Liz Davies paints a bleak picture of what the government’s spending cuts and benefit caps mean to the least advantaged in society.
Child Poverty Action Group (CPAG) tells us that 3.6 million children – that’s one in four – in the UK currently live in poverty. A rise of around 1m since the start of the coalition government.
But that’s not enough for the Tories. For the first time since 1931, the government is cutting benefits in real terms. A rise of 1 per cent when inflation is around 3 per cent means, yes, an absolute cut of 2 per cent.
Most benefit claimants are in work – housing benefit, child tax credit, working families tax credit and child benefit are all paid to people on low wages.
Those benefits don’t subsidise the recipients. They subsidise private landlords and employers, who charge high rents or pay low wages because the state makes up the shortfall.
If there were lower rents, more social housing and a minimum wage set at living wage levels, the benefit bill would be lower.
It’s stomach-turning to watch the Labour Party join in with stigmatising benefit claimants who are not in work.
There are many reasons why people are not in work. High levels of unemployment, caring responsibilities and fitness to work are among the most obvious.
For years jobseekers have had to prove that they are actively looking for work. Measures to prevent abuse or fraud have always been part of the system.
But whether you are in work or not, watch out for what is about to kick in.
Already housing benefit levels are so low that benefit claimants can only afford very cheap rents. They either live in sub-standard accommodation or top up their rent from their other benefits. Or they lose their homes.
Statutory homelessness – which is not the true homelessness figure but only homelessness experienced by families with children or vulnerable adults – rose again this quarter by 6 per cent. The numbers of people sleeping rough are steadily rising.
Come April, the cap on benefit for non-working claimants comes in. Benefits paid to families (whether one or two adults) will be capped at £500 per week and those to childless adults at £350 per week.
The cap includes child benefit. The more children you have, the poorer you will be.
The cap will operate through the housing benefit system. The local authority will calculate the amount of housing benefit that you would normally be entitled to in order to pay your rent.
It will then calculate the other benefits you receive. If the full amount of housing benefit exceeds the cap, your housing benefit will be reduced. You will have to pay the difference.
Most private landlords won’t put up with a constant shortfall between housing benefit and rent for long. So the immediate consequences of the cap will be an increase in evictions and another rise in homelessness.
During parliamentary debates on the matter Tory ministers engaged in shameful innuendo.
The cap would only affect large families who shouldn’t be living in large properties, they said – hinting that they meant immigrant families.
Benefit claimants shouldn’t be better off than people in work, they said, ignoring the real difficulties there can be in finding work and that housing benefit actually goes to private landlords, not to the claimants.
They implied that people caught by the cap will have only themselves to blame.
The government’s official publication says casually that benefit claimants can simply move, get a job or spend a higher proportion of their “other” income on rent.
Those are not real options for most people.
Or they suggested that benefit claimants could renegotiate the levels of their rent, citing supply and demand.
But demand for rented properties is far higher than supply. Surely a free-market government understands that means rents stay high? Rents have not fallen as a result of the current housing benefit cuts.
In London 10,800 households will lose more than £100 from their benefits. Nationally 56,000 households could lose around £90 per week.
CPAG estimates that 63,000 households with children could be left unable to pay their rent.
The money that families on benefit will have to find to top up their rent comes from their other benefits. Each of those other benefits has been calculated so as to pay for minimum subsistence, not for extra rent. The more money spent on topping up rent, the less is available for food, fuel and other necessities.
Council and housing association tenants with larger families will be hit by the cap, despite the lower rents charged in the social housing sector.
Social housing tenants are also facing the “bedroom tax” – if you have an extra bedroom, you lose 14 per cent of your housing benefit. More than one extra bedroom and you lose 25 per cent.
This is supposed to encourage council tenants to move to smaller properties and free up family-size properties.
The first problem is that all properties, including smaller ones, are few and far between.
A tenant willing to move will still wait weeks or months for another property, while rent arrears steadily rise at 14 per cent a week. Housing associations are entitled to evict tenants if they owe eight weeks or more rent.
Second, these are people’s homes. Usually they have lived there for years, since most under-occupation comes when children leave home. It’s brutal to insist that someone should suddenly lose their home.
Third, it’s not only benefit claimants who under-occupy their homes. Council and housing association tenants who don’t receive housing benefit and can afford to pay their rent will be entitled to continue under-occupying. As indeed will everyone who owns their own home and has a bedroom more than is strictly needed. Only the poor are required to move.
The government suggests that people can take in lodgers. A lodger pays rent which counts as income and can therefore cause havoc to calculation of means-tested benefits, including housing benefit.
In October next year, current benefits will be replaced by universal credit. There’s an argument for simplifying the complex benefit system, but there are real concerns that the requirement to apply and communicate online will disadvantage those not used to using computers. And that’s not to mention the government’s less than perfect record with large-scale IT contracts.
Universal credit will leave the working poor worse off. The Chartered Institute of Housing calculates that all lone parent families will be worse off, as will two-parent families where the wage-earner earns less than the living wage (not the minimum wage).
A couple with two children will be worse off unless they earn more than £247 per week.
On top of all this the poor are disproportionately affected by other public-spending cuts.
Libraries, swimming pools, recreational facilities, after-school clubs and breakfast clubs are all used more by the poor than the rich.
Small cuts, such as charging for hospital parking or closing local facilities that were within walking-distance, all affect the poor.
Advice centres are being cut, so that the poor have less and less access to advice and the possibility of challenging a wrong decision by the state.
What will happen? More rough sleeping on the street. More children hungry or without warm clothes. More demands on immediate homelessness assistance (bed and breakfast) and more informal homelessness as families move in with other families. Widespread levels of severely overcrowded accommodation.
The impact of sub-standard, overcrowded accommodation on children’s health and development is well known.
Social services will be stretched to breaking point – something that isn’t noted in any of the government’s impact assessments.
Last year, over 120,000 people used food banks. Expect that number to rise. Shameful, in the seventh richest country in the world.
This article first appeared in the Morning Star.