Unemployment is not a sign of bad character

Rachel Reeves became Shadow Secretary of State for Work and Pensions on 7th October, Iain Duncan Smith’s new opposite number, replacing Liam Byrne. (She was Shadow Chief Secretary to the Treasury from 7th October 2011, and she’s been MP for Leeds West since May 2010.) Her first interview as IDS’s Shadow was published in the Observer late on Saturday night – and Twitter exploded. Blogs to read: Paul Bernal’s “Dear Rachel Reeves”; Mike Sivier’s “Sort out the tax dodgers, Labour, then the benefit bill won’t be a problem”; Jayne Linney “Oh Dear Rachel Reeves – You Got it Badly Wrong!!”.

But in the shouting and the tumult, a handful of people seemed genuinely bewildered as to the problem with what Rachel Reeves had said:

I am still unsure why ppl are so against the suggestion of @RachelReevesMP that people are found jobs for pay, if they cant find their own.

— Hossylass (@Hossylass) October 13, 2013

Who, on the left, wouldn't want more people in better paid jobs? Reaction to Reeves' benefits' comments seems a bit strange to me.

— Andrew Spooner (@andrewspoooner) October 13, 2013

Neither Andrew Spooner nor Hossylass seem to have noticed that while Rachel Reeves is enthusiastic about forcing people into “compulsory jobs”, she’s said nothing about what kind of pay those compulsory jobs will get – and she’s made clear that if you are unwilling or unable to be forced, a Labour government will just let you starve homeless.

If you have been unemployed for a year or two, you are desperate. Read Jack Monroe’s speech to the Conservative party conference. You don’t need a kick in the face, you need a job. And there aren’t enough jobs going.

Well, say the comfortable people who’ve never been there, isn’t that what Rachel Reeves is offering?

Imagine this scenario, then. A woman of 23, with a child to support, loses her job. She can’t find work. After a year, she’s summoned to the Job Centre and told that from now on, she’ll be stacking shelves in Tescos, on whatever pay the DWP choose to give her. If the pay isn’t enough to cover childcare? If the job is too far away and there’s no public transport? If she’s applied to Tesco a dozen times for a paid job and been told there were no vacancies because they can get all the compulsory labour they want from the Job Centre, no cost to themselves? If she wanted to find part-time or flexible work so that she could spend time caring for her child? Tough, says Rachel Reeves: take the compulsory job or we’re done with you, you can die on the street for all we care.

PM works with parody

You couldn’t make it up: on the day the Tory / LibDem coalition are rolling out another round of welfare cuts, David Cameron announces he’s working with someone who doesn’t exist except on the Internet. (No, not Michael Green MP.)

The right to buy and the housing bubble

Graeme Brown, director of Shelter Scotland, writes in the Scotsman today:

RTB [Right to Buy] was introduced in Scotland in 1980 and operated largely unchanged for 20 years. Sitting tenants of public authorities had a right to buy their homes for a discount of up to 70 per cent for flats or 50 per cent for houses. The discount depended on how long you had lived there. While modernisation has slowed its impact, the overall consequences of RTB have been hugely popular.

The numbers are staggering – 490,000 social homes have now been sold in a nation of only 2.4 million households. For some households – not the poorest, but those on modest or below average incomes – it gave access to home ownership and to the accumulation of housing wealth that otherwise may never have happened.

In 2007, This Is Money reported that the cost of an average UK property had gone up by 90% over the previous 5 years: the Council of Mortgage Lenders also reported that the buy-to-let market was rising faster than the rest of the house-buying market. Five years later, the majority of new housing benefits are in work, and housing benefit is a profitable subsidy paid to those wealthy enough to take advantage of buy-to-let.

In 1975, the average house price in the United Kingdom was just over £10,000.

More homes, more jobs

There is a story – probably untrue – that a famous Nazi speaker was invited to address Italian peasants in a pro-Mussolini village shortly after Mussolini and Hitler became allies. He made a speech culminating in the rhetorical demand “Which will you have – guns or butter?” and was startled when the Italian peasants bellowed back in unison “Butter!”

During most of the BNP demo yesterday, there were just three of us and three of them. One of them didn’t talk to us: he stood handing out anti-halal leaflets, or trying to, to everyone who entered KFC.

The other two talked to us. In between saying things like they weren’t racist, but Britain is a white Christian country and ought to stay that way, got nothing against black people but British people ought to get first crack at the jobs that are going, they said: There aren’t enough jobs. There aren’t enough houses. People are unemployed, people are homeless.

These are facts. We all three tried to argue with them that the fault lay not with “the immigrants” nor with “the Jewish bankers” but with governments that consistently won’t spend money on job creation or building new homes, but they were absolutely sure that the problem was “too many immigrants” and “too much money spent in Europe”.

But the plain fact is: when the economy is in recession, the government needs to spend more, not less, to save jobs, not to make people unemployed. Austerity doesn’t work.

Homelessness is a weapon of mass destruction

UK-wide, there are nearly 2 million people on council home waiting lists.

In Scotland, (in 2010-11) 55,227 households made homeless applications to their local council and local councils built about 583 dwellings.
(All of this data was got from the www.shelter.org.uk website, by the way.)

Leslie Morphy, chief executive of Crisis, said

“It is shocking … homeless people are dying much younger than the general population. Life on the streets is harsh and the stress of being homeless is clearly taking its toll. This report paints a bleak picture of the consequences homelessness has on people’s health and wellbeing. Ultimately, it shows that homelessness is killing people.”

There are about 272,401 homes rented from housing associations and about 323,138 council homes – but on 31st March 2011 there were 7,667 council homes standing empty. (According to Scottish House Condition survey data, there are currently 87,000 empty homes across Scotland – so in theory enough to resolve the homeless problem and then some. But there’s a council housing estate standing empty just down the road from me, and the reason people were moved out from there was it was becoming uninhabitable.)

As of 31st March 2011, there were 156,200 people on waiting lists for council houses, and 38,800 more people on transfer lists because their council house or locality has become unsafe or inappropriate. According to the 2001 census, there are 29,299 second and holiday homes in Scotland, about 1.3 per cent of the total housing stock.

According to the Scottish House Condition Survey of 2009, about 71,000 households are overcrowded in Scotland, and 65% of those households (46,000) are families with children. And 5,800 children in Scotland are living in substandard “temporary” accommodation this Christmas, and will most likely still be there at Easter. In England, there’s 70,000 children in that situation.

Bernardos reports:

Suitable accommodation is vital to a stable life that includes education, employment and healthy relationships. Young people are more vulnerable to poor health, involvement in crime and substance misuse, sexual exploitation, unemployment and dependency on benefits when they don’t have a safe place to live. Homeless families find themselves living transitory and uncertain lives. They never know when they will have to move, and basic essentials like a school place or doctor become major problems. Temporary accommodation offers children no stimulation or room to play, which can lead to depression or aggressive behaviour.

So what does the Westminster government consider to be the important issue about council houses and council tenants, this first morning of 2012?

Subletting, which is to be made illegal, and the possibility that some very wealthy people may still be living in council homes, never having taken advantage of the Right to Buy scheme or moved on.

Housing Minister Grant Shapps said:

“For too long this country has turned a blind eye on the multi-billion pound problem of housing tenancy fraud and abuse. This year the coalition is determined to end that scandal. Why should someone on a six-figure income enjoy a fantastically subsidised council rent, whilst those in real need languish on the waiting list? And why is it so easy to get away with sub-letting your council house at market rent and simply pocketing up to £1,000 a week at taxpayers’ expense?”

Any “crackdown” on people receiving a subsidised benefit to make absolutely really very sure no one’s getting it who doesn’t deserve to, ensures that all deserving and honest recipients will have their lives made a misery. Grant Shapps talks about people on a six-figure income living in a council house. Even assuming that £100K+ income is based on two adults both working and earning over £50K a year each, even assuming they have four children, the households with that kind of income are in the top 8% of the population. (I got this from the Institute of Fiscal Studies calculator.) There may be some people in that 8% who are occupying a council house and who have never thought of buying it – but this is plainly not a huge problem. I don’t know what Grant Shapps’ wife earns, but with just his Ministerial salary, their family has a higher income than around 96% of the population. Nice for him. Not exactly a situation where you can find much empathy for people who are scrambling to afford each month’s rent.

What will become a huge problem for people who don’t have that kind of income is that the government want local authorities to investigate everybody’s income. This will mean that having a council house becomes a means-tested benefit. Not just when you’re trying to get to be placed in one, when you absolutely do have to show evidence that you’re in need, but when you’ve been living there for years or decades. Any means-tested benefit is always more costly and more complex to administer than a universal benefit, and universal benefits are better for society.

We need more homes being built in the UK. Building council homes is a win-win-win – it provides employment, which is good for the economy, a win: it moves people from temporary accommodation or homeless accommodation into a proper home, which is good for them, a win: and it gives those people more chance of getting a job or a good education which is good long-term for the economy, a win.

Renting a council house and subletting it is not, at the moment, an offense. My guess is that it’s not because most of the time, the sublet is temporary or to the person who stands to inherit the council tenancy anyway – a council tenant who’s going to be living elsewhere for a year or so, a older council tenant who’s moving into sheltered accommodation and whose son or daughter is moving into their council house. There may be some unscrupulous private landlords getting in there, who are doing it as a business, and if so, they would be rightly cracked down on as part of a drive against rogue landlords.

But that’s not what the Westminster government proposes. Claiming that this sort of thing costs two billion a year – based on a recent analysis that asserts 3% of the UK’s council houses may be illegally occupied – this scheme is having £19M diverted to it and they promise local authorities that any money they “save” by cracking down on council tenants is money that can be spent on new housing. But turning council houses into a means-tested benefit won’t save money, it’ll make council housing stock more expensive and complicated to administer. This is just another way to make the lives of the worse-off of a misery, and divert effort from supporting tenants to investigating them.

Shelter in England is calling on the Government to raise standards of rented accommodation and to properly protect tenants from rogue landlords – if you live in England sign the petition here.

Ben Reeve-Lewis, a tenancy relations officer in an inner London borough, says that Shelter’s campaign is misdirected, blaming local authorities for not prosecuting when the problem is “we are so overwhelmed by the number of weekly complaints that we cannot possibly countenance any more than basic dispute resolution.” He writes:

If the TRO decides that a criminal route is the appropriate solution there will have to be days gathering evidence, writing statements, delivering injunctions, interviewing perpetrators and arranging temporary accommodation for the tenant. The matter might reach the magistrates court in perhaps 18 months, with luck. Perhaps over two years, if the landlord opts for trial by jury. Once in court, judges will often give paltry fines. I once took a landlord to court who threatened a woman and her three children with a gun. It took me two and half years to get it before a judge who fined him £400 and refused the council’s costs in the case.

Most private landlords are decent enough people: I used to agent for one, I used to be one. In both instances, this was a “spare flat” that would have been standing empty due to the person who owned it moving away for a year or two: not a big business, just a means of covering the mortgage. I’ve rented from private landlords until I moved into my own home, shared flats with co-tenants. But the lack of council housing means unscrupulous landlords setting out to make millions out of the taxpayer can rent out accommodaton to people on housing benefit and make a massive profit – this is actually noted an advantage in an advice site for landlords:

An advantage of taking on housing benefit applicants and being up to date with the whole process is that landlords are quite often able to receive more than the market rent that would be payable if they were to let the property privately.

Ben Reeve-Lewis again:

The real problem is enforced local authority cuts, which mean that there aren’t enough resources to deal with the scale of the problem; a judicial system that often doesn’t take matters seriously; the government, for its refusal to regulate the private rented sector; and the police, who proclaim that landlord and tenant disputes are civil matters. In almost all cases I see where the tenant has called police to the incident the police have taken the landlord’s side. They often help the landlord to illegally evict the tenant.

You want to save billions, Mr Shapps? Build council houses. Invest some money in resources for local authorities to crack down on unscrupulous private landlords. Don’t make local authorities waste money on means-testing their council tenants.