It's always families

The Times is leading on a claim that Gordon Brown "plans to take cash from the poorest families." It's an interesting story but quite complicated and significantly over-hyped.

The gist of the story is that the government, in fact the Department for Work and Pensions rather than the PM, is planning to make changes to local housing allowance (LHA). The Times claims that LHA "replaced the old housing benefit in 2007" but the truth is that it is replacing housing benefit, which is the benefit paid to the majority of people who need help with their rent. The Times says that 600,000 people get LHA, of whom 300,000 get paid, intentionally, more than they actually pay in rent. The government plans to remove that surplus income.

So undoubtedly a small minority of people will lose out and if you are on a low income, every bit of money counts. But the Times is saying that people will lose "up to £15 per week". This is the maximum surplus. How many of the £300,000 actually get this? It also reports claims from Crisis the housing charity, that "this could mean that people on £65-a-week jobseeker’s allowance losing 20 per cent of their income". Hang on a second. Crisis is a charity for single people. Who gets £65 per week? Single people over 25 - and that is their living costs, not their housing costs. What Crisis is saying is that the people worst hit by this will lose the amount by which their income after housing costs is increased by a surplus on their housing allowance. Somehow they have worked out that £15 is 20% of £80 (i.e. 65 +15), which it isn't. Undoubtedly some families will lose out but this will be a small minority even of those getting LHA and the money they lose will be a much smaller percentage of their income.

And what is the evidence to back up the article's claims of a revolt by Labour MPs? It quotes two Labour MPs who pay very close attention to this type of issue. One of them, Frank Field, plans to table an amendment opposing the change.

There is a good point in the article, made by Field, that removing the incentive for people to find a rent that is less than LHA destoys the whole purpose of the new benefit. But making it into a big political story comparable to the abolition of the 10p tax rate is way over the top.