Penalty without remedy: The Chancellor’s plans for cuts in housing benefit make a mockery of the Conservatives' 'One Nation' rhetoric


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Sitting in the comparative comfort of HM Treasury, 11 Downing Street or the Andrew Marr Show studio, the notion of cutting the housing benefit paid to poorer families may seem an easy, almost theoretical exercise; another entry on the Excel spreadsheet that will help the Chancellor deliver some £12bn in cuts to social security spending.

Thus it was that George Osborne almost casually tossed into his interview with Mr Marr the idea that the maximum annual benefits cap for a family would be not only cut from £26,000 to £23,000 – but could be “lower in the rest of the country”. A figure of £20,000 has apparently been mentioned in briefings. It was not mentioned in the Conservative manifesto a mere 10 weeks ago. Whatever else may be said about it, there is no mandate for a further cut in the housing benefit cap outside London.

Is this what the Conservative Party now means by “One Nation”? Chasing families around towns, cities and suburbs with cuts to their housing allowance until, presumably, they are all confined to one ghetto in the cheapest area of every region?

And why have we drifted into a position where – certainly – vast sums in rental subsidy end up in the hands of private landlords – which was never the intention for housing benefit? The answer, of course, is that there are not enough jobs and not enough housing. On the first of these the Coalition’s economic approach, while flawed, delivered real gains in employment, though nowhere near enough in many still-depressed parts of the country. That has helped reduce the benefits bill, and will play a part in reducing poverty in the longer run.

On housing, however, things are far more dismal. The record of successive governments in providing more homes of any type – private and social – has been lamentable. This paucity of supply is the fundamental reason for high rents and high house prices. It is the laws of supply and demand working relentlessly, and the cause of the soaring cost of housing benefit. Poorer families, often in expensive, but substandard accommodation, particularly in districts of London and the South-east, are not to be blamed for this, though they will surely be forced to suffer as they find themselves decanted into cheaper areas, very possibly with even less chance of finding a job so they can move off benefits.

What Mr Osborne and his colleagues should realise is that, whatever compliments they receive about the “bravery” of the Budget, it will result in real hardship for families least able to cope. A reduced cap on housing benefits will mean more evictions, more children on the street, more pathetic Cathy Come Home-style scenes of official brutality. “Osborne sends in the bailiffs” would be an appropriate headline once this policy is implemented in earnest.

What is so wrong with the idea of the state providing – that is, building – basic but clean, warm and secure homes? It is an approach that has been out of fashion for a long time, but which retains much sense and appeal. The political temptations of “right to buy” social housing were simply too irresistible to the Thatcher government, and were never reversed to any great extent by the succeeding Labour and Lib Dem-Conservative administrations.

All this wrecked the stock of social housing available, while the private sector failed to keep pace with ever-rising demand. Now the Conservatives wish to further denude the affordable housing supply by selling off housing association homes. Why any government has been able to get away with selling state assets off at well below market rates to random residents has always been something of a mystery.

Building what used to be called council housing is a One Nation policy that would generate jobs and reduce the welfare bill simultaneously; but don’t expect to see it in the Budget.