Monday, 25 June 2012

Why David Cameron is wrong about housing benefit

David Cameron has announced that he wants to stop housing benefits for everyone aged under 25, apart from victims of abuse and domestic violence. David Cameron is wrong. I only have to look at my own life to explain why I find it so. I started full time work when I left school aged 18. I worked for the summer and then moved to Stockholm for six months to be with a girl I'd met. On returning, I started work as a painter and decorator, then did a TOPS course to get a job in IT. At the time I was also playing pretty much full time in a Rock and Roll band. I then met a girl I loved dearly, got a flat and was working in a well paid profession as well as running my own studio part time and playing regularly in a band.

By the time I was 24, I had a very responsible job, had been living with someone for two years and also had my own business and a rock and roll band, playing all around the UK and Europe. Then things went wrong, my relationship went broke down and the band split up. I also had severe health problems, caused by a stomach ulcer, which nearly killed me. I ended up being confined to bed in Edgware General hospital for 6 weeks. I was lucky, the firm I was working for were supportive and I kept my job. I ended up spending six months sleeping on floors at friends. My parents put me up for a few weeks when I came out of hospital, but the arrangement was impossible for both of us. They wanted to enjoy their retirement and not have someone with my lifestyle disturbing them. I'd worked and paid tax for the best part of six years and was used to living on my own. With my parents religious views, there were many clashes and arguments which didn't help my health or their state of mind. I respected their views, but I had moved on.

After six months, my health improved and I found a new flat. In all this time, I didn't need any benefits, in fact I've never claimed them. I do know for a fact that if I'd lost my job I would have had to claim them. Why on earth should someone who has lived independently for six years, be forced to live with their parents, due to a temporary setback. I had a stack of possessions and furniture, which my parents had nowhere to accomodate in the house. Luckily they had a large shed which housed them for the duration of the period between flats.

Many of my friends at the company I was working at were graduates who moved from all over the country to work in London. Would Cameron force people like them back to Scotland, Wales and the North of England if they lost their job, to live with mum and dad? What likelyhood will they have of finding work in those areas, given that they moved in the first place? Many people aged 24 would have similar issues if they lost a job. A period on housing benefits would see them through a period of disruption. Is Mr Cameron really seeking to have people thrown on the street, when they have paid rent (and tax) for several years and suddenly lose their job (there is a recession Dave, brought about by your policies), for want of housing benefit for a few months.

I was lucky that I had an understanding employer and my family were local in London. Many people move to our great city for work and things go wrong. It doesn't escape my notice that Cameron also wants to make it easier for firms to sack someone. Put all these things together and you'll end up with a situation where people under 25 will find it impossible to buy or rent accomodation. So much for a mobile workforce.

Many Tories never take account of the fact that housing benefit is beneficial to the economy. It ensures that people can move around the country to find work, because without a secure tenure, this would be impossible. I also believe it to be highly unfair on parents. Once people reach the age of 18, children are legally independent. The government is, by the back door, raising this age to 25. Parents are already faced with huge extra costs for educating their children, especially if they go to University. As usual it is the decent working parents in the middle of the tax bracket who will feel the burden the most.

As with most of Dave's policies (pasty tax, caravan tax, etc) this really hasn't been properly thought through. If Cameron really is intent on raising revenue, go after the tax avoiders (most of whom are Conservative supporters).

6 comments:

Don't Call Me Dave said...

If Cameron really is intent on raising revenue, go after the tax avoiders (most of whom are Conservative supporters).

Where is your evidence for such a preposterous statement?

Millions of people put their savings into tax free ISAs. Are they all Conservative supporters? There are dozens of legal and honest tax saving schemes that are available to the masses, not just rich left wing comedians. I am willing to bet that your company makes use of some (or all) of the tax allowances available to businesses - and rightly so.

In any case, Cameron’s proposals are not about raising revenue, but cutting expenditure. The country is broke and your yet-to-be-born grandchildren and great grandchildren will not thank you for pissing away all of their money.

Rog T said...

David,

Are you seriously saying that there are a higher percentage of Lib Dem and Labour supporters with ISA's etc than Tories?

I am all for the tax system encouraging entrepreneurs and people who are willing to invest in genuine schemes. It may surprise you to hear that I wouldn't critise Jimmy Carr or anyone else for using them if they are legal and yes my accountant makes sure I use tax effecient schemes to manage my affairs, although none of my money is offshored and for I plough all of my spare cash back into the business.

I think it is outrageous that Jimmy Carr's private and legal tax affairs have been brought into the public domain and Cameron has made a rod for his own back, because now the press can have a field day as they discover similar ruses used by his supporters.

I do however think that there is plenty of scope for tightening the rules to make certain schemes illegal.

There are plenty of things which could be cut without affecting people who may be in deep shit. I don't think a blanket ban on housing benefit for U25's is one of them.

baarnett said...

DCMD: The country is not broke, and never was.

But Mr Osborne told us the country's accounts were like a credit card (they are not) and that we were like Greece, in terms of trouble (never remotely the case. We have mostly long-term, perfectly manageable debt.

The result of his inexperience was to add massively to nervousness, and lack of demand.

The generational debt is of no great concern. We have had a near total collapse of capitalism, and during future expansion (when greed takes over from fear, as it always does) the debt will only marginally reduce growth.

Rog T said...

I fear many Tories don't realise the problems can only be cured by economic growth. Cuts will be a small part of the picture, where there is genuine waste.

Don't Call Me Dave said...

Rog

There is a world of difference between tax avoidance and tax evasion and Cameron, rather foolishly, has suggested that avoidance is immoral. It is not. It is the absolute right of every citizen to arrange their tax affairs to minimise the amount they must pay. If governments did not waste so much of our money, perhaps we would not feel the need to engage accountants to keep our hard earned income from the taxman.

I dislike Jimmy Carr because his idea of humour does not match with mine, but Cameron was an utter fool to comment on his tax affairs which were legal and approved by HMRC. I agree that he (Cameron) has now made a rod for his own back, but this is the price he must pay for putting his mouth in gear before engaging brain. As Guido Fawkes has pointed out today, the LibDem Secretary to the Treasury, Danny Alexander, is a serial house flipper who cost taxpayers over £100,000 using a legal tax avoidance scheme. Will Cameron declare Alexander’s actions as immoral as well?

Evidence has proven that if you reduce tax rates you (a) stimulate growth because people are better at spending their own money than the government is and (b) reduce the incentive to devise tax avoidance schemes (Google ‘Laffer Curve’)

@Barrnett Add up the sum total of our national liabilities (including off-balance sheet debt and future unfunded pension liabilities) and then deduct the sum total of our realisable national assets. We are broke. Anyone who thinks otherwise is Gordon Brown.

thinkinggirlblog said...

Cameron doesn't understand the nature of housing benefit. It's to help people pay rent, not build a life on the dole.

It's like he wants all poor children to be living with their parents, as far away from London as possible, until they are 40.