration charge (to ‘create’ jobs?) and then pay it back to said relatively poor in ‘benefits’? Can’t even you in your leftist asylum see this is crazy?

And if you disgree with Ruth Davidson’s figures, can you counter them with others?

14. Planeshift

“Just walked down my high street and almost every shop is advertising for workers”

You may have noticed it is the middle of october – and christmas is coming. Every retail outlet recruits more staff for christmas, and hence advertises for workers.

That Daily Mail article does not justify the figure – it states that reflects the number of households who recieve more in public services than they contribute but does not specify what they mean. It wouldn’t be that unusual to find that if we divide total spending by population (to get spend per person) then we would find that figure to be higher than a significant percentage of the population, based on looking at salary levels and what people on £X would pay in tax. But again the mail don’t specify how the stats have been calculated.

It’s also a stupid highly rhetorical form of analysis. To give you an example at the individual level; if I get diagnosed with Cancer, the cost of the treatment will be beyond what I have paid in tax. Does this mean I would then be classed as a scrounger? or dependent on the government?

What if you live in the falklands – the cost of UK defence is going to always dwarf what the falklands contributes (and we judge this as a whole, as the whole of our military spending contributes towards deterence of external aggression)?

Ruth Davidson and the Daily Mail are simply not understanding that this crap is exactly why the SNP will win the referendum. The idea that 90% of people in Scotland get more than they pay in is frankly ludicrous – extraordinary claims require extraordinary evidence not assertians designed to appeal to prejudice. (although I could believe it for Wales due to the higher proportion of pensioners here combined with a far poor economy)

15. Chaise Guevara

@ 13 TONE

“Because benefits are a huge % of public expenditure and we have a huge deficit – with benefits not funded by tax receipts (let alone a sovereign wealth fund)?”

They ARE funded by tax receipts. And a lot of those “takers” are going to be pensioners and other people who aren’t paying much into the system now but did in the past.

Anyway, the non-sequitur remains yours, as @3 you seem to hold up the figure in the OP as proof of lack of sustainability, when it fact it misses out a huge amount of vital information (not only indirect taxes, but also how much we get from those who are net providers compared to how much we get from net drains).

What is the percentage of benefits as part of public expenditure?

Chaise @ 15

What is the percentage of benefits as part of public expenditure?

The one single fact we know about benefits is they go straight back into the economy, very quickly. People tend not to save benefits (apart from the very well off)they are spent as soon as they come in, therefore sustaining local economies. That local shop down your street for example. Ask him about benefits and no doubt he will spew the usual Right Wing crap about ‘something for nothing’, but check out his clients; few of the richer, car owning people will be in there buying his overpriced stuff, it will be those on benefits that keep him in clover.

Cutting benefits or better still replacing them ‘food stamps’ will leave him in a worse state than he realises. The worse thing for him would be the introduction of a food bank in his area, see how his local business goes then

17. Shatterface

Maybe, just before the next election, the Tories will send out leaflets in Scotland saying ’90% of people in Scotland receive more in benefits than they pay in direct taxation. By the way, there’s a 90% chance that this means you. Think about that before you vote for us to take that money away.’

TONE @ 13

And if you disgree with Ruth Davidson’s figures, can you counter them with others?

We have been producing figures for people like Davidson and the rest of the Tories and Labour for thirty years, but none have sunk in.

An iron law of political economy is when we get a gaggle of politicians all in the one place an abuse of statistics will follow. For the Conservatives to complain about the housing benefit bill is a bit rich when it was their policies that created the high housing benefit spending by selling off council houses at a steep discount. Nothing wrong with allowing people to buy their social house but not at a discount.

The houses were part of the country’s capital stock and the discounts represented a direct state subsidy to the buyer that was monetised when they sold. Since the capital stock fell most of the housing benefit spending now represents a flow to plug the gap where the stock used to be. A flow that is a state subsidy and being captured by private landlords. What would be fascinating if anyone has the figure is what percentage of the housing benefit budget is going into former social housing now in private hands. I would imagine this figure would be high and is nothing other than a state subsidy to someone who has added no value to the wealth of the nation.

Where we get the usual abuse of statistics is the notion that somehow welfare spending is increasing. Well it is and it is not. Working age welfare spending as a share of GDP and the share of government spending is virtually unchanged in 30 years. What has increased is the state subsidy being captured by private landlords with no increase in utility for society. An unemployed worker in Newcastle receiving unemployment benefit is a welfare recipient. A private landlord renting a former social house and receiving housing benefit is also a welfare recipient. Hopefully the unemployed worker will return to useful employment. No such hope for our rentier who is only a drain on society and should have a LVT applied to to their unearned increase in income. Moreover, the total welfare spending budget has increased because the total of retired people in the population has increased.

Lumping everyone together whether they are students or retired is an abuse of statistics. The way to look at these things to see who is contributing and who is net receiving from society is to split the population into quintiles. The figures are here.
http://www.ons.gov.uk/ons/dcp171778_267839.pdf

Other than the bottom quintile every quintile of working age contributes more in tax than the benefits they receive. However, this changes when people retire. Even groups that we could roughly call middle class change into receiving more from the state ( benefits and indirect benefits ) than they contribute because they are no longer earning a wage. So any increase in the total of the retired group changes everything. The welfare budget increases not because we have more feckless people but because we have more old people. Around half of all health spending is consumed by the retired.

The only way that we will reduce the percentages of government spending spent on welfare is by recapturing the state subsidies that are currently going into the pockets of private landlords and giving less free stuff to old people. However, they vote and they will vote for free stuff paid for by the working age population. Therefore, if we accept as fact that the retired population is increasing and lots of the spending on this group is not discretionary. Unless somehow the pot increases then spending on the working age in every quintile is going to fall. The myth of an increase in fecklessness is just cover for the transfer in resources from the young to the old.

Richard W:
“Since the capital stock fell most of the housing benefit spending now represents a flow to plug the gap where the stock used to be.”

This is a misconception and a common one. Each time a council house was sold, the stock was reduced by one, but the demand was also reduced by one. Therefore, no change.

There are other valid questions that can be asked:

a) Should more council houses have been built in line with demographic changes?
b) Why is owner-occupier percentage going down?
c) How many houses need to be built each year?
d) Should council houses be sold at a discount? (Don’t forget, by the way, that the discounts were a reflection of rent already paid, and represented a transfer of wealth to the less-advantaged).
e) Etc

20. Jack C

” This is a misconception and a common one. Each time a council house was sold, the stock was reduced by one, but the demand was also reduced by one. Therefore, no change. ”

Jack,

The stock I am speaking about was the gross fixed capital stock in public hands. The demand for social housing is a flow and that makes demands on a reduced capital stock. Hence why the proportion of the housing benefit budget going to private landlords has increased. The increased flow of money that the housing benefit budget represents is not an increase in wealth but is merely paying off rent-seeking on capital that already existed.

No, they’re two different things.

When a council tenant bought their home, the tenant and home were both removed from the equation. The council would have x-1 houses to rent, and x-1 tenants to rent them to.

I agree that there are now more private landlords who have bought to let, but that is not related to council house sales.

If it’s only, or predominantly, private landlords who can buy as these houses as they come on the market, that’s a separate problem. (The problem being that houses are over-priced through a lack of supply in recent years).

Jack, the population whether we are speaking about the people who would rent or the ones who would buy is not fixed. Reducing the stock by one and offsetting by one would only work in a static population where no ever dies.

” I agree that there are now more private landlords who have bought to let, but that is not related to council house sales. ”

Of course it is related if they are renting back the same houses that used to be in the social housing sector and collecting the state subsidy represented by housing benefit. Since the houses were already built the capital already existed and housing a social tenant in that capital did not represent much of an additional cost. However, the flow of funds that is housing benefit for former social housing to private landlords is an additional cost to the state.

24. Chaise Guevara

@ 16 Jim

“The one single fact we know about benefits is they go straight back into the economy, very quickly.”

Agreed; in fact, you’ve beaten me to my follow-up point.

jACK c @ 22

When a council tenant bought their home, the tenant and home were both removed from the equation. The council would have x-1 houses to rent, and x-1 tenants to rent them to.

Not true, people would often start their lives in public sector housing but once settled into (at the time) a full time (dare I say job for life?) career with a settled income, they would vacate that house and take out a mortgage on a privately own house, freeing up a public sector house. Selling them public sector housing took the house out of the public sector and caused housing shortages. Some people would remain in lower paid employment and never leave the public sector housing stock and that is fair enough, but the better, bigger, houses were sold off, forcing relatively lower paid to take out ruinous mortgages that many where unable to afford.

Council housing was not build for a laugh. It was built, in no small part by One Nation Tories, to fulfil a great social need. Look no further to the housing market since the housing stock has been reduced. Since the ending of the council housing building programme, the house prices have shot up exponentially. An ex council house bought in the early eighties could fund a retirement to Spain by the end of the Nineties. All well and good, but those people did not contribute value to the house all that happened is that the next generation were forced to fork out more than they could afford to pay for a huge manipulation of the market engineered to make those ‘eighties’ couple feel richer. Of course, their children and grandchildren are now saddled with huge mortgages round their necks and are forced to go cap in hand to mum and dad, but hey, it was nice when it lasted.

Richard W and Jim,
The problem you mention is the failure to adjust the council house stock to meet new demand. Selling council houses wasn’t the cause of this.

Neither are the younger generation saddled with huge mortgages as a result of council house sales. Again, the reasons lie elsewhere.

The “market manipulation” you mention has been around for a decade and more. Actually it hasn’t been a manipulation, it’s been a housing bubble fuelled by cheap money and the bizarre belief that rising house prices are a good thing. (They’re not for the reason you mention: if my house increases in value beyond inflation, the next generation have to pay more. And I still just have the same house. Many borrowed against the equity, in the belief that they’d made money, when they hadn’t).

Finally, the retirement in Spain was a good thing surely? The problem was that other things did not remain equal (in particular, prices weren’t maintained at a stable level).

What the sales did was enable a much wider proportion of the population to own their own homes, and to take the rewards of so-doing. The discounts meant that those who had paid in for years, but who were now getting to old to get on the ladder could also take advantage. This really was a transfer of wealth to the less-advantaged (and onwards to their children), and a good thing too.

(Btw, before you ask, my family didn’t benefit).

@TONE

If you haven’t been dragged back to the asylum can you please answer this question: If welfare payments are cut to the poor without offering them jobs that pay living wages, what do you think will happen to the poor?

Thank you.

28. Turbot Terry

Is discrimination on age allowed? Has the equality act been repealed.

29. Chaise Guevara

@ 28

“Is discrimination on age allowed? Has the equality act been repealed.”

Given that pensions are already allotted based on age, I assume the act doesn’t apply here.

I’ve come to learn that term “Daily Mail scum” on Liberal Conspiracy means English taxpayers working in the private sector, ie. those funding unproductive activity in the rest of the UK economy.

@16 @24

Yes benefit payments are re-cycled straight back into the cigarette, alcohol and online bingo industries.

32. Chaise Guevara

@ 31 LondonJ

“Yes benefit payments are re-cycled straight back into the cigarette, alcohol and online bingo industries.”

Aaaand that’s how we know that you have no idea what you’re talking about. You have some ridiculous little stereotype in your ridiculous little mind and you’re incapable of looking past it to reality.

Londonj ‘ 31

Even if that was true, these industries employ tens of thousands of people and sustain local shopkeepers as well. I wonder how many Tory voting shopkeepers rely on benefits to keep them in cars?

Perhaps we should limit shops to the benefit cap of £26,000 a year? Once £500 in any given week in benefit have been spent in one shop, the shop is not allowed to take in any more unemployed punters?

Londonj,
“Yes benefit payments are re-cycled straight back into the cigarette, alcohol and online bingo industries”.

You don’t actually get much for 70 quid you know. Anyway, so what? Do you have a list of approved products?

Absolute twunt.

35. Man on Clapham Omnibus

Ever since I funneled my income through a number of off shore companies I now recycle much of my earnings into tax deductible fois gras,expensive cigars and Bolli.
Despite my friendship with Warren Buffet, who says he pays less tax than his secretary, I am so glad I haven’t lost my connection with ordinary people.

Then let the PLEB’S fight back commence with everyone concerned helping the course.


Reactions: Twitter, blogs
  1. Jason Brickley

    Majority think Tory welfare cuts ‘will make young people homeless’ http://t.co/2whHlAXT

  2. leftlinks

    Liberal Conspiracy – Majority think Tory welfare cuts ‘will make young people homeless’ http://t.co/1pY8Ipbm

  3. Richard Exell

    Majority think Tory welfare cuts ‘will make young people homeless’ | Liberal Conspiracy http://t.co/ExxGnYiG via @libcon

  4. Mark Carrigan

    Majority think Tory welfare cuts ‘will make young people homeless’ http://t.co/G0r6iHS9

  5. Eugene Grant

    Majority (59%) think Tory #welfare cuts ‘will make young people #homeless’ | Liberal Conspiracy http://t.co/xgcHbIBN @libcon #HBu25 #cuts

  6. Daniel Flynn

    Majority (59%) think Tory #welfare cuts ‘will make young people #homeless’ | Liberal Conspiracy http://t.co/xgcHbIBN @libcon #HBu25 #cuts

  7. David Gillon

    Majority (59%) think Tory #welfare cuts ‘will make young people #homeless’ | Liberal Conspiracy http://t.co/xgcHbIBN @libcon #HBu25 #cuts

  8. Lilacwheelz

    Majority (59%) think Tory #welfare cuts ‘will make young people #homeless’ | Liberal Conspiracy http://t.co/xgcHbIBN @libcon #HBu25 #cuts

  9. BevR

    Majority think Tory welfare cuts ‘will make young people homeless’ | Liberal Conspiracy http://t.co/cXWrOmHf via @libcon

  10. BevR

    Majority think Tory welfare cuts ‘will make young people homeless’ | Liberal Conspiracy http://t.co/1G06VqYs

  11. Dizzying Crest

    Majority think Tory welfare cuts ‘will make young people homeless’ | Liberal Conspiracy http://t.co/1G06VqYs

  12. Dizzying Crest

    Majority think Tory welfare cuts ‘will make young people homeless’ | Liberal Conspiracy http://t.co/cXWrOmHf via @libcon

  13. Malcolm Evison

    RT @libcon: Majority think Tory welfare cuts 'will make young people homeless' http://t.co/soKM1UAv

  14. Mike Bennett

    Majority think Tory welfare cuts ‘will make young people homeless’ | Liberal Conspiracy http://t.co/1G06VqYs





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