Don’t believe what you read about millionaires in Council Houses

CIMG1500Superb piece on the Red Brick blog last week about the latest absurdities of Tory Housing policies.

The proposal, trailed in the Guardian earlier this month, to cap “rent subsidy” at a household income of £60,000, (which would mean that a couple on £30,000 each could see their rent rise by about £70 a week) is seriously flawed for three reasons.

Firstly, it would disincentivise work, and discourage anyone in social housing from getting on in life.

Household income of £60,000 may seem like quite a lot (it is certainly more than my household earns in a year), and may seem like a sensible threshold for rent subsidies to be cut off at. However, a family with Mum and Dad both working on average London earnings of about £25,000 each would only need one grown-up child living at home and earning £10,000 a year (working part-time while studying, for example) to hit that threshold. Such families are not, by any stretch of the imagination, rich. But under the Tories plan they would either have to take a pay cut, move their earnings into the black market – or abandon their council home if they can no longer pay the higher rent.

Secondly, it would further stigmatise social housing and turn more housing estates into ghettoes of the poor or workless.

Many of the council housing estates in popular parts of London , like Blackheath, are a genuine cross-section of society, with the well-off living alongside the working poor, those who are out of work, and pensioners. Some are tenants, some are private owners who have exercised the right to buy (or increasingly, who have bought their home from someone who had), and some are renting privately from such private owners who have entered the buy-to-let market.

Forcing out social housing tenants whose household earnings go above a threshold, particularly one as low as £60,000, would fracture these communities, uproot children from schools, and make it less likely that tenants are in work – surely contrary to any mainstream welfare reform agenda, from the Right or the Left. It would turn the pleasant, socially mixed housing estates of today into the sink estates of tomorrow – just like the estates which were the centre of such unrest in the 1980s. The Conservatives are a bit like the Bourbons of pre-revolutionary France, who “learned nothing and forgot nothing” about their period of rule. Likewise, the Tories seem to have neither learned nor forgotten the disasters of post-war Housing policy, and are running the risk of repeating its worst mistakes.

If the Tories are wanting to free up social housing by forcing tenants on higher incomes to move out, then logically they should do the same to right-to-buy homeowners, who bought the best council homes, at a huge discount below the market value: homes that in most cases would be in the most demand.

But of course, this would run contrary to the Tories’ hidden agenda: to demonise anyone who rents a council home. Loelia Ponsonby, one of the wives of the 2nd Duke of Westminster, once said that “Anybody seen in a bus over the age of 30 has been a failure in life” (a quote often misattributed to Margaret Thatcher). The Tories now apply a similar argument to anyone, of any age, who rents  a council home: they are automatically suspect and should be made to feel they are receiving it out of charity – and should never forget this charity will be withdrawn as soon as they do well in life.

Social housing tenants are damned if they do, and damned if they don’t: if  they are unemployed or low earners they are condemned as feckless and lazy and have their tax credits taken away; if they worker harder, win promotion and earn more, they now stand to lose their home.

What’s more, Housing Minister Grant Shapps implying that all social rents are “subsidised” is just plain wrong – many Council’s rent budgets are self-funding, and some actually produce a surplus that goes into other council services or back to the Treasury.

Thirdly, the policy misses the point.

The real problem is lack of affordable housing (a shortage that is set to get worse as Tory polices mean hardly any new affordable homes are being built). It is absurd to argue that affordable housing would suddenly be plentiful if only all those high earners moved out and freed it up for those on low incomes. New lettings are already in effect means tested, as you have to be in priority need to be housed quickly by a local authority or a housing association. As Red Brick points out, the numbers of genuinely rich people in social housing have been exaggerated, and cannot  be more than a tiny proportion of the total (as far as I know, these supposed millionaires in Council Houses have never been identified). So if the Government tries to force only very well-off people out of existing tenancies, it may grab some headlines but would only free up a few homes, at most.

But then that’s what this ludicrous plan is all about – headlines rather than homes.

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One Response to Don’t believe what you read about millionaires in Council Houses

  1. Pingback: After 16 years as a Labour councillor in Blackheath and Westcombe Park, Alex Grant says thank you and goodbye | Blackheath Westcombe Labour

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