No love, no, sorry, but you\’re not poor

She added: \”We\’re stuck in this position. Whoever is making these decisions has obviously never been in the position of being poor.\”

My word, what is happening? The dripping\’d crust that is the only meal of the day being torn from her toddler\’s fingers? The teenage daughter being sent out to make pennies on corners from strangers?

Louise Ryan, 41, who lives with her husband and two children in Islington, north London, will see the £438-a-week benefit, which covers the rent, reduced to £340 under the changes to housing benefit introduced this month.

No, sorry, but this really isn\’t poverty. One benefit, recall, just one benefit that this family receives, is to be cut from a little under median full time wages to a little under median full time wages after tax. From £23,000 a year to £18,000 a year.

This one benefit is to be cut, and recall that this benefit is receivwed free of all taxation, to median pre-tax individual income. They\’re getting more in one benefit alone than the average person going out to work in the country sees in their paycheque. After this cut.

There are all sorts of ways one could describe this situation but fucking poverty ain\’t one of them.

That housing benefit alone, after the cut, yes, even with family size of four, puts them in the top 17% of the world\’s income distribution.

123 comments on “No love, no, sorry, but you\’re not poor

  1. Ah, but you see, they might have to move out of London, if they can’t afford to live there any more.

    And that’s a disaster. Apparently.

  2. All valid… but the opening quote in your post doesn’t come from the Islington woman, it comes from someone living in Halifax, who appears to be in a somewhat less privileged position.

  3. £438-a-week benefit???????

    Even allowing for inflation, My now retired father, never earned that much. That such largesse was ever available, courtesy of the taxes of other struggling taxpayers is the real surprise.

  4. .. and most of this money flowing right into the pockets of private landlords! One might think that people who consider themselves to be ‘of the left’ would be opposed to such a thing. One might question whether they would applaud the Tories if they, instead, increased the amount of housing benefit paid.. or would that be the trigger for them to get indignant about this awful transfer of public wealth to private interests?

    As an aside, I half heard a radio piece yesterday where someone claimed that the new cap will mean thousands of people being unable to get 2-bed properties in… Liverpool!

    Now, whilst I accept that prices in London are a bit special.. it being a major world city n’all.. but is it *really* impossible to find enough places in Liverpool for £1200 a month? If so then, surely, that can only be *because* housing benefit is too generous, and unless there are legions of wealthy types eager to move into all these incredibly expensive houses which only the top 25%* could afford to rent privately.. then presumably all the rents will drop right back to the HB maximum anyway?

    For the record, where I live (a provincial city not entirely dissimilar from Liverpool in size etc) decent 2/3-bed houses in nice parts of town start at around £600 pcm.

    * figure pulled from the sky.. but it’s going to be a relatively small group of people able to splash down that much on rent (and/or mortgage), especially up here in the barren North.

  5. What’s wrong with bread & dripping, anyway? And I should point out it is impossible to have dripping unless you have previously had meat. Unless you buy your dripping, that is – in which case you could have spent the money on something a little more nourishing, couldn’t you?

  6. Actually for people living in the suburbs living in Islington is a luxury we can’t afford.

    Thank God for these changes.

  7. I live in islington. I live in a council. My husband and I are both fortunate enough to have jobs, and so are not entitled to housing benefit. But who knows how long that will last. We live with our two children. One who was working until his firm closed down early december, the other at Uni, in london, because she wanted to limit her debt. neither child, should they ever choose to leave home, will be able to live close to us (unless they get council accomodation, not likely) and so their children will not have the close family links our family has always managed to maintain. We (the women of the family) have always been able to afford to work, because we were close to grandparents, aunts, cousins, all who have helped out with childcare we would never have been able to afford. I live opposite my mother (73 yrs), who has had a hip replacement, my siblings live nearby, and we all take care of her needs. Saving the tax payer fortunes obviously, as we don’t leave it to the NHS or care homes to take care of our elderly.

    Islington is a very close community, with families who have been here for generations enjoying close family ties that SAVE the taxpayer and do not cost them. I am disgusted at the “Libertarian” view on what we, as a society are about to witness. I am fully aware that many people are happy to move as far away as possible, handing over responsibility for local connections (elderly relatives) to the taxpayer, but some of us would like NOT to be forced to abandon those responsibilities. This is a MUCH bigger issue than the writer is covering.

    There is, without doubt, a scam going on re housing benfits. Private property owners are charging extortionate sums to rent out proerties to those in desperate need. A robbery of tax payers money that has been allowed to occur unchallenged since we saw rents uncapped. And that is what needs to be addressed.

  8. I hasten to add, I am a born and bred Islingtonisn, who has watched as the Borough changed. With the greedy moving in on the needy and taking from us all they could get their hands on, including affordable property. A great shame, it used to be a much nicer place to live.

  9. Let’s be sensible about this is it the families on housing benefit that actually receive this money , of course it isn’t , it’s the wealthy PRIVATE landlords that are creaming of the state and who caused this that evil BITCH that started the Right To Buy scheme in the 80’s . She allowed buildings to be sold off cheap without provision to replace them , she bred the greed that has seen this global collapse , deregulated banking , encouraged people to take on debt and destroyed communities .

    STOP BLAMING THOSE UNFORTUNATE ENOUGH TO HAVE TO RELY ON BENEFITS AND DIRECT IT AT THOSE THAT HAVE CAUSED THE PROBLEM AND ARE STILL GAINING FROM IT .

  10. There would be no need for massive housing benefits if rent controls were still in place. Rachman is alive and well and starting to flourish again. The greedy are once again taking over at the expense of the needy. If the “nasty poor people” can’t afford the exhorbitant rents they should take themselves off to Liverpool along with all the ancient relatives and leave London and surrounds to the deserving wealthy or is that the plan being brought in by the back door. My appologies for the cynicism and sarcasm but this blog deserves it

  11. Kate makes valid points and she is absolutely correct when she says that this problem is far greater than the writer of this blog has covered or actually probably even realises.

    It is easy to use bad language to attack those less fortunate than ourselves, but this surely says more about us than it ever does about the people being bullied and attacked, many who have seen their living standards and employment status change this past 18 months. What takes a far greater degree of intellect is to recognise a problem and try to sort it out thus actually helping people instead of insulting them, swearing at them and condemning them to hell for simply being poor, disabled, vulnerable, old, disadvantaged, unemployed etc.

    Cutting their housing benefit and making them homeless is not a solution, it is adding to a now rapidly growing problem. Or when visitors flood here from abroad to see the Olympics and Diamond Jubilee they are going to be greeted by images of the indigenous population begging and living rough on the streets of not just our capital, but in towns and cities right across this country, because the changes to the HB will not just affect those living in Islington. Luton council and other local authorities have already secured bed and breakfast places for the homeless, how much will this cost the taxpayer?
    I remember the cardboard cities that sprang up the last time we had a Conservative government, for sure we will see these again.

    Sad indictment on the 6th richest country in the world that we cannot even be seen to treat our vulnerable with compassion and humanity.

  12. Kate:

    1) it is not a libertarian view that we should ‘hand over responsibility’ for anything to the tax payer, quite the contrary actually

    2) no longer receiving money from other people is not the same thing as being forced to do something.

    3) capping rents works great if you want to limit the amount of rental property available

    4) the biggest drive for increasing property prices comes, as Tim keeps on pointing out, from the scarcity value (i.e. planning permissions) not from greediness

  13. There would be no need for massive housing benefits if rent controls were still in place.

    That would explain why affordable rented accommodation is so easy to find in New York.

  14. Fuck me, where did the last three bleeding hearts come from?

    I’m straining to think of a situation where I could justify taking money from poor people and handing it over at a rate of £2000 per week so that the man in the film OH links to can live somewhere convenient.

  15. Winston // Jan 2, 2012 at 5:13 pm

    Fuck me, where did the last three bleeding hearts come from?

    Labour party Blackberry alerts ? Odd isn’t it that Tim posts loads of stuff every day and suddenly three people turn up at once who I don’t recall seeing here before ?

  16. Kate, assuming you’re genuine, you really don’t need proximity to maintain family links, my sisters both moved a long way off when they had young children, the family ties if anything grew even stronger and my Mother is extremely close to all her grandchildren.

  17. Alex, research. No tax pound subsidises rent. Council houses are not “state” owned, they are LA owned. A little education for you. And i am no bleeding heart, of that you can be assured.

    Tim adds: Erm, really, you shouldn’t try and use the “no subsidy” argument around here. For we all know what “opportunity cost” means. You should try looking it up.

    The difference between market rents and “social” rents is a subsidy.

  18. And Alex, its a little socialist thing called “affordable housing” Built so that every person in the UK could afford to live in a property. We are messy little critters when left to fester in cardboard boxes under bridges…… The reason we are permitted to live in council houses in inner cities is quite simple. If you shipped us all off to the outer hebrides in little tents, you would have no workforce to rip off. I mean employ…..

  19. @ Tim newman, “affordable” in Manhatten? Point me toward it please?

    @ Thornavis, so your mother made a 4 hour daily roundtrip to look after grandchildren (in two seperate homes?0 daily then right? No I thought not….

  20. Subsidies on this scale totally distort both local rents and local wage levels.
    Why should we the taxpayers be filling landlords wallets just because people want to live where they can’t afford?
    Why should we the taxpayers be indirectly subsidising businesses paying wages that do not cover local living costs ?
    Time for some adjustments.
    As for landlords, they invested in housing, i.e. they risked their capital for return. Time they were exposed to the market instead of being spoon fed our taxes.

  21. Hers an idea. If employers paid their workforce enough, we could all but do away with housing benefit. Novel huh?

  22. Kate: “I live opposite my mother (73 yrs), who has had a hip replacement…”

    …someone paid for that.

  23. @ blatjang, people dont live where they “cant” afford. they live where they have work, or links to communities (yes, even they still exist in some parts of the UK). or where they feel safe, or have familial support, as described above. Grow up, this idea will cost more long term than it could ever dream of saving. It is shortsighted madness.

  24. Mick her and my father paid for it. He lived to seventy (and was still working until he died). they paid in far more than they will ever take out. Not everybody who uses the NHS, council housing, or indeed the benefit system are scroungers. many of us pay into it, all of our working lives. We cant all afford to hide our money in far flung tax havens 🙂

  25. Here’s an idea Kate – why not give each LA the amount of HB subsidy up to the national average then in London say let the taxpayer, businesses and tourists make up the difference.

    If you want the prestige of living in an international city you have to fund it.

    Believe me you can rent a nice terraced property in Lib Dem led Stockport for about £600 pcm tops and get a job.

  26. Kate.

    @ Thornavis, so your mother made a 4 hour daily roundtrip to look after grandchildren (in two seperate homes?0 daily then right? No I thought not….

    I was referring to this :
    “neither child, should they ever choose to leave home, will be able to live close to us (unless they get council accomodation, not likely) and so their children will not have the close family links our family has always managed to maintain.”
    Of course if your definition of close family ties is Granny doing unpaid childcare then I’m afraid I have to disagree.
    BTW how’s Islington Labour party ? I know a couple of people who are members, say hi from me.

  27. “@ blatjang, people dont live where they “cant” afford. they live where they have work, or links to communities (yes, even they still exist in some parts of the UK).”

    You do because you are fortunate enough to have subsidised housing.

    “Hers an idea. If employers paid their workforce enough, we could all but do away with housing benefit. Novel huh?”

    Not very, you would need to replace housing benefits with unemployment benefits though. (And you would have to define “enough”, “enough to live in nice expensive suburbs”? “Enough to buy 2 cars”?, “somewhere close to the value added to the business”? )

  28. Tim newman, “affordable” in Manhatten? Point me toward it please?

    Exactly: Manhattan enjoys rent controls, and as such there is nowhere to rent.

  29. I think again, research. Some tenants in Manhattan enjoy rent controls, those whose tenancies are transferrable etc. Sadly however, not all………

  30. @ thornavis, to most working families, close family ties means granny doing “unpaid” childcare. Most mothers would be unable to work without this support You see most working mothers are not high flying lawyers, or bankers, who can acyually afford paid childcare. Many work in Tesco, or the school playground…… often on minimum wage.

  31. @ Emil, or enough simply to be able to pay the rent, the elctric and the food bill for the week, in the area that houses them close enough to be able to do the job?

    @ John, I am sure those who desire to live and work in Stockport are very glad of that fact. However, as a born and bred londoner, one who has thus far managed to be able to afford to live here, I would rather stay in the community that houses my job and family. Alas, this government seems intent on socially cleansing, not only mine, but many other boroughs too. very sad times indeed. Dickens note book woul be bursting at its seams.

  32. Actually Kate, there are “paradises” that enjoy rent control, such as Sweden. Ever tried getting a rental apartment in Stockholm? Nope, I thought so because there aren’t really that many …

    you basically have four choices to get a place:
    1) buy one
    2) stand in a municipality administered official waiting system for about 15-20 years
    3) go onto the sub-let market for a couple of months at a time
    4) buy a rental agreement on the black market (it will you dearly, I promise)

    Or you can of course choose to live in one of the “nice” suburbs

    (ever heard of incentives? not that many left for property developers to build rental housing you see or for rich people to buy apartments to rent out. You see that is why price controls always have the same impact, they lead to scarcity of supply)

  33. “@ Emil, or enough simply to be able to pay the rent, the elctric and the food bill for the week, in the area that houses them close enough to be able to do the job?”

    Rent for what? 300 square metres with a garden and 5 bedrooms? What food?

  34. Kate: at the margins, given the very low income at which 20% income tax starts, you are arguing that a family with a single earner on minimum wage should subsidise people like you living close to your family so you can have free child care. I realise it’s not obvious, and not what you are asking for out loud, but it’s the natural consequence.

  35. @ Hopper. My rent ISNT subsidised…….. However, as a tax payer, I have absolutely NO objection to my taxes being used to pay housing benfit. I am not a fan of it going into a private landlords pocket, would musch rather it paid for affordable housing, but until we rebuild our depleted (from the right to buy) stock, then needs must.

  36. “Dickens note book woul be bursting at its seams.”

    Oh, FFS. No one in the 19th century would have entertained the idea that government might remove by force funds from poor working people in order to permit unemployed people to live in some of the most expensive real estate in the country.

  37. ” I am not a fan of it going into a private landlords pocket, would musch rather it paid for affordable housing”

    This is really an astonishing example of Orwellian Newsspeak. What does the ownership of an asset have to do with its affordability?

  38. Kate // Jan 2, 2012 at 6:32 pm

    @ thornavis, to most working families, close family ties means granny doing “unpaid” childcare. Most mothers would be unable to work without this support You see most working mothers are not high flying lawyers, or bankers, who can acyually afford paid childcare. Many work in Tesco, or the school playground…… often on minimum wage.

    Yeah I know that actually, being of the people myself and a horny handed son of toil, I know it’s an article of faith to everyone on the left that anyone who doesn’t share their world view is an Eton Old Boy with several offshore bank accounts but it ain’t so. Not relevant to the point I was making anyway.

    I see that the leader of the Islington Council is a certain Cllr Catherine West, I wonder..?

  39. So the argument is “I like how I live, so you should all pay tax to let me live this way”

    No Kate, no.

  40. Kate: suppose your council rent is 400 pounds a month, and that a comparable house in the private sector would cost 600 pounds a month. Your council is giving up the opportunity of an extra 200 pounds a month of income, which it could spend for instance on street lighting to reduce crime or on books for the local schools.
    Now you may argue that making your accommodation cheaper is a better use of the money than the council’s alternatives, but you can’t argue that such a trade-off is happening. That’s what everyone else here is talking about when they say that your rent is subsidised.

  41. @ Emil, the ownership has everything to “do” with it.

    You see, council housing is not subsidised by central government. The money paid goes to the LA, and they get no more nor no less than the amount charged. In the main this money comes from the full rent paying tenant (not all council tenants are in receipt of housing benefit).

    The vast majority of housing benefit is paid to private landlords (not LA’s).

    Now, in Islington, the average rent for a four bed (council) property is 160 per week. This would mean that the amount of housing benefit that a person who was entitled to it could receive would be far below the cap. Where we see stories about these extortionate payments, we see private landlords. Now, when these payments are made to private landlords, the coffers get nothing back. However, central government takes about a third of income from council rents back into the treasury from LA’s.

    This is why I do NOT like my tax pound going to private landlords via housing benefits. I would much rather see LA’s build affordable Council housing in Boroughs, to an amount that is required. Then those who choose to live in properties owned by private landlords would have to pay their inflated rents, and the rest of us could pay what we can afford, and be helped by HB, where necessary.

  42. @ Hopper, that explanation does not = the meaning os subsidised I am afraid. Council rents are not, in any way shape or form, directly or indirectly, subsidised by the tax payer.

  43. Kate: an alternative use of that 200 pounds for the council is to reduce the amount of council tax taken by 200 pounds per month. Still think you’re not subsidised by the (council) tax payer?

  44. @ Hopper – No, I KNOW (not THINK) that council rents are NOT subsidised by the tax payer. No matter what ridiculous spin you try to put on it.

    Tim adds: OK, let’s try this out. If there’s a special tax break for Tim Worstall, is this a subsidy to Tim Worstall? Many on the left would say that it is, yes. Or let’s look at the arguments about tax dodging. It really is said that if one person dodges taxes (legally, through avoidance, of a legal tax deduction) tyhen this means that other taxpayers have to pay more tax in order to fund public services.

    No money moves from the taxpayer to the person with the tax break, so this is the same as your claim about council rents. No money is going from the national taxpayer to paying for council housing. However, the situation is just like with the tax break. Because council (or social if you prefer) renters are paying less than market rents then there is less money flowing into the system than if market rents were being paid. So, every other taxpayer has to pay more into the system in order to pay for necessary public services.

    Nowe, if you want to say that tax allowances, rtax deductions, are not subsidies then fine. But if you claim that they are subsidies then so are below market rents. For exatly the same reasons. The opportunity costs to everyone else.

    BTW the current nett value of all non marketable tenancies (which is the capital value of below market rents, same thing) is £600 billion. That’s what the total system of subsidies is worth to other taxpayers, that’s what other taxpayers, over the years, have to put in because below market rents are charged.

  45. @Kate in Islington

    You want to try living in Luton darling – it looks like downton Calcutta these days.

  46. Kate – can you answer me a question? In the old days the LA had virtually free rein to call on the coffers of Central Government to pay for exorbitant rents, no?

    Who do you think pays for this? Let me give you a clue – poorer taxpayers in other parts of the country that DON’T have access to the prestige and opportunities of London.

    I find the left’s talk very regressive as all it does is preserve prestige and entitlement and so perpetuating the system of entrenching the power of London and the SE.

    I wouldn’t mind so much if London hadn’t squelched on the deal – ie you remember the banks don’t you? London used to say `we need our prestige because we bail you out by having the city of London`. No lateral thinking was done about WHY that had to happen.

    And so it goes on – in the end it’s other taxpayers who are subsidising a lifestyle of privilege and we need to tackle the geographical inequality of the UK.

    I say `let the regions compete on an equal playing field with other areas by using their lower land values and wages`

    Then we might be talking.

  47. Kate,

    The revered Hills Report commissioned by Labour estimated the implicit subsidy in below market rents charged to Council and Housing Association tenants at £6.6 billion a year.

    This practice has two significant consequences. It creates the opportunity for “profit rent”. This leads people with Council tenancies at below market rents to cheat the system by moving out and renting their properties out at market rates. In some instances, incompetent Councils have been paying these rents thorugh Housing Benefit – ripping the taxpayer off twice.

    Secondly, it denies your landlords higher income from rent which they could then use to fund the building of more homes, which in turn would keep market rents down.

    Of course, people whose income is low should get some help through Housing Benefit to meet the market rent, but rent control and security if tenure as enacted between 1915 and 1964 destroyed private renting, forcing those who could not get the limited number of available council homes, to buy, thus pushing up housing values, thus making housing “unaffordable”.

    (Right to Buy, by the way, made no difference. Those homes were not available, they had people living in them.)

    We now have a little more sanity with a strong private rented sector providing 3.5 million homes since the 1987 Housing Act allowed landlords to charge market rent and get their properties back if they needed them at reasonable notice.

    It was Labour’s mad scheme (Local Housing Allowance introduced in 2006/07) which provided for rents up to £2,000 a week to be paid which saw landlords push up rents (Government subsidies will do that). The cost of Housing Benefit was £13bn in 2006/07 £21bn in 2009/10.

    The poposed changes impose a sensibly lower level which will, ultimately bring rents down as the volume of cash in the market is reduced. Many landlords facing a choice between a small drop in rent and a void and the cost of re-letting are choosing to accept the lower rent.

    Were social landlords given the same freedom and planning rules relaxed to allow more building, rents and values would stabilise and possibly even fall. Thankfully, the Government is trying to do both those things.

  48. Kate
    You say council rents aren’t subsidised. Seriously? So you could move into an equivalent private sector rental property in your area and pay the same? So presumably you’d have no problem with selling off all council properties, since it would be just as cheap for ex council tenants to rent from private sector landlords. Only it wouldn’t, would it? And that’s the point. Council rents are a highly inefficient way of dealing with poverty, because they involve taxing the working poor who don’t have a council property to pay for cheap rents to benefit council tenants who are better off than them – either through work or the benefits system. By all means argue for fairness. But recognise this is not the right way to achieve it.

  49. Kate seems to think she is the target of the cuts. No. She and he husband are paying their way. She (and he) would actually benefit from cutting the money wasted by limiting *one part* of the benefit system to the median wage that has to pay for a normal family’s food and clothes and transport to work (and perhaps a Christmas present for the kids) as well as rent.
    What she needs to understand is that (i) the original “Right to Buy” plan was that the receipts from selling council houses would be spent on new built council houses (this was eviscerated by Treasury civil servants hired by the Wilson government who limited the funds to be spent on new houses to the net receipts after paying off all associated debt); (ii) the sharpest fall in the stock of social housing occurred under “New Labour” not Thatcher and (iii) her daughter is very lucky to be able to live at home while attending university: there was no university within cycling (let alone walking distance of my home when I was 18.
    Er, I totally agree with the last paragraph of her “6.59” post that appeared after I started on this. Except that the amount of “affordable housing” required in Islington would be a couple of million dwellings – so the only answers are the whole area covered by tower blocks that ignore planning limitations or a free market with HB.
    I used to live within walking distance of Islington, paying an unsubsidised rent; I couldn’t afford (even if I had wanted it) a black-and-white TV but had a radio that was a 21st present from my sisters and brother-in-law; I just didn’t know how to reply to a single social housing tenant with a flat as big or bigger than mine when she told me that she couldn’t afford the licence for her colour TV. (A nice lady – she gave a tape of “The Who” because she thought I might like it, which I did when I later bought a tape recorder). I mention this solely to illustrate the perception gap between “the rich” and “the poor”.

  50. @Thornavis

    That Catherine West appears to have moved to the UK from Australia in 1998, and she speaks five languages so probably smart enough to understand what a subsidy is. Having said that she’s obviously still dumb enough to join the Labour party, but I suppose clever enough to use that to get a cushy job.

    Maybe that should be my next career move. I wonder has anyone ever used an election as a Trojan horse? Like, got themselves elected to a safe Labour seat and in their victory speech turned around and said, thanks guys, but I’m really a Tory, see ya!?

  51. Winston: Shaun Woodward, elected Conservative MP for Witney. Lasted 2 years before joining Labour, but that was probably just to keep up appearances.

  52. However, as a born and bred londoner, one who has thus far managed to be able to afford to live here, I would rather stay in the community that houses my job and family.

    My Dad’s kids were born in Wapping, E1. Should they therefore be entitled to subsidies to live there for their entire adult lives? Good job they weren’t born in Kensington, eh?

  53. @ annette murphy
    You obviously have NO IDEA why council houses were built. They provided housing for those left homeless from slum clearance.
    Now if you think that people lived in slums when they could afford to move into non-slum privately-rented property, you need a brain transplant from the nearest self-sacrificing rabbit.

  54. Pingback: OSK - Social Justice and the Housing Benefit Cap

  55. John Moss – I completely agree with your comment. However, I would point that rent controls continued beyond 1964. Labour introduced the fair rent system which supposedly excluded a scarcity factor from the rental market. The effect was also to remove rented housing from the market and for the period 1964 to 1985 most new lets were bogus “company lets”. It was only after the assured rental system was introduced in the mid 80’s that property owners were prepared to rent – as you say 3.5 million private tenancies now exist and the system has been successful in providing homes to many.

  56. @surruptitious evil
    Local Housing Allowance from Liverpool City
    council is £103.85 for 2 bedroom and £115.38
    for 3 bedroom. I think there were some moves
    to take 10% off those figures for people on
    benefits for more than a year, or maybe 6 months. Hopefully this skinflinting/flaying has
    been kicked into touch.
    As for council houses being below market rent…
    well these houses are owned by local authority, so in that case anyone who owns their property ie having already paid for it, even built it, should
    then be accused of getting subsidised cos they aint paying market rent on it are they? only a
    little council tax. Which is nowhere near ‘market
    rent.’

  57. “the biggest drive for increasing property prices comes, as Tim keeps on pointing out, from the scarcity value (i.e. planning permissions) not from greediness” … well yes and no – without planning constraint London would doubtless stretch to oxford and beyond, and probably run along the south coast. Parts would be hugely built up, population could top 100 million. Rents would generally be lower, however the most exclusive parts would still be very expensive.

  58. Oh dear. It would seem that my weekly wage (before tax, mind!) is just under the lower rent allowance they’ll get. And we pay a mortgage, rates, etc., too.

  59. Pingback: Why Housing Benefit needs to be cut | Bridge Ward News

  60. Mr Nougat,

    Your rates are per week, not per month. So if with 2 minutes on Google I, who’s been on a couple of courses in Liverpool, can find a 2 bedroom city centre furnished flat, no haggling no nothing at a net rent of £50 per month post LHA, then I think hardly think that signals that the deserving poor are being thrown destitute out on to the streets.

    As for:

    As for council houses being below market rent…
    well these houses are owned by local authority

    Who paid for them with money extracted from where or who exactly? Ah, yes, us. And normally via central government from the consolidated fund – the source of 80 to 85% of local government funding. So, in low rent areas your taxes are indeed paying for Londoners’ excessive Housing Benefit.

    so in that case anyone who owns their property ie having already paid for it, even built it, should then be accused of getting subsidised cos they aint paying market rent on it are they?

    Yes, they are indeed being subsidised. But it is by their past selves. They forwent the use of the income in the past – paying a mortgage or funding a build – in order to get the benefit of not having to spend in the future. No-one here is complaining about voluntary subsidies (and not many about a flat tending to redistributionist overall tax system) – the complaint is about involuntary subsidies from the lower end of the workforce to support people who want to live in expensive areas of London but can’t be bothered to earn the necessary wedge. As Tim said – £18k tax-free per year even after the cuts. That’s a lot of money.

  61. Kate#31
    Nonsense.
    If for reasons outside their control families and individuals can no longer live where they would like, where their community is, where their job is, yes that’s tough. And it seems unfair, but it isn’t the taxpayers problem.
    If a landlord is faced with getting £250 off a tenant or £500 off someone else, guess what happens? There are only so many homes in an area, and if other people move in, also guess what happens?
    Paying these levels of subsidies distorts and drives up the market at the taxpayers expense. It doesn’t help.
    I was brought up on a sink estate- its still there. I’m not. I moved to where ever work was, the south, the north, and abroad.
    However much we might like to live where we were born, it isn’t always going to be possible and it isn’t a right.

  62. @ John. No I dont think I am a target of the cuts. I know I am not, and I know I am not likely to be. We pay, and have all our lives paid, full rent whereever we have lived. What you all seem to have trouble grasping, is that I dont mind that my tax pound goes toward hosuing benefits for those in need (as I said would rather the money went to LAs and not private landlords, but until the rebuild needs must). It is impossible to respond to all of your posts but a few snippets.

    Again, no matter how you dress it up, council housing is NOT subsidised by the tax payer, either directly or indirectly.

    I am not a “Labour Stooge”, whatever you might mean by that. I am a working class woman, who has always paid her way because I have always had the health and ability to do so. Who wouldn’t even mind paying a bit more tax, obviously toward peoples benefit and not toward bankers bonus.

    Nobody says we have the right to live where we were born, but we should not be forced into moving due to an ineffective government change. this will not save money it will cost money long term.

    @ Tim Newman. What subsidies? Nobody subsidises council rents. If they have a council home and pay full rent, they are paying the full amount on that property.

    @ Mohatma Kote, I have family in Luton, and they love the diversity. i am sorry it doesn’t sit well with you. Do you vote UKIP by any chance?

    @ John Moss, i dont think anybody could say “sub letting” is a good thing, but this could be combatted without throwing londoners out on their ears. As most council houses (indeed I think all) will fall within the cap (and so wont be affected by this madness), this move will do nothing to address that issue.

    And now to bed with me. Somebody pays rent…

  63. My wife and I both work in Kensington (Imperial College) and I would always consider us to be fairly well off since we both work and have jobs that pay quite a bit more than average (I make £35k, she makes £50k)

    Like most people who earn our kind of money and work where we do we don’t live nearby. We live in Hounslow and commute every day for 40 minutes along with a couple of million other people.

    The idea that I am paying for people who don’t work to live somewhere I can’t afford makes me want to cry.

    Everyone wants to live somewhere nice, if we could live in Kensington we would, and then we could pick up our own children from school rather than sending them to child minders and after school clubs.

    I just can’t for the life of me think up a decent excuse for this kind of thing.

    As for the chap in the video with the £2k/week rent, the landlord would never get that from a private tenant, not in a million years. My guess: When offered the £400/week under the new limits he’ll take it. It’s government incompetence that breeds this, nothing else

  64. Tim Newman. What subsidies? Nobody subsidises council rents. If they have a council home and pay full rent, they are paying the full amount on that property.

    See Tim’s response here. Either disagree with it, or address it, but don’t pretend this hasn’t been explained in this very thread.

  65. Kate, Kate, Kate, how can we make this any clearer?

    Imagine a taxi driver, he has two potential customers standing outside his cab , one an ordinary punter, the other his brother in law. They both want to go 20 miles but in opposite directions. If the driver takes the punter he’ll get a full fare of £60, but he knows if he takes his brother in law he’ll have to do it a mates rates, say £30. But if the BiL takes any other cab he’ll have to pay the full £60.

    He takes his BiL anyway and loses out on the extra £30 he could have made. The taxi driver is down £30, the BiL got a below market rate ride because it was subsidised by the driver missing out on a full fare.

  66. ” I have family in Luton, and they love the diversity.”

    Ah, now we know you’re a Labour stooge! ‘I like something, so everyone else better like it too. Or else!’

    You might want to look up ‘diversity’ in a dictionary – it seems the only diversity you aren’t in favour of is diversity of opinion, so you aren’t really in favour of it at all, are you?

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  68. Can I just add my vote to the Kate your either a Labour stooge or a complete fool camp.
    Nobody has the rigth to choose one of the most expensive areas in London to live in, then expect everyone else to fund their chosen lifestyle for them.
    If you cannot afford to fund your own lifestyle then do what everyone else does and find somewhere cheaper to live.

    Have you no shame woman? Your taking money that could be better used to aid the really poor.

    For shame.

  69. poor in this country (excluding life for the poor saps who have to work to fund the ‘poors’ liefstyle) now means only 1 sky+ box, a rather sad and lonely 40″ flat screen tv and just a playstation 3 OR a Wii (not both).
    I think Louise Ryan, 41, parasite on the taxpayer needs to be taken aside and shown what real poor is

  70. *Again, no matter how you dress it up, council housing is NOT subsidised by the tax payer, either directly or indirectly.*

    Well, why are we not seeing council housing being erected left right and centre if it is “free” to build?

    Oh yea, it’s all planning, yea……….

  71. “(I) wouldn’t even mind paying a bit more tax”

    Absolutely priceless. Kate, you are almost beyond parody.

  72. @kate

    You talk about diversity, but that is not what I am talking about at all.

    You go through some areas of Luton and you won’t see a single white face.

    That is not diversity.

    Funny how those who preach diversity never seem to live in the most “diverse” areas.

  73. I can’t help noticing, Kate, that (1) you bemoan the gentrification of Islington (your post 13 describes arrivals as ‘the greedy’ and little better than thieves: ‘A great shame, it used to be a much nicer place to live.’ I take it that this is not a reference to the large homosexual community in the borough?) but (2) celebrate ‘the diversity’ of Luton (your post 73).

    My wife is Polish, and it is a revelation to me how recent Polish immigrants, in particular, work extraordinarily hard. I suspect that the historical analysis will be that the latent English working class is simply not prepared to work and (importantly) risk as much as immigrants are.

    Dickens (your post 39) already has a suitable character: Harold Skimpole from ‘Bleak House’, who lives with John Jarndyce at the latter’s expense.

  74. Every time (any) government gets involved and pours complicated money into the system, you get opportunists finding ways to suck it back out again.
    (see later for exception) Whether they are well motivated or not, governments (local and national) are dumb and wasteful. Whether it is Thatcher selling council houses to stop Labour buying votes with cheap rents, or a sequence of Labour governments fattening social security & housing subsidy payments to levels higher than the average working wage, they create more problems that they solve.
    The problem for London is simple. It is a third-world capital city with too many businesses and too many people; If you want a cross-section of the people to live and work there, then local councils have to build housing for rent. It doesn’t need any subsidy, it needs a calculation of supply and demand, and the private sector rents will drop too as a bonus.
    The Banks are desperate to lend money to AAA rated customers. If the councils can’t find a way to raise money on the financial markets under the current rules, then change the rules.
    If you look a the amount of Railtrack and British Waterways Board (or whatever they are called) land kicking around unused in London, and the power of compulsory purchase, you could sort this out in 12 months with a bit of conviction and commitment.
    Jeez, they can even grant themselves planning permission………….

    * exception- regional support grants to move businesses out into the regions is the only way you will reduce the load on the south-east. With the ongoing mediocre calibre of people in national and local government, it is only going to get worse.

  75. @Mahatma Kote

    Funny how those who preach diversity never seem to live in the most “diverse” areas

    Dahhling, we’re the Labour Party – our function is simply to represent those areas.

    Of course we wouldn’t live, go to hospital or send our children to school there. Good grief, have you seen some of these places? They’re completely ghastly!

  76. A cassus belli for change in the present benefits arrangements; it is scandalous that this family gets more in benefits than the average working man and this is only one payment from a vast raft. No Council Tax to apy, no Water Rates to pay, Unemployment Benefit, Child allowances, Free School dinners.
    This is the end result of Gordon Brown’s spending spree and why this country is broke.

  77. I dearly hope Kate is a Labour activist. In the next year we need much much more of people like her telling ordinary hard working people that they are too stupid to understand why it is morally wrong to work hard and pay their taxes in order that Kate’s friends can live where they want to. For free.

    Ordinary working people understand that £400 a week HB is not poverty.

    Ordinary working people understand that they can’t live anywhere they choose.

    Kate doesn’t. The Labour party doesn’t.

    Please carry on.

  78. I’m afraid Kate is representative of a large swathe of the UK population, for whom the concept of ‘opportunity cost’ is as alien as ancient Egyptian hieroglyphics.

  79. Hanlon’s razor, or “misunderstandings and neglect create more confusion in this world than trickery and malice.”

    Kate is convinced that her house isn’t subsidised, that she is paying the right amount of money – but that the housing market has been manipulated, which is why everyone else is paying more.

    That’s pretty clear from

    “With the greedy moving in on the needy and taking from us all they could get their hands on, including affordable property.”

    and

    “A robbery of tax payers money that has been allowed to occur unchallenged since we saw rents uncapped. And that is what needs to be addressed.”

    It doesn’t seem to have occurred to Kate that there is a link between house and rental prices, and what the growing difference between local authority rents and market rents really represents.

    Alex

  80. I wonder why this person’ Kate’ is not bleating on about her socialist friends who are earning £100,000 plus a year and blocking council housing or thos who are sub-letting at exorbitant rents. Actually, we can solve the problem easily if we stop allowing iommigrants to swamp our country.

  81. More evidence Kate is in fact a complete Labour stooge. Note the way she accused one poster on here of voting for UKIP. As if this was akin to being a kiddie fiddler or something equally beyond her understanding. Though maybe she is dyslexic and meant to accuse the poster of being in the gasp shudder ‘BNP’? Being a Hardline Marxist or member of the SWP would of course in Kate world be absolutely acceptable. Gotta love them haven’t you.

  82. The Thought Gang.

    I’ve lived in Halifax. If you’re paying £438 a week on rent, you’re an idiot.

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  86. Kate

    Your only material objection to the cap seems to be that ‘it will cost more than it saves’ based on your own anecdotal evidence of caring for children and elderly family members.

    This claim, which cannot be proven one way or the other, is actually not the most important consideration, nor should it be for Labour and the Left.

    A housing benefit system that pays more to those out of work than the average person earns in work, makes a mockery of the benefits system and makes a mockery the notion that you should work hard and pay taxes. The cost is irrelevant. This is about principles. Even if your claim of it costing more than it saves is true, it should be disregarded, because the principles at stake are more important.

    Labour believes in benefits (so much so that they have tried to entrap that vast majority of the working population in the benefits net). Yet the housing benefit system currently undermines the public’s support for welfare, which in turn undermines the electorate’s trust in Labour.

    I would have thought this would have been blindingly obvious?

  87. Let us assume for ten seconds that the payers of Council Tax are not the same as “the taxpayers”.
    Nevertheless, council house rents are *still* subsidised by the taxpayers because the houses were built with the help of loans from the Housing Corporation, a central government body, at a subsidised rate.
    Next:
    Conservative philosophy/policy is that we (those of us earning more than the average wage – obviously not all conservatives earn more than the average wage, but …) should pay taxes to cover the essential costs of the state and subsidise those whose wages are not enough for their families to live decently without luxuries. Labour instead says that almost everyone should pay tax and that we should subsidise council house tenants whether they need it or not (including some highly-paid Labour MPs).
    New Labour decided that council tenants should only pay 50% of the market rent for their properties. I do not see how that can not be subsidised.
    Like Kate I don’t mind my tax pound going to those in need, but I don’t see why I should indirectly subsidise the accommodation of Labour MPs (actually I object to the extent to which we subsidise the pensions of all MPs, but that’s a different question) and directly, through my Council tax, those who can afford to have two cars including a newish Jaguar parked on the drive in front of the garage that presumably contains the best car.
    I think it ridiculous (just bloody stupid) that New Labour expected people to simultaneously pay income tax and claim income-related benefits. If you need to claim benefits you don’t have spare money out of which to pay tax.

  88. Just in passing, I love that the guy who links to this lists this on his blog:

    “Tim WorstallThe Top Five Journalism Villains of 2011 |”

    OK, so the second half doesn’t refer to the first half, but I like to think for many people, not naming anyone in particular, Polly, Ritchie, etc, etc., it is true.

  89. This happens in Scotland but not to the degree as in the SE. Many folk (including me) would have liked to live near family but we couldn’t afford it.

    Landlords need to be controlled but also people shouldn’t be accommodated in properties whose owners charge extortionate rents paid for by taxpayers.

    It is a complex issue but one which could be resolved in time.

    Has that Baroness paid her dues yet? You know, the one who lives in a London housing association house?

  90. @john77

    If you need to claim benefits you don’t have spare money out of which to pay tax.

    Absolutely right. But what you do need to administer such nonsense is two entire government departments employing thousands of people, situated in Labour strongholds.

    So, HMRC (based in Liverpool) removes the tax from your income at source – then the DWP (based in Newcastle) gives some of it back to you in benefits.

    It’s a laughably inefficient and expensive way of operating, but of course Labour cares little for efficiency and expense where taxpayer’s money is involved.

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  92. I’ve lived in Halifax. If you’re paying £438 a week on rent, you’re an idiot.

    I don’t think he said that. The £438 per week benefit is being paid in Islington.

  93. Discussion seems to be going around in circles, but I’d be interested in a sensible response from the regulars to one of Kate’s points. To whit: would we be worrying so much about what will happen to the old – and who will pay for it – if we take steps to avoid, rather than encourage, flexible workforces in a peripatetic flux over their accommodation and the availability of NMW temporary jobs? Which is most cost-effective?

    Kate has also indirectly asked – where should the low-income workers needed in any city actually live? How should they get to their NMW part-time cleaning jobs in Canary Wharf? How long should they take to get there?

  94. “would we be worrying so much about what will happen to the old – and who will pay for it – if we take steps to avoid, rather than encourage, flexible workforces ”

    Probably we would. Who says that most people in receipt of these benefits currently live near elderly relatives anyway?

    “where should the low-income workers needed in any city actually live? ”
    In places that they can afford to live. Why should some low income people be paying tax to allow other low income people to live in places that they themselves cannot afford.

  95. “Probably we would. Who says that most people in receipt of these benefits currently live near elderly relatives anyway?”

    Presumably they are/were, or we would have been having this conversation years ago? (Anecdotally also, in my family, this will be the first generation in which the oldest aren’t looked after by their children or grandchildren and thus may end up needing residential care).

    Freedom of movement is a good thing, don’t get wrong. I’m far away from my 70s parents because I wasn’t “stuck”. I’m just saying. Don’t talk about the public purse unless you’re looking at in the whole.

    “Why should some low income people be paying tax to allow other low income people to live in places that they themselves cannot afford?”

    Because, presumably, low income people need to live within do-able distance of their low income jobs. Or they won’t be able to do them. It’s just silly to think someone on 16 hours NMW (although presumably UC will reduce the number of 16 hour jobs) will spend £50 a week on a Travelcard and another 10 hours on a commute.

    Localities should cater for all workers needed in that locality.

  96. We were having this conversation years ago. For as long as I can remember, how to look after the old, has been an issue. If you are suggesting that hosing benefit be contingent on someone looking after an elderly relative who would otherwise be in a home, then maybe – just maybe – there might be something in it. Otherwise, the whole issue is a red herring. As it currently stands there is no connection – other than coincidental – between housing benefit, and looking after old people.

    If people on low incomes cannot afford to commute to low income jobs, then they should take other jobs that are in the area they can afford to live. This would also presumably increase wages for low income jobs in high income areas. There is no reason why other low income people should either subsidise low wages by employers or expensive housing.

    No it is not for the locality to cater for all workers in the area. If my local Barclays does not pay enough money to cleaners to get cleaners, it is not for me to subsidies Barclays low wages. That is a transfer from my pocket to low employers; no thanks.

  97. @ Jill
    There is a *lot* of social housing in Islington – Peabody estates as well as Council/Housing Association. Much of it is under-occupied because New Labour decided that Council House rents should be half the market rate so it would cost those tenants more to move into smaller accommodation more suited to their needs than to stay where they are. If the Coalition ignored the Labour apologists in the media and scrapped all subsidies on houses/flats and replaced them with subsidies for tenants in need (and abolished the Council tax subsidy for second homes – why should anyone who can afford a second home need a subsidy?!?), the *effective* supply of accommodation would increase significantly.
    The rich don’t want to live in Peabody Buildings Estates or most of the council estates, so there is room for the cleaners to live there. You may not know that there are Peabody Estates in Islington and Westminster but I have walked round many of them, so I do.
    As for Canary Wharf – well I personally should like it cleaned by all the people in the FSA who messed up bank regulation but I suspect that the workers there wouldn’t tolerate the state of the offices if they did so, so I suppose that some competent cleaners would have to walk/bus in from the rest of Tower Hamlets or Hackney.

  98. @Jill

    “…low income people need to live within do-able distance of their low income jobs. Or they won’t be able to do them.”

    I thought the market was king.

    If there are not enough people living close to the places where workers are needed, the attractiveness of the job needs to increase i.e. the wage – it’s simple supply and demand. This would give the workers more cash to rent properties without taxpayer subsidy.

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  102. An ignorant American has a question for Kate: you say you have to live near your mother because she recently had a hip replacement and you have to take care of her. But, if she has to be taken care of, and you’re the one who’s taking care of her, why doesn’t she live with you? And don’t say anything about her needing her “independence.” If she needs to be taken care of, she’s not independent. What if she goes to get a glass of water in the middle of the night (when, presumably, you are asleep at home) and falls down? Does she just have to lie there and wait for your daily visit?

    Also, you mention your kids and your relatives kids all need to be taken care of by their grandmother so you and the other parents can do whatever it is you do all day. I’ve kind of lost track and don’t feel like going up and reading all your entries. Is this the same grandmother with the hip replacement, or another grandmother?

    Anyway, it’s real nice that you live all together in the same place your family has always lived for generations and generations I assume. However, that comfy togetherness isn’t anyone else’s responsibility to pay for. If you *really* can’t get along without your extended family members, you should all live together in a house in a cheaper part of the country, not taking up space in city apartments that should be available for new families to rent.

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  105. See Kate was spinning a line straight from a Murphmeister posting about employers paying people more…….that explains a lot !!

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  107. @Jill: Further to the answers ChrisM and Peter Moores, if people doing unglamourous but essential jobs can’t afford to live in an area because accommodation is too expensive another market option is that those jobs don’t get done. This would make the area less attractive to live in (as the streets don’t get cleaned etc), presumably lowering the price of accommodation/property in that area until such a time when the wage people were prepared to pay for these bottom end jobs (which mayt well be going up for the reasons stated in the earlier answers) and the cost of living in the area became compatible. Hence, it is possible to argue that the housing benefits are actually distorting the market to keep the property values of the well off up as well as the wages of the poorly off down.

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  111. £438 a week??? The £ closed at $1.54 today., so that’s $2,900 a month.

    Here in primitive and impoverished Chicago, $2,700/month will get you 19 listings with 4BR/2bath, in such upscale areas as Bucktown, Roscoe Village, and River West:

    “*Bucktown Luxury* 4BR/2BA. High End Finishes. Kitchen features BOSCH Stainless Steel appl…”

    “Large 4 bedroom duplex in Roscoe Village. Features four big bedrooms, gourmet kitchen…”

    “4br, 3 full baths, 2 half baths, 2 car garage (height for lift!) rowhouse in East Village.”

    etc.

    Oh, and Kate, the Local Authority is an arm of the State.

    And your housing is subsidized, just as the fancy meals in the Commons dining room are subsidized, MPs pay only 57% of the cost; British taxpayers kick in £8,823 per MP per year (vide Guido Fawkes).

  112. Kate,

    When LA properties were moved from the LA to Housing Associations there was big central government money on the table for ‘revitalisation’ of the housing stock as an incentive for the LAs to let go of it. I believe HAs are subsidised much more than just that, but I know this example to be true as a LA—HA revitalisation kept me in food and booze and foreign holidays for a year.

    Incidentally I’m currently working as a gas engineer/problem solver contracted to one of the super-HAs here. I live in a privately-rented one-room studio in Stamford Hill in an otherwise Hackney Council building that costs me over £700 a month. My neighbour across the hall doesn’t work (sickness benefit I think—I hear him cough a lot) and his rent is considerably less than half of mine. Now I earn very decent money down here, if I lived a different country I’d be firmly installed in the technical professional middle classes and could live in a property that reflected that. And yet here I must live in a distinctly low-end part of London, in a council block populated mainly by drunks and the mentally ill. I cannot even afford to consider somewhere like Islington. Fact is that the strangling of available housing stock by huge property-owning cabals that acquire them entirely outside of the market and that can decide who they give them to (and let’s face it, it ain’t going to be me and it wouldn’t be you nowadays either) seems like one hell of a way to distort the market for everyone else, subsidy or not.

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