Gradually, and in large steps, the Housing Benefit changes introduced by the coalition government are making big areas of Britain’s cities unaffordable for all but the well-off.
With the labour movement preoccupied by pension revisions and cuts to jobs and services, these steps have passed with little in the way of grass-roots resistance. A new phase of the changes started on 1 January 2012, and should be the signal for building local campaigns.
Where tenants are willing to defy, campaigns should mobilise to stop them being evicted, as they stopped poll-tax defiers having their property seized by bailiffs in Scotland over a decade ago. Such mobilisations can win; landlords, who are prospering now, can be forced to make cuts in rent matching the cuts in benefit.
We should demand that the Government stops, or at least freezes, the cuts in benefits. Three facts add up to an emergency:
• Rapidly-rising private-sector rents, as people who might otherwise have bought homes rent instead;
• Rapidly-rising unemployment;
• Declining real wages
Cuts in benefits should not even be discussed until that emergency has passed.
The whole labour movement should add urgency to its long-standing campaign for more council housing to be built. Instead, the coalition government is moving to remove security of tenure from council tenants, and to raise council rents further.
It should also demand the reintroduction of publicly-set limits to the rents landlords should charge. Those limits existed in Britain from 1915 until they were almost abolished by Thatcher’s Housing Act of 1988: rent controls now apply only where the tenancy agreement was made before 15 January 1989.
The Labour candidate for London mayor, Ken Livingstone, has promised to introduce a “London Living Rent” ceiling. That is a good move, but it is not clear that the mayor has any legal powers to make rent ceilings more than a voluntary target. The next Labour government should be committed to introducing proper rent controls.
Instead, Labour leaders have supported the “principle” of the Housing Benefit cuts and quibbled only about “detail”. Labour spokesperson Liam Byrne said: “The government has got get the detail right otherwise it will simply clobber the poorest and put families on the street”. Byrne’s objection seems to be mainly that the financial cost of dealing with more homeless people could be large.
From 1 April 2011, the level of Local Housing Allowance was reduced so that in each area about three in ten properties for rent should be affordable to people on benefit, rather than five in ten properties as previously.
Maximum rates of Local Housing Allowance were also introduced (without any maximum on rents!) This especially affects claimants with large households.
The total effect is to put about 800,000 homes out of the reach of benefit claimants, or to put 1.3 million tenants in a position where they have to move, run up debt to pay their rent, or get evicted.
People making new claims since 1 April 2011 have been affected straight away. Existing claimants have had “transitional protection” for nine months — expiring on 1 January 2012, or nine months after their last annual benefit review.
Also on 1 January, the “shared accommodation rate”, a special lower rate of Housing Benefit, was extended from under-25s to cover all single people under 35. They can get benefit based only on cost of a room in a shared house. The change kicks in after their local authority’s yearly review of Housing Benefits.
The effects are enormous. In Newham, east London, there will be twice as many claimants as there are houses or flats affordable on benefit. In Croydon, 17,000 claimants will be chasing 10,000 properties. These are not posh areas.
There is a further time-bomb in the Government’s plans. Housing Benefit will be increased in line only with the Consumer Price Index (CPI), not with rent levels, which historically have risen much faster than CPI. Research by the housing organisation Shelter shows that this change will make increasingly large areas of Britain’s cities unaffordable as the years go by.
People seeking jobs will be able to afford to live only... in depressed areas where there are no jobs available, and so rents are lower.