Housing benefit cap – economic injustice and the disintegration of mixed communities

by Rev Paul Nicolson, Zacchaeus 2000 Trust.

Delivered at the Defend Council House Lobby in Committee Room 7 at the Parliament at 1pm on 11 Oct 2010.

The decision to cap housing benefit is a spectacular example of economic injustice. It continues decades of the disintegration of economically mixed communities, and hits the poorest households below the belt – while protecting the speculators and landlords who profit from high rents and therefore high housing benefit.

I was a Parish priest in a beautiful village in the Chiltern Hills from 1982 to 1999. Most people have seen it on television, where it is called Dibley.  During that time, a combination of the sale of council houses and private speculation ended the mixed community of rich, middle class and poor. The right to buy led to the sale of council houses to sitting tenants for £25,000 they are now being sold on at around £250,000; the villagers’ rented cottages were bought by a speculator in the 1940s and sold off for a fortune every time a tenant died. You have to raise at least ££400,000 to live in Dibleyland now unless you are a servant, a farm labourer or a vicar in tied houses. Continue reading

What is happening to the poorest house-holds as a result of the cuts?

Church Times. 3rd September 2010.
From the Revd Paul Nicolson

Sir, — The circumstances of a family we are helping might help your readers understand what is happening to the poorest house-holds as a result of the cuts.

A mother and father with four children were homeless, in the sense of having no settled accommodation for 2.5 years. They applied to Westminster for help in May 2009, and eventually were able to move into appropriate accommodation in April 2010, because of the help in arranging a deposit provided by Hackney Social Services. Westminster provided no help whatsoever, despite there being four relevant children to whom Westminster owed a duty under the Children Act.

The family has suffered appalling stress through living in overcrowded accommodation and because of the continuous and imminent threat of eviction when in temporary accom mo dation. The health, education, and behaviour of children is known to suffer when they come from overcrowded and insecure homes.

The father suffers from psoriasis, a condition aggravated by stress, and the mother has problems with her heart. These medical conditions were made known to Westminster, who took no notice.

Without our intervention, this family would have been on the streets. Their situation remains precarious, because they cannot afford the only accommodation they could find. The rent is £1800 per month, and the local housing allowance (LHA) for four bedrooms in that area is £1495, leaving them to pay £305 per month above their housing benefit; they are very worried about getting into arrears again, as the father is on a very low wage.

None of the rise in the price of houses or rents in London over the past 30 years is the responsibility of housing-benefit claimants, but they are being punished for the errors of the 1979 and 1997 governments in deregulating lending and abolishing rent control in a housing market in short supply; this forced rents and prices to explode, and allowed landlords and banks to profit from the means-tested housing benefit at the expense of the taxpayer. Some of the landlords we encounter live, and hold passports, in nations not particularly friendly towards the UK.

The LHA was introduced by the Labour government as a response to the £21-billion cost of housing benefit to the Treasury. Claimants are now required to pay the balance of rents above the arbitrary caps of LHA out of means-tested wages or unemployment benefits, all of which are below the Government’s poverty threshold, which will be increased by two per cent less in perpetuity, because increases will be related to the Consumer Price Index, not the Retail Price Index.

The coalition plans to abolish the LHA and limit housing benefit to £400 a week for a family and £250 for an individual. It is certain that there will be a public outcry when the misery of thousands of cases of eviction of vulnerable debtors start going through the county courts. It is estimated that 750,000 of the households will be affected in the UK, 4500 in Westminster.