The housing benefit cap is wrong

The ConLib coalition's proposed housing benefit cap has understandable appeal.

The cap may bring down the overall cost of renting a house, and there is a populist line that working people should not have to subsidise people on benefits living in nicer houses.

However, there are a number of problems with cutting housing benefit:

1. If someone who has been living in an expensive area such as Earl's Court loses their job, the idea is that they move to a cheaper area such as Erith.

However, few landlords want to take on someone who can only pay their rent using Housing Benefit.

Walk along your local High Street and look at how many estate agents have "No housing benefit" or "No DHSS" stuck to their window.

This, as The Third Estate points out, is one reason why the benefits bill is so high:

In such circumstances it is obvious that the small number of letting agents who are willing to deal with these apparent untouchables will be able to charge what they like.

2. For those people on housing benefit who are unemployed and fit for work, time spent looking for a new home or relocating because of housing benefit changes will be time that could be spent looking for work.

One could argue that relocating could be done at the weekend, but this would mean that people would have less time to rest, making them less efficient when looking for work.

3. The latest Private Eye makes the point that families who cannot pay their rent will have to present themselves as homeless at the town hall.

While they are assessed, they must be placed on temporary accommodation costing £300 a night on average.

After verification, a council must then re-house the family, adding to the 4.6m on the housing waiting list.

4.Private Eye also highlights that housing benefit will be linked to the consumer price index (CPI) which does not include housing costs.

Rents have risen by 2.5% more than the CPI over the past decade, according to the Chartered Institute of Housing, which says that within a generation there will be towns and cities across Britain where people on benefits cannot afford any accommodation.

Campbell Robb, the chief executive of Shelter, told the BBC that: "The vast majority of housing benefit claimants are either pensioners, those with disabilities, people caring for a relative or hardworking people on low incomes, and only one in eight people who receive housing benefit is unemployed.

"We are really concerned that, even at current levels, nearly half of Local Housing Allowance claimants are already making up a shortfall of almost £100 a month to meet their rent."

Bridget Phillipson, MP for Houghton and Sunderland South, calls for social housing as a fairer way to tackle the housing benefit costs.