How to win votes and alienate people? — June 25, 2012

How to win votes and alienate people?

*This post is focused solely on David Cameron’s “plans post-2015” on housing benefit, not all his welfare reform speech*

There can be no doubt that David Cameron’s speech today on welfare reform shows how worried he is about his political life-span. It was a cry for help from the Tory right; a pledge to attack the “entitlement culture” in Britain; and the first sign of desperation from the normally perfectly assured Conservative leader.

Cameron is lost. Politically he doesn’t know where he stands, so he has done what any Conservative leader would do and has attacked welfare recipients, but crucially, YOUNG welfare recipients. He is seeking to perpetuate the myth that under-25s are lazy and feckless. We are far from it.  Why is he doing this? To win back the traditional Tory vote. His plan to slash housing benefits for under-25s (and save £1.8bn) is a perfect example of “conservatism”, it is a vote winner. Here’s the real killer, the vote he’s winning here is the over-60s vote, the key voting age (in terms of actual numbers). There is no doubt about it, cutting housing benefits for under-25s is the beginning of a vote winning series of policies from the Conservatives. Come 2015, they could be election winning policies.

The problem is, they are terrible policies. Ill-thought out, ill-timed and irresponsible. Anybody up for another round of omnishambles?

One million young people are unemployed, how is taking away £90 per week (on average) in housing benefit going to help young people? Removing housing benefit from anybody retrospectively is cruel. It is not the claimants fault that the Government’s expenditure has gotten out of hand, it is the Governments. On the one hand, the Government has said in the past ‘You clearly need financial help with housing, and we will provide £x to cover this based on your needs.’ They then turn around and say ‘People think you receive too much, we need their votes, so, sorry, but we’re taking it away, you probably still need £x, but oh well. Votes are more important than your housing benefit.’

The last Government and some of our pensioners are responsible for excessive spending and a housing bubble, which forced the average price of a home in the UK to over £225,000. Does David Cameron really think that the majority of under-25s can afford a 40% deposit? His idea is crazy.

The Government should be relaxing planning laws, and encouraging private enterprise to increase the housing stock in the UK. We need more affordable homes, with low interest rates businesses should be confident to invest, but our red-tape stands in their way.

Of course, there are disincentives within our welfare system that need to be tackled, but Cameron and the Tory-right are hoping that if they shout loudly enough and for long enough, people will believe them that benefit claimants are the scourge of this country. People are on benefits because they require financial help, not simply to “sponge” off the Government.  How about for once, we actually clamp down on tax evasion, instead of always focusing on demonising benefit claimants.

We spend £5bn on the universal benefit of a free bus pass for pensioners. Why not make that means tested and save the £2bn there, instead of attacking the next generation? Oh, because pensioners vote. How very cynical of you…

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Reviving Right to Buy — April 3, 2012

Reviving Right to Buy

David Cameron and Grant Shapps today announced the revival of one of Mrs Thatcher’s most popular policies – the Right to Buy. The Act allowed people living in social housing to purchase their home from the Government at a discounted rate (depending on how long they had resided there). At the 2011 Conservative Party Conference, Cameron had pledged to increase the discounts available. The idea is to encourage hard-working families to get themselves on to the property ladder, to join the self-sufficient middle classes. A step up in the world if you will. Cameron said:

I want many more people to achieve the dream of home ownership. In the 1980s, ‘Right to Buy’ helped millions of people living in council housing achieve their aspiration of owning their own home.

The scheme is fantastic in principle. But, and believe me I hate having to do this… As Polly Toynbee rightly pointed out ten years ago:

The forgotten fact is that although it was life-changing for many of the 1.5 million who have bought their homes, in many places – the nations’ property hot-spots – it has been a calamity now turning into a crisis because there was no policy to replace all the lost social housing.

The Government has to use the receipts to replace the homes taken off the market, if possible it should be done on a one-for-one basis. If we simply plod along with a repeat of the 1980s version and don’t learn the lessons then it will be a disaster. We shouldn’t favour an increase in social housing ownership over helping first-time buyers, we should be pushing the two together. The new scheme will create jobs in the housing industry which is good news, but the real drive in the industry has to come from the private sector, not the state.

Another issue is that the Government must change its legislation that allows the home owners to rent out their council house, the Government can be praised for aiding people into home-ownership, but the state shouldn’t be allowing people to profiteer at the expense of the majority of taxpayers.

The benefit cap & social housing — February 28, 2012

The benefit cap & social housing

Is an increase in social housing the answer to the benefit cap debate?

My regular followers on Twitter will be sick to death to hear me once again talk about the benefit cap. But when my dissertation is partially on the benefit cap, what can you expect? I have blogged about the benefit cap in the past, as have many others.

This week has seen a bit of a revival in the debate, especially in The Daily Mail who as ever, is on a crusade against “benefit scroungers”. Yesterday they ran a story about how over 100 people are claiming so much in housing benefit that they could easily afford to be paying a mortgage valued in excess of £1m.

Shocking headlines like that invoke a reaction for sure. Firstly we shouldn’t victimize existing tenants who “are costing the tax payer so much in housing benefit”, it is not explicitly their fault that the Government pays such ridiculously high rents on their behalf. (They could try getting a job, as many Daily Mail readers would fall over themselves to suggest). The real issue that has to be tackled is the housing benefit itself.

The benefit cap of £26,000 a year has caused a lot of debate, yet if you look closely in many instances, especially in the South East and London the bulk of a claimants benefits are incurred by housing benefits. £400 a week (the cap on housing benefit to come in) is nowhere near enough to cover rents of existing tenants in these places. “To live in Kensington is not a right, but a privilege.” – this is a line often used to ignore the rights of those existing tenants, one I myself have been guilty of suggesting.

I am not suggesting that the Government should continue paying the rents of these people, but to attack them personally, is a redundant argument. They are not to blame for the lack of rent control on housing benefit and spiralling costs of housing.

And herein lies the crux of the problem. There are NO rent controls on housing benefit. Private landlords have been allowed to charge rents as high as they choose and the Government has continually been paying them. There should be no way that the Government pays £5,000 a month in rent for anybody. In fairness to the private landlords, they are simply following the capitalist, free market approach, they aren’t to blame for garnering as much profit as they could.

So should we have rent controls? No. I don’t think this is idea either. Rent controls are illiberal, I’m not in favour of state regulation on the whole. It would force private landlords out of the market in the long run as their profits would be eroded, and the availability of housing would fall even more.

So what should the Government do? It should create more social housing. Yes, this would increase Government spending in the short term, but it would drastically reduce its spending in the long-term. Gone would be the days when the Government paid out £1,000 a week rents for housing benefits. Gone would be the days when housing benefit cost the country £20bn+ a year.

An increase in social housing would be to every taxpayers advantage. With expensive rents no longer being paid by the Government and claimants relocating  to social housing, private landlords would have to reduce their rents to compete for customers. The housing market could once again become competitive, something that hasn’t happened since the housing bubble boom.