Cloth Caps, Benefit Caps and the North/South Divide

I'm sure there are times when this blog appears to exist primarily to take pot shots at my local paper, and this post may appear one such salvo. 

Let's start with its resident 'humourist' looking at the very serious situation of a woman with three children told to move to Stoke-on-Trent as, thanks to the 'Benefit Cap', she will have to leave her north London home.  Entitled 'Stoke-on-Trent is not a dumping ground for Londoners' it starts by informing us 'A woman from London this week complained that being forced to move to the Potteries is inhumane. A bit rich from the city which gave us the jellied eel.' 

The same gift for wit and cultural sensitivity shines through as the article continues:

'I can imagine too that, in her head, Ms Bruce-Annan is wondering whether the city can match the multi-cultural mix of the capital. She should be reassured that, at any one time, there's at least three lots of gypsy caravans occupying green spaces within its boundaries...'

and

'Of course, Stoke-on-Trent wouldn't wish to be overrun by Londoners. No-one wants to see the Stanley Matthews statue replaced by one of Dennis Wise. And few of us would wish our local pub despoiled by 25 gin-sodden southerners stood round an upright piano singing Any Old Iron.'

Depressingly, someone was indeed paid to write this - and without having to use a Tardis to return to a 1970s variety show to collect the cheque.  http://www.stokesentinel.co.uk/John-Woodhouse-Stoke-Trent-dumping-ground/story-22838895-detail/story.html

The 'serious' news item on this story was little better, treating it as if the woman herself had 'dissed' Stoke-on-Trent and seeking to reassure her it was a wonderful and welcoming place, while giving no explanation of how the 'Benefit Cap' of an apparently generous £500 per week, coupled with obscenely high London rents, was forcing her to move to a city she had never heard of.  Predictable consequence - a troll-fest of cliches about lone parents on benefits, a sprinkling of racism once a photograph showing her to be black appeared and any impression of Stoke-on-Trent being a friendly, welcoming city obliterated by its own knuckle-dragging army of keyboard warriors.

Meanwhile, 'darn sarf', at least the political context got a fairer airing, though 'Things to do and see... it’s a 28 minutes drive to the Alton Towers theme park.  Surrounding area? Mainly just the Alton Towers theme park,' is perhaps the faintest praise dished out to what is actually a great part of the world to live in (this from a southern exile) since the Hitchhiker's Guide summed up planet Earth in two words.  So, better than the Sentinel's approach, but 'could do better.'  http://www.getwestlondon.co.uk/news/local-news/mother-dealt-inhumane-ultimatum-council-7651899

As none of these august publications have explained it, here's a brief guide to the 'benefit cap', not to be confused with the 'welfare cap' on overall Social Security spending. 

In a nutshell, exempting some claimants in receipt of certain disability benefits, it limits the total amount that can be paid in benefits each week to no more than £350 for a single person and £500 for a couple or family, including housing costs.  The justification is that the average wage of £26,000 amounts to no more than £500 per week, therefore those who don't work, and don't have to contend with serious disabilities, shouldn't receive more than this.  A deceptively simple premise which sounds fair (as indeed does most effective propaganda), especially in this part of the world where £500 per week is a damned good wage.  Or it does, until you break it down a bit.

Do all families 'on benefits' get £500 per week?  Of course not!  Excluding housing costs, a lone parent with three children and no other income (like the woman facing rehousing in Stoke) would get £72.40 income support for the adult, plus £169.28 child tax credit and £47.60 child benefit.  Letter after letter will tell her 'this is the amount the Government says you need to live on.'  A total of £289.28.   The maximum she could receive in housing benefit for a private tenancy in this area would be £109.62 per week, taking the total to £398.90, plus 70% of her Council Tax bill.  But at no point does she have anything like £500 to spend on herself and her children.

If this person was instead in paid work and earning £26,000 gross per annum, she could still bring home more than her benefits after tax and NI, and qualify for £105.75 child tax credit every week and her child benefit, and in her first year back to work, it would be more than that.  In Stoke-on-Trent, her rent would be too low for her to receive housing benefit and she would have her full Council Tax to pay.  Until the present Government reduced the percentage to 70%, she would also have got 80% of any reasonable childcare costs covered by working tax credit.  How cutting support for childcare costs is 'making work pay' escapes me, but in the Secretary of State's world I'm sure it makes perfect sense. 

But I digress. 

Let's run those sums again with some London rents.  Harrow's Local Housing Allowance for a three bedroom house is exactly £300 per week, the sort of happy coincidence that usually only happens in made up examples, so without the 'benefit cap', our lone parent with three children would get £289.28 benefits for herself and her children, plus £300 housing benefit (all of which would go out in rent) - a total of £589.28. 

The 'benefit cap' limits what she gets to £500 per week, but does so by reducing housing benefit payments - shifting the perceived blame for the measure to the councils who administer HB and keeping the anger at arms length from the Government in the process.  So every week, her rent payments are £89.28 short.  Or, to put it another way, if she pays her full rent, her weekly disposable income is almost a third less than 'the amount the Government says you need to live on.'  It's more than the allowance she receives for keeping herself, as an adult, fed, clothed, clean and warm.  That is unsustainable.  It is 'inhumane'.

In work - again at £26,000 - our Londoner still gets her £105.75 tax credits and £47.60 child benefit, in addition to her wage, and she'll get housing benefit too.  On £300 per week rent, it works out at about £189 HB per week.  But at no point, either in Stoke or Harrow, is our 'worker' worse off than her counterpart on benefits.  I'm not saying it isn't possible when you start to take work-based expenses into account, but you don't make the worker better off by cutting the claimant's income - you make the system fairer by allowing the real costs of transport, work clothes, childcare, union subs etc to be disregarded as income when assessing in-work benefits. 

There is an argument that the worker isn't sufficiently better off, but taking money away from someone else does not actually make them a penny richer.  It merely makes the workless person poorer and, as driving down benefits drives down wages, neither actually wins in the long run.

The immediate consequence of this policy for someone like Cecilia Bruce-Annan and her children isn't just to uproot them from a neighbourhood they know and send them 200 miles north to live among strangers, some of whom have already formed their hostile opinions based on a half-telling of her story in the local press.  It also moves them away from a location where there are more job opportunities, and at a higher typical rate of pay, than there are in Stoke.  In the long run, there is a strong possibility it will cost the state more in benefits, as Ms Bruce-Annan may well be jobless for longer here than in Harrow and whatever is 'saved' now on her housing costs will be lost in long-term tax credits to compensate for the local lousy wages.  What price too the disruption to her children's education, the loss of the family's circle of friends?  Talk about knowing the price of everything and the value of nothing!

Of course the sensible way to solve this isn't a 'benefit cap' but a 'rent cap', which would take the steam out of the Capital's run-away house price inflation (predicted today at a possible 26% this year) and help benefit claimants and non-claimants alike, though from the comments in the papers, you'd think the reintroduction of the Workhouse was the preferred option.

Does anyone else understand what the benefit cap is and why it's unfair?  Actually, they do.  Unsurprisingly, it took a local Green to write to the Sentinel with what we might once have hoped a local Labour politician would have the guts to say.

'The 'bedroom tax' and other reforms conducted in the name of austerity have created a gulf of inequality that may be impossible to bridge. They have hammered mercilessly the poorest and most vulnerable members of society, whilst large corporations and wealthy individuals are allowed to evade tax with impunity. Even though the sum lost to the Treasury as a result dwarfs spending on welfare.'  

The full letter is here: http://www.stokesentinel.co.uk/Situation-makes-Stoke-Trent-inhumane-Cecilia/story-22831018-detail/story.html

After a barnstorming performance at a public meeting on the threatened privatisation of local cancer services, it really won't take much more from the Greens for my party membership fee to be in the post.

Bring back Atos...?

Few tears were shed when Atos Origen decided to take an early exit from their Employment and Support Allowance contract with HM Government.  While we all knew that this didn't address the fundamental flaws of the Work Capability Assessment - the bizarrely strict test to determine who has 'limited capability for work' and who does not - it was still good to see the back of a spectacularly incompetent contractor.  Atos are now effectively - or ineffectively - working out their notice and, while we wait for their successors to be appointed, the process of assessing and reassessing claimants grinds all the more slowly. 

If you are an existing ESA recipient, already receiving benefit at the longer-term 'Work-Related Activity Group' (WRAG) rate or 'Support Group' rate, this may very well be - in 1066 and All That terms - a GOOD THING.  For the time being, you are relatively safe.  Ditto if you are part of the last cohort of Incapacity Benefit and Income Support recipients who might not pass the hated WCA and thus are better off where you are.

But the imminent demise of Atos isn't joyous news for all.  It's certainly a mixed blessing for new claimants.  Those likely to fall short of the magic 15 point threshold for ESA entitlement may be quite happy to settle for the 'assessment rate' indefinitely - in effect, getting Jobseeker's Allowance without the hassle of jobseeking and hazard of sanctions. 

Less happy the claimant with a sound case for one of the higher rates.  They'll be stuck on the assessment rate, £28 per week or more short of their proper entitlement long after the start of the 14th week of their claim, when they should have started to receive whichever additional component suits their circumstances.  When they are eventually assessed they'll get their arrears but in the meanwhile, they might very well suffer severe financial hardship.  Here in Stoke-on-Trent, they could incur Court costs and bailiffs fees being chased for 30% of their Council Tax, when a timely award of the WRAG rate would give them the money to pay it; an award at the Support Group rate would exempt them.

One group of new claimants may never receive their full entitlement.  Consider this example:

Jack is a self-employed window-cleaner.  He breaks a leg and wrist in an unlucky fall from his ladder one day; both are quite complex fractures and it will be some months before he's able to return to work.  He makes a claim for ESA and starts to receive the 'assessment rate' of £72.40 per week.  13 weeks on, he's still in plaster.  During this time he should have his face-to-face assessment and if this is done properly (humour me...) should comfortably score 15 points plus.  His benefit should then increase by £28 per week, or possibly more. 

Instead, there's no sign of an assessment by week 14, so he stays on the 'assessment rate' until he can be seen by a medical services (Atos) 'health care professional'.  His appointment eventually comes through more than eight months into his claim.  At this point Jack is out of plaster at last and, apart from a few follow-up physio appintments, is almost ready to climb his ladder again. 

The HCP does an examination of the claimant as he presents on the day, as the law requires, and finds no descriptors apply.  A Decision Maker at the DWP considers the report, awards no points and finds Jack fit for work.  Jack's ESA ceases.  As no account can be taken of the months when he was incapacitated, he misses out on several hundred pounds due to an administrative and procedural glitch completely beyond his control.  Because most people don't understand these arcane bits of Social Security law, he probably doesn't even know he's missed out, so won't complain or take advice.

The same problem arises for anyone who recovers, or stops claiming ESA, for another reason between the end of week 14 and the date set for their face-to-face assessment.  There is no mechanism to consider their health retrospectively because, when the regulations were drafted, there was every expectation that claimants would have their WCA well within the 13 week assessment period.

If this sounds like you or someone you know, perhaps now would be a good time to contact your MP and ask when this broken system is going to be fixed, because it will get worse before it gets better.  I don't really think we'll be saying 'bring back Atos!', but at least you could appeal a bad decision based on a poor medical assessment.  I don't know how we fix this.