23 Aug 2010

Housing Benefit: cuts affect 1200 in Stroud


The Government announced cuts of £1.8bn to housing benefit in its emergency Budget soon after coming to power. According to an impact assessment by the Department of Work and Pensions, almost a million households reliant on Local Housing Allowance - the form of housing benefit paid to tenants in the private rented sector - will be affected. On average according to the national charity for single homelss people Crisis, over £600 a year will be lost from some of the poorest households in the country (download figures here).

I contacted Crisis and found that their research shows 1,200 households will be affected in Stroud District. While this is bad news it is worse in other areas where larger numbers of households are affected.

As Cllr Martin Whiteside, Green Party Parliamentary spokesperson, said in our news release (see here): “These cuts could create a surge in homelessness which would cause damage for generations to come. It is also counter-productive as the costs to society of somebody who has lost their home are huge compared to keeping someone in accommodation. The social problems of homelessness include health problems and providing expensive, emergency accommodation”.

I'm quoted saying; “According to the Department of Work and Pensions report, 1,200 households will be affected in Stroud by these changes. Residents will struggle to pay rent and could fall into debt, and worse, homelessness. We could avoid these cuts by properly tackling tax avoidance and tax evasion perpetrated by some of the wealthiest, which could raise billions of pounds a year.”

I've said before for those who still think cuts are necessary should read 'Cuts: The Callous Con Trick' by Caroline Lucas et al, http://www.financeforthefuture.com/TaxBriefing.pdf. See also Green Party news release of 19 June 2010, "Cuts ‘destructive and unnecessary’ says Green Party leader”, at http://www.greenparty.org.uk/News/2010-06-19-callous-cuts-report.html.

I applaud Crisis for raising this issue which has already led to concerns amongst residents locally. As the Crisis report warns cuts to housing benefit could have hidden costs in the future like the social problems of homelessness, including health problems and providing accommodation. It does not make sense to hit the most vulnerable members of our communities.

Housing benefit cut is equivalent to big increase in income tax for poorer people

As Caroline Lucas, Green Party Leader and MP said in her own constituency the cuts are equivalent to paying an income tax rise of over 4.5 per cent: “These particular Tory-Lib Dem cuts will leave more people struggling to pay the rent, more people falling into serious debt and ultimately more people becoming homeless. This is very unfair, coming at a time when many of these people are facing economic uncertainty or even redundancy. Once again we see the Conservative-Lib Dem coalition’s cuts hitting the poorer people in society. The government could avoid these cuts by properly tackling tax avoidance and tax evasion perpetrated by some of the wealthiest, which could raise billions of pounds a year.”

Caroline Lucas MP has written a strongly-worded private letter to David Cameron - she has accused the PM of dealing council and housing association tenants a double-whammy as he proposes to slash housing benefit while also attacking security of tenure (see letter here).

In the letter Caroline questions the PM’s evidence base and calls his proposals “ill-judged”. Mr Cameron has indicated publicly - but with no prior announcement from the Department of Communities and Local Government - that he would like to see fixed terms for all new council and housing association tenancies, lasting as little as five years (see Guardian here). She rightly accuses him of “coercion”, saying that “making continued occupation of a tenant’s home dependent on an official deciding whether or not the tenant deserves to remain there would both remove tenants' security and discourage social mobility.”

Caroline asks: “Why would I want to get a job and do well if this meant I might lose my tenancy?”

Plus what about the cost of the process of assessing who should and shouldn’t lose their home, including the inevitable appeals and possible court cases. As Caroline says: “These are people’s homes not just their houses”

The plain fact is that, there is a shortage of council house supply due to massive and continuous under-investment in council and social housing over decades - made worse by the disastrous policy of ‘right to buy’ which has decimated the council housing stock. I can hardly believe the LibCons are even suggesting these moves. Very depressing indeed.

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