A call for a fairer cut

By Kathryn Rose

The Conservative-Liberal coalition is planning to cut people’s housing benefit if people do not work – this is how part of the June 2010 budget is popularly being summarised and with some foundation. A more accurate report would state that the coalition government are not planning to instigate the 10% cuts to housing benefit for the unemployed immediately; they intend to wait until April 2013 when it is hoped that employment levels will be rising. This scheme is based upon the economy recovering at the planned rate and if the economy behaves in the way that the government wish it to then many of those currently unemployed need not fear being affected.

So who will be affected by such cuts? The intention is to apply 10% reductions to housing benefit in cases where someone has been classified as a jobseeker for a year and has failed to find work during that time. Single parents with children aged 5 years or older are set to be classified as jobseekers too from April 2012 so they will also be affected by this cut in housing benefit. The government has yet to outline how unemployed single parents’ housing benefit is to be reduced by 10% without it having a negative impact upon their children; however, I am sure that a responsible government will put procedures in place to ensure that children are not penalised for their parents’ inability to find work.

When contemplating the addition of such statutes it is helpful to consider just how long they will be in place for. One useful lesson to be gleaned from the launch of the government’s ‘Your Freedom‘ website is just how long any statute remains upon the statute books once created. While it’s comical to note that any whales washed-up on the coast of the United Kingdom belong to the Queen, following the creation of a statute in 1322, when the statute relates to economic matters its longevity is a rather more serious issue. The planned changes to housing benefit are not due to start until a time when it is hoped the economic recovery will be secured; however, in the circumstances this may not be our last recession.

This country has had recessions in the past – in the 1920s, 1973-75, 1979-81 and 1990-92, for example – so while it would be nice to assume this one will be the last one, the evidence of history suggests it may not be. It seems especially unlikely that this will be the last recession when you consider that there is yet to be a commonly accepted theory on how to prevent recessions from happening. A 10% reduction in housing benefit for those unable to find work within a year would be unpalatable during this recession; I do not believe it will be easier for those whose homes are threatened by such a policy during the next.

George Osborne has explained the government’s decision by stating that “because I took decisive action…the forecasts show unemployment is going to fall, and that is a good news story”. If Osborne defies his critics, economic growth conforms to the government’s timetable and all goes as planned then this is a short-term solution. In years to come another recession is likely to happen, regardless of who is in power, as history repeats itself. Those who are penalised for being unable to find work during the next recession will have to pay for the longevity of a statute intended to work in this particular economic situation.

At this stage it does not appear likely that the government will retract its policy and so I suggest an amendment. This should achieve their proclaimed goal of encouraging job-seekers to find work whilst also protecting the most vulnerable during recessions. The amendment is that the proposed 10% cut to housing benefit should only be applied to those job-seekers who refuse offers of work (other than from the armed forces as this work can be classed as life-threatening) or who have refused to comply with the Job Centre’s requests to search for work. Such an amendment would mean that those who try without success to find work, and their children, will not be penalised.