Depending on which paper you read there are somewhere between one in six and one in four households on Housing Benefit. Almost 25% of London homes are reliant on Housing Benefit, well above the national average of just under 18%. The overall cost of Housing Benefit last year was Â£17.7Bn and has gone up by Â£2.7Bn since 1997. When Tony Blair came to power he said he would reduce this bill but Labour kept running from the potential vote-losing policy.
This figure is a wake-up call. This level of housing benefit has increased during one of the most intensive booms this country has ever seen to a level where a huge proportion of the population rely on it for survival. With the economy in the state it is in, this figure will probably rise. It will probably be worse when you look at the wider picture of welfare dependency.
Successive governments have used the tax system to redistribute wealth to the extent that people now expect it. Despite their protestations, when the Tories get in I doubt much will change. Remember, it was at a level of Â£15Bn a year under the Tories before Labour came to power.
But applying a 2% inflation rate year on year for 12 years on Housing Benefit and that Â£15Bn should become a shade over Â£19Bn. So it’s not like it’s ballooned under Labour. But it should have reduced during the boom years. All that it did was help inflate the housing bubble.