New benefit cap means workless private renters now banned from 92% of UK

Tue, 09/06/2015 - 11:49 -- nick

A reduction in the benefit cap was a centre piece of the Tory manifesto in the run-up to May's election. Flushed with the unexpected popularity of the anti-welfare measures developed within the last coalition, one of very few popular cost-cutting exercises, the obvious direction was onwards, turning the screw further, developing the 'scrounger' narrative and punishing those who had no choice but to depend on this dwindling income.

Last week's Queen's Speech showed the new Conservative government's determination to press ahead with this measure. Even as some other 'commitments' were downgraded to suggestions - the Human Rights Act repeal can wait for another day - the reduction in the cap from £26,000 per year to £23,000 is to be pushed through in the first year of parliament.

The cap itself isn't well understood. Most workless benefits are paid according to income levels or basic entitlements, and for most claimants only housing benefit - the one part that varies according to cost - will be affected. To ensure the government can continue to spout an idea of a moral basis for cuts, working people, most pensioners and many disabled people are exempt, regardless of the level of benefits they receive and ignoring the idea of affordability so vital to the argument. This measure is targeted directly at unemployed people, the lepers of the welfare world.

This targeting of housing benefit means the cap is likely to affect claimants' homes and choice of accommodation more than any other aspect of their lives, but will have huge implications to the UK's social mix. A look at how a family's income would reduce shows just how stark the choices facing them would be.

Using the website EntitledTo, which calculates benefit amounts, a couple with three children of school age, with no disabilities in the family or any non-welfare income, is entitled to £1,450 per month from the public purse. This is made up of Jobseeker's Allowance, tax credits, and child benefit.

Under the old benefit cap this would have left £717 per month as a maximum housing benefit claim. But under the new cap, the most this family could spend on rent would be £467.

The BBC's web tool 'Where can I afford to live?' shows how radical this reduction is in practice. Under the £26,000 cap, our family could afford to live in three-bed rented accommodation at the low end of the market in 57% of local authority areas in the UK. This includes no London boroughs, almost none of the south-east, but a range of options in the north, midlands, Wales and Scotland. This property size requires two children to share a bedroom and could not be considered luxurious.

Drop the cap to £23,000, however, and the change is stark. Now the family could afford to rent in only 8% of council areas, with all of the south and East Anglia off-limits, and most of Scotland and Wales, with only a few isolated areas of the north-west, north-east and south Wales open to claimants renting privately.

In fact you could draw a line from the Wash to the Bristol Channel and no medium-sized workless families could be found in private rented housing beneath it when the cap is fully enacted.

Many of those on benefits have access to social housing, but the implementation of a new category of 'affordable rents' of 80% of the local average - itself a moving number based on factors outside the control of claimants - instituted by the coalition means this option is moving increasingly out of reach of anyone living in London or the south-east, as revealed by the Guardian this week.

The cap's challenges come on top of a range of welfare cuts enacted over the last five years, including below-inflation rises, downgraded hardship funds, sanctions which remove all income from claimants for varying periods for the most spurious reasons, and in advance of £12 billion more cuts to be confirmed in July. All of these reduce the resilience of unemployed people, the constant financial battles they fight reducing their ability to make up the shortfall in rent payments and sapping the energy they want to use to look for work.

There are some exemptions to the cap for workless people, including those who have had jobs in the last year and some people in the early stages of a Universal Credit claim, but those long-term unemployed who struggle to find work are likely to see major financial problems and evictions from their homes.

We are rapidly approaching a point where the UK's poorest, particularly those unfortunate enough to be unemployed and who have larger families, are running out of reasonable housing options. The result is likely to be an increase in the use of temporary accommodation which fails the overcrowded families within it and costs the public purse more despite reforms being marketed as part of an austerity drive.