The Labour Party under Andy Burnham

greatkingrat said:

While it is true that mathematically 50% of people will always be under the median, that is not the definition of relative poverty. The definition is 60% of the median.

So take three people earning £50, £100, £150. Median is £100, 60% is £60, 1 person in poverty.
Change that to £70, £100, £130. Median is still £100, 60% is £60, nobody in poverty.

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I knew that the poverty level was a proportion of the median (ie not the median itself) but didn't appreciate the effect that had.
However, your figures do reduce the high earner as well as increasing the low one, which is not dissimilar to the point I made. But your example would still work without reducing the highest figure though, because the median (ie the income of the person at the middle point) would remain as £100.
I was always fascinated by maths. and making an example by a few figures is a good way to illustrate the point. I should have tried it myself on this calculation...

Edited to correct Americanised auto correct

== Doublepost prevention - post automatically merged: 12 Jun 2026 ==

Tetchytyke said:

The threshold they use for relative poverty is 60% of the median figure.

As @greatkingrat also points out above, you can raise incomes for people at the bottom (and at the top) without raising the median.

If you have five people and they earn £30, £50, £100, £150, £200 then the median is £100 and relative poverty is £60. Two people are in relative poverty.

If you have five people and they now earn £61, £70, £100, £300, £400 then the median is still £100 (and relative poverty is still £60). But now nobody is in relative poverty, even though the income gap between the poorest and richest has doubled.

In my example the person in the middle who is still only earning £100 is going to be upset though. They're closer to the poor people and further away from the rich. Hence all the anger.

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Thanks, see my post above - I tried to make this a quote but missed the boat.

As a pensioner who saved hard (and made sacrifices) so that I can have a reasonable retirement I feel sometimes I'm in situation in the last paragraph - though I'm certainly not angry.
What might upset me, though, is if the State Pension became means-related. My railway pension, for which I paid 7 1/2 percent of my salary (and I know it's more now) would be used in the means test resulting in a reduction my state pension. So the contributions would be wasted, in the sense of providing no benefit. Rather like the amount of NI (? 11 1/2 percent) similarly paid.

The main thing about relative poverty is that it's actually a measure of inequality, not poverty. It falls during a recession, not because poor people have got richer, but the rich people have got poorer which drops the bar down.

Merle Haggard said:

As a pensioner who saved hard (and made sacrifices) so that I can have a reasonable retirement I feel sometimes I'm in situation in the last paragraph - though I'm certainly not angry.
What might upset me, though, is if the State Pension became means-related. My railway pension, for which I paid 7 1/2 percent of my salary (and I know it's more now) would be used in the means test resulting in a reduction my state pension. So the contributions would be wasted, in the sense of providing no benefit. Rather like the amount of NI (? 11 1/2 percent) similarly paid.

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We pay so much in welfare now that incentives to work hard and save prudently for the future are very limited.

JamieL said:

We pay so much in welfare now that incentives to work hard and save prudently for the future are very limited.

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"Pay so much"? Maybe you should try being unemployed for a while. I'm fed up of people complaining about welfare being too generous, failing to understand that they might come to rely on it one day.

Most people claiming welfare likely want to be in a job, not the scrounger stereotype the Right always come out with.

== Doublepost prevention - post automatically merged: 12 Jun 2026 ==

JamieL said:

The best interests of the country are to ensure the Defence Investment Plan is fully funded whilst also avoid crashing the economy with yet more tax rises. A 10% reduction to all welfare benefits would comfortably fund all requirements.

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Again, this point of view shows little empathy towards people who are out of work. I take it that you personally are in a comfortable "job for life" and/or have enough savings to tide you over if you were long-term unemployed and/or are confident that you would quickly find another job? I suspect the answer is no, as few people are lucky enough to be in that situation. In which case, try to put yourself in the shoes of a long-term unemployed person.

Sorry for the combative tone, but picking on people on welfare is something that incenses me.

JamieL said:

We pay so much in welfare now that incentives to work hard and save prudently for the future are very limited.

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Welfare spending is a sticking plaster to cover up the failure to invest in public services properly. It's not a coincidence that welfare spending increased further (after the GFC) after austerity became government policy in 2010, a reminder that there is a cost to NOT spending money in the right places.

If we want fewer sickness benefit claimants, we need to invest in the NHS to actually treat them. Lower unemployment benefit requires more investment in both education/training and industry.

The problem we have is there is now so much debt, the investment required is very difficult to fund, and simply cutting welfare beforehand will have even more costly effects (more homelessness, crime, lack of consumer spending, etc.).

Tetchytyke said:

Always used to make me laugh (and not in a good way) when middle class people turned up in my office having lost their job or had a serious health diagnosis. The look of horror on their faces when I told them what they were actually entitled to was something else. "How am I supposed to live on that?" Quite.

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Why is there not a "like" button on this forum?

== Doublepost prevention - post automatically merged: 12 Jun 2026 ==

AlterEgo said:

Earming £50k still doesn't make you rich though. The mean salary for a 50 year old in the UK is higher than that.

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Didn't know that. I'd have guessed maybe £40,000 but that was purely a guess.

JamieL said:

We pay so much in welfare now that incentives to work hard and save prudently for the future are very limited.

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I hope that your divorce from reality was an amicable one.

You're completely missing the point that many people who are claiming benefits are doing so because the amount they earn from working is insufficient to meet their needs. If you want to cut that particular benefits bill, you can either increase the amount that those people earn, take steps to reduce their outgoings, or a combination of both.

You probably won't want the minimum wage to go up because it'll cause inflation. You could get people to work more hours, but that's not so easy to do when people are already working full time. You could ask people to do additional work if they're working part-time, but trying to coordinate two or more jobs when each employer insists that you treat their work as your primary job can also be somewhat difficult. That's before you factor in things like childcare and travel times between jobs.

So we're left with reducing costs. You probably don't want loads of new houses built because heaven forbid that it reduces the value of your own property. You probably won't want more public housing built because "who is going to pay for it?" The other major costs such as food and energy have increased greatly over the last few years, but any attempts to reduce those is seen as interfering with "the market".

I'm sure that many more people would love to be able to save more for the future, but when money comes in and then goes straight back out again to cover the bills, there's not much, if any, left over. Your answer is the typical Tory response that people simply aren't working hard enough.

Here's a thought: instead of kicking those at the bottom harder, why not extract just a little bit more from the top? Y'know, the ones who actually hoard all the wealth.

JamieL said:

We pay so much in welfare now that incentives to work hard and save prudently for the future are very limited.

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nw1 said:

I'm fed up of people complaining about welfare being too generous, failing to understand that they might come to rely on it one day.

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I agree with nw1. The thought that any of us might have to depend on the welfare system in the future, at a time when it's being so comprehensively attacked in the popular press and by politicians, is precisely the reason that I "work hard and save prudently for the future".

Quite aside from the systemic bias GusB describes – the system actively working against many who are struggling to survive – the political sabre-rattling around this brings with it its own negative, self-defeating consequences. For all that there is a perception of people scrounging from the system, there's also people like me engaging in the paradox of thrift. I could afford to spend a little more in the economy – go out for more meals, pay a few more tradespeople around the house rather than do it all myself, buy the slightly fancier food etc. – and contribute to tax receipts in the process. Instead, I choose to save or go without, so I'm perhaps a little more protected in a possible future where I'm on the hook for exploitative amounts for health insurance, or where a crippling illness renders me unable to afford my (modest) outgoings if I should have to rely on a hollowed-out welfare system.

What I lose in convenience but save in pecuniary terms may be merely a hollow comfort in the longer term, given the sums involved in some of these worst-case scenarios, but at least it gives me some comfort and choice.

The current political approach of offering simple solutions to extraordinarily complex and multifaceted problems is simply unsustainable, especially where most of the narrative conveniently forgets to highlight that each apparently obvious choice has a slew of unintended second-order effects elsewhere in the system. Some of the smarter members of the political class know this, but are boxed in and seem unable to do anything about it. While this seems to be a problem that particularly afflicts right-wing talking points and their myopic views, it's not a uniquely right-wing failure mode – political incentive structures and diffuse long-term costs that aren't reflected in electoral accountability make it rational behaviour for any governing party.

Ultimately, the political debate on welfare almost never engages with the problem at the level of sophistication it deserves.

nw1 said:

Sorry for the combative tone, but picking on people on welfare is something that incenses me.

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It partly enrages me and partly just makes me despair.

Anyone who says that you can just cut welfare spending without any consequence is, to be quite honest, being intellectually dishonest.

This is why the right wing try and dress everything up in the language of morality, everyone on benefits being feckless wasters and scroungers who should just be kicked harder. It's much easier to avoid the intellectual dishonesty if you create a straw man.

Otherwise the right would have to focus on the truth of their position: they want to take money from poor people rather than have poor people take money from them. Fine, that's a legitimate libertarian position to take, if you're not poor then poverty isn't your problem. But don't try and dress it up as anything else.

Every pound you cut from welfare is a pound that has to be found from somewhere else. You're finding it from the NHS when people's physical and mental health deteriorates, you're finding it from the justice system because people turn to crime to pay the bills (or turn to drugs to escape the misery), you're finding it from the education system because the children have behavioural problems, you're finding it from the welfare system in 10 years time because the impoverished children now become unemployable adults. You're finding it from food banks, you're finding it from charities like the Greggs Foundation, you're finding it from organisations like Citizens Advice. You're finding it from the person who gives a beggar a couple of quid.

Ever notice how governments of all persuasions lump fraud and error together as one category? That's because most DWP wastage is through official error, not through claimant dishonesty. There are dishonest benefit claimants just as there are dishonest politicians, but in my 20 years I can count the number of people I thought were genuinely dishonest in their disability claims on the fingers of my hands. All were, in their own different ways, also fundamentally unemployable people.

I think it is telling that Jamie here doesn't want to actually engage with the practical realities of any of this. He just wants to make intellectually dishonest blanket statements and move on.

125Spotter said:

Ultimately, the political debate on welfare almost never engages with the problem at the level of sophistication it deserves.

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Indeed.

When Universal Credit was being devised, the think-tank which proposed it suggested that the income taper should be between 30% and 40% and that everyone should get a small allowance before that taper kicked in. This means that, for every £1 you earn, your benefit entitlement is reduced by between 30p and 40p, reducing until your benefit entitlement drops to zero.

Instead, George Osborne set the income taper at 55% and there is only an earnings allowance if you're disabled or have children. This means that, for every £1 you earn, your benefit is reduced by 55p until your benefit entitlement drops to zero. And as the taper percentage is higher, this happens quicker.

It's weird, really. There's huge focus on the marginal tax rate of 50% to 60% for people earning between £100k and £125k. Apparently this is unfair and disincentivises them from working. It probably does. But for people on benefits the marginal tax rate is also 55% and...tumbleweed. Apparently the benefits claimants are just lazy or something.

Tetchytyke said:

Every pound you cut from welfare is a pound that has to be found from somewhere else.

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I don't think this kind of thing helps discussion - there is obviously no pound for pound correlation. Nor does accusing people of making 'intellectually dishonest blanket statements' help much!

oldman said:

I don't think this kind of thing helps discussion - there is obviously no pound for pound correlation. Nor does accusing people of making 'intellectually dishonest blanket statements' help much!

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If that's what you believe, why not? Why not use a term such as "intellectually dishonest" if you think that anti-welfare arguments are precisely that?

nw1 said:

If that's what you believe, why not? Why not use a term such as "intellectually dishonest" if you think that anti-welfare arguments are precisely that?

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Intellectual dishonesty is in the eye of the beholder, and to say that something is 'precisely that' is just an empty put-down.

oldman said:

I don't think this kind of thing helps discussion - there is obviously no pound for pound correlation.

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The thing is, there is.

Welfare benefit amounts are supposedly based on the minimum amount of money a person needs to live on. So, as proposed, we cut the payment by a blanket 10%. Has that minimum amount to live on magically gone down or is the welfare recipient now only receiving 90% of what they need? Where do you think that other 10% now comes from?

Child poverty is estimated to cost £39bn a year. Removing the 2-child cap, of which 70% of people hit by it are working, costs £3bn. Even if the change only reduces child poverty by 10% then still there is your pound for pound correlation.

Same with PIP. You raise the threshold so some people with disabilities are no longer entitled to it. But those people still have health problems and still have disabilities, it is just that they're no longer getting the money to help them with them. So they're at the doctors more often, or they're now taking more medication, or they can't afford the carers they need to stop their heath problems worsening. Do you think all those outcomes are free of charge to the taxpayer?

The idea that you can cut these things and save money is intellectually dishonest. Clearly that's just my opinion, that goes without saying. I have also explained why I think that.

But why shouldn't I say what my opinion is? If you disagree with me that's fine, we can have a conversation about why and where you disagree with me. But "this doesn't help" isn't that conversation, is it?

The other factor to consider is that if you give someone with a budget which leaves them £0 at the end of the month having spent only on the essentials £100 chances are they'll spend it (or if you wound prefer waste it, take your pick).

If you give a tax cut to a wealthy person they're likely to save it.

The latter is of limited benefit to the economy, the former then goes around the system and boosts GDP.

Deleted.

By far the largest single element of "welfare" spending is the state pension, and that is not determined by any criteria relating to the "minimum amount of money" required for any given standard of living.

We also have major welfare spending categories that are ultimately self defeating - such as Housing Benefit which tries to make housing more affordable by pumping more money into an overheated housing market.

These could be cut without generating "pound for pound" spending elsewhere.

Reading the following in the BBC news report dated today, while it is understandable that Government ministers may be exasperated over the failures in the Ministry of Defence it is clearly not helpful for the Government to make commitments that require resources that the armed forces do have have and which the Government is not willing to fund.

There may in the end be no need to deploy forces either to Ukraine or the Strait of Hormuz as those conflicts could resolve in ways that make these two commitments unnecessary but the Government really should not make commitments that require resources that the armed forces do have have and which the Government is not willing to fund.

To deliver the commitment to further raise defence spending from the 2.5 percent of Gross Domestic Product planned for 2027, funded by reducing overseas aid to 0.3 percent of Gross National Income, to the promised 3 percent of Gross Domestic Product by 2030 it would really be better for the Government to add one percent across the board to all income tax rates throughout the UK so everyone in the UK who pays income tax contributes.

This would raise an extra £10.9 billion by 2029-30 which is around 0.3 percent of GDP. It would also show to the whole world a clear political commitment by the UK Government to deliver the promised defence spending of 3 percent of Gross Domestic Product by 2030.

Overturning the manifesto commitment not to raise income tax would reinforce that message, making clear that this commitment is so important that the manifesto commitment must be set aside to deliver it. It would also show the Labour Government to be decisive and controlling the agenda which it clearly is not at present.

Defence row exposes tensions over how to keep UK safe

Ex-Defence Secretary John Healey has said the defence investment plan is "well short of what is required".

www.bbc.co.uk

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To its many critics, the Ministry of Defence failed to spend well what money it got, botching procurement after procurement, delivering new equipment late and over budget.

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The government has also been ambitious in the commitments it has promised allies: to deploy land forces to Ukraine after a future ceasefire; to lead a multinational force protecting the Strait of Hormuz if the fighting ends; to provide Nato with a strategic reserve corps; to lead the alliance's defence of the High North and Arctic.
The accusation against Sir Keir Starmer and Rachel Reeves, the chancellor, is that they were and are not willing to find the money to meet these targets and commitments.

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https://ifs.org.uk/publications/options-tax-increases

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Increasing all rates of income tax by 1 percentage point would yield an estimated £10.9 billion a year by 2029–30

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HSTEd said:

By far the largest single element of "welfare" spending is the state pension, and that is not determined by any criteria relating to the "minimum amount of money" required for any given standard of living.

We also have major welfare spending categories that are ultimately self defeating - such as Housing Benefit which tries to make housing more affordable by pumping more money into an overheated housing market.

These could be cut without generating "pound for pound" spending elsewhere.

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Well, there's one easy way to cut the housing benefit bill: build lots more public housing so that those payments aren't going into the pockets of private landlords. At the same time, you then free up more of the private rented sector and take pressure off the housing market. It's not a quick fix, though, and I don't see how cutting housing benefit entirely is going to solve any problems in the meantime. If anything, it'll cause more problems because you'll end up creating more homelessness and debt in the form of rent arrears for those who simply cannot afford to pay. Councils will be on the hook for finding emergency housing and you'll end up with that money going to the proprietors of bed and breakfast accommodation instead.

Lets not forget that the housing benefit bill has already been cut through the bedroom tax under-occupancy charge, meaning that households with spare bedrooms have to fund the difference between what the government pays and what the landlord charges.*

* In Scotland, the difference is covered by Discretionary Housing Payments; I don't know about other devolved areas.

The Ham said:

The other factor to consider is that if you give someone with a budget which leaves them £0 at the end of the month having spent only on the essentials £100 chances are they'll spend it (or if you wound prefer waste it, take your pick).

If you give a tax cut to a wealthy person they're likely to save it.

The latter is of limited benefit to the economy, the former then goes around the system and boosts GDP.

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Exactly. People on benefits don't save - they put the money they receive back into the economy. Give a tax cut to a wealthy person and they'll probably spend it in a foreign country on holiday!

The Ham said:

The other factor to consider is that if you give someone with a budget which leaves them £0 at the end of the month having spent only on the essentials £100 chances are they'll spend it (or if you wound prefer waste it, take your pick).

If you give a tax cut to a wealthy person they're likely to save it.

The latter is of limited benefit to the economy, the former then goes around the system and boosts GDP.

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My understanding is that the economics term is the "marginal propensity to consume"

== Doublepost prevention - post automatically merged: 12 Jun 2026 ==

GusB said:

Well, there's one easy way to cut the housing benefit bill: build lots more public housing so that those payments aren't going into the pockets of private landlords. At the same time, you then free up more of the private rented sector and take pressure off the housing market. It's not a quick fix, though, and I don't see how cutting housing benefit entirely is going to solve any problems in the meantime. If anything, it'll cause more problems because you'll end up creating more homelessness and debt in the form of rent arrears for those who simply cannot afford to pay. Councils will be on the hook for finding emergency housing and you'll end up with that money going to the proprietors of bed and breakfast accommodation instead.

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Indeed, the idea that, after over a decade of austerity, we can solve our problems with simplistic cuts is obviously flawed. If we want to solve this issue, we need properly costed investment strategies, explaining how capital investment is going to put us in a stronger position to pay other debts.

Unfortunately, this involves long term thinking, and holistic view of costs, and the people we have chosen to implement this are politicians.

GusB said:

Well, there's one easy way to cut the housing benefit bill: build lots more public housing so that those payments aren't going into the pockets of private landlords. At the same time, you then free up more of the private rented sector and take pressure off the housing market.

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It doesn't really matter where the housing comes from, just that it appears. Supply and demand and all that.
The government could build lots of housing, sure, but the infrastructure to do this doesn't exist and hasn't existed in many decades.

And without massive cuts to day to day spending there is no money to pay for anything like that.
We are already riding the ragged edge of a showdown with the bond vigilantes.

If you want to accumulate capital then day to day spending must fall.

In the short term a more likely result would be to gut planning restrictions and allow "mobile homes"/prefabs/"manufactured homes" to flood into the market. They can be built with very little on site labour and are still considerably better than spending half your income on a house share.

GusB said:

It's not a quick fix, though, and I don't see how cutting housing benefit entirely is going to solve any problems in the meantime. If anything, it'll cause more problems because you'll end up creating more homelessness and debt in the form of rent arrears for those who simply cannot afford to pay. Councils will be on the hook for finding emergency housing and you'll end up with that money going to the proprietors of bed and breakfast accommodation instead.

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All increasing housing benefit does is drive the prices up even higher. The same number of people are still chasing the same amount of housing.
The price just climbs until it absorbs all the extra money provided to the renters.

It doesn't really change much - especially as second homes are already a negligible portion of the housing supply - except landlords make even more money on their housing units.

HSTEd said:

The government could build lots of housing, sure, but the infrastructure to do this doesn't exist and hasn't existed in many decades.

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The best time to plant a tree was 20 years ago, the second best time is now.

HSTEd said:

And without massive cuts to day to day spending there is no money to pay for anything like that.
We are already riding the ragged edge of a showdown with the bond vigilantes.

If you want to accumulate capital then day to day spending must fall.

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Why must strategic capital investment be funded out of operational expenditure. No businesses operate that way, why should our government. If we can show that capital investment will reduce operational expense, that is likely to be well tolerated by the markets.

HSTEd said:

In the short term a more likely result would be to gut planning restrictions and allow "mobile homes"/prefabs/"manufactured homes" to flood into the market. They can be built with very little on sight labour and are still considerably better than spending half your income on a house share.

All increasing housing benefit does is drive the prices up even higher. The same number of people are still chasing the same amount of housing.
The price just climbs until it absorbs all the extra money provided to the renters.

It doesn't really change much - especially as second homes are already a negligible portion of the housing supply - except landlords make even more money on their housing units.

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I agree that looking at more straightforward planning laws, other options for housing manufacture are all great ways. But leaving critical housing infrastructure to the whims of the same private companies that have failed us for the last 40 years seem like doing the same thing again and expecting different results.

Yew said:

Why must strategic capital investment be funded out of operational expenditure. No businesses operate that way, why should our government

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To a large extent Google and Amazon does! But I accept the point.

Yew said:

If we can show that capital investment will reduce operational expense, that is likely to be well tolerated by the markets.

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The problem is the markets would have to have faith that this programme will succeed without massive cost overruns and will actually succeed in reducing housing benefit costs.

If housing benefit costs fall, rents must fall, which means the value of housing (all else being equal) will fall.
If we want rents to fall radically house prices will have fall radically.

Can you convince the markets that the government will actively pursue policies that cause the value of houses to fall by half or more?
Such policies (all else being equal) would likely destroy the government if they succeeded, so it will be a hard sell.

Funding such things out of day to day expenditure means that you don't actually have to sell the markets to start the programme, and demonstrates credibility which will make existing borrowing less expensive - you can sell the programme by example.

Yew said:

I agree that looking at more straightforward planning laws, other options for housing manufacture are all great ways. But leaving critical housing infrastructure to the whims of the same private companies that have failed us for the last 40 years seem like doing the same thing again and expecting different results.

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We wouldn't be relying on the same private companies.
Right now the planning system is the primary weapon the big housebuilders use to maintain their oligopoly and help strangle the supply of housing. The 1948 system assumed mass delivery of publically built housing would keep housebuilders honest and prevent them abusing planning permission, but then publically built housebuilding ended.

If we destroy the planning system's ability to prevent housebuilding the big housebuilders would be forced to build vast amounts or cede the market to incomers. But whatever they do, once the state is not using the threat of violence to prevent housing construction, housing would be built.

If I can buy a prefab house off ebay and buy the corner of a field off a farmer for a few hundred pounds, why would I pay astronomical sums for a Barrett (other builders available) house?

Even if I pay thousands for utilities I will end up enormously ahead. Let alone when (probably retiring) farmers start laying out plots on their fields with the utilities done using a trenchdigger.

HSTEd said:

All increasing housing benefit does is drive the prices up even higher. The same number of people are still chasing the same amount of housing.
The price just climbs until it absorbs all the extra money provided to the renters.

It doesn't really change much - especially as second homes are already a negligible portion of the housing supply - except landlords make even more money on their housing units.

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I would definitely like to see Housing Benefit scrapped for this reason, however the problem is, if it is scrapped, the rent of those in receipt of that benefit isn't going to miraculously drop at the same time, so we could see a huge amount of homelessness and/or a increase of demand in properties at the bottom of the market (which also increases rent). I would be very keen to see what viable solutions exist that manages such a transition.

HSTEd said:

It doesn't really matter where the housing comes from, just that it appears. Supply and demand and all that.
The government could build lots of housing, sure, but the infrastructure to do this doesn't exist and hasn't existed in many decades.

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The infrastructure does exist in many places, though, as does some of the housing. I once lived in an area that was deemed to be hard-to-let because it was perceived as "rough" and there were many empty properties as a result. I accepted a flat there because I'd missed my initial allocation (it went to the wrong address) and a refusal at that point would have put me to the bottom of the list. As it turned out, the place wasn't all that bad after all. The buildings themselves were in reasonable condition and a bit of modernisation was all that was required.

HSTEd said:

In the short term a more likely result would be to gut planning restrictions and allow "mobile homes"/prefabs/"manufactured homes" to flood into the market. They can be built with very little on site labour and are still considerably better than spending half your income on a house share.

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Pre-fabs and mobile homes are certainly one way to alleviate the problem in the short term, as long as we don't end up with the situation where people are still living in them forty or fifty years later.

HSTEd said:

All increasing housing benefit does is drive the prices up even higher. The same number of people are still chasing the same amount of housing.
The price just climbs until it absorbs all the extra money provided to the renters.

It doesn't really change much - especially as second homes are already a negligible portion of the housing supply - except landlords make even more money on their housing units.

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Who's talking about increasing housing benefit? By building more public housing (which have cheaper rents) you're increasing the amount of housing and reducing the pressure on existing housing. There will still be some need to provide housing benefit to those who cannot work and for those on the very lowest incomes, but those people who are working full time will be able to afford accommodation without resorting to state benefits.

HSTEd said:

If housing benefit costs fall, rents must fall, which means the value of housing (all else being equal) will fall.
If we want rents to fall radically house prices will have fall radically.

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I'm afraid that you've lost me. If housing benefit costs fall because there is additional housing at the lower end of the market, it doesn't necessarily mean that the value of houses will plummet. There may well be a slight decline in income for those who rent out houses privately - that's not an entirely bad thing. I don't honestly think that there will be a shortage of people wanting to rent somewhere to live; people who are currently in house/flat-shares may suddenly find that they're able to afford a place of their own rather than having to share with strangers.

GusB said:

The infrastructure does exist in many places, though, as does some of the housing. I once lived in an area that was deemed to be hard-to-let because it was perceived as "rough" and there were many empty properties as a result. I accepted a flat there because I'd missed my initial allocation (it went to the wrong address) and a refusal at that point would have put me to the bottom of the list. As it turned out, the place wasn't all that bad after all. The buildings themselves were in reasonable condition and a bit of modernisation was all that was required.

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The number of long term empty properties in the UK is only around three hundred thousand (just over ~1% of the housing stock) its not enough to seriously move the needle on price. We are looking at a shortage of several million units, as many as five million according to the work done by Shelter.

EDIT: ONS Stats put the number of 'long term vacant homes in England at about 265,000, as seen here, adjusting for the rest of the UK will bring us to value of around 300,000.

There were 264,884 long-term vacant dwellings in England on 7 October 2024, an increase of 3,410 or 1.3% from 261,474 on 2 October 2023.

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We don't really have a building industry that can substantially increase the numbers of houses built with conventional methods - the personnel resources don't exist and any building programme fast enough to make a difference to housing benefit will be so fast that you will just end up making anyone you train redundant a decade later! That will be a hard sell in terms of getting industry or anyone else to train these people.

GusB said:

Pre-fabs and mobile homes are certainly one way to alleviate the problem in the short term, as long as we don't end up with the situation where people are still living in them forty or fifty years later.

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That's a problem for 40-50 years later, but given the population predictions for the end of this century get lower and lower every time they are revised, I doubt it would be a serious problem.
EDIT: See the population statistics on the ONS website here. Population peaks around 2052 ish at around 72.5 million and then starts falling back.

The only way people are living in the prefabs 50 years from now is if they are nicer than other housing available, since in the absence of the planning straightjacket unsuitable homes would be torn down and replaced.
Current projections put the population falling below current levels circa 2091, and as I said, population projections keep being lowered every time they are revised.

GusB said:

I'm afraid that you've lost me. If housing benefit costs fall because there is additional housing at the lower end of the market, it doesn't necessarily mean that the value of houses will plummet. There may well be a slight decline in income for those who rent out houses privately - that's not an entirely bad thing. I don't honestly think that there will be a shortage of people wanting to rent somewhere to live; people who are currently in house/flat-shares may suddenly find that they're able to afford a place of their own rather than having to share with strangers.

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House prices are, generally, set by the rents/income that could be generated by owning them, as with any other capital assets. If rents that can be generated from a house (or rents avoided by buying a house as an owner occupier) fall , then the house price will fall unless this is offset by interest rate changes.

In order for rents to become affordable without massive benefit spend they must fall by half or more, and this cannot be accomplished whilst keeping house prices high.
Even if the extra capaity is only added at the "bottom" of the market, it will still affect the general supply and demand balance throughout the market stack - the price reductions will propagate up the pile as everyone takes slightly 'worse' housing for much less money.

But returning to the original discussion, the state pension is the elephant in the room on welfare spending.

oldman said:

Intellectual dishonesty is in the eye of the beholder, and to say that something is 'precisely that' is just an empty put-down.

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But aren't you just putting down @Tetchytyke's arguments in a rather lazy way, i.e you are making an empty put-down yourself?

They are making some very valid points about the harm of benefit cuts, and the effect they have on the poorest in society. Therefore, if you do not agree with what they are saying, you need to argue that people on benefits would still be able to live an acceptable life even with cuts.

HSTEd said:

The problem is the markets would have to have faith that this programme will succeed without massive cost overruns and will actually succeed in reducing housing benefit costs.

If housing benefit costs fall, rents must fall, which means the value of housing (all else being equal) will fall.
If we want rents to fall radically house prices will have fall radically.

Can you convince the markets that the government will actively pursue policies that cause the value of houses to fall by half or more?
Such policies (all else being equal) would likely destroy the government if they succeeded, so it will be a hard sell.

Funding such things out of day to day expenditure means that you don't actually have to sell the markets to start the programme, and demonstrates credibility which will make existing borrowing less expensive - you can sell the programme by example.

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Locally to me (around an hour to London) 3 bed home is £400,000 to buy (slightly more than the cheapest currently on rightmove) and £1,500 to rent (£100 less than the cheapest currently on rightmove).

From the get go an agent will be taking a cut (typically 10%) so the private landlord is working on a maximum income of £1,350.

They then have to pay tax on this income (after reasonable costs, such as fees, safety certificates and the like but interest payments for the mortgage are mostly taxed for landlords where an individual owns the property).

As such they are working on maybe £1,100 a month to make it pay.

As such, even buying existing housing, it should be possible for the council to reduce their rental costs from the market rates.

As with all these things the early years are where the maths is tight.

Although, over time, the maths gets better and better.

If you want to cut welfare then people have to be paid a wage that is able to be lived on, we are subsidising a low-wage economy,
Business will scream we can't afford it, and fight tooth and nail,

then there's the cost of living, water, gas electric, none of these ever seem to come down, only by a small amount, food cost, only ever go one way, If you were to take into account all price rises, then inflation, is much higher,

So how do you solve an unsolvable puzzle? you have to control prices, you have to help people to use less energy, and water, stop insane profits from being taken out of the country, and where firms are putting shareholders above consumers, the government needs legislation to bring it into line,

Outfits like Southern water, Thames water, should have been nationised and ran as non-profit plowing the revenue back into renewing the system, and fixing leaks, on measures that help people to use less,

nw1 said:

They are making some very valid points about the harm of benefit cuts, and the effect they have on the poorest in society.

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The claim was that every pound removed from welfare is equal to a pound spent on something else. Unless the converse claim is also true (that spending a pound on welfare saves a pound from something else) - which if true, would mean we should agree to the WASPI claims, for example - this seemed like quite an oversimplification.

I do agree with the wider discussion around long-term effects, but I would argue there is a progressive case for finding ways to get people off welfare (choosing my words carefully here as I'm not proposing to "just scrap" anything). The reason benefits are so incredibly stingy is because so many people are on them, therefore any increase, even a small one, is unaffordable. The present situation involves a lot of people receiving an amount in welfare which is enough to prevent destitution but not enough that they can ever improve their lives. Thus, both the left and the right dislike the present situation, as the left view it as insufficient and the right view it as wasteful. In reality this is a problem with a straight monetary compromise.

If we were able to (over the long term) focus the help a bit more tightly, it could be more generous to those recipients who don't have a pathway out of welfare. I would probably be in favour of borrowing to fund things like mental health treatment or investing in education and training, getting out of this rut would in a sense be a form of capital investment.