Housing Benefit

Housing Benefit

What are we to make of the new U.K. housing benefit scheme being piloted in a few areas; the "Local Housing Allowance"? instead of individual claimants getting an individual level of housing benefit according to their individual rent under the current system, the new idea is that there is one standard local level of housing benefit for all claimants in private rented housing, regardless of their particular rent. There will be across the board flat rates for general categories, such as a single room, a bedsit, one-bedroom flat, etc.

Those whose actual rent is less than the standard rate are able to pocket some or all of the difference! Even JSA claimants in such circumstances will be able to keep up to £5 of the difference, a small but real increase in weekly income. On the other hand if your rent is more than the standard payment you'll have to make up the difference from your own pocket. The payment of housing benefit will be direct to the claimant instead of the option being there, half the time, of having it paid directly to the landlord.

So far we have heard conflicting opinions about this new system from people in areas where it is being tried out. Some see it as all bad and yet another neo-liberal attack on their incomes, while others say they've not noticed much difference, or they've even been a little bit better off because of it.

Will all landlords now put their rents up to the new standard level, all rents being pushed from the bottom upwards? This isn't necessarily the case. The level of private rent isn't determined exclusively by the level of housing benefit, and the majority of private renters don't necessarily get housing benefit. In any case the new standard rate will certainly not be above previous housing benefit capping levels, in which case there was nothing in the H.B. system already to stop the landlords putting up the rent and sometimes having it all paid by H.B. before.

Private tenants have to compete with each other to get rented accommodation, and such competition is particularly fierce in london and the south east. However it is also true that landlords, particularly petty landlords, will sometimes have to compete to find tenants. Even in the south east, there will always be a significant number of places going for below average rent because they are smaller or shabby or in less trendy areas. Outside the south east there are some petty landlords who jumped on the tail end of the buy-to-let bubble late in the day and now, finding themselves in difficulty, may not find it so easy to find and hold on to tenants. Such is the potential crisis for the landlord system that the government is openly talking of knocking down 100,000 or so "surplus" houses in the north!! In any case the new system isn't going to work unless it deliberately allows many claimants to make a small surplus.

There is an open social apartheid element to this, claimants and dolees are being economically shunted into the "cheaper" accommodation in the more run down parts of town. Meanwhile salaried professionals and "yuppies" move into the rented accommodation in the trendier parts of town, the "cultural quarters" and "regeneration" and "development" areas. Oddly though, in return for accepting their second class status and doffing their cap to the upwardly mobile salariat sector of private renters, a significant number of H.B. claimants are being allowed to keep a few quid extra as a sweetener. Since when did the all powerful crushing juggernaut onslaught of neoliberalism and the warfare state bother having to pay sweeteners to the little guy?

Surely this new system can't be exclusively about slashing housing benefit levels? Under the old system the majority of H.B. claimants are still under, levels are already capped and could be capped further if the government wanted to. We need to remember that H.B. isn't really for our benefit in the first place, it is for the benefit of the landlords, it is a generous subsidy for them from the state. If the state cuts this subsidy too much it will contribute to depressing prices in the buy-to-let sector and encourage an even wider property slump. Isn't this the last thing they want? They might want to reduce the H.B. bill bit by bit on the long run, but if they slash it all now they wreck their own economy!

Where I am living I am still under the old system. Now personally I am not that too bothered about whether the new system would leave me 5 pounds worse off or 5 pounds in surplus, although it would be nice to be a little in surplus. What I do notice about the new system, however, is that at a stroke it cuts bureaucracy and administration costs. But it doesn't just cut bureaucracy for the council, it also cuts bureaucracy for the tenant. This is particularly the case if for instance you are living in shared rented accommodation in one property but with different individual rents on different sized rooms but stuck on one joint tenancy with all the other tenants in the property and maybe stuck with an uncooperative landlord who doesn't want claimants living there. Under the current system it can be a real nightmare in such a situation to have to prove your own individual rent on your own individual room before your claim can proceed. This can cause really stressful nasty delays and bad situations, even people ending up in the street..

Under the new system apparently you don't need to prove your individual rent, as long as your name is on the joint tenancy you're automatically entitled to some kind of bog-standard payout. Surely, even if you are one of the unlucky ones who ends up 5 pounds worse off a week until you find a cheaper place, that represents an improvement for many tenants? Isn't this a small step back from the encroachment of the oppressive bureaucratic means test? You don't need anymore to prove your individual rent, you just need to prove you are a tenant, that's it. Turned out nice again.

It used to be virtually impossible to find a landlord in the privately rented sector that would take a tenant on housing benefit, and when they did most would demand that the payment be made straight to them from the council. However I have noticed, in london at least, a growing number of letting agencies have been getting to learn about the benefits system and have sussed out how to try and make it work for them. Alongside many letting ads that display the standard slogan "no DSS" there are a growing visible number that now state "DSS welcome".

Also, I have always found it far preferable to have housing benefit paid to ME first before it goes anywhere near the pocket of a landlord. This gives me and my fellow tenants a little bit of specific bargaining power. If the landlord fails to do repairs etc. that they are required to do, we can threaten to withhold some or all of the rent. No doubt they might then threaten to evict, but it is a game of bluff on both sides and it gives you a little specific bargaining power. The new system reinforces this bargaining power by always paying the H.B. to the tenant rather than, as is sometimes the case at the moment when the landlord demands it, paying the money direct to the landlord. I would argue that it is a basically good principle that H.B. always gets paid first to the claimant rather than direct to the landlord.

Maybe I have got this all wrong, write in folks and tell me, but could it be that what we are seeing here is the fallout from the shrinkage of council housing and social housing forcing the state to pump in heavy subsidies to the private landlord sector to act as a poor substitute. A funny temporary side effect of this is minor temporary improvement in the situation for some of those who were always suffering as private tenants, a small partial step back from the means test for H.B. claimants, and some claimants being allowed to pocket a small surplus. Smart claimants who club together could even form co-ops, target cheap properties, charge themselves below standard rent and part finance themselves by pocketing the surplus???...fantasy...fantasy....

get orf moi laand
In 1872 an official return of the land in britain was made and it was fairly correct because in every parish rates were paid and strict records were kept in 5000 parishes. Since then you might have thought the state would have every householder publicly registered in an updated land registry. But since then the richest land owners and the powerful have used their power to hide and bury the facts. As much as 50 per cent of the wealthy today did not register their land, which they have held in covenants and trusts and off-shore deals, so as not to pay any tax. Not that we are sympathetic either way to the bureaucratic plundering by the state or to the monopoly of the land owners.

In 2001, as the land-registry bill went through parliament the parliamentary secretary said: "The crown is the only absolute owner of land in England and Wales". Under the feudal structures of britain's laws, freehold and leasehold are inferior and of vassal status to the crown. Only in Scotland has this been sorted out and individual bourgeois citizens own their own land. Even when you've finally paid off the mortgage you are still really only a lodger of mrs windsor.

Funnily enough though, the holding of unregistered land does not debar landholders from receiving subsidies from the government. Over £4bn pounds is paid to them in grants for unproductive land and the EU subsidies go to boost the tenant farmer rents to land owners by an estimated £12 - 17bn.

Land in britain is not scarce - more than 85 per cent of the south east is still undeveloped - but planning approvals have been restricted since the second world war, new house building has been heavily restricted since the seventies. And please spare us a lot of the "greenbelt" nimby whingeing. A lot of this land is ugly commercial farmland, carved up by tractors, polluted with chemicals, growing rapeseed for animal feed and cheap vegetable oil. Some new, low impact, and preferably green houses with some HUMANS living in them is just what it needs to cheer it up. The state has since the 1947 town and country planning act nationalised development rights, since the seventies new house building has been slowed right down.

Now I would prefer that housing was free, and we are still inspired by the spirit of the eighties when there were an estimated 30,000 squatters in london alone. I survived a year of squatting myself in the nineties, and despite being over 40, feeble, depressed, and grumpy, and knowing our luck, we couldn't completely rule out going there again (with heating and clean toilet please). But even some mild liberal reform, if it happened, like giving redundant farmers some of their development rights back and a little building deregulation, would enable the construction industry to build all sorts of spacious and innovative homes in large numbers. Even small and independent builders and coops would be able to get a piece of the action and build spacious homes which they could both build and sell cheap or lie in themselves!! Forward to decentralised utopian socialist super-cities with lots of green bits...get rid of the tanks and build the new peppercorn rent jerusalem on salisbury plain....daydream... But the entrenched monopoly landowners and the state bureaucracy are both deliberately blocking this.

At the moment both social housing and housing benefit are largely, an indirect subsidy to employers needing a cheap but housed workforce. But if freehold meant greater freedom, there would be much less of a state and monopoly landowner maintained housing crisis that required so much state subsidy and state intervention to try and contain it and manage it.

We recommend people read the extensive article "The Housing Question" in issue 13 of "Aufheben" magazine (despite their heavy going marxism). They can be contacted via Aufheben, c/o Brighton & Hove Unemployed workers centre, P.O. Box 2536, Rottingdean, BN2 6LX. We couldn't help laughing at the bit where they had to explain to some of their academic readers the methodological validity and meaning of the term "middle class". But their article gives a good historical account of the housing crisis and struggles around housing in britain since the industrial revolution. Along the way they discuss how the radical upstart english industrial bourgeoisie of the early 19th century chicken out by the end of the century and retreat into conservative alliance with the landed gentry, how the private rented sector in britain went into decline after the second world war and became relatively smaller compared to europe, and how the expansion of council housing in the fifties and sixties ran into crisis in the seventies.

Their article ends up pointing out how, under thatcher onwards, "For the young working class, who were once often the most militant section of the class, the sensible course has become to knuckle down, and to work hard in order to become homeowners. Indeed in the last three decades owner occupation has proved a far more assured way of improving one's standard of living than collective action, particularly since the defeat of the labour movement in the 1980s." And now, "With the transition to an era of low inflation, but high house prices, the attitudes [new expanded lower middle class] induced by home ownership are likely to change.... As the "property escalator" switches off, those who do manage to become house owners will face years of heavy debt with little prospect of escape.....Home ownership will no longer be such a conveyor belt into the middle classes. As such the transition to a new era in housing is likely to lead to major class realignments."

Paul 2005

Whinger Press

ppetard (at) hotmail.com