The end of HB for under 25s? (July 2012)

Last week David Cameron announced a number of policy initiatives, including a proposal to cut housing benefit for anyone under 25. My mind absolutely boggles at how on earth he thinks this is a good idea. It seems so obviously to be a bad idea, but just to be sure I’ve rounded up the articles and blogs that I feel best critique the proposal

1. By way of introduction, a summary of the 17 initiatives announced by Cameron

2. The guardian reports that the prime minister’s second trache of reforms, which go far wider than expected, are designed to give political momentum to the government. Indeed, Cameron acknowledged his Lib Dem colleagues would not agree with all his ideas and the Lib Dems are adamant they are not going to co-operate with any of the package.

Additionally, Cameron said his speech, was designed to spark a debate rather than set out specific policy reforms. He proposed removing housing benefit from under 25s, restricting benefits from families with three children or more, linking benefits to average earnings, as opposed to inflation, time-limiting some benefits, restricting access to benefits for school leavers, and increasing the proportion of benefits paid in kind as opposed to cash.

The article also suggests that these reforms, aimed at cutting a further £10b off the welfare budget, were announced as the government realise the universal credit programme will cost money, rather than make savings.

3. Tim Leunig considers that practicalities of the proposal: “Let us stop and think about this for a moment. An obligation on “children” to live with their parents is an obligation on parents to house their children until they are 25. What penalty does Cameron propose for parents who refuse to take in their 24-year-old child? If a couple separate when their children are in their 20s, which parent is liable to accommodate the children if necessary?

Cameron needs to explain what will happen to people whose parents refuse to house them. If a parent refuses to house a 15-year-old child, the child is taken into care. They may be placed in a children’s home, fostered or put up for adoption. Is Cameron proposing that the state tries to arrange foster care for 23-year-olds?

Cameron also needs to tell us what happens to married people aged under 25. Is he proposing a legal obligation on parents to house their sons-in-law and daughters-in-law as well as their own children? Or is he proposing that any young married couple should be forced to split up if they can’t afford the rent, and return to their own parents? What happens if the young couple have children? Do parents now have an obligation to house not only their children and their children-in-law, but their grandchildren as well?”

4. Jules Birch concludes a blog on Cameron’s speech by saying: “the point of course is that without tackling the underlying problems of low wages and high housing costs any policy designed to ‘make work pay’ is doomed to lurch from soaring costs to swingeing cuts.

Cameron says he is not making policy prescriptions, just starting a debate, but he is also setting an agenda. This is about a political calculation of the gains that can be made from pitching pensioners against young people, home owners against tenants, commuter towns against the inner cities and ‘hard-working families’ against benefit claimants. And playing to the Conservative backbenches.”

5. Nick from IPPR sets out an interesting alternative proposal that “young people who don’t go to university shouldn’t have access to lifetime social housing tenancies or even housing benefit, but make the case instead for a properly funded apprenticeship or FE college-based route into adulthood. (Why should the state subsidise young people to live away from home to study at university but not at an FE college?) It could make the case for young single parents to have the guarantee of Foyer-style housing, in which they can bring up their children while attending classes to get themselves qualified”

6. A Guardian editorial highlights the contradictions of Cameron’s speech, including: “the perversity of reducing housing benefit for families whose adult children land a job, apparently blissfully ignorant of how his own government had increased this particular charge by 27% in both 2011 and 2012, with another 27% rise pencilled in for next year.

Then there was the centrepiece of the weekend spinning – the abolition of housing benefit for the under-25s. With the cosy middle-class assumption that mum and dad can always welcome back jobless twentysomethings, this sounded like a suggestion from a gin-soaked colonel in his clubhouse. Does Mr Cameron even know that he recently legislated for cuts to force council tenants to downsize once adult children flee the nest?”

7. Nicola Hughes from Shelter lists 5 reasons why cutting housing support for young people is a bad move:

  1. Benefits work as a temporary safety net
  2. Not everyone can rely on their parents
  3. And those who can will feel the strain
  4. Housing benefit supports work
  5. It’s a political tightrope

8. Declan Gaffney explains how the comparisons Cameron used in his speech to conjure up the sense of ‘real unfairness’ that he talks about, are misleading and deceptive

9. Nichi Hodgson from New Statesman gives examples of how a short spell on housing benefit provided her (a graduate) and her cousin (a recently redundant carpenter) with the support they needed whilst finding employment. She concludes by saying “there may well be some 18 year olds that plot a trajectory from their parents’ council house to their own, but for the majority of the 380,000 under 25 year olds currently claiming housing benefit, their circumstances will be as nuanced and complex as Cameron’s proposed policy is crude”

10. Julia Unwin fro New Statesman highlights that “we know that the current system of welfare reform does nothing to get people out of poverty…but reform needs to take account of the realities of both the labour market and the housing market…any system that claims that work is the best route out of poverty needs to address the fact that work actually traps many people in poverty from which there is no escape. The fact that more than one in five (22%) working-age housing benefit claimants are in work and the numbers have nearly doubled in the last 3 years is testament to the fact that people who are working hard are also dependent on benefits.

Working hard, paying very high rents in a climate in which there are very few new jobs – this adds up to a picture which is rather different from the one presented in speeches and presentations.”

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