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Thatcherism and private landlords led to £1,460-a-week housing benefits—not Labour

PUBLISHED: 08:24 04 May 2011

Belle Harris

Belle Harris

Carmen Valino

The ‘exclusive investigation’ into housing benefits by the East London Advertiser produced no more information than anyone choosing to read Tower Hamlets Council’s publicly-available expenditure accounts (Advertiser, April 21).

Figures were repeated that one family receives £1,492 weekly Housing Benefit.

No family ultimately receives anything in Housing Benefit. The council pays it all to landlords.

The amount Tower Hamlets pays out to housing associations and private landlords is largely met from Government grants.

That landlords can get away with charging such outrageous rents is, indeed, a scandal and is the major cause for the continuing high rents at a time of economic recession.

As reader Stuart Madewell said in his letter last week, the Labour Government reduced the amount private landlords could get, but unfortunately failed to reform the basic system (Advertiser Letters, April 28).

The Con-Dem Coalition’s cap on Housing Benefit will do nothing to change the system or reduce its costs. It will just force large families from their homes, which landlords will then sub-divide and which is no solution.

Margaret Thatcher introduced the present benefit system in the late 1980s, specifically as a substitute for the low-cost, low-rent system of social housing, paid to local authorities for housing. She ensured that the new beneficiaries would be the private sector which now receives two-thirds of the £20 billion it presently costs the Government.

The lethal combination of stopping of council house building while at the same time introducing the ‘right to buy’ forced town halls to sell off their housing stock, as Stuart Madewell’s letter pointed out, thereby forcing them to use the more expensive private landlords to accommodate those ever-increasing numbers eligible for housing under various Homeless and Benefit acts.

Also, Thatcher introducing Poll Tax and later the almost-equally regressive Council Tax removed both the ‘equalisation’ of local rates which George Lansbury had fought for in Poplar in the 1920s.

This, together with the centralisation of Business rates, resulted in local authorities losing their Business rates income as the major source of revenue for discretionary welfare services, costing Greater London £3 billion a year.

This is something I have been banging on for about 20 years—but no-one listened.

The alternative, to help out the already-rich Westminster, was to give local authorities the powers to raise revenue from parking charges, which are now horrendous.

Ironically, the Business rates will be restored next year to the relevant collecting authorities, according to the Localism Bill, in time for the GLA elections—but without equalisation.

Tower Hamlets will then be awash with money, as will all ‘collecting’ authorities such as the GLA. The current deep cuts in jobs and services will have proved to have been unnecessary.

It is not too late to restore these services, by-stop the ‘enabling’ process of social care using the now over-cautious reserves for short-term funding.

Bell Harris


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