Posted by: Isabel Hardman17/02/2011
Iain Duncan Smith has taken quite a dramatic u-turn on housing benefit today. Only last week he was trumpeting the virtues of a 10 per cent cut in jobseeker’s allowance for unemployed people, claiming it created an incentive to return to work. But this morning, on the Today programme, he said: ‘The more we looked at this, the more I reviewed the interplay between that reduction at 12 months and the universal credit and work programme meant that all of these people were going to move into the work programme anyway, so they would be having intensive help to get back to work.
‘What I want to do is to make sure there are no disincentives for the unemployed.’
This will not come as a huge surprise to anyone who has been following the housing benefit cuts. Ever since George Osborne unveiled this particular cut in the emergency budget, charities and MPs have condemned it as indiscriminate, as it would punish anyone who had the bad luck to be unemployed for more than a year, regardless of whether they were doing everything they possibly could to get a job.
Dropping this cut formed one of the key demands in the alternative offer that Inside Housing presented to ministers at the end of 2010. It was also at the centre of a rebellion from backbench Lib Dem MPs including deputy leader Simon Hughes, Bob Russell and Mike Hancock, and members of the House of Lords. In the past few months it had become clear that this cut would not make it through Parliament unscathed.
So the last-minute decision to drop the cut is a massive victory for our ‘What’s the Benefit?’ campaign, and for those campaigning both inside and outside Parliament. But this still doesn’t make the government’s housing benefit reforms fair. The coalition laid legislation last year which brought in damaging cuts to the benefit which the Work and Pensions department itself warns will lead to families leaving their communities and support networks for cheaper areas with fewer job opportunities. These cuts still stand.
Today Richard Capie, deputy chief executive of the Chartered Institute of Housing, said: ‘We do however remain deeply concerned about other aspects of the welfare reform programme. CIH recognises the importance of reducing the welfare and housing benefit bills and has supported reform in this area for some time.
‘However, as with the JSA decision, we hope that parliament and government in particular will revisit some important aspects of the legislation, which for all their good intentions, remain deeply flawed and unsustainable.’
Campbell Robb, chief executive of Shelter, added: ‘While Shelter supports the aim to simplify the benefits system and make work pay, there is a real concern that we will see a further rise in homelessness if these changes go ahead.’
We reported two weeks ago that peers hope to use an independent review of these cuts, which start for new claimants renting privately in April, to persuade the government to think again. And members of the public bill committee that will examine the bill line by line have told me they are keen to seek amendments on another cut which will link housing benefit to the consumer price index rather than the retail price index.
So although today’s concession is very welcome, it isn’t enough. There is quite a fight ahead before the housing benefit reforms are fair to vulnerable tenants.
From What's the benefit?
The blog for our What’s the Benefit? campaign, which is calling on the government to find a fairer way to reduce the £21 billion housing benefit bill than its current proposals.