Low pay and high housing costs are a toxic mixture that traps people in poverty

One of the things that was often repeated during the election campaign was that the best route out of poverty was to have a job with a secure wage.

In theory this is right, and it is something that I advocate strongly within BHT. Unfortunately, getting a job is no longer a guaranteed way out of poverty. Over the lifetime of the Coalition Government, the majority of new claims for housing benefit came from working households on low pay. Low pay and high housing costs are a toxic mix which makes a mockery of calls for people to “do the right thing”.

I hope that the new government will do something about low pay.  Even the Living Wage is no longer adequate in high cost areas such as Brighton and London.  I also hope that the new government will realise that it is economic madness to allow the ever increasing housing benefit bill to carry on as it is. What I fear that there will be further arbitrary caps imposed without looking at the cause for the spiralling costs.

The way forward will require courage and foresight by the Chancellor and the new Housing Minister.  Over the course of the Parliament there needs to be a shift in investment in housing, away from revenue support through housing benefit, into capital investment into new homes, not for sale, but for rent.

Continuing with the Right to Buy does not help increase supply, and we need to make sure that houses that were built with public subsidy remain in public ownership and charging rents that people can afford.

Just before the elections, David Orr, Chief Executive of the National Housing Federation, spoke about the consequences of further cuts in benefits: “This is not reducing support to people who are living in luxury. It will put even more people into having to make a choice between paying the rent or buying food. Food banks will become more and more common. Homes will be cold in the winter because the family living there can’t afford to put the heating on. Oh, and as an aside it also means that the affordable rent programme will not be affordable for anyone at all on a low income and will probably fall apart.”

The only thing I disagree with him about is the affordable rent programme.  It already isn’t affordable for anyone at all on a low income.


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