Chief Whip housing letter sees IDS in a Pickle!

Iain

I am concerned as to the discovery of the real rationale and policy intent upon social housing of our package of welfare reforms affecting the payment of housing benefit namely the spare room subsidy and overall benefit cap.

More specifically my concern is should the electorate realise that a cap does not mean a reduction in the overall cost of handouts and in fact can and does increase the overall bill then the political ramifications of your heroic reform of the burgeoning welfare state will be serious.

Your own departments housing benefit data reveals all four policies collectively cost the taxpayer in real terms £440 million more per year despite our huge efforts to politicise these pesky civil servants these past 5 years.  The inherited bill of £20.8 billion even when accounting for the 9.91% increase in HB average payment levels and accounting for the 2.95% increase in the housing benefit claimant count, or a real term like for like comparison, reveals an overall increase of £440 million per year at the April 2014 HB bill of £24.04 billion.

This means, collectively, these four reform policies, which all reduce housing benefit at source, have the real effect of increasing the overall housing benefit bill in other areas. Thankfully the general public are still of the mindset that a cut or cap must equal a reduction in cost though the many social media channels are attempting to explain this non sequitur to the great unwashed with some evidence this is beginning to work

Secondly, our politically powerful claim in public and in parliament that the spare room subsidy has saved £1 billion to the taxpayer is factually contradicted in your department’s official housing benefit figures and is worrying.

It is extremely difficult to hold the usual line that you choose not to recognise those figures and so we will need a new strategy and soundbite when the matter is raised.

Moreover, it is not arithmetically possible for the policy to save £1 billion in its two years of operation when it cuts an average of £14.98 per week from on average 480,000 households over this period.  This can only give a maximum theoretical figure of £750 million over the two year period and that assumes no expenditure cost of the programme such as the millions you have allocated to local government in Discretionary Housing Payments.

Regrettably, Iain and despite the efforts of Gove, some of the great unwashed have the basis arithmetic skills to compute the figures!

Our stated policy of reducing the benefit cap figure from £500 per week to £440 per week in London and a lower figure, perhaps 90% of this or £396 per week for families in the provinces is also having worrisome scrutiny.

This means in the cheapest low rent areas social landlords cannot fully occupy a 3 bed property as to do so would see the tenants receiving a maximum of £63 per week in housing benefit if they have 3 children and just £38 per week in housing benefit should the tenant have 4 children.  Previously we have persuaded the typically mute and complicit social landlords that the benefit cap is just a private rented issue in high rent areas yet this can no longer hold as some of the sandal wearing Guardian reading woolly liberals are already stating this means the social landlord has a huge financial risk is they FULLY occupy the property on top of the spare room subsidy financial risk if the landlord UNDER occupies the property.

The benefit cap and bedroom tax policies work against each other, as we always have known, is becoming common knowledge in social media circles and that the social landlord is at financial risk which ever way they tenant the property.  Such social media reports say this also gives a strong financial imperative for all social landlords to not accommodate the tenant household in receipt of welfare benefit which begs the question where are such households to live?

The benefit cap is a greater financial risk to the private sector landlord given the higher rent levels the unsubsidised market has to charge and that leaves the housing option for the family in receipt of benefit to be excessively high taxpayer cost of temporary homeless provision and for far longer duration that currently exist. So while we have always known about disguising the true cost by transferring a proportion of the additional HB bill to local government this is potentially becoming common knowledge and also worrying.

In short our package of heroic welfare reforms aimed at reducing the overall housing benefit cost,  that already cost the taxpayer more than they save, can now only increase that additional taxpayer cost of housing benefit in huge terms is inevitable and far more worryingly becoming common knowledge.

Thankfully, the sandal wearing Guardianistas have yet to find again the Pickles letter from 2011 despite the Guardian printing that letter with an extract from a letter sent by Cabinet Minister Eric Pickle’s private secretary to the private secretary of David Cameron back in July 2011 about the overall benefit cap.

“Firstly we are concerned that the savings from this measure, currently estimated at £270m savings p.a from 2014-2015 does not take account of the additional costs to local authorities (through homelessness and temporary accommodation). In fact we think it is likely that the policy as it stands will generate a net cost. In addition Local Authorities will have to calculate and administer reduced Housing Benefit to keep within the cap and this will mean both demands on resource and difficult handling locally.”

It would be most embarrassing if this personal letter from me to you gave recall to the unfortunate letter above from Nico Heslop to the PMs PPS Matthew Styles with its all too perspicacious warnings of the additional taxpayer cost of a £500 per week overall benefit cap which must lead to hugely increased higher taxpayer cost if the cap figure is reduced again, and despite the 78% approval rating for the policy.

As the old saying goes, you can fool some of the people all of the time but not all of the people all of the time and you know only too well from past experiences the good of the party is paramount and so henceforth the welfare reform policies will now be referred to as your welfare reforms.

However, should the electorate not discover the true impacts of your welfare reforms then the potential night of the long knives of course becomes full support from the 22 committee, Whites and the rest of the grandees.

Yours

 

Chief Whip

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And look what else this very perspicacious letter says….

 

Yes that means IDS carried on with his overtly political and economically costly overall benefit cap policy knowing not only that it would cost hundreds of millions per year more BUT it would also see an additional 20,000 families – or 50,000 men women and children – evicted and made homeless …with the cap at £500 per week.

Now reader, imagine just how many more men, women and CHILDREN will be evicted, made homeless and those CHILDREN’S lives and educational and health and economic chances well and truly buggered when IDS and the Tories lower the overall benefit cap to £440 per week in London and £396 per week in the provinces and because IDS believes it to be right!!!

And even if you are a heartless bastard dear reader, just imagine how much more tax you will have to pay for this blatant piece of political policy from the economic buffoon and deluded zealot that is Iain Duncan Smith!!!