Tory Budget to cut 'housing subsidies' for higher earners
July 5, 2015 7:49 AM   Subscribe

BBC: "A clampdown on "taxpayer-funded subsidies" for "higher earners" living in social housing is to be announced by the chancellor in Wednesday's Budget. 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, George 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." George Osborne said: "the Budget would "reward work over welfare" and allow people to keep more of the money they earned."
posted by marienbad (40 comments total) 7 users marked this as a favorite
 


Wednesday's budget is going to be a nuclear bomb of bastardry.
posted by Devonian at 7:59 AM on July 5, 2015 [18 favorites]


Yeah, the budget is obviously going to be terrible, but this particular policy seems totally reasonable: Why exactly should the state subsidise people who can clearly afford their own housing at the expense of those in greater need?

I guarantee that the implementation will be utterly f*cked up however. It’s going to be the spare room tax all over again - a real problem, to which the proffered solution is most asinine thing you could possibly think of.
posted by pharm at 8:10 AM on July 5, 2015 [5 favorites]


Yeah, the budget is obviously going to be terrible, but this particular policy seems totally reasonable: Why exactly should the state subsidise people who can clearly afford their own housing at the expense of those in greater need?

Because it's a bit like saying people who earn $60,000 a year in the Bay Area don't need help when a two bedroom condo goes for $2500/mo which is pretty much half your gross. 30-40K quid in Greater London doesn't go far at all when the average price of a 2 bedroom flat is well over a thousand pounds a month.
posted by Talez at 8:16 AM on July 5, 2015 [27 favorites]


At the same time he's cutting inheritance tax (which will cost about a £1,000,000,000)
posted by Just this guy, y'know at 8:19 AM on July 5, 2015 [28 favorites]


> Why exactly should the state subsidise people who can clearly afford their own housing at the expense of those in greater need?

Shouldn't it be at the expense of those in radically less need?
posted by benito.strauss at 8:21 AM on July 5, 2015 [9 favorites]


At the same time he's cutting inheritance tax (which will cost about a £1,000,000,000)

And gutting two thirds of a billion pounds from the BBC. They really fucking hate the BBC.
posted by Talez at 8:25 AM on July 5, 2015 [18 favorites]


Another thing which bothers me about this policy, along with the bedroom tax, is that central government is shitting all over local government. Social housing is owned by local councils, not by Westminster. It should be the choice of the local governments to organize how much is charged and to whom. The same, in bucketloads, goes the proposal to have a firesale of housing association property. Central government doesn't understand its boundaries.

Doubtless the argument will be raised that as central government subsidizes local government policy, then Osborne has the right to impose a budget upon them. But no Westminster government will ever seriously work to strengthen the ability of local government to raise its own money and enact its own choice of policy. I'm almost of the opinion that there isn't actually any functional local government in most of England. Their discretionary tax raising and spending powers are miniscule.

Oh, and is this £30k for each household? That's potentially a couple earning £15k each, which is really very little.
posted by Thing at 8:27 AM on July 5, 2015 [8 favorites]


Yeah, I suspect that's why "Higher Earners" is in "Scare Quotes"
posted by Just this guy, y'know at 8:29 AM on July 5, 2015 [4 favorites]


Oh, and is this £30k for each household? That's potentially a couple earning £15k each, which is really very little.

The "livable wage" of £9.15 that they endorse is only £19,000 a year. These people and their cognitive fucking dissonance.
posted by Talez at 8:30 AM on July 5, 2015 [8 favorites]


I suspect the underlying reason for this is ideological; if social housing costs the same as private housing, we might as well not have it. It'll gradually give way to a system of shitty landlords who charge whatever the market will tolerate, which is where we're half-way to now. I think they want to finish the job Thatcher started in the 80s.

The inheritance tax thing is a nightmare; it's going to incentivise older people to hang on to properties they no longer need, rather than downsizing and freeing up the housing stock for families who need it.

And the whole "work over welfare" thing is a false dichotomy - most people claiming benefits are working. They just can't earn enough to fully meet their own needs, because they don't earn a living wage. Tax cuts will only go so far, because the poorest aren't taxed that much anyway. The system as it stands is just subsidising landlords and big businesses who get away with letting the taxpayer pay a big chunk of people's rent and wages.

And of course the elderly get their 'triple locks' and guarantees that the Tories won't touch them as long as they keep quiet and don't think too much about their grandkids.
posted by pipeski at 8:35 AM on July 5, 2015 [18 favorites]


"A clampdown on "taxpayer-funded subsidies" for "higher earners"

I read that far and thought that this was an attempt to get rid of the subsidies that the wealthy receive. Sadly, the rest of the sentence makes it clear that it is just a gross attack on the poor.
posted by Dip Flash at 8:43 AM on July 5, 2015 [3 favorites]


I suspect the underlying reason for this is ideological; if social housing costs the same as private housing, we might as well not have it. It'll gradually give way to a system of shitty landlords who charge whatever the market will tolerate, which is where we're half-way to now.

The government have provided something like £10bn in low cost loans for new private rented sector housing. The terms stipulate that the properties must not be sold to owner-occupiers for the term of the loans. I know that in at least some cases it is being used to build blocks of apartments marketed exclusively to foreign buyers. The government is thus literally paying for its citizens to become capital poor by seeing their money drain out of the country rather than into owning property.

Of course, the government also has a "starter home" scheme in the works, where people under forty will have access to new houses at 80% of the market price. Housebuilders will undoubtedly jump at the chance of building houses "exempt from some regulatory and planning obligations"* and "on sites that are not currently assigned for housing development". There's no word yet on how big these houses will be, but given that the bottom range of new houses is currently under 80m2, I expect the starter homes will be tiny.

*This may well mean Section 106 and affordable housing contributions. Basically meaning the housebuilder will come out better off by discounting a few small houses.
posted by Thing at 9:13 AM on July 5, 2015


I hate when gross things are dressed up as good things. "Higher earners" should actually mean "higher earners," not "this is going to really fuck the middle and working classes."
posted by MoonOrb at 9:29 AM on July 5, 2015 [2 favorites]


I suspect the BBC move - basically, moving a subsidy for the elderly from the social budget to the BBC - is going to have a few problems, as it would seem to be illegal. The Government can't, in general, command independent organisations to pay for its policies on a whim. Much as it may like to, and much as it may hate the BBC.
posted by Devonian at 9:39 AM on July 5, 2015


Welcome to America, England. Here's a tip: if you see Ayn Rand on someone's bookshelf, you should immediately burn their house to the ground. If they ask why you should tell them "it was in my own best interest to see a pretty light show."
posted by sexyrobot at 9:50 AM on July 5, 2015 [33 favorites]


At the same time he's cutting inheritance tax (which will cost about a £1,000,000,000)

That's disgusting.

"The poors have to pay their way!"

"But what about this huge chunk of revenue we're cutting--"

"THE POORS. HAVE. TO PAY."
posted by Ray Walston, Luck Dragon at 9:56 AM on July 5, 2015 [10 favorites]


These policies cannot be implemented without destroying a number of local authorities. This is because LAs will find themselves stuck with the housing duty under s193 Housing Act 1996, to many households made homeless through no fault of their own, and/or various duties to children in need under the Children Act 1989 . It's already happening with the Benefit Cap and the Bedroom Tax, and it's going to get magnitudes worse. In Birmingham, funds for discretionary housing payments are predicted to run out in November, halfway through the fiscal year, at the same time as 27,000 people will be hit by the £20k Benefit Cap. There will be a housing crisis the like of which has never been seen. The authority probably just won't be able to pay the bills necessary to meet its statutory duties. Fuck knows what happens then.

If you are reading this and voted Tory...jesus. Just consider whether you are actually a worthwhile human being.
posted by howfar at 10:32 AM on July 5, 2015 [26 favorites]


I should, of course, note, that the Labour party supporting the Benefit Cap is a total betrayal of the people of this country. Curse them all. This will not stand.
posted by howfar at 10:45 AM on July 5, 2015 [3 favorites]


So, social housing in England was not originally intended to lower the cost of housing. Modern social housing began immediately after world war two and was intended to deal with the massive number of houses destroyed during the way and the generally poor quality of the housing stock. It was explicitly intended to provide for the general needs of all people, not just those in poverty. The policy flipped back and forth between those goals over the years and the nails in the coffin were gleefully hammed in by Thatcher.

There's still a lot of people who live in council houses that have been family homes over multiple generations who do not see themselves as poor or their houses as any form of charity. Yes, the rents are way below market value, but the cost of private rents in the UK is massively overinflated as an intentional result of housing policy over the last 30 years. Home ownership has high up-front costs due to deposits, fees, etc. so not accessible for many people but even so, renting is far more expensive by a long margin, even when you take into account other costs of home ownership. Due to house price inflation running above general inflation, people who were able to become home owners earlier have often been able to sell at a price way higher than their buying price, benefiting from policies that have directly and negatively affected those not in a position to do the same.

So charging market cost for social housing penalises people who have been excluded from home ownership by government policy that has prioritised those who are better off and have been able to purchase their homes. Meanwhile, the cost of providing housing benefit has been massively inflated by demand for housing being allowed to outstrip supply, placing money in the hands of private landlords.

The Tory idea that people in council houses are the recipients of charity from a benevolent state and making people who are marginally better off pay market rent is just 'fair' ignores the entire context of housing policy. It would be more justifiable if market rent didn't involve a market that's been intentionally distorted to favour the better off, but that's very much not the case.
posted by xchmp at 10:56 AM on July 5, 2015 [18 favorites]


Yeah, the budget is obviously going to be terrible, but this particular policy seems totally reasonable: Why exactly should the state subsidise people who can clearly afford their own housing at the expense of those in greater need?

My ex boyfriend moved to London just under four years ago and was paying 200 quid per week for a room in a flat shared with three other people. By comparison, I pay just under a thousand dollars a month for a massive apartment in downtown Toronto.

Luckily he was making decent money; London is absolutely bonkers when it comes to living costs.
posted by feckless fecal fear mongering at 11:19 AM on July 5, 2015 [1 favorite]


I've said about San Francisco that it's going to be interesting to see if a city can exist with nothing but highly paid techies. In a similar way, it's going to be interesting to see if London can survive with nothing but empty flats owned by overseas plutocrats.
posted by LastOfHisKind at 11:26 AM on July 5, 2015 [10 favorites]


In a similar way, it's going to be interesting to see if London can survive with nothing but empty flats owned by overseas plutocrats.

And bankers/hedge fund asshats.
posted by el io at 11:41 AM on July 5, 2015 [1 favorite]


but you repeat yourself, el io
posted by feckless fecal fear mongering at 11:51 AM on July 5, 2015 [2 favorites]


Because it's a bit like saying people who earn $60,000 a year in the Bay Area don't need help when a two bedroom condo goes for $2500/mo

They don't need help, or that's the prevailing wisdom anyway (in the US). I was in San Francisco visiting last week and I have no idea how people who earn less than, say, $200k afford to live there anymore, unless you already own the property you live in, or unless you live in a pre-1979 multi-unit building subsidized by rent control and your landlord isn't likely to do an Ellis Act or a constructive eviction by rent increase on you.
posted by blucevalo at 11:51 AM on July 5, 2015 [1 favorite]


People of the United Kingdom, believe me, you want to be less like the USA, not more.
posted by schroedinger at 12:01 PM on July 5, 2015 [3 favorites]


Our government doesn't want our country to be more like the USA. It wants it to be more like the UK circa 1900, before the Labour party came along and spoiled it for the toffs.
posted by pipeski at 12:16 PM on July 5, 2015 [12 favorites]


There are loads of shitty poor areas of London with run down council housing. If you're prepared to live on the 18th floor of some horrible block surrounded by addicts and join the underclass then you're fine.

more like the UK circa 1900


All rich western countries are moving back to this - the post-WW2 rebuilding necessitated a little sharing of wealth with the working class, but that was a blip.
posted by colie at 12:22 PM on July 5, 2015 [10 favorites]


Yeah, they are taking it all back, we aren't going to be allowed to even have the small share of the wealth that we have had since WW2.
posted by marienbad at 12:28 PM on July 5, 2015 [4 favorites]


Housing associations came to prominence in the wake of the original Right to Buy process, during the Thatcherite Great Leap Backwards. They effectively replaced the council housing that had been sold with new affordable and mostly decent accommodation that the poor, old, infirm and vulnerable could afford to live in. It was often a battle to get funding for such housing as developers either resented paying for it or didn't want it (or its tenants) on their sparkly new sites. But it worked, and housing associations were often at the forefront of pushing fairly radical and innovative agendas around energy saving and environmentally friendly designs, and skills development and training for residents (like helping to build the housing they would be living in, for a wage and some honest to goodness apprenticeships).

Now the Tories are talking about extending the same right to buy to social housing, the same vulnerable groups will be exposed to the same housing pressures as during the Leaderene's reign. The more things change, etc etc.
posted by Martha My Dear Prudence at 12:55 PM on July 5, 2015 [1 favorite]


> By comparison, I pay just under a thousand dollars a month for a massive apartment in downtown Toronto.

Uh, where in downtown Toronto pray tell :P?

Those apartments from my perspective have well receded into the myst of history.
posted by pmv at 1:05 PM on July 5, 2015


Heh. My apartment, you're not getting it! Block or so east of Eaton Centre, so there's reasons the rent is (relatively) low. Still, given the gentrification, and given the size of some other apartments in the area, it's relatively cheap.
posted by feckless fecal fear mongering at 1:10 PM on July 5, 2015


By comparison, I pay just under a thousand dollars a month for a massive apartment in downtown Toronto.

You left out that you pay $700 cdn a month for 5MB internet.
posted by srboisvert at 2:09 PM on July 5, 2015 [1 favorite]


Yeah, they are taking it all back, we aren't going to be allowed to even have the small share of the wealth that we have had since WW2.

They're going to try. And we'll stop them, by whatever means they make necessary.
posted by howfar at 2:17 PM on July 5, 2015 [5 favorites]


That's fine talk, but it won't happen. No major political party is seriously against what is happening, and I doubt that public opinion is totally against it either. The situation is nowhere near crisis or even a problem for most people and you cannot expect a mass movement. The rollback of the state will stop eventually, but it is hard to know whether that point will represent a new normal. Attitudes to the state may simply have changed for the majority.

That said, I don't think that the political situation in the UK--small 'p' political--is stable. There are a lot of unanswered questions about who we are and where we're going. The next five years will be much longer than we imagine.
posted by Thing at 2:57 PM on July 5, 2015


The situation is nowhere near crisis or even a problem for most people and you cannot expect a mass movement.

I think this is simply untrue. The numbers I gave above are quotes I've had directly from Birmingham City Council. BCC is already in the process of closing nearly everything it has and halving its staff. It is going to be financially incapable of fulfilling its legal obligations. This is the largest local authority in the UK, and it is on the verge of collapse. Given the reasonable likelihood of another global recession in the next five years, I think we're in a very unstable period.
posted by howfar at 3:54 PM on July 5, 2015


Don't worry Brits, once they're done gutting housing and the BBC, it's not like the NHS is next or anything. Spoiler: the NHS is next.
posted by T.D. Strange at 9:49 PM on July 5, 2015 [6 favorites]


I agree with Thing - there is a lot of talk but for most people, no real action. There was a lot of this talk before the election, and then the Tories won a surprise majority. The really sad thing is, this is the kind of thing most voters want. Imagine voting Tory with £12bn of unexplained benefit cuts looming? This type of cruelty is barely the tip of the iceberg, and people voted it in willingly.
posted by hazyjane at 10:15 PM on July 5, 2015


The really sad thing is, this is the kind of thing most voters want.

Nobody knows what the hell voters want because the meaningful choices available are mostly constrained to either the evil blue party of austerity or the treacherous red party of austerity. People who found themselves with another choice - the comparatively nice yellow party that, for no apparent reason, appear to be the most terrifying threat that the people of southern England could ever face - voted for them in massive numbers. And even though votes for the Green Party and UKIP were clearly never going to result in any actual representative voice, about 16% of voters decided to throw their votes away on one or the other, which can't really be interpreted as anything but a massive "fuck you both" to the Tory and Labour Parties.

Even with the massive distortion caused by the de facto disenfranchisement of millions of people by the First Past The Post system, the government in power barely managed to scrape a quarter of the votes of the electorate, which in the UK's insane system, managed to translate into something portrayed as a decisive victory and a mandate for massive change, both economically and in the continual ratchet of authoritarianism.

So no, what voters want is a mystery. All we know is that about a quarter of the people who could vote could be persuaded to vote Tory when presented with a choice of Tory or Tory Lite.
posted by xchmp at 12:46 AM on July 6, 2015 [6 favorites]


Lots of talk above about UK becoming like the US. I think the intention is for some neo-liberal economics, but it's clogged up with huge amounts of upper-class/private school/aristocratic crap, which makes whatever comes out inherently (a) cruel, and (b) full of vile double-speak. If you listed to whatever any Tory says as if it was said by "General Melchett" of "Blackadder Goes Forth" (https://en.wikipedia.org/wiki/List_of_Blackadder_characters#Melchett), it makes more sense:

For example:

“Frankly, we cannot hide from this thinking if you step back you become less of a target. They are attacking our way of life and what we stand for, and so we have to stand united with those that share our values.”. As read with General Melchett's voice, it's clearly just guff and bluster, and there's a total idiot in charge.

Or:

"
we've got to find savings in welfare - and we have found that £12bn of savings in welfare that we said we'd be able to find in the election". Said as General Melchett, it's quite clearly utter bullshit and a total lie, or just cruel and stupid (or both).

Everything any Tory says in this Gov (more or less anything) means almost entirely the opposite of what is being said, and is either cruel or stupid, or both.
posted by rolandroland at 3:32 AM on July 6, 2015 [3 favorites]


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