Welfare Benefits

Sadly, it's not unusual for politicians to exploit tragic events for their own ends and so it's proved over the sad case of Stephanie Bottrill whose recent suicide is the starting point for this comment piece by Andrew McKie - which appeared in The Herald the other day.

Now my only knowledge of this woman comes from what I've read in the newspaper and seen on the TV - but it seems to me that killing yourself by deliberately walking in front of a lorry on the M6 motorway is a very disturbed thing to do - and extremely selfish too, if you put yourself in the shoes of the unfortunate lorry driver.

I agree with much of what Andrew McKie has to say, but he is wrong on one point at least - when he says that  almost everyone is struggling to meet their housing costs these days.

Because the fact is that with mortgage interest rates at an all time low - many people with mortgages have seen their housing costs fall and for people with large mortgages - the savings are worth thousands pounds a year.

But the key point that Andrew McKie gets right is that a welfare system that hands out public money to households earning £60,000 a year - while taxing low paid workers to pay for these benefits - is madly out of control.

Difficult choices to be made helping those most in need

By Andrew McKie

No-one will dispute that the case of Stephanie Bottrill, a grandmother from Solihull who killed herself by walking in front of a lorry after her housing benefit was cut, is a tremendously sad story.

Sorrow and sympathy are the only reasonable reactions when presented with anyone who has reached a point of such despair.

This particular case, however, also demands a political response, because Mrs Bottrill, in a series of notes which she left, directly blamed the Government for her decision to end her life. So, although it is inappropriate and distasteful to have to deal in political point-scoring in the aftermath of an individual human tragedy, that debate was clearly part of her intention.

As with the changes to disability allowance, and the introduction of checks on whether individuals were genuinely incapable of work, restrictions on housing allowances were always going to create individual cases of hardship. If the Government (or, in the case of housing benefits, the local authority) restricts spending on these areas, those in receipt of the funds are bound to be worse off.

Most people – whether they are on benefits or not – quite naturally feel it is unfair when their income is reduced. And given the vast bureaucracy involved in administering benefits, it is also inevitable that some of these cases will be unjust, and seem so to most of us.

But there is also near-universal acknowledgement across the political spectrum that benefit spending is unaffordable; and, indeed, that it was far too high even before the Government ran out of cash. As I've written before, the majority of this spending is not, in fact, directed at those who are out of work, or unable to support themselves (pensions and their attendant benefits are the majority of it), but housing is undoubtedly one of the areas most obviously out of control.

The taxpayer spent £21 billion last year on housing benefit – up one-third on a decade ago, and almost seven times as much as the cost at the time of the Housing Act of 1988, which created much of the complexity in the current arrangements.

Almost everyone agrees that housing benefit is counter-productive – it provides a huge disincentive to employment for those out of work, and discourages people from moving to find work. Its primary beneficiaries are not the poorest and those most in need of help, but private buy-to-let landlords, who can charge uncompetitive rents in the knowledge that the state will foot the bill. By distorting the market, this also – particularly in London and the south-east of England – results in ridiculous rental costs for everyone else and keeps house prices artificially high. It is acknowledged by all the political parties, too, that housing benefit is particularly susceptible to fraud.

It is dishonest of the Labour Party, which accepts the need for reform of this absurd system, to characterise the restrictions on housing benefit as a "bedroom tax". Under the changes which Iain Duncan Smith has introduced, the limit for housing benefit is set at a maximum of £20,000 a year; it is impossible to see how restricting someone to receiving that amount of public funding can be described as a tax.

It doesn't follow that this reform is therefore a good policy. In fact, it's rather a bad policy. But that's not because it might force some people in receipt of benefits to move from expensive areas, or because halting the practice of giving people public funds to live in larger houses that they need is a bad thing in itself.

No-one struggling to meet his or her own housing costs (which, these days, means almost everyone) is likely to think it reasonable that those who receive benefits should avoid the constraints that face every working person. There is no fundamental human right to live in a large house in Kensington and Chelsea and have people working on minimum wage at Asda pay for it through their taxes.

The reason why the policy is a fundamentally misguided one is that there is a shortage of smaller houses for people in this position to move to. And while it sounds fine in theory to stop subsidising spare rooms, it won't magically enable those who were receiving those funds to conjure up the shortfall.

But if the policy is not very effective or well thought through, nor is it intentionally callous or vindictive. Mrs Bottrill, as it happens, was offered another house, and money for removal costs, but chose not to take it up. And the welfare system, however flawed, still includes numerous public bodies designed to help those in need. A great deal of money and manpower is devoted to helping people claim the benefits they qualify for.

One of the most juvenile and unpleasant aspects of political debate in this country is the characterisation of the Conservative Party as being dedicated to bashing the poor. The vast majority of politicians of all parties are motivated by a genuine desire to help people, and I see no reason to exclude Mr Duncan Smith from that group.

You may, by all means, believe that his policies are misguided or counter-productive – as I say, I happen to think this particular policy is flawed – but there are no grounds for doubting his sincerity. Mr Duncan Smith has been thinking seriously about these issues since his visit to Easterhouse more than a decade ago.

That things have not improved is a testament to the labyrinthine complexity of public benefits, not an indication of hatred for the disadvantaged. If you doubt this, ask yourself whether any Conservative politician expresses the kind of hatred for the poor that some politicians on the Left routinely direct at the rich.

One of the most obvious failures in reforming welfare, of course, is the reluctance of all parties to remove universal benefits, such as the winter fuel allowance and free travel, from those who have no need for them.

The huge expansion of welfare spending under the last Government demonstrates that as much, or more, damage can be done by increasing provision as by reducing it. A system which handed out money to households on £60,000 a year, while taxing the lowest-paid workers to pay for it, is patently ridiculous.

The problem – which I suspect almost all politicians genuinely want to solve – is how to help individuals in genuine need, or in desperate circumstances. Whatever the solution, it will always involve making difficult choices. It doesn't help the poor to pretend otherwise.