By Pete Challis
It may not be the main topic of conversation at ‘country suppers’ but the Prime Minister displays appalling ignorance of the way housing benefit works. Here are two examples – but readers may have others.
Cameron appears not to know that one in six people claiming Housing Benefit has got a job and that the fastest growth in HB spending has been amongst working people who can’t afford their housing costs. He seems to have been afflicted by the same memory loss that Iain Duncan Smith frequently displays. Or perhaps he’s learning to ignore facts altogether, like Grant Shapps – see Twitter hashtag #shappstistics
The other day Cameron contrasted people in and out of work with young people ‘living at home’ and young people getting ‘housing benefit’.
We are sending out strange signals on working, housing and families. Take two young people: one who has worked hard, got themselves a reasonable job and is living at home thinking, “Can I afford to buy or rent a flat?” whereas another has got himself on to Jobseeker’s Allowance and then gets housing benefit.
Since Conservative Minister Peter Lilley changed the rules in 1996, young people under 25 have only been eligible for the ‘shared accommodation rate’ of housing benefit. It is not £90/week as Cameron claims. The rate ranges from £45/week in Sunderland to £123.50/week in Central London. There are only 3 of the 152 Broad Rental Market Areas (the areas used by Rent Officers to determine the maximum that will be paid) where it is more than £90/week, and in 116 it is less than £70/week. The average is £65.30/week. The Government extended this to single people under 35, in January.
The full list can be found here http://www.voa.gov.uk/corporate/RentOfficers/LHARates/lhaJuly2012.html
Non dependant deductions
Cameron’s wide ranging ‘Welfare’ speech exposed contradictions between his rhetoric and Government policy on Non Dependant Deductions (NDDs).
“If a family living on benefits wants their adult child to stay living at home they are actually penalised – as soon as that child does the right thing and goes out to work. You get what’s called a non-dependent deduction, removing up to £74 off your housing benefit each week. I had a heartrending letter from a lady in my constituency a few weeks ago who said that when her son leaves college next month, her housing benefit will drop significantly, meaning her family may have to split up. This doesn’t seem right”
David Cameron 26 June 2012
What he failed to mention was that his Government has been making things far worse. In the 2010 Budget George Osborne not only ended the freeze on NDDs that had been in place since 2001 but increased them faster than inflation in order to return them to 2001 levels in real terms – as the Impact Assessment from DWP makes crystal clear:
12. The decision to uprate the non-dependant deduction rates in three stages to what they would have been had they been fully uprated since 2001 in line with growth in eligible rents and Council Tax was announced in the June 2010 Budget as part of a package of measures designed to bring Government expenditure under control and reduce the fiscal deficit. Uprating the non-dependant deduction rates is a reverse of the policy since 2001-02 to freeze the rates and is intended to provide a fairer deal for taxpayers and provide an expectation that adults make a reasonable contribution towards their housing costs.
Source: Equality Impact Assessment: Income related benefits: change to the on dependant deduction rates: Feb 2011
June 2010 Table 2.1. Budget Policy Decisions
Deductions for non-dependants: reverse previous freezes on uprating and maintaining link with prices from 2011-12. £ million.
2010-11 0 2011-12 +125 2012-13 +320 2014-15 +340