Leaked Letter Reveals Tory Welfare Reform Madness: 40,000 More Homeless Families, and An Increase in Cost

Britain’s incompetent coalition government has just hit a new low. In a leaked letter to David Cameron from the office of Eric Pickles, the Secretary of State for Communities and Local Government, the ruinous impact of the government’s decision to cap benefits at £500 a week per family (essentially capping housing benefit at £400 a week) is exposed. Pickles, via his private secretary Nico Heslop, told the Prime Minister in no uncertain terms that 40,000 families will be made homeless by the government’s savage welfare reforms, and that the estimated £270m saving from the benefits cap “will be wiped out by the need to divert resources to help the newly homeless and is likely to ‘generate a net cost,'” as the Guardian explained.

The limit on housing benefit was a key plank of Cameron’s manipulation of the electorate last year, with the unemployed portrayed as workshy scroungers, and housing benefit portrayed as something that is a result of their greed, rather than of  landlords setting rents that are either unnecessarily high or an unfortunate response to an overheated property market. The proposals alarmed those involved in housing and welfare, although in polls the public decided to support Cameron and his vile politics of envy, in which he pushed the notion that it was unacceptable for the unemployed to live in houses that those in work were unable to afford.

I lamented all of these developments in my articles last year, Critics Attack UK Government’s Cruel and Ill-Conceived Assault on Welfare and On Housing Benefit Cuts, British Public Reveals Shocking Lack of Empathy and Compassion, in which I also noted that, according to independent research commissioned by Shelter from the Cambridge Centre for Housing & Planning Research at the University of Cambridge, an estimated 134,000 households “will either be evicted or forced to move when the cuts come in next year as they will be unable to negotiate cheaper rents.”

Shelter also noted, “Of these, an estimated 35,000 households will approach their local authorities for housing assistance, and where councils have a legal duty to help they will face costs of up to £120 million a year providing temporary accommodation such as hostels or bed and breakfasts,” adding that these costs “would cancel out a fifth of the £600 million the Treasury has said it will save from the cuts in 2012, the first full year they are in force.”

Eric Pickles’ intervention provides different figures, but the impact is, if anything, even more damaging, as his letter suggests that these changes, impacting on 40,000 families and creating, in London, what Boris Johnson appropriately criticised as “Kosovo-style social cleansing, ” will not save any money at all, and will actually end up costing more that leaving all these people where they are.

There is more in Eric Pickles’ thoroughly alarming letter — an acknowledgment that “We are already seeing increased pressures on homelessness services,” that local authorities “will have to calculate and administer reduced Housing Benefit to keep within the cap,” and that plans to build 56,000 new, “affordable” homes will, as a result, be savaged. Involving a distressing proposal to oblige or allow social housing landlords to charge rents at 80 percent of market rents, the success of this venture depends, in Pickles’ view, on the availability of housing benefit, whereas the cap will, he estimates, lead to 40 percent of the new homes not being built at all.

Pickles’ letter also highlights a particularly cruel benefit-cutting proposal, warning of a PR disaster were it to be implemented. “I understand that there may be a suggestion around requiring families to divert a percentage of their non-housing (benefit) income to cover housing costs,” he writes, adding, “It is important not to underestimate the level of controversy that this would generate (likely to dwarf anything already seen on the HB only caps) and the difficulty of justifying this in policy terms as well as implementation.”

That really ought to tell you all you need to know — that the Prime Minister and his advisers, as well as happily making at least 40,000 people homeless, and striving to eradicate social housing as a valid form of not-for-profit housing, also propose forcing poor families to use the money provided for their living costs (and, for example, child benefit) to be taken away from them to subsidise their rents.

This, of course, is a sign of the essential meanness of spirit of this particular pair of privileged Etonians and their colleagues (including their Lib Dem stooges), as they work out how to kick the poor as savagely as possible, but it is not the only problem, of course. As with almost every aspect of the government’s proposed cuts — and as Eric Pickles pointed out so significantly — the sums don’t even add up. As a result, the welfare reforms join a list of costing disasters that show up the PM and his Chancellor George Osborne as the most incompetent political double-act in living memory, so driven by an ideological desire to destroy the British state that they can’t even make a valid economic case for their reforms.

Think of the savage “reform” of university funding, in which, having eradicated state support for arts, humanities and social science degrees, and having scrapped the fee limit of £3290 a year, the government had the nerve to complain when universities largely decided to charge fees of £9000 a year. Most universities need to do this simply to survive, as it costs more than £9000 a year to teach a student, but the government never thought about this, and is now whingeing about how much it will all cost.

Think of the brutal cuts to legal aid, which are supposed to save £350 million, but will leave ordinary people with almost no ability to seek legal assistance in cases involving debt, employment, housing, family law and criminal negligence. This appears to be a huge financial saving, but as legal experts have warned, and as Zoe Wiliiams explained in a Guardian article on June 22, “This might be a cut, but it isn’t a saving. It will cost us a fortune.” Back in February, judges warned that “a massive increase in ‘litigants in person’ — ordinary people appearing in court without a lawyer — will slow down the court system and may cost more money down the line,” as the Guardian explained. The judges’ council, chaired by head of the judiciary, Lord Igor Judge, stated, “The proposals would lead to a huge increase in the incidence of unrepresented litigants, with serious implications for the quality of justice … at a time when courts are having to cope in any event with closures, budgetary cut-backs and reductions in staff numbers. There is a real question whether the cost savings arising from the proposed cutbacks in the scope of civil and family legal aid would be offset by the additional costs imposed on the system by dealing with the increase in litigants in person.”

The Law Society has launched a campaign against the proposed cuts, establishing a website, Sound Off for Justice, describing its own proposals for saving £384 million “while still protecting access to justice.” The Law Society explains, “Our savings protect the continued provision of legal aid for the neediest in society, while the MoJ proposals would remove the right to legal aid that supported the families affected by the Hillsborough disaster, the Thalidomide scandal, and the Clapham rail crash.”

Think also of the planned privatization by stealth of the NHS. Resistance to the reality of the plans, revealed through the legally enforceable obligation for competition in every aspect of the NHS, has been rigorous, and critics have pointed out how throughly disastrous the government’s plans would be for huge swathes of the NHS in which enforced competition is entirely inappropriate. The government now claims to be revising its plans, but ministers cannot be trusted until the entire bill has been scrapped, because the main reason for the reforms is the ongoing privatisation of the NHS. This can only cost more and result in worse healthcare, because corporate interests don’t have a social conscience, and are designed solely to maximise profits at all costs.

32 years after Margaret Thatcher began the destruction of British society, we need a new way of thinking, which no one in the mainstream appears able to provide. Cameron and Osborne may be spectacular examples of arrogance, stupidity and callousness, but they’re also, essentially, just tinkering with the broken template provided by Margaret Thatcher, John Major, Tony Blair and Gordon Brown, which failed so abysmally with the financial crash of 2008, but whose true impact remains unacknowledged.

Andy Worthington is the author of The Guantánamo Files: The Stories of the 774 Detainees in America’s Illegal Prison (published by Pluto Press, distributed by Macmillan in the US, and available from Amazon — click on the following for the US and the UK) and of two other books: Stonehenge: Celebration and Subversion and The Battle of the Beanfield. To receive new articles in your inbox, please subscribe to my RSS feed (and I can also be found on Facebook, Twitter, Digg and YouTube). Also see my definitive Guantánamo prisoner list, updated in June 2011, details about the new documentary film, “Outside the Law: Stories from Guantánamo” (co-directed by Polly Nash and Andy Worthington, on tour in the UK throughout 2011, and available on DVD here — or here for the US), my definitive Guantánamo habeas list and the chronological list of all my articles, and, if you appreciate my work, feel free to make a donation.