Why the cap doesn't fit.

Considering that I could not bring myself to vote for Labour in this year's General Election because of its weakness in attacking the Tories' 'welfare reforms', and particularly its enthusiasm for leaving EEA migrants and their families in destitution - for they are often women with dependent children - I found it staggering when Harriet Harman lamented 'Labour was seen as supporting “people on benefits” but not those who “work hard.”' 

Labour may have been portrayed as doing so in a hostile press, just as they are always portrayed as 'soft' on immigration, defence and public spending, but to those of us in the business of benefit advice, there was no such impression.  We were crying out for them to stop singing the Tories' tune on austerity.  Tomorrow, when the Government's latest 'welfare reform' bill reaches the Commons, they have another opportunity.

Sadly, I suspect Labour are prepared to throw benefit claimants under the metaphorical bus of Osborne's £12bn cuts, rather than have a principled debate about Social Security.  Already, there is a cross-party acceptance of the Benefit Cap and a willingness to see it lowered, despite the fact that a £23,000 cap cuts into the income of even one and two child families in London, and a £20,000 cap inflicts similar hardship right across the country.  Many of the families affected may be unable to seek work due to sickness, caring responsibilities or bereavement, as neither assessment rate or 'WRAG' level ESA, Carer's Allowance nor bereavement benefits are disregarded.  Those who can seek work are unlikely to find it easier when they are spending more time haggling for Foodbank vouchers.


The 'benefit cap' concept isn't just twisted ideology - in many cases, it's bad economics too.  It has the perverse effect of keeping parents with children apart, who might otherwise live together in a shared household.  Even in cheap-to-rent Stoke-on-Trent, two lone parents, each with two children, will get about £350 per week each in benefits to support themselves and their children, and to cover their rent and council tax.  Letting them live together as a couple saves the state, and the claimants themselves, one set of housing costs and a further £30 from combining the adults' personal allowances, reducing the £700 'benefits bill' to the taxpayer by around £180 per week.  Impose a cap of £385 on their joint benefit income - which is what happens with a £20,000 limit - and you're effectively asking one adult to support the other and two additional children on just £25 more per week. 


That simply isn't possible and, as a consequence, they are likely to remain apart.  Impose the same cap on an existing four child family, and you can anticipate family breakdown under financial pressure, and thus a higher benefit bill, without starting to look at the long term financial consequences, or the human cost.  The cruelty of reducing benefits because a family has 'too many' children - children who may well have been conceived in better times, but almost never as a cynical calculation to increase benefit income - should see Labour shaming the Government and holding their own heads high regarding their past record of reducing child poverty, not running scared of it. 


The false narrative of the 'benefit cap' has been allowed to disguise a long-standing truth: there has always been a 'benefit cap'; fixed allowances for adults and children in particular circumstances, set at the minimum 'amount the government says you need to live on' and, even before Labour brought in Local Housing Allowance, there was provision to limit housing benefit to a level judged 'reasonable' by a rent officer.  The key principle was that no family's income should fall below that basic subsistence level. 


What of the argument that it 'isn't fair' for a 'hard-working family' to have a lower income than a 'family on benefits'?  This plainly ignores the point that if a claimant has a higher income than a worker, it is because the family of the first have greater needs.  Just because the 'average' worker earns less than some families receive in benefits, that does not prove benefit rates are too high.  A family with three children needs a higher income to sustain a decent standard of living than one with no kids, just as a family where someone is sick or disabled is likely to have higher costs than one where everyone is in good health.  That is not 'unfair'.  Indeed, once you count in the Tax Credits and Housing Benefit allowed for a working family - at least for now - it is almost impossible to contrive a situation where a family in work isn't better off - even pre-cap - than their unemployed equivalent.


Perhaps the Government know this to be a 'straw man' of an argument, as the proposed new legislation removes the connection between average earnings and the 'Benefit Cap' completely.  So much, then, for the apparent morality behind this policy, which now expects a family with, three, four, five or six children to raise them on the minimum income level for two and displaces families from their homes and neighbourhoods because these have become gentrified and unaffordable.


Is it to much to hope for serious and committed Opposition?

Family Planning

In another post, I lamented the Labour leadership candidates' apparent willingness to throw benefit claimants affected by the Benefit Cap 'under the bus', rather than challenge this despicable policy and the negative stereotypes wheeled out to justify it.  It now seems that, in Harriet Harman's Labour Party, future Tax Credit claimants with more than two children can go under her sickly pink battle bus too. 

Looking at the Benefit Cap, Channel 4 News helpfully showed us what these people look like, interviewing a single mother of eight and chiding her for her irresponsibility.  What they failed to explain was that a family with twice the number of parents and half the number of children face an identical cut in benefits.  Perhaps it is this style of reporting that convinces Harman and co that they cannot win an argument against benefit cuts, though I would argue that in truth, they have never tried to have that argument.

Let's consider the 'two child' limit.  It's popular because, when you talk about large families on benefits, people picture the single jobless mum with eight kids.  Show them instead a picture of a second-time-around suburban married couple, with three children between them from their previous relationships and the bouncing baby they had together before dad unexpectedly lost his well-paid job due to sickness, and all the talk of 'fairness to the taxpayer' starts to sound much more hollow. 

Then show them the woman fleeing a violent partner with the four children she had little choice about conceiving, or perhaps the divorced youth worker, happily keeping her three children without Tax Credits - until Council budget cuts meant her hours and take-home were slashed too?  The divorced and remarried father raising a family with his new wife, again with no state support, until a crisis meant the children from his first marriage had to come to live with dad?  From 2017, these would all be 'new' claims, either for Tax Credits or Universal Credit, with the two child limit applied.  Who's going to stay together?  Who's going to have to split up?  It would make compelling reality TV, wouldn't it?

And here's a classic 'poverty trap'.  A family currently getting Tax Credits for four children have the offer of much better paid work, which will lift them out of benefit entitlement altogether - while it lasts.  But it's a one year, fixed-term contract; at the end, if they need to claim CTC or UC again, they would be making a 'new' claim so will get no support for two of their children. 

It seems to me that Harman and her ilk continue to fall into the trap of dividing the population into 'workers' and 'claimants', failing to understand that very many of us, our friends and our families, will migrate between these states, whether we like it or not.   It isn't 'welfare' for 'them' - it's Social Security, for us all.