The benefit cap: Popular, but ill-judged and supported by lies

Mark Hoban has a history of lying to the people, as the above image shows. How can we believe what he's trying to tell us about the benefit cap?

Mark Hoban has a history of lying to the people, as the above image shows. How can we believe what he’s trying to tell us about the benefit cap?

What a shame that so many Vox Political articles this week are on the same subject: Your Government Is Lying To You.

Today, the lies are clustered around the benefit cap, which has been launched this week – in only four London boroughs, rather than nationally.

Perhaps the Tory-led Coalition government already has an inkling that it got its sums wrong?

Nevertheless, David Cameron’s Twitter feed announced to the world that yesterday (April 15) was “A big day for welfare reform as we pilot a cap on benefits equal to the average wage. Amazingly Labour oppose it.”

Two sentences, two untruths.

Firstly, let’s look at the average amounts that families bring into their homes. While it may be true that the average family wage is £26,000 per year – equal to the £500 per week at which benefits will be capped – it is not true that this is the total amount of income such a working family may receive. A couple with four children earning that much after tax, with rent and council tax liabilities of £400 a week would get around £15,000 a year in housing benefit and council tax support, £3,146 in child benefit and more than £4,000 in tax credits: £48,146.

That’s not an average; just an example. The average income of a working family is, we are told, £31,500, or £605 per week, with a little change left over. So there is a huge difference between what Mr Cameron says the average working family takes home, and what the average working family in fact takes home.

If benefits were capped at this figure, though, most unemployed families would already be receiving less, so there is no saving to be made – and the whole point of this, from the Coalition’s point of view, is to cut the benefit bill. It isn’t about fairness at all.

The second lie is that Labour opposes it. In fact, the Labour Party agrees that there should be a limit on the amount of benefit working-age people may receive – for exactly the same reason the Coalition keeps using: Limiting benefits is an incentive to seek work.

Obviously, employment should pay more. If people have a particular way of life and they want it to continue, then they should earn it. There is cross-party support for that principle and, by stating otherwise, Mr Cameron is feeding falsehoods to the public, trying to create a false impression.

Is he doing this because this is his most popular policy (wrongly so, for reasons we’ll address shortly) and he doesn’t want to admit that Labour would have carried it through as well?

Of course, there would have been one difference: The Labour version would have been fair.

Note that the government is also lying about the benefits affected by the cap. It says Jobseekers’ Allowance, Income Support, Child and Housing Benefit all count towards it, but not disability benefits.

What is Employment and Support Allowance if it isn’t a disability benefit, then? ESA is also counted when calculating whether a claimant’s or family’s benefits should be capped. It is only provided to people with a long-term sickness or disability.

So: Labour supports the benefit cap and would probably have brought it in. But Labour would have installed the cap on a regional basis, taking account of variations in the cost of living across the country. Labour said this would help ensure that the policy works in practice.

As long ago as January last year, Labour was saying that the version of the policy that has now come into effect would backfire.

When rolled out nationally, it is expected to save £110 million per year from the £201 billion benefits bill. For the drop-in-the-ocean effect it will have, we can see that it is already disproportionately popular. But consider the knock-on effects and it becomes clear that the benefit cap may cost the taxpayer much more than leaving matters as they were!

How much will local authorities have to pay on homelessness and housing families in temporary accommodation? Most out-of-work families with four children, and all those with five or more, will be pushed into poverty – Department for Work and Pensions figures show that the poverty threshold for a non-working family with four children (two of whom are over 14) is £26,566 – £566 more than the cap.

“Serves them right for having so many children while on benefits,” you might say. What if they weren’t on benefits when they had the children? The UK has been plunged into a recession after a period of full employment (more or less) as defined back in the 1940s, when the original Welfare State was created. The number of families forced into unemployment has grown massively as a result of the credit crunch and banking crisis, and they have been kept there by the policies of the Coalition government, which continue to depress the economy and prevent growth. Anybody can fall on hard times unexpectedly and it is one of the principle injustices of the current government that a person can be labelled a “striver” one day, lose their job the next and instantly become a “skiver” in the opinion of, among others, Daily Mail readers.

Of course the DWP has not released any estimates of the increase in poverty – especially child poverty – but a leaked government analysis suggests around 100,000 children would be impoverished once the cap is introduced nationally.

The first benefit to be trimmed, if families’ or individuals’ current benefit exceeds the limit and is deemed to need capping, is Housing Benefit (or, let’s be accurate here, Landlord Subsidy). It is expected that 40,000 families will be unable to pay their rent and will become homeless. That’s a lot of work for local authorities, who will have to try to find reasonable accommodation for them while paying the (higher) cost of putting them up in bed-and-breakfasts.

Many families may break up in response to the pressures. Parents who live separately and divide the residency of their children between them will be able to claim up to £1,000 a week in benefits, while a couple living together will only be able to claim £500. Of course, this would completely wipe out any saving the government would have made on that family and in fact would cost £13,000 more every year, per family.

Finally, Mark Hoban was on Radio 4’s Today programme, telling the nation that the best way to avoid the benefit cap is “to move into work” – completely ignoring the fact that there is hardly any work available. When thousands of people apply for a single job in a coffee house, as happened within the last few weeks, you know the employment situation is dire. Perhaps the government is playing fast and loose with its increased employment figures as well?

So which do you believe – the comfortable lie that the benefit cap ensures people in work earn more than those on benefits (there was never any danger of the situation being otherwise), or the unpalatable truth that the government’s imbecilic handling of the situation will cost us all many millions more in damage control when it all goes wrong?

12 thoughts on “The benefit cap: Popular, but ill-judged and supported by lies

  1. Jj

    The sad part is, this ridiculous, opaque nonsense actually washes with a lot of people.
    Punishing the poor makes an acceptable alternative to raising living standards for those with little earning power.

    I’m just waiting for the day when something clicks in the populace. When they stop looking down at that poor person and they face upwards and see the face of luxury and comfort, grinning back down with familiar scorn and realise ‘you’re to blame’.

  2. Phil The Folk

    In Westminster up untill July last year, they were only paying out £6,000 per month for temporary accomodation. Now they are are paying out over £2,000,000 per month, so case proved Mike i think? But the Housing Minister had the nerve to come on TV and tell everyone that Westminster Council was breaking the law by having people in temp’ accomodation for more than six weeks, completely ignoring the fact that his policies had created the situation in the first place!

    1. Junior

      Member for West End Ward
      Cabinet Member for Housing and Property

      45 Welbeck Street, London , W1G 8DZ
      Tel: 020 7224 4545 / Fax: 020 7224 5151 / Mob: 07747 601812

      I have has to write to him on a number of occassion. Along with

      paul dimoldenberg ([email protected])

      Due to Mark Field does answer me (his to busy write article for Guardian and other earning a fee

  3. Angie

    can someone please tell me where they come up with the salary of £26,000 per year
    I was working full time and I only got £12.000 a year a nursing assistant only get £14.000 so where do they get this magical figure of £26.000 from.

    1. Mike Sivier

      It’s £26,000 for families (£500 per week), £18,200 for single people (£350 per week). As you can tell from the article, there’s no real justification for it.

  4. Ant Lea

    Come of it, medical lay people,medical assistants,retired GP’s,many with less than five years medical training,asking Professional consultants/surgeons indirectly on behalf of a government’s behalf.

    How does/can this make financial sense asking 1 professional then,getting 1 semi professional opinion’s on the professional’s specialist recommendations diagnosis and expertise’s.

    Then paying two people to do the same job.I presume privatization means waste and creating employment that does not need to exist as the framework and medical expertise already exist from NHS and not a private IT company.

    Could anyone guess the NHS and GP’s response too £110 million a year towards services and reform.

  5. Hu

    Hoban is a spectacular arsehole. Surely a better Tory must exist to act as IDS’ bully boy. Hoban seem to think if he talks quickly nobody will pick up on his lies. People like this have corrupted and polluted British politics possibly irretrievably. Sadly, because most newspaper editors can sell more papers by joining in with the witch-hunt currently focused on benefit claimants they turn a blind eye to government lies and so the liars get away with it.

  6. sylvanmoonscape

    I think that anyone who has more than two or three children before claiming any benefit and who then happens to fall on hard times and needs to claim benefits will be asked to get rid of a couple of the kids to bring their benefits within reason. It can be left up to them to decide which ones they dispose of: the littlest? (they don’t eat as much and so might be less costly to keep) or the girls? Or perhaps ATOS could devise an assessment specifically for this purpose. Whaddya think? Can’t say fairer than that.

    1. Phil The Folk

      You mean as in Monty Python’s The meaning of Life..”I’ll have to give you away for medical experiments! 😉

  7. burns

    hate this government there out of touch with the people who voted for them just do there own thing without a care people who are on benefits are not on a cushie thing I myself had to and it was awful no life at all just an exsistance theres no such thing anymore as a secure job or one of 40 hours a week so people have to rely on thease and this government know it hope for the sake of the uk they get voted out there a total disgrace out of touch greedy wasters there the scroungers…

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