Why Young People Need Housing Benefits in the U.K.

Billfold readers come from all around the world, and manage money differently depending on where they live. James Griffiths reports to us from across the pond.

It wasn’t supposed to be like this. For hundreds of thousands of young people in the U.K., a university degree was supposed to be an automatic ticket to a better life, or, at the very least, to gainful employment. University graduates did not need to claim welfare; benefits, we were told repeatedly by newspapers and politicians, are for asylum seekers or single mothers, and even they probably didn’t need them really, but live off them out of fecklessness due to their general poor character.

So it came as a shock when we began looking for work, and there wasn’t any. Never mind, we can always move from our university towns, flying the comfortable nest we’d made for ourselves of friends, pubs and kebab shops; and joining the inexorable flow of graduates down to London, where there are at least some jobs, if not the jobs we want, but any job will do, provided it’s sufficient to support ourselves while we work as unpaid interns, trying to get the graduate career that we were promised, the graduate career that we paid for. And anyway, the minimum wage is enough to live on, right? It might be a struggle but it’s sufficient.

Except it’s not. 

Many people in the U.K., particularly in the capital, find that their wages will not cover food and rent, which has ballooned out of control as successive governments chose to subsidise private landlords rather than build affordable social housing. A 2011 study by housing and homelessness charity Shelter found renting privately (as opposed to council housing, of which there are very limited numbers) has become unaffordable in over 50 percent of municipalities in the U.K.; this could rise to over 60 percent by 2030. Right now, discrepancies between take-home pay and rent are alleviated by housing benefits, paid by the local council, the budget for which will reach £23.2 billion ($36.3 billion) this year. Housing benefits are means tested and available at varying rates to anyone earning under £16,000 a year, the exact amount paid differing depending on average local rent fees (with an absolute maximum of £250 per week for a one bedroom property).

However, as part of an effort to shave £10 billion off the welfare bill, Prime Minister David Cameron has announced that his Conservative Party will seek to end housing benefits for the under-25s. At present 380,000 young people are claiming the housing allowance, part of what Mr. Cameron terms a “culture of entitlement” which feels it is owed something for nothing.

Mr. Cameron, who is seeking to define his party in more typically conservative tones beyond its current Coalition with the more left-wing Liberal Democrats, is following a tried-and-tested route of attacking the young, who don’t vote in great numbers and even when they do tend to swing to the left. In the same speech announcing the housing benefits reforms, Mr. Cameron dismissed calls for better-off pensioners to lose their free bus passes, television licenses (the method by which public television is funded in the UK) and winter fuel allowance.

Mr. Cameron’s description of the current housing situation was at once persuasive and completely detached from reality. He conjured an image of unemployed 18 or 19-year-olds, with a bare minimum of education, moving out of their parent’s house and into one of their own completely at the government’s expense, out of an ill-judged and selfish desire to be independent just for the sake of it. In reality, only one in eight claimants of housing benefits is unemployed—the majority just simply can’t make enough money to afford rent. The Prime Minister’s solution, that they simply live at home until they’re earning enough to move out, is staggeringly out-of-touch, a reflection of his narrow, upper-middle-class worldview an inability to empathise with anyone who wasn’t privately educated.

In the Home Counties (high income areas in South-East England), where Mr. Cameron grew up, children from well-to-do families are able to live at home and commute into the capital while they move up the bottom rungs of the ladder. Parental subsidies have always been enjoyed by the rich, and are one reason that, in the current economic climate, a number of low-paying but prestigious careers are becoming bastions of the upper classes. What Mr. Cameron’s plan ignores is the vast proportion of the population who either aren’t able to live with their parents (last year over 10,000 young people became homeless after being thrown out by their parents) or have parents who don’t live anywhere remotely convenient for work.

My parents live on the Isle of Anglesey, in North Wales; I went to university in Liverpool, about 80 miles away across the border in England. Whilst I am fortunate in that my parents could support me if I moved in with them, my prospects of getting a graduate position in the small farming community I grew up in are next to nil. My prospects in Liverpool aren’t much better—the U.K.’s deeply out-of-balance employment market means moving to London is an inevitability not a choice, and one that brings with it a massive increase in both rent and cost-of-living. Though I’ll probably escape the proposed cuts, planned for the next parliament, hundreds of thousands of young people will potentially be cheated of a career they want, forced to stay in cheaper areas, overqualified and underpaid; or, worse, they will join the 2.6m people currently out of work in the UK, unable to move to where there is work.

In a month in which a scheme where British millionaires were able to pay only 2 percent in tax was exposed, it is, to borrow Mr. Cameron’s own words, “morally repugnant” for the government to attack young people, already bearing the brunt of the recession and subsequent cuts more than any other group.

 

Previously: Being an Intern in the U.K. Sucks Too

James Griffiths is freelance journalist and writer based in Liverpool, U.K. He graduated as a Bachelor of Laws from the University of Liverpool in July 2012. He has written for publications in the U.K., U.S. and China, and is editor-in-chief of Gossipian.com. Photo: Flickr/shht!

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15 Comments / Post A Comment

cmcm (#267)

The Tories make my blood boil. How someone can feasibly justify cutting benefits for the young – who EVERYONE KNOWS are already screwed, as well as single parents… is completely beyond me.

Who voted in this pompous privaleged assholes?

lalaland (#437)

@cmcm Probably the same people who vote for Republicans in America.

“Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” – John Steinbeck

SO TRUE.

cmcm (#267)

@lalaland I like that quote a lot. Interestingly though, it’s not the same people that vote Conservative in the UK. (I’m an American expat, btw). People are acutely aware of class here and the rich vote for their friends/interests while the rest vote left, and then get even more screwed over when one of the more left parties forms a coalition with the tories.

jfruh (#161)

OK, I’m not a housing economist nor an opponent of social welfare schemes but … is it possible that housing benefits end up pushing rents up in a sort of vicious cycle? I.e., private landlords always look to charge as much as they possibly can, so they’ll always take advantage and charge at the absolute upper threshhold of the means of low-wage earners, but that ends up being an unreasonably amount to pay, so housing benefits go up, as do rents to match, etc.

I full trust that the short-term solution is not to yank housing benefits from low-earners, and have no idea what the long-term solution is (allowing more high-rise housing, public and private, to be built in London? trying to decentralize the British economy?) but thought I’d ask the question.

@jfruh The UK used to have a pretty effective model of publicly-funded social housing that was cheap and of decent quality. But we all know that The Private Sector is More Efficient, so spiraling rents can only possibly be blamed on asylum seekers, health & safety legislation, and Brussels.

ETA: Also, hoodies.

@jfruh Absolutely! Consecutive governments have unfortunately chosen to allow private landlords to run rampant, rather than invest in public housing, and now we’re left with a hugely inflated welfare bill.

Regulation preventing landlords taking advantage of those on housing benefits, and more public housing is needed.

Why don’t they just move out of Brooklyn London?

@stuffisthings The job situation is even worse outside London – particularly in the north.

@londonistheplaceforme I was just preempting the inevitable comment someone always makes on these kinds of posts (even when it’s addressed at length in the post itself, as here.)

City_Dater (#565)

@stuffisthings

Thank you! I was bracing for the inevitable “You snotty entitled people should come live in this place which has no employment prospects for you whatsoever because I am here paying only $5 a month in rent and have a SUN PORCH.”

@City_Dater Obviously, the only Economically Rational thing for people with expensive college degrees in “unnecessary” subjects (i.e. other than Science or Business) to do is to work as a barista for $9/hr in some Wyoming natural-gas boomtown in the middle of nowhere and send half their income back to Sallie Mae each month, until they are 100% free of the shameful stain of sin debt.

Trying in any way to get by in a competitive industry (esp. media) in a large city (esp. New York) — let alone publicly complaining about how difficult it is, or suggesting that policy changes of any kind might be in order — just reeks of entitlement.

Leave the media and arts jobs and the Manhattan apartments to the wealthy scions and get on with your pre-ordained career in Fast Food Management, silly liberal arts peons. That is what you get for studying Literature. The richest and most productive society in human history can no longer support your silly fantasies about “culture.” It’s WORK WORK WORK now, baby. Unless, like, your husband is a Venture Capitalist or something.

Also, hipsters blah blah privilege wakka wakka mommy and daddy.

OK, that’s all out of the way now!

@stuffisthings Soz, didn’t get it.

But Brooklyn is hardly comparable to London, since it’s not a whole city. “Why don’t they just move out of Hackney” (a hip arty area of London) would be comparable – and I would probably agree with the sentiment. Both cities have a lot of different and interesting places to live, and in both cities, a lot of young creative people think they should just live in one particular neighbourhood, which is getting increasingly expensive.

Yes, I live in Hackney. LOL.

Ughhhhh David Cameron. The downside to living in this country long-term and not being a citizen means I cannot vote, but am more affected by what the UK government does than what the US government, which I can vote for, does. (Although at least my local MPs listen to me when I pipe up about things, which is nice.) Cameron is an ass. He’s making things difficult for a lot of people. Normal people! Hardworking people! And I can see the argument for Scottish independence when barely anyone here votes conservative.

I live in Edinburgh, and I know plenty of people who have ended up in London. Yes, there are more jobs, but the cost of living is SO HIGH. I have looked at job listings for London that are equivalent to what I do here and only offer about £3-4,000 more in terms of annual salary. That would be a massive paycut for me once cost of living was factored in. And stress of living in London. Uck.

Apparently in a lot of places, rent is now starting to be pushed down, or at least get a bit more negotiable. The housing market is crap because no one has any money, so everyone’s just renting their places out since they can’t sell. This means more choice, and it’s getting people to bargain with their landlords more. I hope that’s true!

cmcm (#267)

@Kate Amann@twitter Same situation here… I guess I kind of get that I shouldn’t be able to vote in national elections, but I feel like as a long-term Londoner I should at least be allowed to vote in local/ London mayoral elections. Alas, I am allowed the privalege of living here, paying taxes, and can be kicked out whenever I am no longer useful.

Iglooramous (#1,397)

Has the UK experienced any fall out in the housing market the way the US has?

Comments are closed!