Housing Benefit – a £4bnpa subsidy for low wage UK employers

This article finds that Housing Benefit subsidises low wage paying UK employers to the tune of £4.86 BILLION per year.

It also finds that social housing receives £1.125 billion per year in capital subsidy yet produces savings to the taxpayer of £4.08 billion per year as it charges the taxpayer £23.41 less in HB for its 3.37m HB claimants than a private landlords receives.

Hence the £4.08 billion saving that social housing gives back to the taxpayer is then (and some more) given to unscrupulously low wage-paying employers so that working families can afford to work for such wages.

Strange how a few facts reveal that long held myths such as social housing is subsidised when the real subsidised is British employers!!

Do read on as what started on a very closely related subject led me to the startling yet true facts above.


Those who have read any of my blogs will know I like numbers.  Two plus two is always four (unless you are IDS) and numbers are FACT and irrefutable FACT.  The bedroom tax has so much myth and hearsay and nonsense talked about it for example Muslims allowed an extra bedroom as a prayer room and hat angers me and not just because of the racist connotations in it. It angers me as the old adage of tell a lie often enough and people believe it is very much at play.

One very valid point is the inept release of purported fact from reliable sources and today I read a classic example in the Independent:  It says:

The number of working people relying on housing benefit to boost their income has doubled in five years, at a cost of billions of pounds to the taxpayer, a new analysis has disclosed.

Labour will seize on the figures today to argue that millions more people are trapped in insecure jobs with poverty pay despite recent evidence of economic growth.

According to the House of Commons statistics, 478,000 people with jobs claimed housing benefit in 2009/10, rising to an expected 962,000 this year. On current trends, the number of claimants will increase by a further 276,000 to 1,238,000 in 2018-19.

The above is not fact and we see the House of Commons library producing false figures and figures which understate the true FACTUAL figures which are given in Table 6 of the quarterly housing benefit data released and compiled by DWP.  Here is that irrefutable fact:


As you can see this is a spreadsheet table which records by month the number of working people claiming HB in the fourth column from the left – rising from 430,162 in November 2008 to 1,036,816 in November 2013.  So the House of Commons figures which say “...478,000 people with jobs claimed housing benefit in 2009/10, rising to an expected 962,000 this year..” are not factual as well over one million are already working with such low wages they need to claim Housing Benefit.

These are the OFFICIAL figures and therefore the FACT.

You will notes if you look carefully at the above spreadsheet table the final row is a series of percentage figures and these are my figures on the difference between the ‘inherited’ position of May 2010 and the November 2013 figures. So for example the number of claimants in column 2 is 104.92% at November 2013 of the figure at May 2010 or increased by 4.92%.

Do not be too alarmed that the ESA claimants have increased by 464% as this is just an aberration of the movement of IS and IBclaimants onto ESA and note that Income Support claimants have fallen by half.  They cancel each other out as this simple graph reveals:


What frankly annoys the hell out of me is the misreporting of FACT by bodies that should know better such as the House of Commons statistics and the Independent newspaper as well as the highly opportunistic Labour Party.  I reported here LAST August that the HB figures for those working had gone through the one million mark including the comment that this was a near 60% increase since the last general election and it meant that HB was a subsidy for low paying employers – the exact same charge one year LATER that the Independent reveals as a scoop and the same political charge the opportunistic Labour Party is now about to use.

I am not bothered that the mainstream media or the House of Commons Library or the Labour Party clearly did not read my blog: I am extremely bothered that it has taken them 12 months to locate the official fact of the matter from the official figures or in simple terms the mainstream news media the House of Commons and Her Majesty’s Official Opposition are not doing their EASY jobs!

As usual the two main political parties seek to score points and little else and we see the Tories blaming this on the ‘last lots’ HB management:

Last night Mark Harper, the Minister for Disabled People, hit back by accusing Labour of bequeathing the government “an out-of-control housing benefit system” and a “culture of dependency”.

He said: “Their system saw some people claiming £104,000 a year of hardworking taxpayers’ money to live in expensive areas. We have capped benefits so no family can claim more than the average family gets by going out to work and we’ve put an end to unlimited housing benefit.

The usual bullsh*t and bullsh*t terminology is used – the ‘hardworking taxpayers’ by Mark Harper without any sense of irony that the most hardworking taxpayer is by definition those whose wages are so low they qualify for Housing Benefit in the first place!!

It was found that at most 5 (out of 4.752m) HB claimants a whopping 0.00001% claimed more than £100,000 per year in HB.  Still wrong and still far too much of course yet then we find that after the coalition changes to cap LHA the private rented version of HB that LB Westminster alone pays out £153,000 per year to a lot more than 5 households in housing benefit as they have been evicted because of the LHA cap.  Check out this BBC London report from February 2013 which reported that LB Westminster is spending over 150,000 per year on a family of 4 made homeless by the coalition’s LHA cap and this report also reveals dozens of similar cases in that one borough alone and far more HB public purse cost than the 5 cases across the whole of the uK that the coalition levied at the ‘last lot!’

That FACT and proven FACT is 18 months old yet because the belatedly opportunistic Labour Party chose not to challenge it then Joe Public believes that the coalition has reduced HB and stopped this scandalous misuse when in FACT it has increased it!

Perhaps it will take Labour MPs going to Gaza to finally get the rocket up their arse they deserve!

The Labour Party claim to be against the bedroom tax and we now see the Liberal Democrats apparently against it and of course for the same cynical reason, opposition to it buys votes.  Yet why has it taken so long for them to see the obvious and irrefutable FACT surrounding the bedroom tax and wider welfare reform such as HB does subsidise low wage paying employers.

Finally dear reader here are two graph and so simple that even politicians, the mainstream news media and the House of Commons library can understand them.  The first is the total HB spend since the election I used many months ago:

coalition hb bill

As you can see the HB bill despite the welfare reform policies such as the bedroom tax has increased sharply.

The second is the cost paid out in Housing Benefit to working families :



The above uses the Nov 2013 average cost of HB of £89.19 to keep a constant cost figure for ease of comparison between the general election in May 2010 and each year thereafter up until the November 2013 figure.

  • This reveals the Housing Benefit paid out to working families has increased by £1.81 billion per year since the election.
  • That is the same as HB has increased to working families by £1.42 million PER DAY and EACH AND EVERY DAY since the last election
  • Or the UK taxpayer subsidises low wage paying employers by £13.32 million every day

Social Housing gets £1.125 billion in capital subsidy per year yet low wage paying UK employers now get £4.86bn per year for their workers

For every £1 the UK taxpayer subsidises social housing it gives UK businesses £4 in subsidy!!

You think that would be something the UK taxpayer would care to know wouldn’t you reader and I wonder why social housing doesn’t SHOUT that out!  God forbid my regular repeated charge against them that they couldn’t lobby their way out of a wet paper bag was valid in any way!!

FACT the bedroom tax and FACT Housing Benefit and a quick 15 minute investigation reveals some surprising facts!

Social landlords are so inefficient we are told and require £1.125bn in subsidy each year.  So that means that UK businesses are 4.32 times as inefficient as they need 4 times that amount to subsidise the low wages the pay and without this £4.86 BILLION per year their workers could not afford to work for the low pay they receive.

You may argue, and probably correctly, that those in working do not receive the same £89.19 per week of HB as the average for all HB claimants.  It will be less.  I agree yet if the average received by a working household in HB is just £24 per week this is still MORE in HB subsidy that low paying UK employers get than social housing receives.

I have said many time before the initial capital subsidy that social housing receives saves the UK taxpayer over £4bn per year (1,645, 504 private rents each get £23.41 more per week in housing benefit) see tables 4 and 5 of official HB figures) given the lower rents and lower HB this becomes to social tenants over what the non-subsidised private landlord receives.

So in effect all of the saving that social housing gives to the taxpayer is promptly paid out to UK bosses so they can subsidise scandalously low paid jobs.

Yes social housing which has been lambasted by politicians and Joe Public for being subsidised in fact gives a huge saving to the UK taxpayer and in turn itself subsidises unscrupulously low paying UK employers with this saving!

Amazing what a few numbers and facts reveal!!

(Hopefully) Final update 16:00 hours

Here is the capital subsidy that social housing receives £4.5bn over 4 years or £1.125bn per year

capital funding



11 thoughts on “Housing Benefit – a £4bnpa subsidy for low wage UK employers

    1. About time ‘housing’ joined the dots and SHOUTED it from the rooftops. Strange how social housing is seen in a hugely pejorative sense and labelled as ‘subsidised’ yet the great God of the celebrated ‘free market’ the private sector employer requires much more in subsidy than social housing.

      Unfortunately the lack of challenge to that “tell a lie often enough” approach by social landlords does mean that Joe Public accept it as true.

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