Housing allowances in comparative perspective, The Policy Press, Bristol, 2007, 340pp, hardback, 1 86134 754 1, £65,
Housing and the new welfare state, Ashgate, Aldershot, 2007, 224pp, hardback, 0 7546 4440 8, £55.
These two books look at the various systems for subsidising rents and home ownership in different countries. Kemp looks at Europe, North America, Australia and New Zealand. Groves looks at the East Asian ‘tiger’ countries with one chapter comparing these countries’ systems with the UK and Europe.
Most of the chapters in each book are written by a researcher or expert from the country concerned, and both books are by their very nature highly detailed and technical. However, either book would be invaluable for somebody who needs a decent international overview.
It is very difficult to summarise either book, short of saying that the various systems are wildly different, with different underlying aims and outcomes. It is fair to say, however, that no country seems to have found the ‘best’ way of ensuring that even low income households have access to a reasonable standard of housing at a reasonable overall cost, despite a considerable amount of chopping and changing within most of the countries.
The reviewer is only familiar with Housing Benefit in the UK (and to a lesser extent, Germany) so it is instructive to compare the chapter in each book that looks at the UK.
Kemp look at the UK in Chapter 6. He gives a brief overview of our benefits system, repeating the government’s claim that ‘The tax credit for people with low earnings … and a national minimum wage were both introduced to help make work pay’. As an aside, it is of course the position of the Citizen’s Income Trust that the best way of making work pay is to reduce the marginal withdrawal rate.
Kemp traces the history of housing benefit, rent controls, and subsidies for home-ownership in the tax and welfare system from 1915 onwards. Particularly interesting is his point that ‘the means tested [non-contributory] assistance scheme was more generous that the [contributory] insurance scheme. National Insurance recipients with high rent were able to top up their incomes by applying for National Assistance to cover the difference’. Also telling is ‘The way in which Housing Benefit is calculated is relatively simple. Tenants whose income is more than the social assistance benefit rates are entitled to a Housing Benefit payments that is equal to their eligible rent minus 65% of the difference between their net income and the social assistance benefit rates’. Kemp does not mention until later on that the eligibility criteria for and way in which Council Tax Benefit is calculated are very similar, and that this is withdrawn at a further 20% of a claimants income above the same basic benefit levels.
Kemp points out that ‘Housing Benefit … is also an important contributor to their landlords’ rental income stream … cuts in Housing Benefit will consequently have an adverse impact, not only on direct recipients but also indirectly on their landlords … For this reason, landlords and the banks that lend mortgages to them have been very wary or critical of proposals to cut or reform Housing Benefit.’
Kemp also goes into some detail on the new scheme of a Local Housing Allowance for private tenants and the first evaluations of pilot areas, concluding that ‘the evidence so far suggests that the LHA represents an important, but not particularly marked, improvement on the previous Housing Benefit scheme for private tenants’.
Groves takes a briefer and more general look at ‘Housing in the British welfare state’ in Chapter 8.
Groves takes a wider view than Kemp and also looks at the way in which successive governments have reduced the generosity of old age pensions and encouraged older people to finance their retirement by equity release schemes, which he says quite rightly is relying on the ‘lottery of the market’. He also explains Thatcher’s ‘Right to buy’ and the current government’s ideas on asset-based welfare. (‘Right to buy’ is now known as ‘Choice to own’).
Groves looks at state support for housing in Singapore, Hong Kong, South Korea, Japan, China and Taiwan. The main emphasis in these countries seem to be encouraging home ownership, via compulsory savings schemes and subsidies rather than subsidising poorer tenants.
Of the two books, Kemp provides the far better overview in Chapter 1. Groves’ first chapter seems to consist largely of a summary of other research into housing and welfare, using expressions such as ‘decommodification’ and ‘corporatist or egalitarian redistributive models’, ‘welfare states emerge as a result of universal physiological forces, technological determinism or as a consequence of industrialisation’. Kemp, on the other hand, takes much greater pains to put ‘Housing allowance in context’.
In summary, both books are lovingly researched and meticulously presented, each chapter is a goldmine of information into the various systems, their costs, advantages and pitfalls, however neither book comes to a conclusion as to what the best system might be. Readers of either book will still have to make up their own minds!
Mark Wadsworth