Housing Benefit

The proposed cap on housing benefit is rapidly becoming the story that will not go away for the government. First Simon Hughes announced there was no-way a majority of Lib-Dem MPs would be able to support it in it’s current guise. More damagingly, Boris came out against the policy, somewhat clumsily comparing it to ‘Kosovo-style cleansing’. The fact he later retracted some of the statement after a phone-call from Number 10 will do little to convince a sudden change of heart.

At the heart of this is the Tories compulsive need to simplify solutions to the point they not only fail to solve the original problem they also create new ones – the cut in child benefit to middle and high income families is a case in point.

Returning to the issue of Housing Benefit, I think the Coalition government have a point when they suggest that it is unfair when families are effectively penalised for going out to work. They are also right when they suggest that the current benefits system can actually lead to price inflation, putting more money into the hands of private landlords. So, hopefully, we can all agree that things need to change. (And Labour need to stat being clear on areas of agreement as well as opposition).

However there is nothing fair about the Tories way of doing things – a universal cap of £400 per week for a 4-bed house might be simple, but it is also wrong. Does anyone really think that rental prices in Darlington will ever equate to London, or Brighton come to that? Top-end estimates suggest that up to 80,000 households could be forced to move – and they are likely to have to move away from the unaffordable South-East and relocate instead to other regions of the UK. And why not you may ask? Apart from the obvious question of fairness for them – particularly if the family includes school age children who will have to leave friends and support networks behind – there is a simple practicality issue. With welfare, education and local authority budgets being slashed across the UK, can already struggling public services outside of the capital pick up the families London seemingly no longer wants?

A friend of mine commented on Twitter earlier that whilst it is fine to oppose, it is a little hollow if you are not putting forward an alternative. Which is a fair-point. I don’t pretend to have all (or indeed many of) the answers but my basic principle will be that sometimes complex, long-term problems need sophisticated and long-term solutions. I believe that any solution needs to consider the following:

– For the long-term we should start now on a sustained programme of council-house building. This not only helps councils by ensuring that at least some housing benefit ends-up back in their pockets rather than lining those of private landlords, it also offers a much needed capital-spending boost to the economy.

– Any proposed cap on housing benefit needs to be established on a local, or at least regional level and then reviewed on a regular basis.

– Any new cap needs to be implemented over time, with exceptions and extensions for the infirm, the elderly and those with children already in full-time education.

It will be an interesting couple of months as this makes it’s way through parliament – and I wouldn’t bet against some major concessions being made before it completes it’s journey.

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