The trouble with oppositional politics is that it’s always more important to blame the other side than it is to understand a problem properly. There was a classic example of this on the radio this morning. Iain Duncan Smith, the Work and Pensions Secretary, was explaining the changes to housing benefit that come in today. Yes, many households will see reductions in their housing benefit, he says, but the welfare system has to be reined in.
The narrative that Duncan Smith was working to was that housing benefit doubled under the last Labour government. The implied message there is that Labour were soft on welfare, allowing all kinds of scroungers to enjoy discounted housing at the expense of the hardworking people of Britain. But while that’s a convenient political point, it ignores the real reasons behind that rise in benefits.
In the decade after Labour came to power, there was a long property boom. The average price of a house doubled and then some. The cost of renting has also risen to unprecedented highs.
Growth in average wages in Britain has not kept pace with the cost of housing. Inevitably, this means that many people have been spending an larger percentage of their earnings on housing. For those on low incomes, that may push you into eligibility for housing benefit.
As evidence of this, you need look no further than the sorts of households claiming the benefit. In the past, housing benefit was closely correlated to unemployment, but more and more working people have been applying. In the last few years, the majority of new sign-ups to housing benefit have been from working families.
The problem with a political explanation of problems rather than a factual understanding of them, is that your solutions don’t get the heart of the matter. So the coalition government’s new plans today will cut the benefit budget, but it won’t do anything to actually solve the underlying problem – housing is too expensive in Britain today. (Before anyone mentions the housing shortage, Britain hasn’t had one since 1971 and that’s whole other post)
Instead, other parts of the government are making things worse. The chancellor’s latest budget includes measures to try and jumpstart the property market again, the very source of the problem. And who can blame them? Rising house prices work magic for the economy – until the inevitable correction of course. But with any luck, that can always be blamed on the opposition.