Tag Archives: Budget 2013

Higher Rents And Less Council Houses: Osborne’s Blundering Cure For The Housing Crisis

chicago-rent-strikeIn under two weeks hundreds of thousands of the least well off people in the UK will find a shortfall in their Housing Benefits due to the bedroom tax.  At the same time the benefit cap will be introduced in three London boroughs, which will see thousands of London families no longer able to pay the rent.  This chaos is to be extended throughout the UK from July.

Changes to Council Tax benefits also come into effect next month leaving people living on as little as £72 a week (or less in some cases) now eligible to pay Council Tax in many parts of the UK.  The Benefits Uprating Bill currently passing through the House of Lords will see Housing Benefit rises capped at 1%, despite rents rising by over ten times that figure in some areas.  Along with cuts to in and out of work benefits, and the public sector pay freeze, many of the lowest income households are due to see that income shrink on an annual basis.

From October this year Universal Credit will start to be expanded across the UK.  Benefit sanctions, meaning people left with nothing and currently running at about half a million a year, are likely to rise due to ever increasing benefit conditionality.  Hundreds of thousands more are being impoverished by the Atos regime for sickness and disability benefits.  A fifth of disabled people are aset to lose Disability Living Allowance over the coming years.

Universal Credit will feature ‘direct payments’, meaning claimants can no longer have housing benefits sent to direct to landlords.  This had led to rocketing rent arrears everywhere it has been tried as claimants already forced to choose between heating and eating are given a large monthly cash payment to pay the rent.  Instead it pays for nappies, or a broken washing machine, or debt repayments to high street loan sharks.  Housing Associations have warned they are cutting the number of new homes available due to stockpiling cash reserves to pay for the inevitable spate of evictions.  So called ‘affordable’ house building collapsed last year.

Even before these changes every measure of homelessness is rising.  Already many councils can’t cope.  Westminster Council is housing families in £3k a week hotels after they have been evicted due to the housing benefit cuts which have already taken place.

Anyone who has been paying attention will point to both the chronic shortage of council housing and soaring rents as two of the key factors behind the housing crisis.  George Osborne’s answer to the problem is higher rents and less council houses.

Osborne yesterday extended the discount for London tenants who wish to buy their council property to £100,000.  What little social housing remains the Chancellor is desperate to sell off.  Once all right to buy houses sold had to be replaced by a new council house.  This rarely happened in practice, but that was the idea.  But even that has been thrown out of the window.  New homes designed to replace those flogged off will have rents set at 80% of the local market and fixed term tenancies.  The long established tradition of genuinely affordable housing on secure tenancies managed by Local Authorities – and often making them a profit – has been glibly demolished by this Government.

Not content with this Osborne has also introduced a series of measures which risk wildly inflating the housing market even further.  Gideon wants to help more people buy houses by making them more expensive.  His Government backed mortgage subsidy, even available for those looking to purchase half a million pound mansions, is likely to lead to a bonanza for landlords.  Whilst he has claimed this new scheme will not be on offer for specifically ‘buy to let’ mortgages, he seems relaxed about it being available to those who already have one or even more houses.  Which simply means a little paper shuffling on the part of grasping landlords and bankers and the scheme will end up being used to buy properties to rent out.  Or leave empty as in the case of some of the most valuable properties in London, bought up as investments with laundered money and then left uninhabited.

The only predictable outcome to Osborne’s scheme is higher rents in both the  social and private sector.  For now Housing Benefits – meaning tax payers –  will pick up the tab for shoveling billions into the pockets of landlords.  The already much maligned housing benefit bill could be set to soar to levels that can barely be imagined now.

According to The Guardian, Osborne’s plan to avoid this could be to cap social security spending if they win the next election.  Should this happen then it seems inconceivable that the current legal protection to prevent children, pensioners and disabled people from street homelessness could be maintained.   It will be just too expensive.  This is the choice the free market offers on housing.  Tens of thousands of homeless children or tens of billions paid to landlords by the state.

Of course this whole tragic mess could be halted overnight if everybody stopped paying their rent.

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Youth Unemployment Soars By 5%

Chart 12: Unemployment rate (aged 16+), seasonally adjustedunemploymentratechart_tcm77-303128Today’s unemployment figures, conveniently released on budget day, make a mockery of George Osborne’s reckless job market predictions.  Youth unemployment rose by 48,000 people this month, almost 5%.  This is despite record numbers of young people on workfare who are not included in the figures which also cover the busy Christmas period.

Unemployment overall rose by 7000 and the number of people unemployed over two years by 2000 – despite the floundering £6 billion Work Programme aimed at helping long term unemployed people find jobs.

Osborne’s lie today that a million new jobs have been created unravels simply by looking at the graph above.  These so called new jobs are in many cases workfare, part time or tax credit funded and low earning self-employment.

The truth is that the unemployment rate has been as flat as the economy ever since this Government weren’t elected.  The situation is little better than at the peak of the first recession.  And now it is rising again, which if it continues will throw all of today’s budget’s benefit bonanza for business into chaos.

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George Osborne’s Credit Card Budget

Osborne-mrbeanGeorge Osborne maxed out his political credit card today with a benefits bonanza for bosses and a middle class housing hand-out all to be paid for by unspecified cuts in 2015.

A range of measures, including corporation tax cuts (Osborne’s dad will be pleased) and Fannie Mae style mortgages for people wanting to upgrade to £600,000 mansions, will no doubt buy Osborne a few headlines.  But he will pay in 2015 when yet more savage cuts – including no doubt more social security slashing – plunge even more people into desperate poverty.

Of course when it comes to public sector workers (currently on strike today – solidarity and all that you benefit sanctioning bastards), Osborne couldn’t wait to wield the axe.  Low paid public sector workers will now face a triple whammy of extended wage freezes along with the already announced real term cuts to tax credits and housing benefit.

For those workers, and the millions other who are set to see in work benefits raided on a yearly basis, the raising of the personal allowance will be of little comfort.

Osborne ploughed ahead with his plans to create mass homelessness by extending the Right To Buy scheme, meaning less homes for those with least.  Still not to worry now that Jemima and Tarquin can upgrade their property investment using a government sponsored loan instead of dipping into the latte-slurping fund.

And for the rest of us, all we got was a trivial cut in the price of beer that the breweries probably won’t bother to pass on.  Let them get pissed is Osborne’s response to the crisis.  And obviously this cut only applies to beer, not wine or spirits, because beer’s what the plebs drink.  A more transparent attempt to neutralise last year’s pasty tax shambles would be hard to imagine.

Once again there is nothing in this budget for the very poorest.  The bosses on the other hand will be laughing all the way to the bank.

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