The claim
“It is also important we end the sensationalist myths about the local housing allowance reforms in 2011…In London around 750,000 private rental homes will still be affordable.”
Lord Freud, minister for welfare reform, South London Press, January 11, 2011.
The analysis
The housing benefit bill has ballooned from £14bn a decade ago to £21bn. George Osborne’s answer is to cap housing benefits – at a maximum £21,000, or £400 a week for a four-bedroom house.
This would see off the last government’s ‘local housing allowance’ which pays housing benefit directly to tenants. It’s based on the average market rent of the area, so some families – in pricey parts of the country – are raking in tens of thousands of pounds a year in benefits.
Who could forget The Daily Mail’s assault on families “milking the system” last year? Top of the roll call was Somali refugee Abdi Nur who, with his wife and seven children, cost the taxpayer £2,000 a week in rent for the £2.1m Notting Hill townhouse.
But the reforms have caused a lot of controversy – even among the Tories.
London Mayor Boris Johnson has warned that people would be forced out of their London homes in a bout of “Kosovo-style social cleansing”.
So as the charity Shelter pointed out, Lord Freud’s defence that 750,000 private homes will still be affordable seemed too good to be true.
It was.
It prompted an immediate cross-examination from Labour’s Lord Knight of Weymouth – who questioned the figures.
And an instant back-down from Lord Freud in response.
He admitted it was an error, but then – without citing a source – said there are “fewer than 700,000 private rented sector homes in total in London, and a conservative estimate is that about 250,000 of these will still be affordable after the housing benefit reforms have been implemented”.
The Department for Work and Pensions insisted to FactCheck that research from the Department for Communities and Local Government showed that during the financial year 2008-10 there were 670,000 privately rented properties in London. About 30 per cent of them will be affordable after the benefits cuts come in, the DWP said.
The verdict
Lord Freud got his numbers in a muddle – confusing available properties with affordable properties.
And this isn’t the first time that the Work and Pensions Secretary’s efforts to calm fears over benefits cuts have been undermined by some “serious deficiencies” in his department’s use of statistics.
The last time, the DWP was caught out dressing up statistics from Find a Property as official figures from the Office for National Statistics (ONS).
If the government wants to deal with what Iain Duncan Smith calls “hysterical scaremongering” about the benefit cut, it needs to be a bit more careful.
