Crisis of the squeezed

The housing benefit was meant to be for, as the government’s own website states, “those on low income.” But as the housing crisis reaches a tipping point, new research shows that middle-income earners are turning to the housing benefit in droves in order to afford a roof over their heads.

The National Housing Federation released a report last month that paints a bleak picture of the nation’s housing crunch. Middle-income earners, making between £20,000 and £30,000 a year accounted for a full two-thirds of housing benefit claims. Since 2008, the number of middle income earners claiming the benefit rose by 350,000, which amounts to 58,000 every year in the past six years.

The number of working people who claim housing benefit is now a staggering one in five. What’s worse, the trend is predicted to continue. The Federation estimates that in five years, the rate of in-work housing benefit claimants will rise to one in three.

Why are so many hard-working families struggling to afford a home? The Federation believes the culprit is a convergence of many factors – astronomically increasing housing costs; the impact of not enough houses being built; stagnating wages that are expected to continue to flat line; and the growing number of people renting privately.

Housing benefit represents the single most costly benefit to the taxpayer, amounting to ÂŁ23.8bn in 2013-2014 and accounting for 30 per cent of the welfare bill.

While the Tory-led government loves to blame poor “benefits scroungers” who milk off the public purse, the truth in the Federation’s report is clear – those who claim benefits work – and many of them fall in the middle of the income distribution.

The blame for the benefits bill thus falls squarely on the shoulders of those at the top;  greedy developers and landlords pricing out honest working people from the housing market, and corporate fat cats who choose to keep wages low to line their pockets. It then falls to the state to bridge the gap.

David Orr, chief executive of the National Housing Federation, said, “Our shortage of affordable housing is now leaving families on a decent wage unable to cover the cost of their homes. This isn’t sustainable or right.

“In the 1970s around 80 per cent of government housing spend went on building homes with about 20 per cent on housing benefits, but today it’s the other way round,” he added.

Prime minister David Cameron’s recent promises of tax cuts for the rich, with an additional £500 a year squeeze on benefits claimants, is not only further proof that the Tories hold no quarter for low-income workers. As the Federation report has shown, they’ve chosen to abandon those in the middle, too.

“The Tory party that has done more to make working people impoverished and insecure than any government since Margaret Thatcher,” said Unite general secretary Len McCluskey. “ It cosies up to the hedge funds and tax avoiders that take from our nation while robbing £500 a year from the hardest working people in the country.”