Westminster blog

The Times has splashed this morning on criticism of the government over its imminent alteration to the housing benefit system (which was in the April Budget) which will save £140m a year.*

Frank Field and others are protesting about the change which will mean that people will no longer be able to keep any surplus housing benefit over and above the cost of their rent.

Over a year ago Frank led a successful campaign to overturn the 10p tax policy. I’m not sure he’s on such firm ground this time.

Firstly bear in mind that this quirky windfall has only existed for the last year or so – until then the benefit was paid to landlords rather than tenants.

Secondly we are in the middle of a recession with public finances worsening by the day. It seems ludicrous to argue that people on housing benefit should receive more money than they actually need for their rent.

ASIDE

Yesterday I mentioned that Teresa May was considering reversing the policy so that landlords once again receive the benefit. Not only would this be good news because it would encourage more landlords back into the sector (I’m told many have quit since the original change). It would also render Field’s new mission irrelevant.

* Currently, half of those receiving the housing allowance, around 300,000 people, have managed to get their property at a rent lower than locally-set thresholds. This allows them to pocket some of the saving; up to £15 a week.

UPDATE

Citizens Advice disagree with me. Here is their take:

“Under current LHA rules, claimants can keep up to £15 of their benefit, if the LHA rate is higher than the rent they pay. This allows for choice, encourages fairer rents and rewards careful spending.

“Plans to remove this excess are ill thought-out, and risk having a considerable impact on levels of poverty without delivering any real savings to the DWP budget.”