Who is the real loser in the Housing Benefit cap?

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Not easy streetThere’s a lot of talk about “cuts” in housing benefit recently. Witness a recent post on the Shelter website Housing benefit warning which warns that moves in the latest Budget to cut the deficit are likely to “push many familes over the edge”.

Shelter is itself reluctant to use the word “cuts” although more vocal supporters on the left wing of British politics — perhaps with a Labour leadership race in mind — are less sensitive.

Generally, Brits are rightly outraged that the “poor” may be hit harder than anyone else in the battle to repay the massive debts run up by the greedily stupid and the stupidly greedy.

And the further one goes to the left, the louder the outrage becomes.

To attract the hard core support of rank-and-file  Labour Party members necessary to become the next leader of Her Majesty’s Loyal Opposition, it would not be surprising to find extreme rhetoric and hyperbole being spouted.

But getting back to the facts as I understand them — and if anyone wants to challenge me I’m more than happy because much of this post is written from memory and not patient research — the “cuts” in Housing Benefits are actually a cap, limiting payouts to landlords to £400 per week (or around £1,600 a month).

As some of you are well aware, I’m in the final stages of a move prompted by my current landlords’ fears over another much-forecast Budget measure, raising Capital Gains Tax to 40% (ironically, this didn’t happen). I think this gives me some knowledge of the rents being paid in South East London right now. As such I know that there are plenty of large 3-bed houses available in this area for less than £1,600 a month.

Where you won’t find houses in that price range are in what used to be called good Tory areas: Dulwich, Blackheath and the like.

In itself, this may be one reason for the cap.

There have been many stories in recent years of people on benefits living in large expensive homes in good Tory areas, at rents of many thousands of pounds a week, simply because their local councils said it was “the going rate”. With a cap of £400 per week, expect to see less of those.

I’ve also come across evidence that many landlords use the Housing Benefit ceiling as an instruction, not a limit. Some of the properties we considered were being offered at two prices: one for “professional families, NS, no pets” and one for “DSS”. Guess which price is higher?

Okay, the argument goes, the self-funding tenant has more to lose from a bad attitude and deserves a premium for their expected good behaviour but that paints everyone on benefits as a slack, lazy ne’re-do-well, which is patent nonsense.

And who pays for this windfall for landlords, many of whom been enjoying huge profits from the buy-to-let market? The ordinary struggling taxpayer.

There seems almost to be a Parkinson’s Law for DSS rents:

Rent expectations expand to fill the Housing benefit cap available

In this case, reducing the maximum rent available may do much to moderate the costs of renting, especially in South East England where the cap most closely fits.

So, are Shelter telling porkies when they say the “budget announcements on housing benefit could push households over the edge”?

It has to be remembered that Shelter is a pressure group which sincerely wants to get a better deal for homeless people and those in poor-standard housing. But, as with all pressure groups, the ultimate weapon in the armoury of  opinion-forming is hyperbole.

I learned this from a former editor of mine, who was always sceptical of the claims made in PR handouts from people or organisations with an axe to grind. since then I’ve never found his scepticism to be misplaced.

It was summed up by general Claude Auchinleck who said (something like) …

It’s never as bad as they say it is

Hyperbole is often the art of accentuating the negative and minimizing the positive or, as Alan Clark put it while being cross-examined during the 1992 Matrix Churchill enquiry

being economical with the actualité

For any pressure group, even if your case is watertight, it never hurts to pile it on a bit thick.

When I were a proper journalist, I was always “uncovering” stories of gross “unfairness” and “inequality”: most never got past even routine scrutiny. We’re all keen to make a case for ourselves; only the best can make it past the absence of hard facts, and most of those go on to become politicians, or lawyers.

So what is Shelter’s hyperbole? For a start, they load their post from the first paragraph:

Today’s budget announcements on housing benefit could push households over the edge

It’s very emotive stuff: “push households over the edge” — good propaganda language — but all qualified with “could”, a weasel world which almost always goes unnoticed, as in: “England could have won the World Cup (had they not been so crap)”.

The article then says …

this debate must not be muddied by the use of an extreme example from one area

… but one of the footnotes goes on to do exactly this …

£104,000 is the current rate for a 5 bedroom property in Central London BRM

The Shelter piece is not inaccurate, it just choses its facts selectively to make the best case. Central London is an extreme example of an extreme example.

Fact is, there aren’t many 5-bed houses in London anyway: most have been divided up into 1- and 2-bed flats or bedsits — or apartments and studios — to meet the demand caused by illegal immigrants and lesbian unmarried mums, or at least that’s what Daily Mail readers like to think. No wonder a 5-bed house attracts a premium.

“Anyway,” say the middle classes who are footing the bill at the end of the day, “We can’t afford to have kids, so we only need 1 bedroom.”

If I were in Shelter’s place, I would do exactly what they’ve done, but I couldn’t pretend it was a balanced view. As they used to say on the Sun newsdesk: Never let the facts get in the way of a good story.

I’m no stranger to the effects of benefits’ reform myself. Most recently, during a period when I couldn’t seem to keep a job down, I missed out on a month’s Housing Benefit after my application “disappeared” in official channels and “missed the deadline”. Despite many appeals to the local council housing office — during which I too piled on the hyperbole — I was firmly informed that “rules was rules”.

More pathetically, in a much earlier spell of joblessness, I had a 60 pence washing allowance stripped from my benefits after a visiting dole inspector decided that the stinking, greasy kitchen sink I shared with six unemployed layabout flatmates was adequate to do a week’s laundry.

I’m sure it cost the DHSS many times more than 60p to send out the benefits inspector. To this day it simply seems mean spirited.

No, the dilemma to be faced by Housing Benefit claimants shortly is: Do I need to live in Nunhead/East Dulwich or can I make do in New Cross?

As any sane person knows the answer is: neither …