Osborne Announces Cut In Benefits Cap To £20,000 A Year Outside London

[Fairyland]

The guardian reporting :http://www.theguardian.com/politics/2015/jul/05/george-osborne-cut-benefits-cap-20000-year-outside-london

[Fairyland]

So claimants outside London are going to be £6,000 worst off per year or £500 per month, assuming they were on £26,000 cap earlier.

If claimants in PRS have a shortfall of £500 per month will their LL drop rent by £500 pcm or £250 pcm in London.

I still don't understand why claimants in London should receive more than others in the country.

[ccc]

I would be very surprised' if someone didn't take this to the European court of human rights.

Person x gets more than person y simply because they live in location z ?

Pretty straightforward case - not that I am a lawyer of course.

[interestrateripoff]

Once more everyone else gets to subsidise London living.

[porca misèria]

Person x gets more than person y simply because they live in location z ?

Whoops. Person in London gets more than person in Athens

[cool_hand]

George Osborne to announce in Budget that higher earners living in social housing must pay market rent.

Under the planned changes to housing subsidies, local authority and housing association tenants in England who earn more than £30,000 - or £40,000 in London - will have to pay up to the market rent, Mr Osborne will say.

The move is expected to raise up to £250m a year by 2018-19.

It is thought that this could affect 340,000 households.

The change - which will cost tenants on average up to £70 extra a week - will build on measures introduced under the coalition government that enabled housing associations and local authorities to charge market rents to those on incomes of more than £60,000.

Extra money from those living in local authority properties will go straight to the Exchequer.

[TheCountOfNowhere]

So busiinesses/landlords in London getting bigger government subsidies than outside of London despite most people not living in London.

#CorruptAsF**k

[iamnumerate]

So claimants outside London are going to be £6,000 worst off per year or £500 per month, assuming they were on £26,000 cap earlier.

If claimants in PRS have a shortfall of £500 per month will their LL drop rent by £500 pcm or £250 pcm in London.

I still don't understand why claimants in London should receive more than others in the country.

I think claimants in London should get more, it costs more in London. However after a couple of years they should be forced to leave London as they obviously don't need to be there (quicker for those without any skills and childcare problems).

[molee]

I would be very surprised' if someone didn't take this to the European court of human rights.

Person x gets more than person y simply because they live in location z ?

Pretty straightforward case - not that I am a lawyer of course.

Welfare benefits in member states are regarded by EU law as 'largesse' and as such the former enjoy complete discretion as to their disbursement. Unless case law has moved on and I have missed something.

[OdoKosh]

^The EU and the ECHR are completely separate legal jurisdictions. The EU's position has tended to be that member states can offer what they like, so long as what is offered does not discriminate between the nationals of a country and workers resident in the country. The ECHR's position has not always been completely consistent but tends towards the view that countries may offer or restrict whatever they like.

[crashmonitor]

Welfare benefits in member states are regarded by EU law as 'largesse' and as such the former enjoy complete discretion as to their disbursement. Unless case law has moved on and I have missed something.

They may not have any say in this kind of geographical discrimination. One assumes though that they do have some say in discrimination against migrant labour, otherwise what is this Brexit referendum all about.

[Fairyland]

Will these cuts in HB have an impact on BTL(reduced rent) and the entire rental market as such aka the trigger for BTL time bomb explosion? Or just optimistic thinking from me?

Edited July 6, 2015 by Fairyland

[Byron]

Is London more expensive than the rest of the UK?

Or is it that Londoners alone claim that it is more expensive.

Try living on some of the UK islands.

Try travelling to work in rural locations, no buses etc.

[ARIMA]

Intrigued how this is going to work at the boundaries - will there be graduated roads, or will there be a binary cut off between streets! Might have some interesting dynamics on the private rental market?

[dances with sheeple]

Will these cuts in HB have an impact on BTL(reduced rent) and the entire rental market as such aka the trigger for BTL time bomb explosion? Or just optimistic thinking from me?

Yes.

Edited July 6, 2015 by dances with sheeple

[ccc]

Welfare benefits in member states are regarded by EU law as 'largesse' and as such the former enjoy complete discretion as to their disbursement. Unless case law has moved on and I have missed something.

^The EU and the ECHR are completely separate legal jurisdictions. The EU's position has tended to be that member states can offer what they like, so long as what is offered does not discriminate between the nationals of a country and workers resident in the country. The ECHR's position has not always been completely consistent but tends towards the view that countries may offer or restrict whatever they like.

So its not black and white then ?

[durhamborn]

The benefit cap is a smokescreen,very few people are affected by it outside of London.Tax credits and DLA/PIP in the household and it doesnt affect you.Ozzie said that would still be the case under the new cap.It was mainly used for a few extreme cases in London and for political capital.

Of course they will freeze the £20k over the next five years probably so that it ends up in real terms an £18k cap.

The budget is all about tax credits.Are the cuts simply a small top slice of 10%?.Or a huge cut and changes to remove them much lower down the income scale?.Are they setting us up for cuts much less than people think so its all a damp squib,or are they preparing people/the media for genuine huge cuts?

[dances with sheeple]

The benefit cap is a smokescreen,very few people are affected by it outside of London.Tax credits and DLA/PIP in the household and it doesnt affect you.Ozzie said that would still be the case under the new cap.It was mainly used for a few extreme cases in London and for political capital.

Of course they will freeze the £20k over the next five years probably so that it ends up in real terms an £18k cap.

The budget is all about tax credits.Are the cuts simply a small top slice of 10%?.Or a huge cut and changes to remove them much lower down the income scale?.Are they setting us up for cuts much less than people think so its all a damp squib,or are they preparing people/the media for genuine huge cuts?

If the turmoil really kicks off they will go for huge cuts IMO.

[Fairyland]

As I understand HB sets the market base rent. Reduction in HB will make renting cheaper for non HB recipients as well. Every little helps.

[SpectrumFX]

I think claimants in London should get more, it costs more in London. However after a couple of years they should be forced to leave London as they obviously don't need to be there (quicker for those without any skills and childcare problems).

That makes sense on an individual level, but in the bigger picture there's an argument that increased income form paying higher benefits and wages (with London weightings etc.) actually only increases the cost of living (or a least the rent element) since the rentiers always charge as much as the market will bear. The classic example is the one from Churchill about bridge tolls below;

http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html

Some years ago in London there was a toll bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings offended the public con-science, and agitation was set on foot, municipal authorities were roused, and at the cost of the taxpayers, the bridge was freed and the toll removed. All those people who used the bridge were saved sixpence a week, but within a very short time rents on the south side of the river were found to have risen about sixpence a week, or the amount of the toll which had been remitted!

[winkie]

It is cheaper to live in London than outside of London if you have a net worth more in assets than liabilities...... I would say most homes are paid for or with a little outstanding debt attached to them.....others actively choose to borrow against their homes and use the money in other profitable ways.....

Outside of London council taxes are higher so is the cost of water and transport.

No debt or no rent to pay and London is a very cheap place to live.

[Kurt Barlow]

Intrigued how this is going to work at the boundaries - will there be graduated roads, or will there be a binary cut off between streets! Might have some interesting dynamics on the private rental market?

Local Authority - Either in a London Borough or the rest of the UK. Simple as that.

[long time lurking]

Will these cuts in HB have an impact on BTL(reduced rent) and the entire rental market as such aka the trigger for BTL time bomb explosion? Or just optimistic thinking from me?

As HB is included in the capped amount it will have some impact for sure how much only time will tell

Would think it will have biggest impact in areas that have an oversupply of BTL and relatively high rents

[renting til I die]

Is London more expensive than the rest of the UK?

Or is it that Londoners alone claim that it is more expensive.

Try living on some of the UK islands.

Try travelling to work in rural locations, no buses etc.

I live in London and actually think, apart from housing costs, living in London is cheaper. Maybe it is due to increased competition or reduced costs but even the big supermarkets seems to charge a little less compared to whereever I have to travel elsewhere in the UK.

[Fairyland]

Oversupply of BTL and high rent = London.

90,000 households are expected to be affected across the country. Don't know how many of them are in London?

So realistically speaking, on a cap of 23k how much rent can a household afford?