Conjuring Cameron’s cap trick

David Cameron has pulled the wool over the media's eyes with his housing benefit cap. The real danger comes from the rest of the £2bn package.

At PMQs this week, David Cameron asked “are we happy to go on paying housing benefit of £30,000, £40,000, £50,000?” and described the cap of £20,000 as the “key change“. The Prime Minister continued this narrow focus today:

“Paying over £20,000 a year for the housing benefit of some families is too high. I do not think taxpayers who pay their taxes will understand why we are being so extravagant.”

This £20,000 cap – one of nine housing benefit reforms announced by the Coalition – is an insignificant part of the coalition’s package. It will affect a small number of people and saves just £65 million (3%) of the £2bn earmarked for housing benefit cuts.

A number of papers and journalists have fallen into Cameron’s trap and devoted their coverage to this measure. For example, the Evening Standard, who are cautious about the reforms, made the following erroneous claim:

“Under the reforms, there would be a £400-a-week cap on housing benefit for a four-bedroom home. It is estimated that this could lead to 82,000 households in the capital having to move, raising fears of a Parisian-style shift of the poor to the periphery.”

The New Statesman make the same mistake: “In London, where rents are significantly higher than in the rest of the country, the £400-a-week cap will force as many as 82,000 families out of the capital – the largest population movement since the Second World War.”

This is wrong and perverts the debate making those who oppose the wider package look out of touch with public opinion. The 82,000 number comes from research by London Councils. They estimate that the entire package will lead to 82,000 families being “at risk of losing their homes“. The main problem is the reduction in Local Housing Allowance falling from the median of local rents to the 30th percentile. Just 17,000 families are affected by the cap.

In July, the National Housing Federation carried out a related study which looked in detail at the 10% cut to housing benefit for the long-term unemployed. They found that, “Brutal cuts in housing benefit … will put more than 200,000 people across Britain at risk of homelessness”. Understanding the problems with the entire package, rather than being blinded by Cameron’s rhetoric, is critical to understanding this debate.

That said, the problems with the Coalition’s approach do not mean that there is no case for reform. Some of the Government’s measures should be supported. A cap on housing benefit itself is a good principle to bring in for future housing benefit recipients. Similarly, increasing the age limit for the shared room rate from 25 to 35 (saving £215m) is a sensible measure and, so long as it’s only a temporary austerity measure, the switch to CPI indexation from 2013-14, which saves £390m, is a reasonable way to reduce the deficit. There is also a case for trying to improve the allocation of properties to family size. Finding a solution to the problem of elderly couples remaining in properties fit for a full-sized family is important. But the Coalition’s arbitrary approach is too much stick and not enough carrot.

But these are sticking plasters to the wider problem of housing shortages in the UK. Over 30 years, public subsidy has moved from bricks and mortar to individuals and, although not an easy task, it is reversing this trend that should be the focus of progressive energy in the years to come.

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22 Responses to “Conjuring Cameron’s cap trick”

  1. Political Scrapbook

    RT @leftfootfwd: Conjuring Cameron's cap trick – how the PM is pulling the wool over the media's eyes on housing benefit http://bit.ly/cMkDmZ

  2. Jill Goble

    RT @leftfootfwd: Conjuring Cameron's cap trick – how the PM is pulling the wool over the media's eyes on housing benefit http://bit.ly/cMkDmZ

  3. Don Paskini

    RT @leftfootfwd: Conjuring Cameron's cap trick – how the PM is pulling the wool over the media's eyes on housing benefit http://bit.ly/cMkDmZ

  4. nakedCservant

    @wdjstraw @oflynnexpress http://bit.ly/cMkDmZ” intelligent commentry though temp austerity measures always become a permanent feature

  5. 5 Chinese Crackers

    RT @leftfootfwd: Conjuring Cameron's cap trick – how the PM is pulling the wool over the media's eyes on housing benefit http://bit.ly/cMkDmZ

  6. Angie

    RT @leftfootfwd: Conjuring Cameron's cap trick – how the PM is pulling the wool over the media's eyes on housing benefit http://bit.ly/cMkDmZ

  7. Inside Housing

    RT @leftfootfwd: 'How the PM is pulling the wool over the media's eyes on housing benefit' http://bit.ly/cMkDmZ

  8. Mike Haw

    RT @insidehousing: RT @leftfootfwd: 'How the PM is pulling the wool over the media's eyes on housing benefit' http://bit.ly/cMkDmZ

  9. paul smith

    Until the 1980s rent controls kept the housing benefit budget in check. Now it appears that those on low incomes are being blamed and punished for high rents charged by landlords.

    It was under Thatcher and Major that it was decided for social housing that ‘housing benefit should take the strain’ with the introduction of private finance for new social housing development in 1989. the current Government plan is to scrap all Government support for new development over the next four years and encourage housing associations first and councils later to double their rents (and hence housing benefit) to pay for new homes.

    Of course the universal credit is waiting around the corner and indications suggest that with housing benefit rolled into it, what we are seeing now will be multiplied many-fold.

  10. Stephen W

    A good article. The 10% housing cut in benefit after 12 months is far less defendable than the cap. Opponents would be better targeting the least justifiable elements of the changes rather than the most reasonable ones.

  11. Lee Cain

    Conjuring Cameron's cap trick | Left Foot Forward: David Cameron has pulled the wool over the media's eyes with hi… http://bit.ly/9wKOeV

  12. Ash

    “increasing the age limit for the shared room rate from 25 to 35 (saving £215m) is a sensible measure”

    If we were talking people moving out of their parents’ home for the first time, or people in already in shared accommodation but newly in need of help with their rent because of redundancy, maybe. But it seems a teensy bit harsh if people in their thirties, who may have been living in their own rented flats for a decade or more, are going to be booted out of them and told to find a room in a shared house. What about someone living in a rented one-bed flat without state support who is then made redundant as a result of Government cuts? Is it a ‘sensible measure’ to kick them out of their home as well as their job?

  13. Wendy Maddox

    RT @leftfootfwd: Conjuring Cameron's cap trick – how the PM is pulling the wool over the media's eyes on housing benefit http://bit.ly/cMkDmZ

  14. Richard

    “A cap on housing benefit itself is a good principle to bring in for future housing benefit recipients.” But a cap on housing benefit already effectively exists in practice. I’ve done some research locally in the past two days and spoken to the rent officers of both Bristol and S Glos unitary authorities who both tell me that while the LHA is calculated at the 5th decile of the BRMA (so can be considered as a cap itself, there is also a limit for each type of property. As an example, HB for a one-bed flat will only be paid upto an upper limit of £550 a month by both authorities which share the same BRMA. That works out at £126.92 a week, half of the proposed £250 a week cap.

    Otherwise, I fully agree with point 3. made by Ash. You appear not to have considered any of these possible scenarii.

  15. JAY H

    You make some excellent points.

    As usual the media have made blanket inaccurate claims about a policy in order to create catchy, emotive headlines.

    My feeling is that most, if not all, the new measures will have an extremely difficult passage through Parliament and could, in fact be dropped altogether.

  16. Mr. Sensible

    Paul that is 1 of the ultimate faulse economies; cutting support for house building, and yet then finding yourself paying out higher housing benefits for higher rents.

  17. Richard

    “Finding a solution to the problem of elderly couples remaining in properties fit for a full-sized family is important.”
    This too does already happen. Perhaps LFF ought to do a bit more detailed research and obtain actual figures before making generalisations.

  18. Teresa

    RT @leftfootfwd: Conjuring Cameron's cap trick http://bit.ly/dl5gi8 – read and worry

  19. british che

    RT @leftfootfwd: Conjuring Cameron's cap trick – how the PM is pulling the wool over the media's eyes on housing benefit http://bit.ly/cMkDmZ

  20. british che

    Conjuring Cameron's cap trick – how the PM is pulling the wool over the media's eyes on housing benefit http://bit.ly/cMkDmZ

  21. Dr Syntx

    If a member of my family or indeed any innocent person might be saved by the application of a control order, I support these orders, if not I remain opposed.

    I am also opposed to any increase in tuition fees and nuclear power unless I am in government in which case I am keen on both these policies and I pledge to support universal child benefits, and housing benefit unless I subsequently decide that these benefits are not fair in which case I am opposed to them.

  22. Jo Cox

    Good analysis from @leftfootfwd on how Cameron is diverting attention from the real flaws in Coalition housing policy http://bit.ly/dl5gi8

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