Welfare reform: enough of the stick, time for the carrot

This coalition has bravely attempted to tackle welfare reform. It’s been controversial, unpopular, but essential – the fact that unemployment has remained surprisingly low throughout this parliament is partly due to the welfare and labour market reforms this government has introduced.

However, there have been far too many losers in the last round of austerity. With the next parliament approaching we must change tact on welfare reform. As Liberal Democrats we believe that politics doesn’t have to be a zero sum game, where one group benefits at the expense of others. That’s why with any future reforms, like a surgeon we should strive to ‘do no harm’ while trying to improve the welfare system.

With this in mind I’m proposing an amendment at conference next month:

Allow elderly people currently claiming housing benefit who choose to move in with someone else to keep a portion of that benefit

The goal of this policy is to reduce the housing benefit bill and increase average household size, which has been on the decline in the UK for 50 years (from over 3 in the 60’s to 2.3 today). 29% of households today contain one person and average household size is projected to fall even further in the next 20 years. Not only are we not building enough homes, we’re not using the ones we have well enough. As we’ve seen in the recent bedroom tax report we also have a serious lack of smaller 1 and 2 bedroom properties for people to downsize to.

Furthermore we have many older people with complex medical needs. If these people had an incentive to move in with their families we could save a fortune on social care and free up more housing. Older people with regular companionship are much less likely to need support from social services or end up in hospital due to an accident at home.

I’ll give you an example of how the policy could work:

Nicola and Pete have a young family and are looking to move to a new home. Nicola also has an elderly mother with numerous chronic health conditions requiring daily social care, who currently lives on her own in a council house some distance away. She’s desperate to move her mother closer to where they live, but there are no one bedroom council houses available and she doesn’t want to risk of moving her into private accommodation on a short lease. Under this policy her mother could move in with the family and the money could be used to contribute towards the rent of a larger house they previously couldn’t afford.

In return the state frees up a large council house, pays less housing benefit for her mother and gets the added saving of social care costs plummeting as the family can help with her mother’s care needs. In many ways the family become a ‘private landlord’ for the person on housing benefit. We currently pay a fortune out to private landlords, instead some of this funding would go to the families looking after their elderly relations. I think this is far better use of the money.

It’s this carrot first approach that I think we should be pushing as part of our welfare reform agenda in the next manifesto. The policy forms part of an amendment to motion F33, Age Ready Britain to make it easier for older people to downsize or move in with relatives. The precise wording is:

After 5. d) (line 84) insert

  1. e) Allow older people currently claiming housing benefit who move in with someone else to keep a portion of that benefit, to encourage better use of our existing housing stock.
  2. f) To assist older people on lower incomes make a planned move we will make the purchase stamp duty free for people in receipt of pension credit.

I’d encourage any conference representatives who agree with this approach to email me at [email protected] with their membership number so I can add your support to this amendment.

* Gareth Wilson is a Videogame Director turned Liberal Democrat activist who blogs here

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15 Comments

  • It is not easy living with your family and I know that living with my daughter would be hell, love each other but poles apart. You assume the woman would also become nurse? This reminds me of that idea raised a couple of years ago of ‘encouraging’ elderly people who own their own homes to downsize and give their homes to councils for rent. I own my own house, live alone and intend to remain that way. Why should I no longer have space or a garden because of my age? Why do poor people no longer deserve space? There are too many politicians who would be happy to see tenements again with a shared toilet.

  • To say that “unemployment has remained surprisingly low” suggests that you are prepared to tolerate a surprisingly high level of unemployment. I know too many well-qualified and determined people – predominantly young people – who have been driven close to despair by the difficulty of finding work. When they do find work, it is often temporary and for 16 or fewer hours a week, and their pay rarely reaches the living wage. If you cannot see this, it is very hard to take your suggestions for small reforms at all seriously. This is a shame as it’s possible your suggestion would help a few people, though I note that you assume that a woman with a young family – and probably a job as well – can take on the complex social and caring needs of an elderly parent as well in order to save the state some money. I know that some people (men as well as women) have taken on this responsibility but I wonder if you have any idea of the stress and exhaustion that women or men taking on that role can experience. It’s not an easy, money-saving solution.

  • Jenny Barnes 15th Sep '14 - 4:30pm

    In the old days social security was there to compensate for the way capitalism never generates enough jobs for all to be employed. Now, the state has washed its hands of any responsibility for ensuring that reasonable work at minimum wage at least is available for all who want it, and spends its time inventing sanctions for people who it decides aren’t trying hard enough. It’s a kick the poor policy, while bailing out the banksters.
    A far better solution would be a citizen’s income. No conditionality, obviously not a great deal of money, but at least something, whatever happens.

  • Philip Rolle 15th Sep '14 - 5:56pm

    Have you asked elderly people whether they want to move in with their families? I bet not many do.

  • Ruth Bright 15th Sep '14 - 6:19pm

    I tend to agree with Anne. I bet poor old “Nicola” does the lion’s share of the child care – now she can look after Mum too! Lucky she doesn’t fancy a career and or standing for the council or parliament. However would she fit it all in?

  • @ Philip / Anne

    Thanks for the comments. I’m not expecting this to be taken up by everyone and solve our social care / housing benefit overnight, but in the same manner as the shared parental leave policy to those people where the circumstances are right it could make a big difference. Anne if you want to stay in your house or anyone else for that matter wants to then of course they should be able to. Its interesting that this idea and the shared leave policy had a similar reaction with many people. Its an *option* for those who would find it useful, maybe people aren’t used to government providing flexibility in this way. We need to get creative on this problem though, as housing waiting lists and social care costs are only going to get bigger.

    @ Kathz

    Point taken, of course unemployment and underemployment of any type in unacceptable but the fact remains unemployment has remained surprisingly low considering the size of the contraction we’ve had. It also wouldn’t mean there would be no social for the person who moved in, they could still have what they needed but would likely need less as there are able bodied people in the household.

  • Why do I feel uncomfortable about this bit ?—
    In return the state frees up a large council house, pays less housing benefit for her mother and gets the added saving of social care costs plummeting as the family can help with her mother’s care needs. In many ways the family become a ‘private landlord’ for the person on housing benefit.

    Partly for the reasons already given in comments from Jenny Barnes and Ruth Bright.
    Partly because for the last 16 years before she died my mother was in receipt of housing benefit, which enabled her to continue to live an independent and happy life. For the last ten years she was in a one bedroom semi-sheltered accommodation provided by the local council (having moved from a three bedroom privately rented house). For those last ten years she had a small garden which she loved, played cards with neighbours in the local community centre and went to a supermarket in a minibus, the cost of which she shared with her neighbours. Would she have been happier or better provided for if she had been plucked from the village and movedi to London to live with her son and family in what then would have become an overcrowded home! No she would not.

    Saving the state money, when it can throw away millions on foreign wars and Royal bunfights, sseems to be at the heart of this proposal. It seems to be based on the Tory assumption that state expenditure is not for the care and comfort of the elderly but for something else, bombing Syria or celebrating yet another Royal baby/wedding/anniversary (delete which is applicable according to year).

  • John Tilley pretty much has it right on this. So when you’ve re-housed Liz and Phil into a 1or 2 bed flat in Kensington, get back to us, and we’ll maybe take politicians seriously on welfare policy?

  • Gareth

    I agree it is a slight addition of flexibility (not sure if a mortgage would be given on the basis of additional elderly benefits though). I must admit that the whole “family becomes carer” is not an assumption we should make. It too easily would become too much and be hard for the family to get the council to then step in to help. Once they are off the books they get ignored.

    There are bigger (and potentially more expensive) fish to fry in the scheme though. For working age benefits the marginal loss rate (withdrawal of benefit and any tax rate) should be lower. That is an important carrot of welfare reform that is still under considered.

    Also the most effective welfare reform would be enabling more house building so housing costs fall therefore reducing the housing benefit bill. Simple and effective.

  • Matthew Huntbach 17th Sep '14 - 9:57am


    Nicola and Pete have a young family and are looking to move to a new home. Nicola also has an elderly mother with numerous chronic health conditions requiring daily social care, who currently lives on her own in a council house some distance away.

    In return the state frees up a large council house

    Are Nicola and Pete mad? Or just philanthropists? Nicola has a mum who isn’t going to live long living in a big council house and they’re going to give it back to the council? What people do in this situation is buy the council house for mum under “right-to-buy”, wait till she dies, inherit the house, sell it and pocket the big dollop of cash that will bring.

    Nicola and Pete don’t need money to do this. That massive dollop of cash that’s coming their way if they do this means there are all sorts of ways of getting round that. If mum’s really just got a short time to live, just max out your credit cards. Otherwise there are various financial products you can use, which amount to someone lending you the money in return for agreeing to spit the profit. At the height of right-to-buy these used to be advertised blatantly with literature distributed door-to-door on the more desirable council estates.

  • Matthew Huntbach 17th Sep '14 - 10:46am

    Anne

    This reminds me of that idea raised a couple of years ago of ‘encouraging’ elderly people who own their own homes to downsize and give their homes to councils for rent. I own my own house, live alone and intend to remain that way. Why should I no longer have space or a garden because of my age?

    Why should a family with five kids have to squeeze them into a two-bedroom flat when there are houses with two or three bedrooms which are never used all around?

    This is the real dilemma. I faced it weekly when I was a councillor. I’d have one piece of casework which was a family living in desperately overcrowded circumstances coming to me supposing that I could somehow pull a string and get them a council house. I had to tell them, no I couldn’t, it didn’t work like that. What had generally happened was that the housing officers had told them the truth – that as they had a roof over their heads, they would NEVER reach the point where they were at the top of the housing waiting list and would get an allocation. They would always be pushed behind those claiming housing under the Homeless Person’s Act. However if these people persisted in pestering the officers, the officers would try to get rid of them by saying “go and see your councillor”.

    Then the next piece of casework would be a single person trying to claim the right to inherit a council tenancy to a big house, claiming that they had lived in that house with their late mum, so it was their right (as it is), but the council didn’t believe them when they told them that (er, the fact that they weren’t on the electoral register and had been registered at another address indicated perhaps the council was right – but, hey, we have an asset which will give you a couple of hundred thousands in cash once you exercise right-to-buy if you can persuade them otherwise).

    Of course I did my duty and gave my advice in the second sort of case, and dutifully wrote the letter to the council trying to put the wannabe tenant’s point. But I can’t say I was happy to do it.

    This is related to the point I have been arguing elsewhere. We are NEVER going to have enough housing to meet everyone’s desires. If we just do what some are arguing, throw away the planning system, concrete over the countryside, build and build, we still won’t meet it, not so long as housing is such a valuable asset which brings in more cash than any other investment.

    So, I think we do have to face up to the difficult issue of having to consider measures that would discourage people from holding onto housing which is above their needs. This is like much else in politics – people shy away from reality and put up easy-peasy hand-waving solutions which appeal to populist sentimentality, but that just works to stop us from discussing less pleasant but workable solutions.

    I appreciate how difficult it is to sell the idea of any sort of policy which amounts to trying to push people out of their houses. I remember when I was young and naive putting the case for Land Value Taxation in my local paper using the argument “it will discourage people from holding onto housing they no longer need, so pushing house prices down and freeing up housing for younger people who have more need for it”, and the abusive response I got back from so many, including a friend of mine who told me “My mum told me she used to like what you said, and she voted Liberal last time because of that, but now you’ve said you want to throw her out of her home, never again”.

    So that’s why now I always make it clear that any proposed land tax would need to have a system whereby older people can pay it from equity with a state guarantee they would never be thrown out of their home over it. Of course, that reduces the large dollop of untaxed inheritance tax people now seem to think they have a right to get, unlike those who haven’t chosen the right parents who must pay tax when they work to get the same amount. Well, ok, that’s why I say, if you really aren’t willing to deal with this sort of thing, send the concrete mixers and the tarmac layers and the tree fellers to Camberley and Bagshot, Chobham and Bisley as a member of the local Liberal Democrats there is proposing, albeit obliquely. As she puts it, any concerns one might have over destroying all the nice countryside and green views in such places is “frivolous and unsubstantial”.

    It’s also why I myself could not regard the “Bedroom Tax” as the outright evil that others paint it as, I could appreciate what it was trying to do. However, yes, again we should not be forcing people out of their homes, so this should only have been implemented after anyone for whom this subsidy to their landlord was withdrawn was offered the nicest alternative that could be found, and most certainly no withdrawal of the subsidy if no alternative could be found.

    I’m sorry if people are offended by the way Gareth has put it, but I’m afraid if we don’t tackle the housing problem in this way, we will just be forced to tackle it in worse ways. So I very much do support the general principle of incentives for people to move to smaller homes.

  • Matthew Huntbach 17th Sep '14 - 10:54am

    Ruth Bright

    I tend to agree with Anne. I bet poor old “Nicola” does the lion’s share of the child care – now she can look after Mum too!

    Yes, and this is another reason why the political right makes cuts after cuts after cuts, and yet still they find state spending is rising.

    The reality is that because people are living longer, there’s a big rise in cases like this. In the past when people had larger families and families tended to live close together, a lot of the care work was done informally by relatives, so it never became a state cost. Now if there’s no relatives able or willing to care, maybe because the children who would have been willing to do it were forced to move miles away in order to find somewhere they could afford to live, the state does end up footing the bill.

  • Hi Matthew,

    Many thanks for your comments. I know its an extremely incendiary issue and have really tried to make this policy an *option* with an incentive for those that it would suit, as opposed a penalty like the bedroom. Contrary to the comments on the thread I’ve received quite a bit of support for this amendment, so here’s hoping it will be one that gets picked to discuss at conference. We really need to use our existing housing stock better. I know the obvious option is to simply build more houses, but as you said unless people are willing to rip up the planning laws to let this happen I can’t see our housing supply substantially increasing.

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