Benefits Cap 'Could Leave Thousands Homeless'

A cabinet minister has told Sky News that "deserving cases" will be helped amid fears a £500-a-week housing benefits cap may leave 40,000 people homeless.

Deep-seated concerns within Government over the Chancellor's plan to cap benefits for families have been laid bare in a leaked letter apparently seen by The Observer newspaper.

The letter, from Communities Secretary Eric Pickles' private secretary to his opposite number in the Prime Minister's office, will be deeply embarrassing to the coalition.

It suggests the estimated £270m saving from the cap may end up as a net loss, because 40,000 people could be made homeless.

In addition, it suggests, half the 56,000 affordable homes the Government expects to be constructed by 2015 will not be built because developers will not be able to recoup enough money from tenants.

Health Secretary Andrew Lansley told Sky's Dermot Murnaghan that he understood the letter had been written several months ago.

But he said measures had to be taken to tackle the housing benefits bill.

"We have made available £190m to support discretionary funds and support for the homeless to make absolutely sure that there are means by which, where there are particularly deserving cases, they can be looked after.

"But we have to come back to the fundamental proposition, which is that the housing benefit bill was out of control.

"Nobody thought it was fair that people on benefits could live in properties and have rent paid for them that were far in excess of the rents paid on properties that people who were taxpayers are living in.

"We have got to arrive at a situation where people who are in work see the benefits of being in work and it pays to be in work."

"But the housing benefit system bill was out of control. Nobody thought it was fair that people on benefits should live in properties, with rents paid for, that were far higher than those paid by the taxpayer."

A spokesman for Mr Pickles said: "We are fully supportive of all the Government's policies on benefits. Clearly action is needed to tackle the housing benefit bill which has spiralled to £21bn a year under Labour."

And a Downing Street spokesman said: "The entire Government is behind the policies on welfare and housing benefit.

"The bill has been growing enormously in recent years and needs to be tackled."

Nonetheless, Labour will seek to capitalise on what it sees as confusion and division at the heart of Government.

Shadow work and pensions secretary Liam Byrne is quoted by the newspaper as saying: "We were assured by ministers that costs wouldn't rise. Now top-level leaks reveal the truth."

Revolutionary Wolf wrote:That's capitalism for ya, folks.

Make no mistake: the austerity measures generating so much political "discussion" in the U.K., U.S., and elsewhere have absolutely nothing to do with debt. They are not proposed to reduce deficit spending, but to reduce government regulations, which inexorably results in severe reductions in government services.

The supposed "debt debacle" is a farce: the government cannot "owe" to itself. An elementary understanding of our financial systems would confirm this for anybody in doubt. The only form of debt that a nation ever need concern itself with is foreign debt, and that is something our politicians are completely ignoring. I will state this one more time for those who believe printing central bank notes (or more accurately, transferring digital representations of "value" amongst banking establishments and the treasury) is anything other than of marginal importance at most: government deficits (falsely labeled government "debt") are almost wholly irrelevant. All that such "debt" could ever signify is the proportion of money to GDP. It has nothing to do with our current economic situation. We cannot truly become bankrupt by generating money in our own banks! We can, however, increase the extent of bankruptcy amongst the poor by severing government services.

Admin wrote:

Revolutionary Wolf wrote:That's capitalism for ya, folks.

Make no mistake: the austerity measures generating so much political "discussion" in the U.K., U.S., and elsewhere have absolutely nothing to do with debt. They are not proposed to reduce deficit spending, but to reduce government regulations, which inexorably results in severe reductions in government services.

The supposed "debt debacle" is a farce: the government cannot "owe" to itself. An elementary understanding of our financial systems would confirm this for anybody in doubt. The only form of debt that a nation ever need concern itself with is foreign debt, and that is something our politicians are completely ignoring. I will state this one more time for those who believe printing central bank notes (or more accurately, transferring digital representations of "value" amongst banking establishments and the treasury) is anything other than of marginal importance at most: government deficits (falsely labeled government "debt") are almost wholly irrelevant. All that such "debt" could ever signify is the proportion of money to GDP. It has nothing to do with our current economic situation. We cannot truly become bankrupt by generating money in our own banks! We can, however, increase the extent of bankruptcy amongst the poor by severing government services.

I believe that the bourgeois systems are collectively trying to reconfigure the overall manner by which they respond to economic downturns. They all seem to be rejecting the traditional Keynesian model of deficit spending and corresponding progressive forms of taxation. Instead, long-discredited 'supply-side' economic theories are continually heralded and perused, as though businesses are going to somehow begin a robust domestic hiring policy with declining demand and lucrative prospects with foreign labor markets — the latter being pertinent to those businesses who can offshore their (labor-based) operations. (That's not even to mention that innovations in automation are continuing at an ever-increasing pace — thereby reducing demand for labor.) Of course, at this stage in the evolution of capitalism, I don't see how it is feasible to even consider the bourgeois liberal solutions to this problem. (The present relationship between big capital and government is such that such liberal proposals are regarded as political non-starters.)

Fear mongering over the public debt serves as a subterfuge for tax cuts. It indeed may strike a reasonable individual as downright paradoxical (after all, if the debt was such an immediate emergency, wouldn't a policy of increasing revenues be absolutely necessary?) until, of course, you see what the proposals on the table actually consist of. For every spending cut there is a corresponding tax deduction that essentially counteracts the 'desired' (deficit) reduction. But this fact does not perturb many people because of the supply-side rhetoric the politicians and media are parroting.