- Created: Thursday, 13 June 2013 12:05
- Written by Robert Clough
Overall benefit cap
The overall benefit cap comes into force in July 2013: it sets the total benefits that a family can receive at £500 per week and £350 for a single person. The government’s argument is that benefit levels should not exceed the average wage. In reality, its purpose is to cleanse high-rent areas, particularly in London, of the poor. Initial government estimates were that 56,000 families would be hit; it has now reduced that number to 40,000. Yet the Department of Work and Pensions (DWP) has sent out letters to 88,840 families saying they will be affected. 47% live in London, and overall 46% live in social housing.
The government has calculated that such families will lose on average £93 per week and this will be through a cut in local housing allowance or housing benefit. These families will be unable to pay rent and will therefore rapidly build up arrears and face eviction. Even taking the lowest figures for affected households, the number of people facing eviction within a matter of months will be 100,000 in London alone, 70% of them children as it will be larger families who are hit hardest.
London councils, most of them Labour, will be demanding that such people follow those who have already been forced to move out of the city following the introduction of the local housing allowance caps last year. Worst hit is Brent with up to 3,000 households affected. In Camden, which is contacting 761 households, Labour leader Sarah Heywood says ‘It’s absolutely a form of cleansing. People in low-paid work will not be able to afford to live in Central London any more. That is economically illiterate.’ However, this will not stop the council from carrying out this social cleansing. When challenged as to whether Haringey’s Labour council would evict victims of the cap, local Labour MP David Lammy said ‘The answer is yes … let’s be brutally honest.’
The government argues that the overall benefit cap will save £270m a year – about 1.3% of benefit spending. In reality it will not: as evictions are stepped up, so councils will be under a legal obligation to pay for emergency accommodation for families. Westminster pays £12,000 a month to house just one evicted family in bed and breakfast accommodation. The overall benefit cap will see hundreds more families made homeless in London.
On 4 May, Stephanie Bottrill killed herself by walking in front of a lorry on the M6 near her home in Solihull. Her suicide note revealed her torment at the prospect of eviction because she could not afford to pay the bedroom tax. Hundreds of thousands of families in social housing are being hit and many are already in a desperate situation. Even before it came into effect, housing associations were sending out intimidating letters to tenants warning them of the penalties of non-payment. In their rush to implement the tax local councils have acted unlawfully: only one, Bristol, has taken into account the 1985 Housing Act which specifies that a bedroom cannot be less than 50 sq ft, and that retrospectively when the council realised it could face a legal challenge. In deciding liability for the bedroom tax, councils have accepted whatever housing associations or their own housing departments have told them about bedroom numbers. They have not sought to validate such information at all – this is also unlawful.
Labour-run councils have been as ruthless in implementing the tax as they have been in cutting services and jobs. At one stage, Liverpool went so far as to treat tenants’ demands for information on how the council determined their liability for the tax as Freedom of Information Act requests, thereby delaying their responses. Coventry’s Labour council has unlawfully said tenants have no right to appeal at all against bedroom tax decisions. Other councils are trying to prevent appeals by saying that they were time-limited even if they were initiated in April, that is, within a month of the regulations coming into force. The fact is that tenants had no access to independent legal advice because of the savage cuts in legal aid for benefit and housing issues that also came into effect in April. In Wirral, these cuts meant that all but two Citizens’ Advice Bureaux closed down.
By mid-May it was evident that a substantial proportion of those affected were not paying: an initial estimate from Riverside in Liverpool said 50% had made no payment and 25% had only made a part-payment. Council estimates nationally are that overall, 50% of the 120,000 households which are suffering a 25% cut in housing benefit because they are deemed to under-occupy by two or more rooms will not pay at all. Many councils are suggesting that tenants apply for discretionary housing payments to help out – but the budget for these represents just 6% of the cuts in housing benefit and council tax benefit. They are no more than sticking plaster.
Housing associations and councils fear they will be financially destabilised especially when direct payments of benefit to individuals comes into force in October 2013. They are responding aggressively to non-payment – standard letters include the threat of eviction if payments are missed. It is up to campaigners to face them down.
Universal credit is supposed to be a single benefit replacing all out-of-work benefits for those of working age. Its implementation will hit disabled people hardest: the aim is to replace disability living allowance with Personal Independence Payments (PIPs), and effectively remove the allowance from around 500,000 people, cutting such payments by £1.5bn. Applications have to be made online, and will be extremely complicated.
As it is, most of those affected can neither afford internet connections nor have the necessary computer skills. Universal credit was due to be piloted from April in four areas in the northwest: technical problems mean that the pilot is operational in only one (Tameside, Greater Manchester) and affects just a few hundred people. Despite this the government has said it does not intend to delay implementation beyond the scheduled date of October 2013.
Underpinning the ConDem coalition is a series of lies about the cost of state benefits which are repeated and amplified by the billionaire press. Chancellor George Osborne claims that benefit fraud costs £5bn a year; the true figure for 2012/13 was £1.2bn or 0.7% of all spending on benefits. This figure is about one-tenth of the benefits that go unclaimed each year because people do not know how to claim, or what they are entitled to. In 2009/10 there were 9,000 prosecutions for £1bn benefit fraud, but only 30 prosecutions for the £5.5bn estimated tax fraud.
DWP Secretary Iain Duncan Smith has claimed that ‘about 1.4 million people spent almost ten years on out-of-work benefits under the last government’, implying they were avoiding work. Only one in a thousand of decade-long claimants were unemployed. Most were on incapacity benefits (90.5%) and 6.5% were lone parents of young children.
Enlarging on a statement by then Prime Minister Tony Blair in 1997 that ‘behind the statistics lie households where three generations have never had a job’, the current Justice Minister Chris Grayling has spoken about four generations of workless families. No one has ever found one of Blair’s families let alone one of Grayling’s. The best evidence is that 0.1% of 20 million working age families have two generations of being without work – but only if you count families whose second generation has just turned 16. In only 2% of workless households had someone never worked, mainly because the adults were under 25 – nearly one million under-25s are unemployed.
Iain Duncan Smith claims that the deficit was caused by the cost of chasing child poverty targets. Between 1993 and 2012 government spending as a whole rose by 42.3%. Spending on welfare rose by 34.9% over the same time. As a proportion of GDP it remained constant at about 11% from 1993-2007, and only rose to 14% in 2009/10 because of the economic crisis. The real cause of the deficit is the bailout of the banks.
The billionaire press plays a major part in this ideological onslaught, stigmatising groups of claimants in order to divide the so-called ‘strivers’ from the ‘shirkers’. They conveniently ignore the fact that 6.1 million people in families in work live in poverty compared to 5.1 million in poverty from workless households. Their hate figures include those who are on £100,000 a year benefits (five families in the whole of the country, with only 3% of claimants getting more than £10,000 pa); and ‘fake’ disabled people (eight out of ten claimants, according to the Daily Mail) who ‘are crippling our economy’ (Daily Telegraph). Yet who owns the press? Serial tax avoiders and evaders like the Barclay brothers (Daily Telegraph, living in the tax haven of Sark), Rupert Murdoch (The Sun, The Times), Richard Desmond who owns the virulent Daily Express and Daily Star and Lord Rothermere (Daily Mail).
Fight Racism! Fight Imperialism! 233 June/July 2013