Worth their weight in Gold: Long term tenancies must stay

The Coalition government has announced that it is considering ending life time tenancies for tenants of housing associations or local authorities. David Cameron’s reasoning behind floating this change is that:

“maybe in five or 10 years you will be doing a different job and be better paid and you won't need that home, you will be able to go into the private sector.”

The inference is that social housing should be only a safety net, not something that is potentially available to all.  That would represent a fundamental shift in the purpose of council and housing association properties.

Housing is a fundamental human need as every student of Maslow’s hierarchy of needs knows. Without security of shelter it is very difficult to think about working and contributing back to society. The stress of not knowing whether you’re safe staying in your house can be a massive emotional and physical drain. In a world where people feel that so much is changing and out of their control, security of tenure is a cornerstone in their lives.

If the coalition is serious about tackling the culture of benefits dependency by getting people back into work this is not the way to do it. Effectively penalising people by getting them to move from their home and pay private sector rents because they’ve got a job hardly helps incentivise people. It doesn’t matter that this might not be for years – the message it sends is that work still won’t pay.  Social Housing needs to be used more effectively and there’s room for reform, but redesigning it as a safety net is not the way to go.

The other thrust behind the coalition announcement on tenure is money. The communities department claims that Social Housing is subsidised to the tune of £35 per week by each tax payer.  If that were true there would be good cause to try and seek savings in economically tough times. In reality, housing association and local authorities fund all of their maintenance and running costs through rent receipts.

What the Communities department may be referring to is government subsidy for the building of new social housing – which stands at a total of £8.4bn over three years, although this still works out at considerably less than £35 per tax payer per week.

So what is the link between building new homes and the cost of renting one?

In the private sector when a building company has completed a new home they sell it (directly or indirectly) to the first owner. If the owner chooses to let the new property they effectively pass on the cost of the build, management fees and their mortgage through the rent to the tenant. Housing associations also borrow cash to contribute to new builds, but the full cost of the build isn’t passed on in rent because of the government subsidy. So the Communities department are right - social housing rents are lower because of the building subsidy. However, rents are also lower because Housing Associations don’t have to make a profit for their shareholders.

There’s another catch. Everyone seems to agree that we need more homes, but the private sector isn’t that willing to build them either and is crying out for – you guessed it – subsidy. Until 2006 the government funded, with some success the Business Expansion Scheme to encourage the private sector to build new residential homes and now the private sector are calling for its reintroduction. It looks like the tax payer is going to be forking out for new builds for some time to come. If the government is going to invest money in the new houses why not invest it where you know it will get passed onto those that most need it rather than ending up in the pockets of commercial builders?

If the coalition seriously wants to try and reduce public subsidy of new builds it could allow rents to go up in the social housing sector to allow greater reinvestment in new builds. This would mean people that were working in social housing were paying closer to the private market rent. It would also mean that it was paying more in Housing Benefit, but there would be the incentive for the coalition to get more people into work without having to end secure tenancies. However, the Housing and Council Tax Benefit system needs reforming because it is a massive disincentive to work because it effectively taxes a new worker at 85%.

Ah, what a tangled web. What was it Palmerston said about the number of people who understood the Schwelsig Holstein Question? Maybe subsidising social housing isn’t such a bad idea.

Social Housing secure tenancies are worth their weight in gold. They improve the quality of life for millions of people in this country by meeting a basic human need for the long term. Treating the national stock of four million Social Houses as a safety net by forcing people to leave their homes when they get work is short sighted, unlikely to save money or increase the total housing stock. Tackling the culture of welfare dependency is and should continue to be a top priority of this government, but ending security of tenure will damage, not contribute to this aim.

Scandal, hubris and Tolstoy: The travails of Gordon Brown

Northern Rock, Missing Child Benefit CDs, Labour party donations. The three sagas that have thrown the Brown government into turmoil and the media into a feeding frenzy. Three months ago Brown was heralded as the most skilled political operator of a generation – he had dealt with foot and mouth, set out a new agenda and had the political hacks asking ‘Tony who?’. But let’s look at the events that have caused all the hoo ha of the last month.

Firstly, Northern Rock. The government managed this pretty well, responding to events (the credit crunch) beyond their control – they had to let the markets know that the Rock had been lent money by the Bank of England or they’d have been accused of a cover up. If they’d have immediately guaranteed every penny thus negating the risk that big investors took the cries of ‘moral hazard’ would have rung out around Westminster. In the end no punter has lost a penny and the government should (eventually) get it’s money back.
Brown's Star rating: * * * *

Next, the missing Child Benefit CDs. In an immediate sense it clearly wasn’t the government’s fault that so much sensitive data had been put in unregistered post by the HMRC. What was more damaging for Brown were the stories that came out of the Revenue and Customs about the low morale and cost cutting regime that meant that taking short cuts had become normal. Brown loved the headlines when he was chancellor about slashing civil servants jobs and saving the tax payer millions, but preventing good staff doing their job properly is a false economy. In the event the government did the firefighting as well as they could, but this was a past action that came back to haunt Brown.
Brown’s Star Rating: *

Finally, the donations scandals. The major Labour donor David Abrahams had been siphoning his donations through his staff who lived on Council estates to ‘protect his privacy’. Some people in a Labour party strapped for cash decided not to look too closely at where the money was coming from and got caught. Human instinct tells us not to look a gift horse in the mouth, but we expect incredibly high standards from our politicians and expect them to rigorously fight their instincts each and every time, even when it doesn’t seem that anyone’s looking. Let him who is without sin casts the first stone…

The encouraging thing is that Brown and Hilary Benn honourably actually refused the donations with Hilary Benn telling Abrahams to donate the money directly if he was that bothered about being involved. The slow drip drip of information leaves a sour taste in the mouth and there may be more to come, but I don’t see why anyone else should fall on their swords yet. The enquiries will lead to ever more stringent rules on donations and we will remain one of the cleanest political cultures in the world. Bungled administration and wishful thinking yes, but widespread corruption – unlikely.
Brown’s Star Rating: * * *

So Brown’s not done too badly over the last month by my reckoning, but he’s been caught at the centre of a rabid media and, as Harold Wilson said, events dear boy, Events. In War and Peace on the eve of battle, Tolstoy has Napoleon surveying his troops and making decisions which he thinks will be decisive in steering the course of the fight. In fact his orders had very little bearing on what happened and the battle was won and lost by millions of combined actions by the soldiers on the field. On this occasion the French lost and the shine on Napoleon’s ‘genius’ was tarnished. Yet as Tolstoy said ‘his orders were not any less good’ than on the occasions he was victorious.

It is hubris on the part of politicians when they pretend that their decisions are the prime factors in events, but equally ridiculous when we the public foist that expectation and belief upon them.

To poll or not to poll, that is the question

In all the feverish speculation amongst the tiny minority known as the 'political classes' about whether Gordon Brown will call a general election one thing seems to have been forgotten.

Do we, the public, really want a general election?

Unless I've missed something there has been no loud street protests demanding the chance to vote, no people queuing outside polling stations desperate for their chance to put a cross in a box. Any groundswell of popular support for a general election must be smaller than a beginner's mole hill.

We're just over two years into a five year parliamentary term and the public seem perfectly happy with the job Gordon is doing. Why would us hard working families want to bother going out on a rainy November evening just to massage Gordon's ego?

Come back and ask us in another year or two and then, sure, we'll come and join in and put a cross in a box, but don't play silly political games now just to get another couple of years in power.

And just a warning... if Gordon does go to the Queen in a week or two's time the Great British Public, not being particularly keen in being dragged into political shennanigans, might not play their part as the Labour party would wish.

picture: bbc.co.uk/news

Hodge on Housing

I’m a bit slow off the mark with this one, but a couple of weeks ago Labour minister Margaret Hodge, whose constituency is in East London got rounded on by her colleagues for posing the question: "In exercising that choice as an economic migrant, should they [migrants] then presume to have automatic access immediately to public social housing?" She went on to say that there was an ‘essential unfairness’ in the housing system biased against families that had grown up in the UK. The tone of Margaret Hodge’s comments make me uneasy – for a start migrants don’t have automatic or immediate access to public housing – the length of time varies on where they come from – for the EU accession countries it is 2 years; and many of immigrants I’ve spoken to don’t presume to have access to social housing at all, but expect to pay their own way for some years and are rather surprised to have access to social housing at the stage they do. Using language like this is misleading and aggravates the ‘fear of the other’ and the often defensive mindset of different communities.

Although Margaret Hodge was cak-handed in her comments, for Alan Johnson to say as he did a few days later "There is no evidence whatsoever that immigrants are causing a problem with social housing" was akin to sweeping the issue under the carpet.

No, of course immigrants don't go to the front of the queue, but three things do happen.

1. Asylum seekers get dispersed around the country and then when they gain indefinite leave to remain return to the area where their own community is to receive support – often East London. They then live in overcrowded housing and consequently gain more points on housing registers or bidding systems and significantly add to the numbers on these lists.

2. Economic immigrants come to the country and stay in private rented accommodation for a couple of years until they pass the habitual residence test and are entitled to benefits/public support. They then join the Council housing register and add pressure to it.

3. Where there are children of refugees or economic immigrants (who have satisfied habitual residence) involved the whole family is likely to be classed as priority need and get housed straight away.

These three issues significantly exacerbate the chronic housing shortages in the London area. This means that someone who has been working all their lives and paying NI contributions and then loses their job or suffers a relationship breakdown and becomes homeless the local authority can do nothing to help apart from placing them on a housing register which will take 3-5 years to yield them a property. The first time in their lives that they need the safety net of the state it does not provide. The ‘contract’ at the heart of the welfare state has failed them

It’s true that the economy benefits from diverse economic immigration, but the social infrastructure takes years and years to catch up – the issues in public housing are repeated in health services in East London. I hate to see any attacks on people based on race and long for more dialogue and story telling at community level so different communities understand where each other are coming from, but it is true that if you are a person that has been working in the UK for decades that the significant increase in immigration levels significantly reduces the chances of you getting housed quickly. To attack anyone says that as racist is not helpful, because we can’t address this housing crisis with practical solutions until we’ve acknowledged it and what many people feel is the root cause of it. If we don’t do this then the BNP will continue to look like the only party that’s dealing with issue head on.

The bulk of this post first appeared in the comments section of this post by Paul Burgin.

20 Questions to a fellow blogger

Paul Burgin over at Mars Hill invited me to answer ‘Twenty Questions to a fellow blogger’ which I did in my normal concise style (!!) You can read it here.

What would you do?

Last week the Joseph Rowntree foundation published ‘need, not greed’, a report which analysed the reasons why people take informal cash in hand work. The findings make fascinating reading for those familiar with the one dimensional government approach of enforcement and cracking down on benefit fraud. Every week I meet people who want to find legitimate work, but are frustrated by the benefits and tax system.

Andrea (20) had been out of work for a few months after personal problems before she found herself a 16 hour a week job in a hairdressers, which earned £88 per week. She wants to get back into full time work, but doesn’t yet feel she has the confidence to do so. The government estimates that she needs £45.50 a week to live on and therefore stops paying her Job Seeker’s Allowance. In addition, two thirds of the money above £45.50 a week that she earns is deducted from her Housing Benefit claim. She is £14.36 a week better off. However, because her hours and her pay vary from week to week she has to inform the Job Centre and the Housing Benefit department every time she gets paid. Sometimes she is not paid on time by her employers and she has to trust that she will not get caught out by inefficient, impersonal, unhelpful benefits administration that might delay the payments she needs for rent and living expenses.

Is it any wonder that people take on cash in hand work, whilst staying on benefits? If Andrea had taken cash in hand she would be £88 a week better off without taking the risk of being without money for weeks if her job stopped and she struggled to ensure she got the right benefit payments. There are numerous non-financial advantages to working part time rather than staying on benefits. It raises self esteem, helps people to get back into the job market, makes it easier to access privately rented housing and crucially, averts boredom and a downward spiral into lethargy and depression. When people ask me about cash in hand work I advise them that legally they must declare their earnings, but I would much rather they worked cash in hand than not at all. There are extra problems to cash in hand work over legal work– you are more liable to be exploited, be paid less than the minimum wage or not get paid at all, but in the context of the immediate minute to minute financial needs of most people on benefits these risks are worth taking.

The government is right that you can survive on the Job Seeker’s rate of £57.50 a week for over 25s, with the help of Housing Benefit and Council Tax Benefit. But imagine not being able to afford birthday cards and presents for your family; not being able to treat yourself once in a while without knowing that it will put you into debt at the end of the month; not being able to travel to visit your grandma for want of what is often just a few pounds. People don’t just want to survive, they want to live.

This is not an argument for increasing benefit rates. We need to encourage, equip and support people back into work in as many ways as possible (education, training, preparing CVs, fare to job interviews etc etc) and a higher weekly allowance will not achieve that. Neither would it reduce the amount of work in the informal shadow economy. We need to make a bigger financial differentiation between benefits and work, through significantly increasing the minimum wage and allowing a greater ‘run-on’ of benefits for the first few months when someone finds work. We also need an efficient and accurately run benefits administration. The ‘faceless bureaucrats’ which Gordon Brown and Oliver Letwin fight to cull have an important job to do in ending Benefit dependency.

The informal cash in hand economy can be an insecure and difficult financial environment, but it can be a lifesaver for those on benefits and I rarely feel the need to reach for the phone number of the government’s Benefits Fraud Hotline.


Name and some of Andrea's details have been changed.

The technicalities are circling

David Blunkett’s critics accuse him of failing to declare a directorship with a DNA testing company to the standards watchdog within two years of leaving ministerial office. Contacting the standards watchdog was not compulsory, only advised. He did not hold the directorship whilst he was a minister. Indeed he resigned the post as soon as he was reappointed to the cabinet. On present evidence David Blunkett is guilty at most of a minor technicality. His opponents delight in tripping him up with an insignificant speck, because they sense he is vulnerable to pressure. Let’s hope that they remembered to check their own eyes first.

Public accountability and transparency of our leaders is to be welcomed, but as David Blunkett’s experience demonstrates technicalities in relation to dishonest gain carry disproportionate weight. We demand resignation for minor infringements in this area partly because there is no agreement on what other behaviour we expected from a minister.

The following questions are a suggestion of what criteria we should be using to judge ministerial conduct. They do not touch on the substance of the decisions made, which are rightly left to political argument.

1) Does the minister make decisions which s/he considers in the long term interest of the country even when these conflict with short term self-interest or political expediency?
2) Does the minister speak with integrity in public? Is the minister prepared to accept responsibility for mistakes as well as successes?
3) Does the minister promote good governance by making every effort to work with ministerial colleagues and overcome personality differences?
4) Does the minister lead his/her department in order that it is managed efficiently, develops a culture of honesty and integrity and seeks to bring out the best in its staff?
5) Does the minister ensure on a continuing basis that s/he listens and responds to a genuine cross section of informed and honest opinion and not become beholden to any one interest?
6) Has the minister used his/her office for dishonest gain?

Was David Blunkett’s misuse of his office to fast track the visa application of Ms Quinn’s nanny sufficiently serious, in the context of the other criteria that he should have been forced to resign?

If there are any ministers who could consistently answer yes to questions one and two it would be surprising although I’m sure that some could answer yes to three to five. However, because there is never discussion about these areas of a minister’s character, integrity and performance we simply don’t know. If we are to avoid the ludicrous scenes surrounding David Blunkett of the last forty-eight hours it’s about time we found out.

Hands up if you want a debate!

‘Would those who would like to discuss whether or not we have a debate please raise your hands now?’ Listening to the news this week I thought I’d been transported back to the Students’ Union. People from across the political spectrum were arguing about whether or not we should talk about abortion. Each morning I would turn on the radio anticipating that the debate would actually have started. Each morning I was disappointed. Just another hand raised in favour of debate.

If and when a debate does start let’s hope it’s a proper one. The early signs are not encouraging. The focus has been on whether the law should allow abortions at 24 weeks, 22 weeks or 20 weeks. This is tinkering around on the edges based on an unspoken consensus that a) we shouldn’t abort babies who might survive apart from their mother with the help of science and b) we shouldn’t abort babies who look like babies. The fact that if the parents waited another couple of weeks it would survive / look like a baby seems to be conveniently forgotten. If it was remembered the discussion seems almost irrelevant. A debate based on this consensus is a debate on quicksand.

We need an alternative starting point. A simple statistic can provide it. In the UK in 2003 were 695000 births and 181600 abortions. Factor in an estimated figure for miscarriages and 19% or almost one in five of recorded pregnancies in the UK is aborted.1 Whatever your view on a women’s right to choose or a baby’s right to life everyone should be able to agree that are too many abortions happening in this country. Whether a woman or couple choose to abort a baby or not the psychological trauma involved is huge and often life long.

I’m not sure I am in a position to tell a woman or couple whether or not they should have an abortion in a unique and difficult circumstance that they find themselves in. I do know that we need to find ways to reduce the number of women that face that choice in the first place. If we’re going to have a debate, these are the things we need to be talking about.

Note
1. There are no official statistics on miscarriages, although approximately one in eight pregnancies miscarry, mostly before ten weeks.

Tea in Westminster

Last Monday the prayer and campaign network SPEAK launched its creative petition the ‘Big Dress’. For four years SPEAK have been collected 15cm2 squares of fabric with people’s pictures, prayers and words calling for trade justice. These have been sown together to make a huge, tent like patchwork dress which was erected in Berkley Square, London. The Bishop of Barking led a fantastic, moving and visual service of repentance for the UK’s and our own individual failure to pursue justice in world trade. This was followed by a mass lobby of MPs at Westminster calling for accountability of UK based multi-national companies.

I was amazed by how easy it is to lobby your MP. We queued up for ten minutes at St.Stephen's entrance, before bypassing the streams of tourists and making our way to the central lobby. There you fill in a short green card explaining why you want to speak to your MP who is then legally obliged to speak to you if the House is in session, he or she is there and not speaking in a debate. You don’t have to make an appointment (although this helps) – you can just turn up. Although my MP wasn’t able to speak to me his researcher came down almost immediately and spoke with us and agreed that we should set up a meeting with the MP in our constituency. Others spent between five minutes and an hour with their MP, one group getting a cup of tea in the House of Lords!

So next time you’re in London pencil in a discussion with your MP on an issue of your choice over a cup of tea in the palace of Westminster!

To find out who your MP is visit www.theyworkforyou.com