The great divide: Housing benefit cap, where do you stand?

re-cycles

I'm no economics expert, but wouldn't it make sense for the government to buy houses rather than pay peoples rent? Surely now the state is a major shareholder in numerous mortgage lenders they could take over the repossessed properties? I don't like the idea of building loads of "council" houses as this always causes areas that have stigmas attached.

bigmat

W1 wrote:

MatHammond wrote:

I guess it depends how "pretty grim" is defined. Pretty grim for most people on here would probably involve not having sufficient disposable income to buy the occasional treat, have a nice holiday a couple of times a year etc. Pretty grim for those on benefits should be grimmer than that, but people need to be able to sustain a civilised existence - clean, secure housing, nutritional food, adequate heating etc. I think the balance is wrong at the moment, but I worry things will shift too far the other way. No easy answers as far as I can see.

Pretty grim means: no sky, no plasma TV, no holidays, no alcohol and no ciggs. None of those are necessary, all are luxuries and none of them can be justified using tax payers money. If you can "afford" them (i.e. choose to buy them over, say, food) then you don't need the help of the state.

As for below 18 degrees being "poverty" I couldn't agree more Matt. 18 degrees is comfortable. It's a long, long way from poverty.

Yep, we're on the same page on this one it appears. Education required, people need to realise what their priorities should be - fags, booze and Sky TV should be way down the list.

rjsterry

I'm not sure the problem is as simple as life on benefits not being 'hard' enough - although some people can clearly lead a fairly comfortable existence on benefits, I'm sure it's equally easy to find examples of people who find it very hard to survive on them. If life in low paid work is equally or more grim, then there's still little incentive to move away from reliance on benefits.

And let's not pretend that people end up in low-paid work just because they don't try hard enough. Not all of us have the luxury of being able to afford to go to university and have access to higher paid jobs.

Those who say that providing anything other than bread and water in an unheated flat at the taxpayers' expense cannot be justified, have still yet to explain why. Why shouldn't you pay a little bit more tax (let's not pretend that your tax bill will go down significantly because of any of these cuts) so that those less fortunate than you can have a decent standard of living? I'm not arguing that people should be wholly reliant on benefits unless they need to, but we seem to keep forgetting that many who claim benefits to a greater or lesser degree pay quite a bit of tax themselves.

Lastly, those who are arguing that people shouldn't exploit the benefits system seem to be a very good match with those who were arguing that tax avoidance was absolutely fine both legally and morally. What's the difference between the two?

W1

rjsterry wrote:

IThose who say that providing anything other than bread and water in an unheated flat at the taxpayers' expense cannot be justified, have still yet to explain why. Why shouldn't you pay a little bit more tax (let's not pretend that your tax bill will go down significantly because of any of these cuts) so that those less fortunate than you can have a decent standard of living? I'm not arguing that people should be wholly reliant on benefits unless they need to, but we seem to keep forgetting that many who claim benefits to a greater or lesser degree pay quite a bit of tax themselves.

You're asking the wrong question though. The question that should be asked is not why shouldn't they have all these things at the taxpayer's expense, but why should they. What right does anyone have to any benefits at all? None.

Unless you're arguing for a communist state? In which case there are a few examples as to why that doesn't work.

W1

rjsterry wrote:

Lastly, those who are arguing that people shouldn't exploit the benefits system seem to be a very good match with those who were arguing that tax avoidance was absolutely fine both legally and morally. What's the difference between the two?

Not a lot. It's the system that's at fault, and this thread is about changing the system, which I support.

KeimanP

There should be some difference between two able bodied people one who works and the other who doesn't.

The welfare system should be there to support those who need it and not for the long term professional benefit user (I am basing this on the able bodied person and not accounting for reasonable reasons for additional benefit payments)

If you wish to live in an affluent area then you need the means to be able to fund that lifestyle, this should not come from the state. If for a variety of reasons your circumstances/luck happen to change and you find that you are no longer able to support the lifestyle that you have worked for you should be able to find assistance from the state for a period of time for the purpose of ensuring you have a roof over your head, clothes on your back (not named), heating, water and food. It should not contribute towards sky tv, new purchases, pub lunches, nights out etc. It should be merely for support. If after a period of time your circumstances and luck haven't changed, you should have to look at relocating for work and lifestyle means.

It should not provide people with a 'get out of work card' or encourage people not to work.

Benefits should be capped, they are a lifeline not a lifestyle. To many people abuse the system and it results in a stigma being attached to those who genuinely need to use benefits but don't deserve the 'tag'

1 bedroom £250 per week
2 bedroom £290 per week
3 bedroom £340 per week
4 bedroom £400 per week is still a lot of money.

Doing a quick property search for SW1 the prices aren't that much more than these caps. Landlords will not want to see their properties stood empty, it would cost them far too much!. Rental prices will adjust and come closer to these caps.

Benefits need to be reined in, this is a good start...

However if you weren't in London and in Yorkshire (granted not the best part) you could have this for £45 a week
http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=1&pid=6393331

or this if you wanted to spend just over the £400 a week
http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=1&pid=7300027[/url]

rjsterry

W1 wrote:

rjsterry wrote:

IThose who say that providing anything other than bread and water in an unheated flat at the taxpayers' expense cannot be justified, have still yet to explain why. Why shouldn't you pay a little bit more tax (let's not pretend that your tax bill will go down significantly because of any of these cuts) so that those less fortunate than you can have a decent standard of living? I'm not arguing that people should be wholly reliant on benefits unless they need to, but we seem to keep forgetting that many who claim benefits to a greater or lesser degree pay quite a bit of tax themselves.

You're asking the wrong question though. The question that should be asked is not why shouldn't they have all these things at the taxpayer's expense, but why should they. What right does anyone have to any benefits at all? None.

Unless you're arguing for a communist state? In which case there are a few examples as to why that doesn't work.

No, I'm not arguing for that. I'm just interested if you have an argument to justify the statement 'nobody has a right to benefits"?

W1

rjsterry wrote:

W1 wrote:

rjsterry wrote:

IThose who say that providing anything other than bread and water in an unheated flat at the taxpayers' expense cannot be justified, have still yet to explain why. Why shouldn't you pay a little bit more tax (let's not pretend that your tax bill will go down significantly because of any of these cuts) so that those less fortunate than you can have a decent standard of living? I'm not arguing that people should be wholly reliant on benefits unless they need to, but we seem to keep forgetting that many who claim benefits to a greater or lesser degree pay quite a bit of tax themselves.

You're asking the wrong question though. The question that should be asked is not why shouldn't they have all these things at the taxpayer's expense, but why should they. What right does anyone have to any benefits at all? None.

Unless you're arguing for a communist state? In which case there are a few examples as to why that doesn't work.

No, I'm not arguing for that. I'm just interested if you have an argument to justify the statement 'nobody has a right to benefits"?

That's rather a non-question - of course there is no "right". If there were no government, there would be no "benefits" - the non-hunter would just starve!

rjsterry

No it isn't. All rights are only what society has agreed to be a basic minimum entitlement. No rights exist in the abstract. My argument is that providing a some sort of benefits system makes us a more equitable and civilised society. The fact that we generally don't see children wandering the streets in ragged clothes and without shoes is a good thing. If you are arguing against this, then what are your reasons? All I've seen so far is "so we don't have to pay so much tax", which I think is a bit thin.

W1

rjsterry wrote:

No it isn't. All rights are only what society has agreed to be a basic minimum entitlement. No rights exist in the abstract. My argument is that providing a some sort of benefits system makes us a more equitable and civilised society. The fact that we generally don't see children wandering the streets in ragged clothes and without shoes is a good thing. If you are arguing against this, then what are your reasons? All I've seen so far is "so we don't have to pay so much tax", which I think is a bit thin.

But that doesn't provide a right, does it?

What arguments can you put forward that anyone has a right to rely on the state? And what is the basis of that right?

I see the point you are trying to make. But there is no justification for working backwards from "why shouldn't they have a plasma TV" rather than forwards from "it's wrong for people to starve to death in a civilised country."

rjsterry

I'd agree that relying on benefits isn't a right. I just think it's something that makes for a better society, and broadly speaking, we can collectively afford it, if less so at this particular point in history. Anyway, I have to get some work done today, so I'm going to have to retire from this one for the time being.

Sewinman

W1 wrote:

rjsterry wrote:

No it isn't. All rights are only what society has agreed to be a basic minimum entitlement. No rights exist in the abstract. My argument is that providing a some sort of benefits system makes us a more equitable and civilised society. The fact that we generally don't see children wandering the streets in ragged clothes and without shoes is a good thing. If you are arguing against this, then what are your reasons? All I've seen so far is "so we don't have to pay so much tax", which I think is a bit thin.

But that doesn't provide a right, does it?

What arguments can you put forward that anyone has a right to rely on the state? And what is the basis of that right?

I see the point you are trying to make. But there is no justification for working backwards from "why shouldn't they have a plasma TV" rather than forwards from "it's wrong for people to starve to death in a civilised country."

We have had a right to some extent since the implementation of the Beveridge report, and further back to the Poor laws.

notsoblue

rjsterry wrote:

Lastly, those who are arguing that people shouldn't exploit the benefits system seem to be a very good match with those who were arguing that tax avoidance was absolutely fine both legally and morally. What's the difference between the two?

The class and education level of the people concerned, clearly.

Sewinman

notsoblue wrote:

rjsterry wrote:

Lastly, those who are arguing that people shouldn't exploit the benefits system seem to be a very good match with those who were arguing that tax avoidance was absolutely fine both legally and morally. What's the difference between the two?

The class and education level of the people concerned, clearly.

That is rather too much of a compliment - 'self-interest' would suffice.

lardboy

The standard of living for a working person should always be higher than if that same person were to stop work and rely on state handouts. Otherwise there is no incentive to work.

I like the idea of Universal Credit, a standard amount of money that is paid to every single person in the country (cheaper overall than means-testing) and you choose how you spend that money. No housing benefits, no tax credits, no jobseekers allowance. There are some incremental allowances (pensioners, severely disabled etc). The basic amount is enough to live on. Maybe £10,000 pa per adult, £5,000 per child. Not a comfy existence by any stretch, but enough to pay for a room in a cheap flat, feed youself, and pay for limited transport. If you want anything above these levels of living, then you have to find work (or go on the rob, as mentioned earlier). You get taxed on every bit of your earnings at a fixed rate (no tax-free allowances, so less admin ), but you will get to keep most of it, and you won't lose your Universal Credit.

This would provide a constant safety net and always provide an incentive to work. A dide effect is a a smaller state as there are far fewer civil servants required, which is probably why it's not put forward by those reforming benefits who have huge vested interests.

notsoblue

Sewinman wrote:

notsoblue wrote:

rjsterry wrote:

Lastly, those who are arguing that people shouldn't exploit the benefits system seem to be a very good match with those who were arguing that tax avoidance was absolutely fine both legally and morally. What's the difference between the two?

The class and education level of the people concerned, clearly.

That is rather too much of a compliment - 'self-interest' would suffice.

Sorry, wasn't clear. The people concerned being benefit claimants and those involved in corporate tax avoidance.

feltkuota

I'd be interested in knowing how much someone that is receiving gbp400 per week+ has, in the past, paid into the system ie how much tax have they paid previously. I guess I'd be happy enough to have those sums paid if the person/s receiving were a net contributer (financially) to society as a whole however if those sums are being paid due to the number of children being raised within that family then it's, in my view, just nuts.

Further to that, how much tax would be likely to be received from them in the future. 400 quid a week (that's what is currently being viewed as a limit so lord know's what has already been spent) is a whole lot of rent and at roughly 1600 quid a month is more than sufficient to pay a 350k mortgage.

W1

notsoblue wrote:

Sewinman wrote:

notsoblue wrote:

rjsterry wrote:

Lastly, those who are arguing that people shouldn't exploit the benefits system seem to be a very good match with those who were arguing that tax avoidance was absolutely fine both legally and morally. What's the difference between the two?

The class and education level of the people concerned, clearly.

That is rather too much of a compliment - 'self-interest' would suffice.

Sorry, wasn't clear. The people concerned being benefit claimants and those involved in corporate tax avoidance.

Did you not see my response (if, indeed, your poke was intended at me)?

rjsterry

feltkuota wrote:

I'd be interested in knowing how much someone that is receiving gbp400 per week+ has, in the past, paid into the system ie how much tax have they paid previously. I guess I'd be happy enough to have those sums paid if the person/s receiving were a net contributer (financially) to society as a whole however if those sums are being paid due to the number of children being raised within that family then it's, in my view, just nuts.

Further to that, how much tax would be likely to be received from them in the future. 400 quid a week (that's what is currently being viewed as a limit so lord know's what has already been spent) is a whole lot of rent and at roughly 1600 quid a month is more than sufficient to pay a 350k mortgage.

Pffft! Either your figures are a bit off there, or I'd like to meet your mortgage broker. A quick look last night at a 2-bed house in zone 5 shows rent at about £900-£1000 pcm. Whilst I'm all for people being responsible with their family planning, real life is a bit more messy than that. Unless we are going to take a Victorian "stop the poor from breeding" approach, then I think we have to accept that sometimes we may need to provide more than 1-bed flats.

sketchley

feltkuota wrote:

I'd be interested in knowing how much someone that is receiving gbp400 per week+ has, in the past, paid into the system ie how much tax have they paid previously. I guess I'd be happy enough to have those sums paid if the person/s receiving were a net contributer (financially) to society as a whole however if those sums are being paid due to the number of children being raised within that family then it's, in my view, just nuts.

Further to that, how much tax would be likely to be received from them in the future. 400 quid a week (that's what is currently being viewed as a limit so lord know's what has already been spent) is a whole lot of rent and at roughly 1600 quid a month is more than sufficient to pay a 350k mortgage.

Telegraph wrote:

http://www.telegraph.co.uk/news/newstop ... round.html

When the scheme was rolled out nationally in 2008, its shortcomings were spectacularly exposed by the case of Toorpakai Saindi, a jobless Afghan immigrant with seven children who was living in a large house in Acton, west London.

Not only had Ealing Council agreed to fund her rent of £2,875 per week, but it also emerged that the landlord was profiting hugely from the new LHA payments because similar properties in the area were being rented to private tenants for less than half the price.

jzed

£1600 a month is enough to pay a mortgage of £250-300k.

rjsterry

Sketchley wrote:

Telegraph wrote:

http://www.telegraph.co.uk/news/newstop ... round.html

When the scheme was rolled out nationally in 2008, its shortcomings were spectacularly exposed by the case of Toorpakai Saindi, a jobless Afghan immigrant with seven children who was living in a large house in Acton, west London.

Not only had Ealing Council agreed to fund her rent of £2,875 per week, but it also emerged that the landlord was profiting hugely from the new LHA payments because similar properties in the area were being rented to private tenants for less than half the price.

Well that rather backs up the point that the landlords are really the ones doing well out of this. I imagine Ealing Council found the house for Mr Saindi rather than him browsing estate agent's windows. It also suggests that Ealing Council housing department need to be a bit more hard-nosed when dealing with landlords.

sketchley

rjsterry wrote:

Sketchley wrote:

Telegraph wrote:

http://www.telegraph.co.uk/news/newstop ... round.html

When the scheme was rolled out nationally in 2008, its shortcomings were spectacularly exposed by the case of Toorpakai Saindi, a jobless Afghan immigrant with seven children who was living in a large house in Acton, west London.

Not only had Ealing Council agreed to fund her rent of £2,875 per week, but it also emerged that the landlord was profiting hugely from the new LHA payments because similar properties in the area were being rented to private tenants for less than half the price.

Well that rather backs up the point that the landlords are really the ones doing well out of this. I imagine Ealing Council found the house for Mr Saindi rather than him browsing estate agent's windows. It also suggests that Ealing Council housing department need to be a bit more hard-nosed when dealing with landlords.

Agreed, landlords are the loosers in this policy not the people on benefits.

feltkuota

RJsterry

I guess you'd like to meet my mortgage broker...

sketchley

JZed wrote:

£1600 a month is enough to pay a mortgage of £250-300k.

To get a £300k mortage you would need at least a 20% deposit in savings. Also you will need an individual income arround £75k pa.

Hands up, who on here has £60k in the bank and earns £75k per year? I'd guess not many of us get near that. Despite working hard and earning well I couldn't buy a house for £ 360k. Yet for a non working family, housing benefit will happily pay out £1,600 per month so they could live in that house. Hardly a "cutting" cap is it?

notsoblue

W1 wrote:

notsoblue wrote:

Sewinman wrote:

notsoblue wrote:

rjsterry wrote:

Lastly, those who are arguing that people shouldn't exploit the benefits system seem to be a very good match with those who were arguing that tax avoidance was absolutely fine both legally and morally. What's the difference between the two?

The class and education level of the people concerned, clearly.

That is rather too much of a compliment - 'self-interest' would suffice.

Sorry, wasn't clear. The people concerned being benefit claimants and those involved in corporate tax avoidance.

Did you not see my response (if, indeed, your poke was intended at me)?

Nope, which response was that? And it wasn't intended as a poke, its what I *actually* think :P

jzed

Sketchley wrote:

JZed wrote:

£1600 a month is enough to pay a mortgage of £250-300k.

To get a £300k mortage you would need at least a 20% deposit in savings. Also you will need an individual income arround £75k pa.

Hands up, who on here has £60k in the bank and earns £75k per year? I'd guess not many of us get near that. Despite working hard and earning well I couldn't buy a house for £ 360k. Yet for a non working family, housing benefit will happily pay out £1,600 per month so they could live in that house. Hardly a "cutting" cap is it?

You've exactly hit the nail on the head. The benefit cap is not low enough. The injustice is that there are many people out there who get a free leg up into properties, whilst hard working, tax paying families get no assistance.

People should be encouraged to live within their means and the government should only provide benefits were people are unable to by themselve reach a minimum. If they don't like the minimum then do something about it.

How about a government scheme where the use the £250k and build 5 houses in cheaper more sustainable areas of the UK. The government could borrow the money from the banks it bailed out, who should be happy to lend at an interest and repayment rate of £1600pm from a government guaranteed borrower.

SmellTheGlove

I think we need the cap, I can see a benefit to rents becoming lower as a result. (We have laboured too long in UK under the supposed advantages of "ownership" but that's OT).
The number of people so massively affected by the cuts that they end up with nowhere to live will probably be small so, in the case of the capital BJ's "cleansing" will surely turn out to be a facewash rather than an enema.
If landlords lose out, well, they have businesses to run so will no doubt have their contingencies in place; I won't shed a tear.
As a nation we must have safety nets too - I don't believe they are being swept away with the HB reform. The problem comes with the number of jobs that will be created that will take people out of the qualifying earnings range. If there are enough new jobs, then the benefit bill must also go down accordingly. If the jobs don't show up, the bill could remain or even rise. Simply put, we need more people earning to really make a radical difference to the HB bill.

Wallace1492

Let's get reforming. If people cannot afford to live in London, why should they be subsidised? I choose not to be there, visiting is bad enough. Why should my tax subsidise someone else's housing? Yes, we do need a safety net, but let's get a reality check.

If people are not paying the top dollar, then prices will fall. If nobody for the local jobs then the salary's will increase. A balance will be found rather than keeping the housing costs high from subsidy.

rjsterry

Sketchley wrote:

rjsterry wrote:

Sketchley wrote:

Telegraph wrote:

http://www.telegraph.co.uk/news/newstop ... round.html

When the scheme was rolled out nationally in 2008, its shortcomings were spectacularly exposed by the case of Toorpakai Saindi, a jobless Afghan immigrant with seven children who was living in a large house in Acton, west London.

Not only had Ealing Council agreed to fund her rent of £2,875 per week, but it also emerged that the landlord was profiting hugely from the new LHA payments because similar properties in the area were being rented to private tenants for less than half the price.

Well that rather backs up the point that the landlords are really the ones doing well out of this. I imagine Ealing Council found the house for Mr Saindi rather than him browsing estate agent's windows. It also suggests that Ealing Council housing department need to be a bit more hard-nosed when dealing with landlords.

Agreed, landlords are the loosers in this policy not the people on benefits.

Surely you mean winners?

I'm assuming that what happened was that Mr Saiidi and his family turned up at Ealing Housing Department, needing somewhere to live. They checked their lists and found that they didn't have one of their own suitable properties available, so needed to go to a private landlord. Quite how they got from that fairly reasonable starting point to renting a more than suitable house at above market rate is the real question.