Caps and Taxes – One Month On…

The Bedroom Tax (and those areas piloting it, the overall Benefit Cap) has now been in place for almost a month. So, is it a resounding success? Unsurprisingly, the answer is a resounding NO.

We’ve been following developments in Harringey over the past month, and they are (at best) appalling. As Joe Goldberg wrote in Progress Online last week ‘behind the headlines lies a government department with no system, no mechanism and no back-up plan to deal with a policy that is flawed in principle, and flawed in its implementation’. As Joe points out, because Universal Credit isn’t yet in place, determining who will be affected by the cap requires checking 13 separate databases, and it took 3 days for Harringey Council staff to even decipher the incomplete DWP data sent to them – in order to identify just 22 families affected. He estimates it may be another year before the cap is in place across the borough. With 634 households in Brent acknowledged to be currently endangered, the timescale here could be a ‘mere’ 86 days. Even more worrying developments are now taking place in Harringey, which not only threaten the homes of existing residents, but the future of social housing in the borough altogether.

Brent Housing Action member Nic Lane has provided a great outline of the rest of Joe’s article and the implications of the issues we’re seeing in Harringey for the rest of London:

“Just over a week after the formal introduction of the benefits cap pilot scheme – or the “phased roll-out” as local councillors prefer to call it – Joe Goldberg, the cabinet member for finance in the Borough of Harringey, has posted an article on the website of NuLabour think tank Progress detailing some first impressions.

Once you get passed the factual error in the second word of the article (the benefits cap arrived in Haringey on MONDAY 15th April, Joe!) it makes interesting reading on a couple of levels.

First is Goldberg’s assertion that as 54% of those affected by the benefits cap are London residents, the cap is effectively a tax on the capital’s urban residents. He also points out that rental charges rose by 8% last year in London and rightly recognises that the increases in the housing benefit budget are due to the spiralling cost of housing rather than the so-called “Dependency Culture”.

As Haringey activists were quick to point out, he doesn’t follow this statement through to the logical conclusion: that of capping rents. That would require acknowledging the “Dependency Culture” amongst the true beneficiaries of housing benefit – the landlords who can wait a few weeks for the benefits system to sort out their payments because they can get the top rate local housing allowance for substandard housing, from desperate claimants and councils seeking to avoid the increasingly onerous costs of temporary housing for the homeless. A Brent Housing Partnership employee has verbally reported that landlords just outside London are already subdividing their properties in preparation for the forthcoming cash bonanza when the benefits cap hits all the poorer London boroughs in October 2013 and the enforced exodus of claimants really begins.

As if it hadn’t started already – Newham are rehousing families in Birmingham, and the Staines Anarchist Group reported economic migrants being decanted from the South Kilburn Estate to Staines and Egham as long ago as February.

This casts the report in the last Haringey Solidarity Group newsletter “Totally Independent” that the council won’t evict those in temporary accommodation for rent arrears caused by the Benefit Cap in a curious light. Regulation A13 (2) (e) of The Housing Benefit (Amendment) Regulations 2012 clearly states that those in approved temporary accommodation are exempt from the maximum social sector rents, and therefore the benefits cap. Besides, under the extant legislation the homeless can be relocated outside the boundaries of the relevant local authority.

According to Goldberg this will only affect five families in Haringey currently. In what seems to be a completely counter-intuitive statistic he asserts that the DWP have so far only reported 22 households in Haringey as being affected by the benefits cap: the five homeless families, four families who have downsized their home and/or found work and a further eleven families renting in the private sector.

This is apparently due to the confusion caused by the 13 separate databases required to work out eligibility. Presumably he hasn’t been keeping up with all the IT problems plaguing the single-payment Universal Credit software, let alone reading the 200 memoranda released under the Freedom of Information Act on 26th March detailing the myriad technical problems with Universal Jobmatch, which will be a single – albeit central – feed into the Universal Credit decision making process.

While the previously existing system was far from perfect Goldberg seems to accept the requirement to streamline as a given. The reason there are 13 separate databases is because of this thing called “contingency”. Benefits were tailored to individual requirements.

The movement towards Universal Credit, a one-size fits all benefit, is based on “conditionality” – the requirement to jump through hoops or risk sanctioning (the loss of benefit entitlement) for up to three years. At one point Goldberg even echoes Matthew Oakley of Policy Exchange, one of the sculptors of Universal Credit:

“As shocking as this is, we cannot escape the fact that the notion that families can claim as much as £800 per week, equivalent to just under £60k per year pre-tax salary, will never seem fair to those who are struggling to pay their way in work, and deal with the same exorbitant and escalating childcare and housing costs”.

There is no explanation as to how this family became entitled to this level of benefit, or why they are not working – it’s just number-crunching, and poor number-crunching at that. How many of us know a claimant household on £800 per week? How many of them reside in Haringey? Go the whole way Joe – demonise them further and tell us about their £2k holiday! (We don’t need to know they’re a family of five paying for two disabled children to receive twenty-four hour respite care… just tell us about the money!)

Beveridge, one of the architects of the Welfare State, pointed out that claimants had a moral obligation to their families to take state benefits over work if they bring in a sum greater than employment. Obviously this is a particularly unfashionable view in an age where free labour is enforced via the workfare programmes and financial rectitude demands “working for benefits” for ALL claimants – even when these policies are wholly uneconomic and ineffective, as the Public Accounts Committee reported yet again on 22nd February 2013.

In all the recent fuss about Thatcher many people have overlooked that this whole “conditionality” determined system came about with the Welfare Reform Bill of 2009… and Goldberg and his progressive ilk are still peddling this discredited ideology despite the ever growing evidence despite their mealy-mouthed claims about the “pernicious attacks” on their borough’s residents.

Let’s shut this whole corrupt system down now while we still have the opportunity rather than hand it back to this mob to fine-tune what was their pet project in the first place.’

Well said, Nic.

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