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Fishbone Glover

The Penny Starting To Drop?

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Picked this link up from the blog this morning:

http://www.guardian.co.uk/politics/2012/jan/04/housing-benefit-tax-credit-subsidise

A few letters in the Guardian highlighting that Housing Benefit merely fills the pockets of landlords and tax credits subsidise business profits by allowing them to pay their staff less than a living wage, rather than helping the poor, as intended. The pertinent quote is:

Similarly, tax credits were introduced by New Labour to deal with stagnating or falling real wages for the working class; the minimum wage was set far too low. The irony of the large benefits bill is that, far from featherbedding the feckless poor, housing benefit goes straight into the pockets of landlords, while tax credits enable employers to pay below a living wage and thus subsidise their profits.

Dr Jamie Gough

Co-author, Spaces of Social Exclusion, University of Sheffield

The penny must be dropping if this kind of thing is appearing on the Guardian website, I know it's only the letters page, but it's a start. What with other coverage in the Telegraph about benfit caps:

http://www.telegraph.co.uk/news/politics/8995034/Why-we-need-a-cap-on-housing-benefits.html

It looks like the whole issue surrounding it is coming to the attention of the public (I know it's not exactly news to hpc'ers).

As far as I can see, the only solution to the problem is to do away with tax credits and housing benefits in their current form, although the planned universal allowance may go some way to addressing the problems. It would mean, however, that landlords would only be able to charge what people could afford to pay so people would get the accomodation they deserve, based on their ability to pay for it. Solving the problem of the £100K per year HB payments to idle families with lots of children.

Edited by Fishbone Glover

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What if these benefits- tax credits - were dropped? In a situation of mass immigration, do you think employers would start to pay higher wages to make up the difference?

Or would the other side of capitalism - the wicked foot of overpopulation rule - called in science the 'tragedy of the commons'?

Basically this says that if employers can import people at will, then the most proven profitable situation is one of wages driven to substiance levels and overexplotation. i.e. wages drop to bread and water levels while profits and rents rise to grand country estate levels.

We have seen wages utterly collapse as a share of GDP, while profits and rents have soared.

I am afraid there is this wishful thinking that if only the market was allowed to work, rents would fall - in many areas they would - and wages would rise - they would not - profits would instead.

I accept that £800 from the average workers pay packet per year - 21bn - goes directly to subsidize landlords and is an evil, and leads directly to many vast areas of the north swamped with immigration at the puzzlement of the Ms Duffys of this world in places like Oldham, because low cost housing is smapped up and then filled with imported 'housing benefit bodies' which benefit the landlord at the cost of the taxpayer, as there is a minimum rent established by HB. The housing benefit system fuels mass immigration and welfare claims at the expense of taxpayers.

But do we really want to see people driven to the victorian levels of poverty the free market under mass immigration implies?

Picked this link up from the blog this morning:

http://www.guardian....redit-subsidise

A few letters in the Guardian highlighting that Housing Benefit merely fills the pockets of landlords and tax credits subsidise business profits by allowing them to pay their staff less than a living wage, rather than helping the poor, as intended. The pertinent quote is:

The penny must be dropping if this kind of thing is appearing on the Guardian website, I know it's only the letters page, but it's a start. What with other coverage in the Telegraph about benfit caps:

http://www.telegraph...g-benefits.html

It looks like the whole issue surrounding it is coming to the attention of the public (I know it's not exactly news to hpc'ers).

As far as I can see, the only solution to the problem is to do away with tax credits and housing benefits in their current form, although the planned universal allowance may go some way to addressing the problems. It would mean, however, that landlords would only be able to charge what people could afford to pay so people would get the accomodation they deserve, based on their ability to pay for it. Solving the problem of the £100K per year HB payments to idle families with lots of children.

Edited by brainclamp

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What if these benefits- tax credits - were dropped? In a situation of mass immigration, do you think employers would start to pay higher wages to make up the difference?

Or would the other side of capitalism - the wicked foot of overpopulation rule - called in science the 'tragedy of the commons'?

Basically this says that if employers can import people at will, then the most proven profitable situation is one of wages driven to substiance levels and overexplotation. i.e. wages drop to bread and water levels while profits and rents rise to grand country estate levels.

We have seen wages utterly collapse as a share of GDP, while profits and rents have soared.

I am afraid there is this wishful thinking that if only the market was allowed to work, rents would fall - in many areas they would - and wages would rise - they would not - profits would instead.

I accept that £800 from the average workers pay packet per year - 21bn - goes directly to subsidize landlords and is an evil, and leads directly to many vast areas of the north swamped with immigration at the puzzlement of the Ms Duffys of this world in places like Oldham, because low cost housing is smapped up and then filled with imported 'housing benefit bodies' which benefit the landlord at the cost of the taxpayer, as there is a minimum rent established by HB. The housing benefit system fuels mass immigration and welfare claims at the expense of taxpayers.

But do we really want to see people driven to the victorian levels of poverty the free market under mass immigration implies?

It's not an either or thing you know. There is a big (huge really) spectrum of possible outcomes between what we have now and 'victorian levels of poverty', whatever that means. Sounds a lot like over the top hyperbole to me though.

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What if these benefits- tax credits - were dropped? In a situation of mass immigration, do you think employers would start to pay higher wages to make up the difference?

Or would the other side of capitalism - the wicked foot of overpopulation rule - called in science the 'tragedy of the commons'?

Basically this says that if employers can import people at will, then the most proven profitable situation is one of wages driven to substiance levels and overexplotation. i.e. wages drop to bread and water levels while profits and rents rise to grand country estate levels.

We have seen wages utterly collapse as a share of GDP, while profits and rents have soared.

I am afraid there is this wishful thinking that if only the market was allowed to work, rents would fall - in many areas they would - and wages would rise - they would not - profits would instead.

I accept that £800 from the average workers pay packet per year - 21bn - goes directly to subsidize landlords and is an evil, and leads directly to many vast areas of the north swamped with immigration at the puzzlement of the Ms Duffys of this world in places like Oldham, because low cost housing is smapped up and then filled with imported 'housing benefit bodies' which benefit the landlord at the cost of the taxpayer, as there is a minimum rent established by HB. The housing benefit system fuels mass immigration and welfare claims at the expense of taxpayers.

But do we really want to see people driven to the victorian levels of poverty the free market under mass immigration implies?

Immigration certainly drives down wages and increases rents. I think most people agree that uncontrolled immigration needs to end. However, I think you are mixing up this issue with the absurdities and perverse incentives created by our tax and benefits system. Both that and immigration need sorting out, and one being wrong doesnt justify the other remaining as it is.

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Picked this link up from the blog this morning:

http://www.guardian....redit-subsidise

A few letters in the Guardian highlighting that Housing Benefit merely fills the pockets of landlords and tax credits subsidise business profits by allowing them to pay their staff less than a living wage, rather than helping the poor, as intended. The pertinent quote is:

The penny must be dropping if this kind of thing is appearing on the Guardian website, I know it's only the letters page, but it's a start. What with other coverage in the Telegraph about benfit caps:

http://www.telegraph...g-benefits.html

It looks like the whole issue surrounding it is coming to the attention of the public (I know it's not exactly news to hpc'ers).

As far as I can see, the only solution to the problem is to do away with tax credits and housing benefits in their current form, although the planned universal allowance may go some way to addressing the problems. It would mean, however, that landlords would only be able to charge what people could afford to pay so people would get the accomodation they deserve, based on their ability to pay for it. Solving the problem of the £100K per year HB payments to idle families with lots of children.

So how many millions £££ were spent on "Think-Tank" Professionals (piss-takers) who came up with this scheme to rip off the taxpayer and cross subsidise stingy employers and BTLer's

We worked these consequences out years ago on HPC!

Why isn't the money "clawed back" off these scum who were paid millions to work out the consequences of their actions?

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Every penny not spent on rent is a penny that can be spent on something else.

The present govt are forcing 100's thousands of people on £65 a week to spend their cash on subsidising the roof over their heads as well as thieving £150 back pa by force or imprisonment if they want to watch tv

So it's an illusion that the Govt even pay the full benefit rate which is transferred to paying BBC £800,000? salaries of Paxman-Clarkeson etc

Instead of capping housing allowance (throwing thousands out of their flats-houses as soon as they loose their jobs) the best thing is to bring back what Thatcher AXED which is Rent Controls

But 100's of Vi Govt Ministers with multiple BTL's will be having nothing of the sort thank you very much!

Edited by erranta

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The present govt are forcing 100's thousands of people on £65 a week to spend their cash on subsidising the roof over their heads as well as thieving £150 back pa by force or imprisonment if they want to watch tv

So it's an illusion that the Govt even pay the full benefit rate which is transferred to paying BBC £800,000? salaries of Paxman-Clarkeson etc

Instead of capping housing allowance (throwing thousands out of their flats-houses as soon as they loose their jobs) the best thing is to bring back what Thatcher AXED which is Rent Controls

But 100's of Vi Govt Ministers with multiple BTL's will be having nothing of the sort thank you very much!

The whole system stinks.

Fundamental problem: "Benefits" are, in the end, NOT "benefits". They shouldn't be needed!!! If PURE logic - and PURE market forces were allowed to apply - there would be NO NEED for benefits. "Benefits" are now a MASSIVE, MASSIVE subsidy system - propping up "prices" [rents too] at a completely artificial rate.

It beggars belief that this isn't just SPELT OUT every day in the "media".

Solution: Take away ALL "benefits" - and let the whole system go back to REALITY.

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Excellent. Now they're figuring out how Housing Benefit has pumped up rents, shouldn't be long till they figure out...

  • How student loans have pumped up tuition fees.
  • How Winter Fuel Allowance has pumped up energy prices
  • How government borrowing has pumped up government salaries
  • How BBC licence fee has pumped up the price of "Jonathan Ross type Non-talent" salaries
  • How reckless lending, overdrafts, credit etc have propped up daft businesses and people. Causing undeserved influence over our economy.
  • How banks are then pocketing a fortune at the expense of every other productive endeavour.

and then ....... the big shocker.....

  • How fraudulent mortgages pumped up house prices.

Next stage of waking up...............

  • Realising its all down to the expansion and abuse of the money supply. Otherwise known as printing money or QE & Zero interest rate policy.

DUH!!

  • Next step.... join HPC.co.uk and rant about it.
  • Next step.... start to really listen to what Ron Paul is saying.
Edited by sleeping dog

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The whole system stinks.

Fundamental problem: "Benefits" are, in the end, NOT "benefits". They shouldn't be needed!!! If PURE logic - and PURE market forces were allowed to apply - there would be NO NEED for benefits. "Benefits" are now a MASSIVE, MASSIVE subsidy system - propping up "prices" [rents too] at a completely artificial rate.

It beggars belief that this isn't just SPELT OUT every day in the "media".

Solution: Take away ALL "benefits" - and let the whole system go back to REALITY.

Does that also apply to Pensions, one of the biggest ponzi schemes of the lot?

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Excellent. Now they're figuring out how Housing Benefit has pumped up rents, shouldn't be long till they figure out...

  • How student loans have pumped up tuition fees.
  • How Winter Fuel Allowance has pumped up energy prices
  • How government borrowing has pumped up government salaries
  • How BBC licence fee has pumped up the price of "Jonathan Ross type Non-talent" salaries
  • How reckless lending, overdrafts, credit etc have propped up daft businesses and people. Causing undeserved influence over our economy.
  • How banks are then pocketing a fortune at the expense of every other productive endeavour.

and then ....... the big shocker.....

  • How fraudulent mortgages pumped up house prices.

Next stage of waking up...............

  • Realising its all down to the expansion and abuse of the money supply. Otherwise known as printing money or QE & Zero interest rate policy.

DUH!!

  • Next step.... join HPC.co.uk and rant about it.
  • Next step.... start to really listen to what Ron Paul is saying.

Nice sum up.

Shame it wont fit on the front of the Daily Express.

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agree with most of your post but

How BBC licence fee has pumped up the price of "Jonathan Ross type Non-talent" salaries

Is stretching it a bit. The tv license is very cheap and despite all the flaws of the bbc and channel 4 they also provide some excellent and truly world class programming and services. If you'd pointed out how sky tv has pumped up footballer's salaries, contributed hugely to celebrity 'culture ' and inflated prices of decent entertainment (and therefore the prices we all pay at retail for advertised goods) I would have more sympathy.

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The tv license is very cheap and despite all the flaws of the bbc and channel 4 they also provide some excellent and truly world class programming and services. If you'd pointed out how sky tv has pumped up footballer's salaries, contributed hugely to celebrity 'culture ' and inflated prices of decent entertainment (and therefore the prices we all pay at retail for advertised goods) I would have more sympathy.

If it provided value for money then people would be willing to pay for it. I can't remember the last time i've watched any BBC thing on TV, and yet still have to pay for it. It's not about quality, it's the fact that it's a tax that annoys me.

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agree with most of your post but

Is stretching it a bit. The tv license is very cheap and despite all the flaws of the bbc and channel 4 they also provide some excellent and truly world class programming and services. If you'd pointed out how sky tv has pumped up footballer's salaries, contributed hugely to celebrity 'culture ' and inflated prices of decent entertainment (and therefore the prices we all pay at retail for advertised goods) I would have more sympathy.

I didn't word that bit very well. So fair criticism.

What I was going for was the way the licence funded BBC were (unknowingly) pumping up the market value of so called "star talent" when bidding against ITV, Sky etc.

The BBC fell into the same trap as the government. They thought they were responding to market prices, not realising THEY were inflating the market price. Admittedly in this case it has less to do with expansion of the money supply, but more to do with an isolated distortion in the marketplace.

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If it provided value for money then people would be willing to pay for it. I can't remember the last time i've watched any BBC thing on TV, and yet still have to pay for it. It's not about quality, it's the fact that it's a tax that annoys me.

It provides better value than any other broadcaster I am aware of (less than 50p a day for various tv and countless radio stations as well as a significant web presence). If you believe otherwise please enlighten me.

If you genuinely don't watch anything on bbc 4 you are seriously missing out.

The news, whilst far from perfect is better than any other msm channel.

I'm assuming you don't have kids or you'd appreciate their children's output.

Things like bbc introducing provide a chance for genuine fresh talent and creativity and are an at least partial antidote to z factor etc.

Think of the children of chav parents. Should they only have access to sky and itv? I think it would be a real shame.

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I didn't word that bit very well. So fair criticism.

What I was going for was the way the licence funded BBC were (unknowingly) pumping up the market value of so called "star talent" when bidding against ITV, Sky etc.

The BBC fell into the same trap as the government. They thought they were responding to market prices, not realising THEY were inflating the market price. Admittedly in this case it has less to do with expansion of the money supply, but more to do with an isolated distortion in the marketplace.

Fair play and thanks for the reply. The meat and potatoes of your post is absolutely spot on IMHO. !!

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It provides better value than any other broadcaster I am aware of (less than 50p a day for various tv and countless radio stations as well as a significant web presence). If you believe otherwise please enlighten me.

If you genuinely don't watch anything on bbc 4 you are seriously missing out.

The news, whilst far from perfect is better than any other msm channel.

I'm assuming you don't have kids or you'd appreciate their children's output.

Things like bbc introducing provide a chance for genuine fresh talent and creativity and are an at least partial antidote to z factor etc.

Think of the children of chav parents. Should they only have access to sky and itv? I think it would be a real shame.

I think you're missing that most stuff available on TV is also available on the internet for free - not programmes that have been paid for, but random entertainment or education.

You might say that tescos giblets pies are excellent value at 50p each, but that is no reason to be forced to buy them if you also want to buy a steak.

That's pretty much the start and end of my problem with the license fee - i recognise that for some people it provides entertainment, education, news, and so on. Fair enough, let them pay for it. You're giving reasons why the BBC license fee is good value for money - and i might agree if it was a choice everyone got to make. Cost versus value.

I only tend to watch films on TV - news + education i get off the internet, can't stand most soaps i've tried to watch, and i've found no reason to try and watch anything else yet. Why should i have to pay for the BBC license just because i want to watch something on Film4?

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Now they're figuring out how Housing Benefit has pumped up rents,...

The evidence does not support that hypothesis.

'Leading the market? A research report into whether Local Housing Allowance (LHA) lettings are feeding rent inflation.' [september 2011]:

http://www.cih.org/policy/CIHBPF-August2011.pdf

1. Executive summary

[...snip...]

1.10 [Chartered Institute of Housing] and the [british Property Federation] have collaborated on research to review available data on the LHA to see what if any effect it has on rent inflation. In particular we looked at whether the increase in average rents for LHA claims could be caused by other factors such as changes in the composition of the caseload.

1.11 Caseload composition can cause an uplift in average rent levels if the proportion of claimants shifts from between regions where rents are relatively inexpensive (such as the North and the Midlands) to more expensive areas (London and the rest of Southern England).

1.12 Likewise a shift in the composition of the caseload away from single person households towards a higher proportion of families would also cause some uplift in average rents because larger properties are more expensive.

1.13 A simple comparison of the LHA rates at the start and end dates will show whether rents levels have generally risen or fallen and the size of any caseload effect can be estimated by superimposing the caseload characteristics at the start date onto the LHA levels at the end date.

1.14 We also tested whether there was any evidence for a relationship between the proportions of the market that is let to housing benefit claimants and LHA inflation by applying a standard statistical test.

1.15 We found that between November 2008 and February 2010 the number of areas in in which LHA rates had fallen outnumbered those in which there had been an increase by a ratio of more than 2:1.

1.16 This pattern was repeated in all the regions and if anything was more marked in London and the rest of southern England. This trend was also stronger in the one to three bedroom property sizes that together account for over 85% of all claims.

1.17 The increase in average rent levels during this period is entirely due to a shift in the relative distribution of the caseload from the North and the Midlands towards London and Southern England. After adjusting for this "caseload effect" average housing benefit rent levels fell by 1% (instead of the reported 3% rise).

1.18 We found no evidence for a relationship between the LHA inflation rates and the proportion of the market that is let to housing benefit tenants.

1.19 Overall it seems that LHA rates do broadly reflect what is happening in the wider (non-housing benefit) market and this should not be surprising because LHA rates are set from data that excludes housing benefit lettings. There is no evidence to support the contention that the LHA is inflationary or produces a feedback loop.

1.20 Our findings call into question the Government‟s strategy that it can use its power as a bulk purchaser to force landlords to reduce their rents. If LHA rates do not contribute towards rent inflation then conversely they cannot be used as a tool to force rents down.

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Back to the original point. Regardless of hypothetical future scenarios, housing benfit is an abomination.

A benefit paid directly to an individual or company to fund their speculation.

Grossly distorts the housing market. I still think pople understimate quite HOW MUCH it is NOW distorting the market.

Makes it more sensible to stay on the dole than work.

Punishes the low paid, fund by their own tax payments.

Grossly distorts the housing market. LIAR RENTS.

and Grossly distorts the housing market..........

And while I'm at it, things like automatic free dental care for the unemployed is crazy when the low paid have to fund it theirselves.

We need a proper minimum wage and active protectionist policies for British jobs. Make slave foreign labour a serious crime. The next time Cameron is photographed with a packet of Lurpack on his table he should be horsewhipped.

I don't care if I'm the last one standing who wants to be able to feel some pride in Britain, but it's been run into the ground by this spiv elite, and purely for their benefit.

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I think you're missing that most stuff available on TV is also available on the internet for free - not programmes that have been paid for, but random entertainment or education.

You might say that tescos giblets pies are excellent value at 50p each, but that is no reason to be forced to buy them if you also want to buy a steak.

That's pretty much the start and end of my problem with the license fee - i recognise that for some people it provides entertainment, education, news, and so on. Fair enough, let them pay for it. You're giving reasons why the BBC license fee is good value for money - and i might agree if it was a choice everyone got to make. Cost versus value.

I only tend to watch films on TV - news + education i get off the internet, can't stand most soaps i've tried to watch, and i've found no reason to try and watch anything else yet. Why should i have to pay for the BBC license just because i want to watch something on Film4?

This is maybe splitting hairs, but technically it's not a BBC license fee, it's a TV license. Some of it goes to running the transmitters etc. and some also funds Channel 4.

If it was made into a fee for just the public broadcast infrastructure alone (TV & radio) I doubt it would be much less than £100 anyway because of the overheads of collecting it. Care to find out what other countries pay for a TV/broadcast license that doesn't subsidise a national broadcaster?

Don't forget, part of what you pay is also subsidising thousands of pensioners who don't have to pay a penny. :lol:

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The evidence does not support that hypothesis.

'Leading the market? A research report into whether Local Housing Allowance (LHA) lettings are feeding rent inflation.' [september 2011]:

http://www.cih.org/policy/CIHBPF-August2011.pdf

I've seen that loads of times. So wrong it's laughable. What scenarioare they comparing it to in order to come to the conclusion that 'actually markets work in the opposite way than we've always assumed'.

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