A helping hand

The welfare state is back. As our housing bubble continues to deflate, the helping hand of the state has been extending its reach to people who had forgotten they needed it.

In last week’s Budget, Alistair Darling extended the homebuy scheme along with more help for the support for mortgage interest scheme.

For arch pessimists, this may perhaps look like rearranging the deckchairs on the Titanic. But there is a real opportunity here to use such measures to change the attitudes that have set the tone of housing debate for far too long. With so many households looking to the state to save their homes and the housing market, now is a perfect time to break the hold of a housing ideology that sees ownership as the mark of the more complete citizen: independent and free of the state, but also not a burden to others.

In this country, the lowest rung on the status ladder too often appears to be occupied by social housing and housing benefit claimants. Popular myth suggests those served by these institutions are the feckless and idle.

But if ever such an account were believable, it is now utterly bankrupt. For its intended appeal was to the interests and beliefs of a home-owning middle class that is now feeling ever more vulnerable and a great deal more inclined to seek the help of the welfare state.

This, then, is an opportunity to tackle the assumption that social housing tenants and benefit claimants are dependent in a unique, and morally compromising, way. As is now plain to see, dependence on the state to meet and protect our housing needs is a matter of degree. When push comes to shove, as the floods of 2007 reminded us, even the wealthiest homeowner relies on the state to protect their rights.

And this truth can and should be reflected institutionally. One way to do so would be to replace the many forms of housing assistance – including housing benefit and support for mortgage interest – with a single, housing cost credit.

A housing cost credit would provide for different needs and risks under the same universal system, cutting across classes and backgrounds. And there would be a sliding scale of help with a gradual taper, in which assistance was withdrawn incrementally as households move up the income scale.

One of the practical pay-off s would be the removal of some of the notorious work disincentives of the housing benefit system, where high withdrawal rates can disincentivise work. But, just as importantly, it may help us to move away from the stigma and prejudice, and break down the divisions between those that need the state and those that think they do not, that has dogged the social housing sector for the past three decades.

James Gregory is a research fellow at the Fabian Society and is the author of the forthcoming publication In the mix: narrowing the gap between public and private housing

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