There were a couple of interesting contributions to the housing welfare debate last week. The Inequality Briefing website's latest post, using data from the ONS Labour Force Survey, said that:
In 0.5% of all households containing more than one generation all adult members reported never having had a paid job. In one third of these households, the members of the younger generation reported leaving full-time education less than a year ago.
Its hard to believe that worklessness is an epidemic in our society when only 1 in 200 multi generational households contain no-one in employment. That is not to say that it isn't an issue that politicians and policy makers should address. But it is not possible to portray it as the most pressing social problem of our age.
Also last week, the GMB released the results of an investigation into housing benefit, entitled HUGE PAYMENTS FOR HOUSING BENEFIT IN LONDON SHOWS LANDLORDS ARE THE REAL WINNERS FROM BRITAIN'S WELFARE SYSTEM. The language employed is rather colourful, but the underlying message is clear: Housing Benefit Is Big Business. With much of the £23bn a year bill going to large companies and wealthy individuals, this assertion is hard to deny. The Earl of Cadogan is given as an example, with Cadogan Estates Ltd allegedly getting £116,000 from Kensington & Chelsea; as is the Duke of Argyll whose Argyll Estates is believed to pocket £126,000 from Argyll and Bute Council.
Whilst the appearance of these noble lords on the list of those landlords receiving the biggest payouts will no doubt raise the blood pressure of any right thinking Socialist, their receipts from the public purse is mere chicken-feed compared to that of other less aristocratic and more anonymous landlords. For example, Caridon Property is said to take in £2.6m across 9 London Boroughs, while Atlas Property Services rakes in £1.8m from the London Borough of Ealing alone.
What struck me is the scale of Housing Benefit. It's not just the size of the annual bill to the taxpayer, rather it is the degree to which this welfare benefit has become dispersed through the housing market. Leaving social housing to one side, the GMB estimates that nearly 40%, or 2 in every 5, of private rented households across the whole country are now in receipt of Housing Benefit. Yet only around 7% of the workforce is unemployed. In London, perhaps surprisingly, the figure is lower at around 34%. But this average covers a very wide variation, from 70.5% in Enfield, 61.3% in Barking and Dagenham and 57.7% in Croydon, down to only 10.8% in Kensington and Chelsea and 2.45% in the City of London.
The figure for Lewisham is 39.6%, so we are around the national average, but somewhat above the London average. So a closer look at Lewisham may tell a story that is similar to that for the country as a whole. In 2012/13, the Council paid out, on behalf of the Government, an estimated £228.4m in Housing Benefit and £32.4m in Council Tax Benefit. We have 120,000 domestic properties in the borough. This includes owner occupiers, private rented, council and other social rented dwellings. In 2012/13 39,112 of these properties, or 32.6%, were in receipt of Housing Benefit. That's nearly a third. Yet the total number of unemployed people at the end of 2012/13 was about 10,400. That's just over 5% of the working population.
So it would appear that the majority of Housing Benefit, which is funded by taxes raised on everyone, including the poorest in society, goes to those in work, as a subsidy to their employers who are not paying them a wage that can support them. It then gets passed on to landlords, probably all of whom are relatively well-off, some of whom are very wealthy individuals indeed, and some of whom are multi-million pound businesses.
If William Beveridge were to pay us a visit today, I think he would have to conclude that this part of the Welfare State has evolved into something that he and its other founding Fathers neither expected nor desired. It must now be time for a radical rethink.
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