Saturday, October 19, 2013

Tories condemning London low paid to life long poverty and benefit dependency

Do the Tories really know what they are doing with their so called "affordable rent" housing policy? Do they realise they are going to force many London workers to life long poverty and dependency on state benefits?

Even in Newham which traditionally is one of the most inexpensive boroughs in London to rent or buy.

The policy which is being enforced by Tory Mayor, Boris Johnson across London requires nearly all new social housing and re lets of many existing homes to be at an average 80% of market rents.

This is to make up for the slash and burning of capital grant aid by this Government to subsidise the building of new homes.

Leaving aside for the moment the short term idiocy of not building new homes when we have a massive housing shortage and need to increase economic demand in the economy. 

An one bedroom Council home in Stratford, let at a so-called "affordable rent" (80% of market) is still a staggering £191 per week. Council tax for Band B property is £19 per week (£974 a year). So total housing costs of £210 per week (figures Newham Council).

If a worker earns a London living wage (£342 gross per week) how would they live and pay the rent? After tax and national insurance they will be left with £287 per week. After housing costs of £210 per week they will be left with £77 per week - before you take into account travelling costs, fuel, clothing and food etc. The Taxpayer will have to step in to give housing benefits and/or tax credits especially if they have children.

Of course many workers in Newham don't even get a living wage and try to survive on the minimum wage of £248 per week. (£223 after tax and national insurance).

If they had a traditional social rent (around say 45-55% of a market rent) at £85.56 per week then they would at least have the chance to pull themselves out of poverty.

So instead of the government funding the building of homes at social rent and allowing low paid workers to escape benefit dependency as the Tories claim they want they are forcing low paid workers and their families into lifelong benefit dependence.

95p in every £1 spent on housing by this government is spent on housing benefit and only 5p on new homes. What a waste.

For better paid workers who cannot afford to buy then 80% of market rate is of course better than 100% but unless there is a subsidy to enable rents for the low paid to be at a social level then you are just condemning the vast majority of low paid workers to a life on benefit dependency.

(picture used in recent BBC "Beds in Sheds" programme. The new Tory "Barracks for the Poor"?)

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