Dear Claire,
I trust you saw the 7 leaders’ debate last night. It
didn’t really break any new ground or tell us anything we didn’t already know.
Someone does need to tell Cameron to stop making the same statement over and
over again: ‘The mess we inherited’, ‘The situation we inherited’ etc. It’s
getting a bit stale now, as well as being utterly inaccurate as to why the
situation is as it was in 2010. But that’ll be the subject of another letter.
For now, I’d like to talk about private landlords. These are people that have done very well under the Tories, after the shocking lack of responsibility your party has taken over the building of more affordable and local authority housing.
That oleaginous reptile that is your party chairman, the haughtily loathsome Grant Shapps, made several claims about how the Tory party would build more houses in 5 years than the Labour party did in 13, prompting the following statement from Andrew Dilnot, the head of the UK Statistics Authority: “as so often in the public debate” Mr Shapps may have subjected the statistics to “selective use”. No surprise there!
Anyway, the Tories are planning a benefit cap which will see the maximum benefit a family could claim fall from £26,000 a year to £23,000.
For now, I’d like to talk about private landlords. These are people that have done very well under the Tories, after the shocking lack of responsibility your party has taken over the building of more affordable and local authority housing.
That oleaginous reptile that is your party chairman, the haughtily loathsome Grant Shapps, made several claims about how the Tory party would build more houses in 5 years than the Labour party did in 13, prompting the following statement from Andrew Dilnot, the head of the UK Statistics Authority: “as so often in the public debate” Mr Shapps may have subjected the statistics to “selective use”. No surprise there!
Anyway, the Tories are planning a benefit cap which will see the maximum benefit a family could claim fall from £26,000 a year to £23,000.
This will have a dramatic effect on the number
of homeless families, and will end up costing MORE than the money it purports
to save.
As mentioned before, the shocking Tory record on providing homes means that we have a massive housing shortage with huge waiting lists and people cannot afford to get on the property ladder and houses always rise in value don’t they?
As mentioned before, the shocking Tory record on providing homes means that we have a massive housing shortage with huge waiting lists and people cannot afford to get on the property ladder and houses always rise in value don’t they?
What the state will pay in housing benefit
to private landlords is fixed on a local basis and called Local Housing
Allowance, or LHA, the private rented version of Housing Benefit. Here is a
list of how much LHA is payable in a number of cities across the country
on a weekly and monthly basis.
Hull
£103.56 pw / £448 pcm
Newcastle £115.07
pw / £498 pcm
Liverpool £120.82
pw / £523 pcm
Ipswich
£129.47 pw / £561 pcm
Birmingham £132.00 pw / £571 pcm
Glasgow
£137.31 pw / £595 pcm
Cardiff
£150.00
pw / £650 pcm
Leeds
£151.50 pw / £656 pcm
Bristol £175.74
pw / £761 pcm
The current £500 per week OBC for families
applies right across the country and the Tory plan is to reduce this to £440
per week in London and less than that in the regions and here I assume 90%
of London figure or £396 per week outside of London to illustrate.
A tenant household of 2 parents and 3 children
(2P3C) gets the same amount of welfare benefit and child tax credit anywhere in
the country, which will be £334.56 per week in this financial year of 2015/16.
When this £334.56 is taken away from the CURRENT £500 pw cap it leaves a
maximum of £165.44 pw or £716. pcm as the maximum amount of Local Housing
Allowance (LHA) this family will receive for a 3 bed property.
Currently with the £500 pw cap it is only in Bristol in the examples above that the 2P3c household needs to find money from their welfare benefit to top up the rent and in this case it’s an extra £10 per week. In the other cities mentioned above, all the rent will be paid. In short the current overall benefit cap has little impact outside of London and the South East (excepting a few pockets in the North such as York, parts of Trafford and a few more).
YET when the £396 per week regional cap is brought in, the 2P3C household will only receive £61.44 pw in LHA or £266 pcm to pay towards rent. That means in Hull, the lowest rent area, the 2 Parent 3 Child household will have to find £182 pcm from their welfare benefit to pay the rent. Remember this is the lowest rent area and the top up in Hull is the equivalent of 3 times the unaffordable bedroom tax! So, a simple question for the landlord:
If it’s your property being rented out in Hull, would you let your property to a 2P3C family benefit household who you know only receive £266 in benefit, to pay your rent of £448 per month? Of course not! You could not afford to take what amounts to a £2,184 yearly paycut, representing a 40% reduction in the rent you could expect.
The situation is compounded in those areas where the LHA payable is higher than it is in Hull.
The Tory Benefit Cap means that private landlords will have no incentive to house a benefit family. It will cost them money.
Local councils will, potentially, be inundated with thousands of benefit families currently with private landlords who are seeking to evict them come May 8th if the Tories remain in office.
That is going to cost local councils a fortune to assess all cases in the first place, which must then find the council has a legal duty to put these families into hugely expensive temporary homeless accommodation, while they find alternative accommodation for them, which of course they will not find in the private rented sector, so that will have to be in social housing.
The overall welfare bill will rocket and you, me and every other taxpayer will have to pay more in tax as the overall benefit cap will cost every single taxpayer more. Clearly this won’t apply to the many Tory party donors that avoid their tax liabilities.
Currently there are 1.5 million private tenant households receiving on average £107 per week in LHA, a yearly sum of £8.34 billion. If 20% of these are evicted then 300,000 households instead of getting £107 per week paid in rent from the public purse, will cost perhaps £400 per week and so the housing benefit bill will rise by about £5 billion p.a.
So, a £5 billion increase in expenditure necessary because of the Tory benefit cap!
This is just the increase in the housing benefit bill from the private rented sector alone. Add in the additional costs of those evicted and placed in expensive temporary homeless provision from social housing, and you could probably double that figure.
The Tory Benefit Cap will be disastrous for social and private tenants, for social and private landlords and for every single taxpayer in the land. Hundreds of thousands will be made homeless and that includes hundreds of thousands of children who will have their life chances severely compromised because of the policy.
In summary, we may draw 2 conclusions:
Firstly, the existing benefit cap policy and the bedroom tax and LHA cap and SAR cap make up the 4 welfare reform (sic) policies of this coalition, that aimed to reduce the overall housing benefit bill. As the official figures show, they did not save a penny and actually cost more in real terms. The planned reduction and regionalisation of the Benefit Cap will make that extra cost so much worse for each and every taxpayer.
Secondly, in housing over the past decade and more, it has been speculated many times that the private landlord would withdraw from the ‘benefit tenant’ market: this times it’s a racing certainty with the Tory Benefit Cap.
Will you have the moral fibre to stand up and make this case, or will you carry on voting with your party on every issue? Is your conscience sufficiently pricked to make you take action, or will you allow your ambition for high office silence any criticism of those in your party?
Over to you!
Kind regards
Currently with the £500 pw cap it is only in Bristol in the examples above that the 2P3c household needs to find money from their welfare benefit to top up the rent and in this case it’s an extra £10 per week. In the other cities mentioned above, all the rent will be paid. In short the current overall benefit cap has little impact outside of London and the South East (excepting a few pockets in the North such as York, parts of Trafford and a few more).
YET when the £396 per week regional cap is brought in, the 2P3C household will only receive £61.44 pw in LHA or £266 pcm to pay towards rent. That means in Hull, the lowest rent area, the 2 Parent 3 Child household will have to find £182 pcm from their welfare benefit to pay the rent. Remember this is the lowest rent area and the top up in Hull is the equivalent of 3 times the unaffordable bedroom tax! So, a simple question for the landlord:
If it’s your property being rented out in Hull, would you let your property to a 2P3C family benefit household who you know only receive £266 in benefit, to pay your rent of £448 per month? Of course not! You could not afford to take what amounts to a £2,184 yearly paycut, representing a 40% reduction in the rent you could expect.
The situation is compounded in those areas where the LHA payable is higher than it is in Hull.
The Tory Benefit Cap means that private landlords will have no incentive to house a benefit family. It will cost them money.
Local councils will, potentially, be inundated with thousands of benefit families currently with private landlords who are seeking to evict them come May 8th if the Tories remain in office.
That is going to cost local councils a fortune to assess all cases in the first place, which must then find the council has a legal duty to put these families into hugely expensive temporary homeless accommodation, while they find alternative accommodation for them, which of course they will not find in the private rented sector, so that will have to be in social housing.
The overall welfare bill will rocket and you, me and every other taxpayer will have to pay more in tax as the overall benefit cap will cost every single taxpayer more. Clearly this won’t apply to the many Tory party donors that avoid their tax liabilities.
Currently there are 1.5 million private tenant households receiving on average £107 per week in LHA, a yearly sum of £8.34 billion. If 20% of these are evicted then 300,000 households instead of getting £107 per week paid in rent from the public purse, will cost perhaps £400 per week and so the housing benefit bill will rise by about £5 billion p.a.
So, a £5 billion increase in expenditure necessary because of the Tory benefit cap!
This is just the increase in the housing benefit bill from the private rented sector alone. Add in the additional costs of those evicted and placed in expensive temporary homeless provision from social housing, and you could probably double that figure.
The Tory Benefit Cap will be disastrous for social and private tenants, for social and private landlords and for every single taxpayer in the land. Hundreds of thousands will be made homeless and that includes hundreds of thousands of children who will have their life chances severely compromised because of the policy.
In summary, we may draw 2 conclusions:
Firstly, the existing benefit cap policy and the bedroom tax and LHA cap and SAR cap make up the 4 welfare reform (sic) policies of this coalition, that aimed to reduce the overall housing benefit bill. As the official figures show, they did not save a penny and actually cost more in real terms. The planned reduction and regionalisation of the Benefit Cap will make that extra cost so much worse for each and every taxpayer.
Secondly, in housing over the past decade and more, it has been speculated many times that the private landlord would withdraw from the ‘benefit tenant’ market: this times it’s a racing certainty with the Tory Benefit Cap.
Will you have the moral fibre to stand up and make this case, or will you carry on voting with your party on every issue? Is your conscience sufficiently pricked to make you take action, or will you allow your ambition for high office silence any criticism of those in your party?
Over to you!
Kind regards
Polly
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