Debate Magazine

Natalie Bennett on Top Form

Posted on the 24 February 2015 by Markwadsworth @Mark_Wadsworth

The BBC have put up a transcript of her car crash interview.
As to building more social housing, they both missed the point.
It doesn't really matter what they cost to build in £millions or £billions, the important consideration is whether the overall annualised cost (minus rental income) is less than paying Housing Benefit to private landlords.
Gov.uk says there are 1.7 million HB claimants renting from private landlords at a total cost of £9.32 billion a year = £105 a week average.
Councils can wangle land virtually for free, and the build cost for a small terraced house or a decent flat can't be more than the £60,000 figure she gave*. Let's say councils borrow at 3% over 25 years, that's loan repayments of £3,500 per unit per year plus £1,500 annual maintenance and running costs = £100 a week.
So even if councils allow people to occupy them rent free, it's still no more expensive than paying Housing Benefit.
If you factor in rental income of £80 a week (the average charged for social housing), it is a considerably better deal for councils, tenants and the taxpayer. And it's a considerably better deal for working private tenants who are not claiming HB because private sector rents will fall markedly and/or lots of landlords will sell up.
That woman is her own worst enemy. And I happen to know that she has been presented with itemised and robust calculations for paying for their suggested Citizen's Income; I accept that you can't her to remember the finer details but surely you can expect her to remember that it's all been worked out and costed?
If you join the dots, they can also claw back a lot of the Citizen's Income in rent, in other words you can choose between £72 a week cash or a roof over your head, however modest.
FFS.
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* Steven L points out in the comments that if the government spends money on having housing built, it claws back a fair bit of that (a third?) in CIS deductions, PAYE, corporation tax (housing is zero-rated for VAT).
So if it funds construction by borrowing, it is cash positive in the first few years. The 3% interest cost is further reduced by income tax thereon.
I cheerfully admit that £60,000 might be a bit on the low side and I did not factor in a cost for land. But all of these little adjustments net off to nil at worst, leaving the overall saving to the taxpayer intact.


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