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Housing Benefit Climb Down

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Just saw this in the Guardian:

http://www.guardian.co.uk/society/2011/feb/17/nick-clegg-housing-benefit-cut-dropped

"The government has dropped plans to impose a 10% cut in housing benefit on anyone unemployed for more than a year after a last-minute intervention by Nick Clegg.

The cut was proposed in the June emergency budget, but will now not feature in the welfare reform bill published by Iain Duncan Smith.

Last week the work and pensions secretary maintained that the 10% cut would be kept to give unemployed people an incentive to find work. But the measure was seen by many Liberal Democrats as punishing the poor twice.

Clegg also feared that private sector landlords in areas of high unemployment would be reluctant to rent to jobseeker's allowance claimants if their housing benefit income was at risk of being reduced.

Duncan Smith denied that the idea was dumped due to opposition from Clegg, insisting: "I am fully at one with Nick on this."

He said he had decided not to press ahead with the cut because all of those affected by it would anyway be recruited on to the government's new back-to-work programmes.

Duncan Smith told BBC Radio 4's Today programme: "You won't see this in the bill for one very good reason - the more we looked at this, the more we reviewed the interplay between that reduction at 12 months and the universal credit and the work programme, it meant that all of those people were going to move on to the work programme anyway, so they would be having intensive help to get them back to work."

It is also understood ministers have decided not to put carer's allowance, worth £55 a week, into the new universal credit system, after carers' organisations said it would increase means-testing and complexity.

David Cameron and Duncan Smith will jointly launch the welfare bill, claiming that money being poured into a streamlined universal credit system will take 950,000 people – including 300,000 children – out of poverty.

The government will also announce moves to reduce the flow of people – 300,000 a year – who leave work to claim sickness-related benefits.

According to Duncan Smith, the new system will be simplified and result in nearly a million people being "lifted out of poverty" and around a million of the poorest Britons seeing increases of £25 a week as they return to work.

"What will happen is British people will genuinely be able to get British jobs because they will be incentivised to take those jobs, we will expect them to take those jobs but work will pay better than benefits," he told BBC Breakfast.

"A life on benefits will no longer be an option for somebody. After all, right now there are huge numbers of people sitting on benefits, sometimes in rented accommodation, that people who are working could never dream of affording.

"That system has got to change. Fairness to the taxpayer as well."

David Frost, chair of the British Chambers of Commerce, and Dame Carol Black, national director for health and work, will be asked to lead a review of what Cameron will describe as a "sicknote culture".

In his speech the prime minister will argue that the "collective culture of responsibility – taken for granted 60 years ago – has in many ways been lost. You see it in the people who go off sick when they could work or the people who refuse job offer after job offer.

"The benefit system has created a benefit culture. It doesn't just allow people to act irresponsibly, but often actively encourages them to do so. Sometimes they deliberately follow the signals that are sent out."

Government sources said 2.7m households would be better off as a result of universal credit, and more than 1m would see an increase of over £25 a week, with 85% of the increase going to households with the lowest 40% of income.

Transitional protection will ensure that there are – at least initially – no cash losers as universal credit is phased in from 2013.

The shadow work and pensions secretary, Liam Byrne, said: "We'll support the government where it builds on our big reforms to sort out sickness benefits and get people who can work into work.

"But welfare to work won't work without jobs. We need a plan B for the economy because yesterday's figures showed the private sector isn't creating jobs fast enough to pick up public sector job cuts."

In other changes, disability living allowance will be reformed by the introduction of a personal independence payment for disabled people.

There will also be measures to reduce fraud and error, including a single investigation service and a new mobile regional taskforce to investigate every claim in high fraud areas, along with civil penalties – £50 for lesser offences."

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I think that's sensible enough; I particularly like that the spotted one of the unintended consequences, where a jobseeker wouldn't get a place for fear of lower benefit later on.

The key plank of the welfare reform is to make work pay; cutting HB would really be punishing twice.

Of course, this will be headlined as a Government U turn by the Beeb.

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I don't see it as a major concession, I still think the reform will tackle much of the endemic problems

I agree. I didn't think the 10% cut after being unemployed for a year is sensible. There are a variety of reasons why someone might be unemployed for more than a year, particularly in the current jobs market. Housing benefit should be for housing and jsa for jsa. I don't think they should mix the two.

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What I am struggling to come to terms with is if there is going to be one universal credit why will there be any housing benefits at all, as that would be two benefits.

I just so much want it to be a universal credit that is a maximum of what someone on national average salary takes home and no Housing Benefit in addtion, even if they have 56 kids.

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On the broader topic of social responsibility, Cameron is dead right BUT I don't think he's being open enough about the evidence of that across the whole country, or where the root causes are.

Myself, I'd say the problems lie in;

* The Welfare State, and the growth of the concept of the State as perpetual carer.

* The decline in the role of the owner in business, leading to the rule of the professional manager who takes short term views (ultimately leading to competitive decline) and rapes his shareholders.

* The failure of secular philosophy to provide an adequate argument to replace behavioural control through religious terror.

* The collapse of education.

Half the problem is that the last item means nobody can even understand the scale of the problem; all it would come down to is "does this mean more cuts?".

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snip

* The failure of secular philosophy to provide an adequate argument to replace behavioural control through religious terror.

snip

How about the fact that millions of manufacturing and tech jobs were mercilessly outsourced to cheaper places, lack of any sense of a stake in ones own community and future and the fact that there is no replacement for religious mumbo jumbo other than the vacuous celebrity culture promulgated by popular TV. If that's the best the social engineers can come up with, then perhaps it would be better to reconnect people with the source of their sustenance and become a primarily agrarian society ruled by warlords and the catholic church again?

Edited by Pindar

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How about the fact that millions of manufacturing and tech jobs were mercilessly outsourced to cheaper places, lack of any sense of a stake in ones own community and future and the fact that there is no replacement for religious mumbo jumbo other than the vacuous celebrity culture promulgated by popular TV. If that's the best the social engineers can come up with, then perhaps it would be better to reconnect people with the source of their sustenance and become a primarily agrarian society ruled by warlords and the catholic church again?

Bit of a scatter gun thing there, not sure if that's a list or whatever. Bottom line, I can't say I'd ban outsourcing because who am I to tell anyone else what they are allowed to do?

The collapse of education, which was more needed than ever as it began to dawn on most people that there is no supernatural being governing us, is a hammer blow; that's why your celebrity culture rules, and why people get outsourced, and why there is so little competition in the field of business and capitalism. If people are made cattle then what do you really expect other than fattening up and harvesting?

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* The Welfare State, and the growth of the concept of the State as perpetual carer.

* The decline in the role of the owner in business, leading to the rule of the professional manager who takes short term views (ultimately leading to competitive decline) and rapes his shareholders.

* The failure of secular philosophy to provide an adequate argument to replace behavioural control through religious terror.

Pretty much sums it up for me.

One correction though: secular philosophy have consistently given great tools to control citizens' behaviour in form of various ideologies, from ancient Roman concept of virtue to relatively recent idea of nationalism. Thing is, the great experiment of a society without consistent ideological indoctrination of its citizens seems to have failed.

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I like Duncan Smith's words.

Whenever I read something about his reforms though, I read carefully, and try and work out how the changes can save money. I read about people being lifted out of poverty, and that can only mean more taxpayers money spent on them. And of course more taxpayers money spent on that drags the taxpayers towards and into poverty.

What I can never find is any indication of how money will be saved. There are no benefits being axed or reduced. There is a load of guff about forcing people to work. We all know that this will never happen, there will be a lot of intimidation directed at benefits people if they were to decide that, and they wont want the hassle, so they will just back down. So what is going to change? Why are people going to work for £25 a week? What is IDS thinking?

IDS, your plans arent going to work. Go back and try again.

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Oh ffs, can't you lot who welcome this see it's just a gift for the btl crowd you claim to despise?

If you lose benefits for not getting a job, your income will fall anyhow. All this does is make sure the landlord does not have to share the pain.

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What I am struggling to come to terms with is if there is going to be one universal credit why will there be any housing benefits at all, as that would be two benefits.

I just so much want it to be a universal credit that is a maximum of what someone on national average salary takes home and no Housing Benefit in addtion, even if they have 56 kids.

More like minimum that someone on national minimum wage takes home.

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What I am struggling to come to terms with is if there is going to be one universal credit why will there be any housing benefits at all, as that would be two benefits.

I maybe wrong, but I think your housing benefit contributes towards your universal credit, which has a maximum

So rather than getting money here, money there, etc and it potentially amounting to a big number it call goes into a central pot with a limit.

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What I am struggling to come to terms with is if there is going to be one universal credit why will there be any housing benefits at all, as that would be two benefits.

I just so much want it to be a universal credit that is a maximum of what someone on national average salary takes home and no Housing Benefit in addtion, even if they have 56 kids.

Yes I'm confused too, surely HB only has another couple of years.

My guess is that UC will be about 140 per week....and that's it.

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The government shouldn't be involved in the housing market at all. Why the hell should my taxes be keeping someone in an overpriced house that I cannot afford to buy?

If we didn’t have HB based upon actual rent paid we'd have to have a system of an "acceptable" rental bundled into normal benefits paid to all claimants.

And then would be a slew of Daily Wail items about people who were getting the "acceptable" rental and slumming on a friends floor thus blowing the rent money on booze and drugs.

So there would be a clamour for rental to be paid on an "as incurred" basis.

And HB would be invented.

tim

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I like Duncan Smith's words.

Whenever I read something about his reforms though, I read carefully, and try and work out how the changes can save money. I read about people being lifted out of poverty, and that can only mean more taxpayers money spent on them. And of course more taxpayers money spent on that drags the taxpayers towards and into poverty.

What I can never find is any indication of how money will be saved. There are no benefits being axed or reduced. There is a load of guff about forcing people to work. We all know that this will never happen, there will be a lot of intimidation directed at benefits people if they were to decide that, and they wont want the hassle, so they will just back down. So what is going to change? Why are people going to work for £25 a week? What is IDS thinking?

IDS, your plans arent going to work. Go back and try again.

Depends how tough they are going to be on implementing the rules. As the programme on BBC2 showed it seems that a lot of people on benefits do not see any benefit in working because the level of benefits is so high, so they do not bother. Hence a million immigrants to do everything from pick fruit, man hotel reception desks, cleaners, etc.

So what Duncan Smith seems to be saying is that if you do not look for work seriously and if you turn down a job, then you will lose all benefits, this remains to be seen because it will be job centre plus staff dishing out the bed news and they may opt for an easy life. He is saying that if you take any work we the govt will make sure you are better off than being on the universal benefit by about 25 pounds a week.

So where the savings come from is obvious if the claimant takes a private sector job because instead of paying full universal credit the govt only pay the difference between the private sector wage and the top up. The result is less obvious if the claimant takes a public sector job but the assumption here is that the job will be filled anyway and a percentage would be filled by immigration, get the benefit claimant to take the job instead of an immigrant and you get a saving supposedly because immigrants are not entitled to benefits until paying a certain amount of N.I (two years I think), but this is one reason why immigrants will work for such low wages.

So savings hinge on two things - Job centre plus staff being tough and immigration being reduced massively especially from Eastern Europe, but there is hope here because the German economy is booming and the restrictions that Germany put on Eastern Europeans (when we did not and basically said come on in) are no longer in place, may mean the EE's may go to the higher wage german economy, be closer to home and take a more stable currency.

Time will tell.

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The other thing is how long this is taking to implement, from the announcement today "It will start for new claimants in 2013, if given the go-ahead by Parliament, but would take 10 years to come into effect fully."

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The other thing is how long this is taking to implement, from the announcement today "It will start for new claimants in 2013, if given the go-ahead by Parliament, but would take 10 years to come into effect fully."

In my view the length of time is a good thing. We have had so many knee jerk reactions form labour that were failures because there was no long term planning, especially with computer systems, that this needs to be done right for it to work.

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  • 312 Brexit, House prices and Summer 2020

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      • down 5% +
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