Behind the Housing Benefit debate

After a slow start to the debate about the coalition’s reforms to Housing Benefit things seem to be hotting up somewhat. The government proposes capping payments to households at a maximum of £400 per week (or £21,000 a year). The government suggests that this will affect up to 21,000 households or 2% of claimants in the private rented sector. However, over 17,000 of these households are in London, and this constitutes 11% of such claimants in the capital.

Those who argue against the policy see it as the Conservatives’ ‘final solution’ and as an attempt to ‘cleanse’ the poor from our more expensive cities. Whether one accepts such emotive language or sees it as overblown rhetoric, it is certainly the case that there are some fundamental issues that lie behind the proposals. First, the attempt to limit Housing Benefit implies that no one has an absolute right to live in a particular place. One may have roots in a community and be deeply committed to it, but what matters is whether one can afford to live there. Second, the limiting of payments also suggests that a couple should only have children if they can afford them. The state is no longer prepared to automatically increase benefits indefinitely as family size increases.

Put another way, these proposals question whether the state or the taxpayer has a duty to fund the lifestyles of the poor regardless of the cost. Those in receipt of benefits are to face restrictions on their choices, as is the case with those who rely on their own income. Whether the government intended these changes to have these effects, or just saw the proposals in terms of the money they would save is unknown. Certainly, there was no attempt to debate these issues before the policy announcements. However, this should not detract from what is a quite fundamental shift in the role of the state and its duty to the poor.

 

Dr Peter King is the author of Choice and the End of Social Housing.

Well-meaning benefits to help the poor have created incentives to have children unaffordable by their parents. Reversing this unsustainable policy will no doubt produce a number of hard cases in the short-term. But the government should hold its nerve with a view to the long-term advantages to taxpayers.Undoing many of the welfare state’s incentives to behave irresponsibly (because others are expected to pay) is a massive reform project which will take at least a generation to complete. So that the government is now prepared make a start is indeed good news.

Ignoring the question of whether it is moral to put people on Housing Benefit or any sort of welfare at all is the question of whether the poor are really poor if they are living in Kensington. Should our society be taking people out of a poor neighbourhood into wealth without doing anything to earn it-

Dan, you make an interesting point here. However, putting people on HB in places like Kensington ensure that they stay poor and do not take up work, as there is no way they could afford to fund their housing costs themselves. HB therefore might actually increase the numbers of poor people in rich boroughs.

Actually there was one election document which stated that HB would be capped along the lines the government has proposed. Page 3 of section 2 of the Labour Party Manifesto states:“Housing Benefit will be reformed to ensure that we do not subsidise people to live in the private sector on rents that other ordinary working families could not afford.”It seems that the DWP had been working on such a policy for some while before the election.

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