Sunday, 27 June 2010

Redistributing wealth

There was an epic post over at Devil's Kitchen the other day, pulling together Guardian pieces, Tim Worstall and Ol' Blue Eyes, covering the government's proposed cap on Housing Benefit. Therein the Devil summarises the problem by quoting a comment from the Guardian piece.
To sum up, some people are effectively being given a pre-tax income of £77,000 for doing nothing, and people far poorer than that are paying for it through taxation. The chancellor claims this is unfair and you disagree. Right.
The case point being that housing benefit is paid based on average rents in each area, so in posh Camden unemployed folk, folk on low income, foreigners and the incapacitated can claim £1000 a week or so, paid for out of the tax that everyone else has to pay.

After discussing the issue with people who know about this sort of thing, and my own wee flag I like to wave about how you can pretty much buy a house in Hull if you're on Job Seeker's Allowance, it seems that the problem lies in the 'Local Connection' section of the 1996 Housing Act, which essentially penalizes claimants and councils who seek better value further afield.

I suggested doing something about this one the government's Spending Challenge website.

So I was rather surprised this morning to read on the BBC that the government were acting on my suggestion.

Alas, I didn't bother reading the article until later. The thrust seems to be to move unemployed folk from poverty ghettos to more affluent areas, which is kind of the opposite of what I had in mind.

JAY'S POLITICAL BLOG reads it as:-
On the surface, this idea is not bad in itself. Many people do move to wherever a job takes them. But as Mr Balls says, the coalition has already cut millions of pounds from funding for the jobless. He is absolutely right to accuse the Tories and the Liberal Democrats of taking money away from the poorer regions whose economies need regeneration; a move which will, in turn, only serve to slow the overall economic recovery, if not take Britain back in recession.

By encouraging people to move to more prosperous areas where the jobs are more likely to be, that is exactly what the Conservative-Liberal coalition are doing.

My take is that in Hull you've got fourth generation unemployed people, the cost of living is very low, the housing benefit bill per claimant is low compared to Camden, Westminster and Islington.

So, if you've got unemployed and unemployable people, why keep them in broom cupboards in the most expensive areas when they could quite merrily have a higher standard of living and more space elsewhere.

What could happen is that the Tories and the Liberal Democrats would be taking housing benefit money away from the richer regions and moving it to the poorer areas.

Me, I used to live in expensive West Hampstead, I had a nice job and could afford it, unemployment got me, my self-confidence was shot to fuck, I moved five miles west to Wembley where rent was so much cheaper and I could survive on minimum wage until my self-confidence rose to the heady heights it is today.

I'm fucking great me.

1 comment:

  1. I used to live in a village of 2000 people. There were no jobs. I know a lot of people who struggled to move out to a city where there would be jobs. It seems sensible to make the process of moving easier.

    On the other hand, encouraging people to move into cheaper areas is unfair. This would be bad for rural areas, where opportunities for the locals are very poor but prices are put up by holiday homes people. It would be encouraging people to move away from their support network at a potentially very vulnerable time. Though, obviously, as you say it works in some circumstances.