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Osborne’s housing benefit myth sad contrast with real job losses

Posted on 23 June 2010 | 11:06am

In this spin-free (sic) world of the new coalition government, I draw your attention to a piece in today’s Guardian.

It is but a tiny molehill amid the mountainous coverage of George Osborne’s first and, alas, not last Budget.

It is tucked away at the bottom of page 5 beneath the headline ‘Osborne’s £104,000 claim “not based on real cases.”‘

I must admit that even I, immune though I am to most Tory spin, let out a little ‘tut-tut’ when the Chancellor reported that ‘some families’ receive £104,000 a year in housing benefit.

Yet the little Guardian report suggests this may not be so. In this era of Freedom of Information, surely if such sums were being paid in such a controversial benefit, we would know how many, where they lived and who they were. Not so. ‘We don’t have any figures on how many people are claiming that rate,’ a spokeswoman for the Department of Work and Pensions is quoted as saying.

But the same spokeswoman admits the £104,000 is based on what a family who were housed in Kensington and Chelsea, one of the wealthiest parts of the UK, WOULD receive IF they were given a five bedroomed home. In other words the chances are there are no such families taking £104,000 at all.

In a weird form of mitigation the spokeswoman says that whilst they have no records of such large claims (we are only the government, eh?) a search of the websites of the Sun and the Daily Mail would ‘throw up stories of people being paid the same if not more.’

So let us be clear, dear, if I may patronise you as much as you appear to be patronising the Guardian reading public. The Chancellor made an eye-catching claim, one that will be used to justify major cuts, without any government knowledge that such a claim was justified, beyond reports published on the websites of two tabloid newspapers not best known for their objectivity. Interesting approach to communication of major policy decisions.

There were a lot of measures announced yesterday but a lot of unanswered questions about the impact. Chief secretary Danny Alexander seemed not to have a clue, nor even to have thought much, about  how many jobs might be lost as a result of the huge public sector cuts coming down the track.

He was so happy to be sitting alongside David Cameron and his nodding dog party leader, Cleggo, as Osborne delivered their Budget, that he had perhaps not asked the kind of questions a progressive might have done.

He was so happy to be able to have a table in the Red Book showing that the rich would pay the most that he did not think through the disproportionate impact on the poor of departmental cuts which as of today are just figures but will quickly become programmes scrapped, progress halted, people thrown on the dole. And he seems not to have thought much about the idea that people who go on the dole cost the State money, rather than the other way round, and do not give much back by way of tax or spending.

The £104,000 figure may be a myth. But the lost jobs and the impact on spending (government spending up, private sector spending down) will be all too real, once cuts in theory become people, real people as opposed to the ones not on £104,000 a year housing benefit.

*** Buy Prelude to Power here at Amazon.

  • George Woodhouse

    Sadly Alastair, in your efftorts to pour scorn on the achievements of this new consensus government, you perhaps deliberately, overlook the fact that your friend Gordon was bonkers enough to create such a crazy benefits system that made it possible that someone could be paid this amount in housing benefit. Similarly, while pensioners struggle on £5K per year, others, on £60K per year, qualify for child tax credits. I just hope this new government, over time, will get everything back into some sensible order again.

  • sarah

    Not one to picky, but surely Alastair meant sick ??

  • Susan Harwood

    As someone who has faced the possibility of homelessness a few times (and lucky to sidestep it) who has, in the past, had to borrow money in order to pay the deposit on rented accommodation and was told by Housing Benefit that a metre-cupboard too small to hold a bed is a ‘bedroom’ because it had a window – which meant we (as a couple) were ‘over-housed’ and couldn’t receive full housing benefit, and who, in consequence, had to keep her eyes on the pavement in case people had dropped coins which we could use to buy food . . . I’m glad you are fighting the myth that Housing Benefit is an easy-to-work-system enabling unemployed and/or disabled people to live like kings and queens.

    Now you are stepping back from Government, I hope you argue yourself back to Labour roots so, by the time the Labour Party is back in power, it has ‘Remembered’. Hopefully, being in opposition will be something like taking a moment to look in the mirror. I hope so. And please hang on to what you see so, when you go back to helping to rule the country, you can stay stepped-back from the idea that everyone on Benefit is a scrounger, a useless cheat.

    Listening to representatives of the Labour Government speaking about claimants in general, over the last few years, has been painful, terribly painful.

    I’m looking forward to you being creative in opposition.

    Susan Harwood

  • Chris lancashire

    So Osborne may have told porkies over a maximum housing claim Figure? Doesn’t compare with announcing a 20p tax rate and forgetting to mention you’ve scrapped the 10p rate for poor people.
    Get a life.

  • kathy

    Susan, No decent human being wants people to struggle as you appear to have. Of course people like you should receive all the help we can give. However, under Labour, a culture of being better off on benefits than working thrived. People like Alastair and any MP do not live in the real world. They do not live in a street where there are countless families sitting all day doing nothing and being paid for it and provided with cars and able to have two holidays a year. They know how to work the system and the system stinks! I know of more than one such family.Despite the fact that my husband and I worked hard all our lives, brought up decent kids who in turn work hard and pay taxes these people are and have always been better off than us. I am talking about not one generation but two or three generations of families who have never had to go out and earn a living because the state provides them with more than they need. Labour did nothing in 13 years to correct this unfair balance. When there were high employment rates they did nothing to get these layabouts back to work. I would question people who talk about child poverty. Do you know any children who go about without shoes on their feet? Or who are suffering from malnutrition? That is real poverty and I do not believe there are many families in Britain today suffering like that. If there are no one would dispute they need all the help they can get. It is the so called poor with their 42 inch televisions, computers, game consoles that people object to. This is the reason I stopped voting for Labour. They penalised hard working families and rewarded the workshy. If this coalition reverses this trend then I say Good for them! And yes Alastair, there have been stories in the papers of families who have been housed in homes costing millions of pounds with astronomical housing benefit costs. There may not have been thousands but the fact there are any is a disgrace. These same people happily pose for newspapers and their attitude is what’s the problem!

  • Ned Clarke

    Spin, while not your invention, was something that you and Mandelson over-perfected. New Labour, sadly, couldn’t lie straight in bed and as for the the Guardian reading public, all 319k sold copies of them (ABC); they should actually become a protected species. The latest idea of pay walls should kill that newspaper off completely and when added to the New Statesman, which has been dying since the 1960s, next to go you may consider that it’s time to move on and accept one of those high paying lobbying job offers:)

  • Marcus Shingler

    Is not the fact that you can theoretical claim £104,000 a year not enough to make the point though? Doesn’t seem to be much of a defence to say “well nobody has so far”! I think there is a clear need to carefully assess where we are with public spending. Unfortunately I think this Govt has little idea of how to prioritise and what we will get is a blunt 25% cut across the board save for a precious few areas such as the NHS, which in my view should not be ringfenced as the idea that there is no waste in the NHS is absurd and its protection is purely politically motivated nonsense.

    I hope the Opposition will hound not only the Conservatives but more particularly the Lib Dems who have sold their soul, hook, line and sinker for a small kernel of power. Their behaviour post election has been nothing short of shameful.

    Marcus Shingler

  • Brian Hughes

    Right-wingers love arguing from the singular to the plural, from the few to the many and much prefer anecdotes to data. Even if there are, as they allege, ten families receiving £100k pa in housing benefits that doesn’t mean the whole system is broken.

    It’s the tired old slippery slope / tip of the iceberg / I know one [insert minority of choice] person who thinks x, therefore all [insert the same minority] think x / I know someone who works at y and he says it’s a mess therefore it must be a mess / I went to the north of England once and met no poor people therefore there are no poor people in the north of England type of argument.

    It’s no wonder they want to stop gathering performance measurements in public services. Far better, in their view, to rely on casual observations from their friends…

  • Richard

    You need to spend more time with the dreaded Harriet Harperson coaching her on her delivery and content. She was dreadful at PMQ’s.

    Whichever pigmy wins the leadership election, after five months of a vacuum, the party will be beyond recovery.

    Unless you come to terms with the loss of the election, and the blame for thr £1.4 trillion national debt legacy, Labour will no longer have any significance or future.

  • crookedmouth

    Interesting observation AC:

    “The Chancellor made an eye-catching claim, one that will be used to justify major cuts, without any government knowledge that such a claim was justified, beyond reports published on the websites of two tabloid newspapers not best known for their objectivity. Interesting approach to communication of major policy decisions.”

    The words pot, kettle, WMD, 2002 internet research, no evidence, beyond doubt, spin, spring to mind.

    Maybe he just believes he is doing the right thing; never mind the facts, as long as that is your defence everything is all right, isn’t it AC. Your selective forensic analysis is most amusing.

    Never trust a Campbell.

    ps before the usual pravda reading NUlab economic mess legacy deniers wade in, I am not a Tory. Until Nulab wipes out the current crop of so called Nulab talent (the Millibands, Balls, Harman, Cooper, Burnham et al) it will suffer from a major credibility problem – one which will keep them in opposition for at least 20 years.

  • s chapman

    What if…what if….what if…
    AC what if you grow up and get a life –
    What if these cuts and spending discipline lead to inward investment and companies that were on the sidelines now chose to expand as they feel more confident the UK is not a debt laden country and Foreign companies decide to invest..
    what if people decide to actually work now because they have to rather than sleep…
    what if your wrong for once !!

  • Nick

    Where IS Gordon Brown ? Is he ill ? Is he sulking ?

    His continued boycott of Parliament since the Election (seven weeks and counting) is not only embarrassing, it is a dereliction of duty to his constituents.

  • Mark Brierley

    The £104,000 was not reported by Osborne as a theoretical possibility, it was reported as a fact, used create a fiscal “shock and awe” to justify the severest budget ever. The phrase “dodgy data” springs to mind…

  • Trickie Dickie

    Housing benifit for those on JSA over 12 months will be reduced to 90%. After 12 months on JSA it is harder to find work where employers reject long-term unemployed in favour of those either in work job shifting or those still with redundancy money in the bank.
    Many claimants are forced already to top up a shortfall in HB from their JSA as it is.
    What is the reason behind this small but poisonous cut?
    I can see some vunerable people being made homeless simply because landlords will evict them in favour of tennents in work….afordable housing for JSA claimants especially single men over 50 who may have suffered from a divorce and or other trauma will be left to rot in squalid bedsits until suicide becomes the only release from the pressure and futility of job seeking in a world that writes off men in the work place after 50.
    Take any commutor train and count the men/women over 50. The increase in retirement age will end up with more over 50’s rotting in the benifit system until they can claim their pension….if they survive that long.

  • Paul Thompson

    Crikey, your blog has certainly stirred the Clamberon Appreciation Society.

  • Tiffany Brinks III

    Apropos yesterday’s budget and Alistair’s comments, this piece by Krugman supports both his remarks and helps to illustrate the full impact of amateur budget policies. Google it!
    NY Times June 20, 2010
    Now and Later
    By PAUL KRUGMAN

    Tiffany Brinks III

  • Graham Jones

    Let’s not beat about the bush, the government are not being ‘economical with the truth’, they are not’ misleading the public’ – the government are guilty of good old-fashioned LYING. They are telling porkies, great whoppers at that.
    To suggest that people are getting such a sum for housing benefit, is to lead the public by the hand into the realm of fantasy-land, and leave them there. What is even more galling, is that the Lib-dems are prepared to go along with it, for the moment.
    How long this coalition will hold is anyone’s guess, but how long before we see defections is becoming more predictable. Some Lib-dem MP’s are now beginning to question more openly there pact with the tories, and Clegg is going to face a full revolt if he doesn’t start getting more concessions on the economy. Forget the PR ticket, that is dead in the water compared to the hardship many people are about to face.
    These next few days are a real chance for the Labour party to start putting their case again, and Liam Byrne made a good start on Newsnight, where he was up against the hapless Danny Alexander. It was good to see Newsnight prepared to ask the difficult questions, it’s just a pitty that it always seems to be a Lib-dem put up for the cameras.
    Of course, most of the media are still playing this budget down. Laura Kuenssberg remarked the other day that there hadn’t been a public outcry – yeah, thanks to the media! – who have been a complete disgrace. Andy Marr told an audience at the Hay-On-Wye festival, that he had been told by the public “to go easy” on the coalition. I couldn’t believe an experienced journalist at the BBC had said that. Has Jeremy Paxman been going easy on the government? No, because he values the job he does. If Andy Marr won’t ask the difficult questions on our behalves, then it’s time he stood aside for someone who will. The Alistair Campbell Show has a nice ring to it.
    It is one thing when we are being lied to by the government about non-existant housing payments, we expected that; but another when we are not being served by a major journalist with a public-service broadcaster.

  • Patrick James

    Issues like this claim of Osborne that there are families getting £104,000 in housing benefit stated as fact when it is very unlikely to be true seem to be ignored by the Conservative supporting tabloids. It is not surprising but it is very worrying. It means that Osborne knows that he can get away with such statements and be free from being taken up by it in most of the mainstream print media.

    I think the problem Osborne has is that the public know that this budget is more severe than was necessary. Its severity is because the Conservatives are using the deficit as an opportunity to massively reduce the public sector where they don’t like it.

    When people do start losing jobs because of this budget the issue that it is more severe than necessary will be very apparent to them, their friends, families and community.

    —————————————-

    A lot of fun is being had at the expense of the Lib Dems, and I participate in this. It is shameful that they went into the election with a policy of not being so severe with the budget and now they have changed to complete support the Conservative party’s excessive severity.

    However I think that the Labour party leadership contenders should be really presenting the party to the Lib Dem voters as being one that they will like and vote for. The disenchanted Lib Dems also need to find the Labour party appealing so that they will vote for it or, even better, maybe join it.

  • Pat Morgan

    I think you are clutching at straws Alastair.

    Why don’t you just be happy for the coalition and wish them well.

    You’re sounding as though you have a bit too much time on your hands.

  • Sandy Andrews

    Kathy,

    People on benefits are not paid enough to run cars, take holidays, have huge TVs etc … If you really know families that seem to be living like that you really should report them to the appropriate agencies as they are obviously not in need of benefits.
    Perhaps they are working in the black economy or possibly they are just not honest.
    However, I think the families you describe are probably mythical, the vast majority of families that are out of work only receive just enough money to get by from week to week, I suspect that you would not really wish children to go unfed and unclothed because their parents are unemployed.

  • Brian Tomkinson

    I suppose the £150,000 per annum in housing benefits paid to an Afghan family reported in today’s Daily Telegraph is also a myth. Mr Campbell find out and apologise if it is correct.

  • G Jones

    Kathy

    The real scandal is not that benefits a so high (because they are not) its that wages for those on the bottom are so low. You and the other tory activists masquerading as human beings may be wetting yourselves at the thought of throwing so called scroungers off benefits and into the virtual slavery of low paid employment but perhaps you forget that there have first got to be jobs to go to. Hmm! no chance of that now that Boy George has as good as killed off the fragile recovery.

  • Dr Olu Ojedokun

    AC

    Am I missing something? Why is no one, particularly from the Labour Party factoring the billions owed us by the banks we part nationalised in the attempt to reduce the deficit?

    Surely a narrative which articulates that the monies owed by the part nationalised banks would eventually be paid back in due course would help blunt the need for the severity of the cuts and taxes we face?

    It may well be I am not getting it.

  • Alan Quinn

    Ally, you have to admire the Tories for their enthusiasm to get on with the job, they are cutting with fervour, the poorest will be hardest hit along with the North but the Tories don’t care, it’s a simple as that.
    You need to make sure that who ever becomes leader when we are back in power that we get on with our programmes with the same gusto.
    As with Osborne’s infatuation with the private sector leading us out of recession with an export led recovery, some things spring to mind. The loan to Forgemasters, cancelled, the LibDems obsession to cancel Eurofighter Typhoon (interest from Japan, Canada, Turkey, Switzerland and India…..I believe these might be ….exports) and the threat to Airbus A400M from Fox. Vauxhall’s future at Ellesmere Port is still uncertain as is the loan to Nissan to make electric cars in Sunderland, both in the North.
    I thought we were only in this mess because the banks and private industry stopped functioning, that’s why we had to step in and get the money flowing again.

  • kathy

    Sandy, if you read my post again you will see that I have no problem with people genuinely in need and believe they should get all the help they can. However I wish the people I am talking about were mythical figures. I can assure you they are very real and I have lived amongst them for many years. They get every kind of benefit including mobility allowance which they use for cars even though there is nothing wrong with any of them. A bad back, suffering from stress, not easy to prove unless investigated thoroughly. That does not happen at the moment and they get away with claiming more and more money while the fools who work all their lives pay for it.

  • Elizabeth Johnston

    Keep up the good work Alastair, don’t worry about not having enough time on your hands, ‘they’ need to be exposed, we’ve all been duped. I bulked at the £104,000 claim yesterday…..as for Harriet, I agree with the previous comment,less of the screeching,lower the high pitch tone of voice, more razor sharp retort please.

  • anna

    No one has mentioned the black economy. People not apparently in work but living reasonably comfortably are very often in ‘cash in hand’ jobs, sometimes legally (e.g. building work), sometimes not (e.g. drug dealing).

    Claiming benefit can be a straight fiddle – some shady employers release their workers to sign on; or it can be the only way of dealing with the system. If you sign on, then manage to find casual work, you are supposed to report this and your benefit stops. But what do you do when the casual work stops and you start looking for more work? You can’t get the job seekers’ allowance without going through the whole application rigmarole again – this can take weeks. So people just keep on collecting their benefit while doing casual work to have some protection when the work stops. It isn’t right, but neither is the system.

  • Lisa Ansell

    The changes to housing benefit/LHA- mean that a) as I am working part time, I may have to leave the town me and my daughter live in. The town we are part of. b)In September when was due to go back to work, if there are any jobs- I will be on less than income support levels. I am a social worker. I have worked since I was a kid.
    I blogged about it here.
    http://www.deeplyflawedbuttrying.wordpress.com

    I have to date, spoken to 6 friends, all single parents, all working- who this will have same effect on.

    I thought the days when you were destitute and cast out by society, because you had to leave your husband- were over. Apparently not.

    Do the right thing- stay married. Regardless of the circumstances. Pr you are screwed, and unwelcome in mainstream society.

  • Kathy

    G Jones Why if someone does not agree with you are they a Tory activist? Believe me you could not be further from the truth. I am well aware what low pay is. Until I was made redundant for the second time last year. I was working for the minimum wage but I was still working. The culture of being better off not working and milking the system has gone on too long. The time to nip it in the bud and get the workshy into jobs was during the good times when employment was high. Labour did nothing to address this and you are right there are no jobs at present. My point is that there are people who have grown up in a family where there is no work ethic and claiming as much benefit as they can get is what they learn from their parents and grandparents. How can this be right? Far from being heartless, I firmly believe that we should help those in genuine need and have stated this in previous posts. I have now retired and have my state pension. My husband who is a builder spent most of last year out of work due to the recession. Despite working all his life and never claiming anything he discovered he was not entitled to any benefits because he is self employed and I was then working part time so we were not entitled because of that as well. We struggled to get by on my small wage so do you see not why I get annoyed with people living most of their lives claiming from the state?

  • s chapman

    Dr Olu….clearly not a doctor of common sense or finance.
    The reason we cannot begin to factor in the nationalised banks is that our breal-even is way higher than the current share price.Presumably you advocate not selling our stake at a big loss??Also the Govt have to have an eye on protecting this “investment” thats why hammering the banks and their workers is not the greatest idea..something Labour should be aware of as they made the nationalising decision….i.e dont throw stones in glass houses…pls think through your arguments on here..

  • Chris lancashire

    Matthew Parris’ column in The Times worth a read today. Says it all really Alastair.

  • Caroline

    S Chapman

    Perhaps the point is that most people know we the taxpayers own those assets, and it would therefore make sense to reflect their potential value in any estimate of how the budget will be improved when they are sold. I don’t buy your hitting the banks will depreciate the value of our own asset – the biggest asset this country has is the people, and this government does not seem too bothered about hammering their finances.
    Also, if it is possible to come up with inflated figures of what our potential debt interest MAY be in the future, it ought to be perfectly possible, now the budget has been set to forecast, based on the governments brave estimates of the private sector growth which it says will flow from its tough (true) but fair (to the rich) policies, what the value of these assets will be in say 4 years time, when we do come to sell them. I don’t think any of us would advocate selling the banks at a loss. I would however suggest that it would be far better to keep whatever share of those banks in state ownership is possible, to give those of us who in the future do not want to be held to ransom by fat cat bankers somewhere to put our money, and be safe in the knowledge that they are not frittering it away down the betting shop. The government is unlikely to agree, and is more likely to sell the shares, once it looks like they are back in the black, at knock down prices to their rich pals. They may try and persuade the public, as they did in the 80s that buying shares is a good idea, but by then there are unlikely to be too many of us in any position to buy more than a postage stamp as a result of those same brave economic policies.

  • sonny

    To be eligible for full HB on five bed property one would need to have at least eight children/dependants reasonably expected to reside with you. I cant think of anyone who has 8 kids. in fact as a Housing Advocate for a national service provider for many years, dealing with 100’s of cases a year, I have never come across a single family that would qualify for a 5 bed property under the Housing Benefits or Homelessness legislation.

    Typical that a Tory chancellor with such wild and irresponsible spin seeks to somehow divert responsibility from the millionaire tax avoiders and bankers to the most vulnerable in our society.

  • Phil Bourne

    Caroline

    Great answer to which I wholeheartedly agree… except for one minor point. I would sell the bank assets at a ‘loss’…but I would legislate such that the loss (plus interest) is paid back by the banks before they can pay any more bonuses to staff earning more than twice the minimum wage!

  • Brian Powell

    Poor Alastair complaining at what he see’s as the Tories using Nu-Labour tactics. It does seem rather nonsensical for Alastair to be complaining about the type of newspaper the Sun is, now that it backs the Tories. It used to be the best thing since sliced-bread when it was the instrument used by Nu-Labour to spin its stories. A case of biter bit Alastair.