Dunce’s cap

If history repeats itself, first as tragedy and then as farce, then the politicians seem intent on doing both at the same time with the benefit cap.

This weekend work and pensions secretary Iain Duncan Smith and his Labour shadow Liam Byrne compete with each other to demonstrate either complete ignorance of their brief or a cynical disregard for the facts. Or both.

Byrne kicked off on Saturday by accusing the Conservatives of ‘playing politics’ with the benefits cap. In piece for the Conservative-supporting Daily Telegraph – no hint of playing politics there - he set out Labour’s case for agreeing to the need for a cap in principle but adapting the system with a series of regional caps that could take account of differing housing costs.

He argued: ‘Most of the benefits paid under the cap are for housing. But these are far higher in places like London than in other areas. While all that £500 a week might get you in central London is a one-bedroom apartment, in Rotherham, Yorkshire it would get you a six-bedroom house. How can a “one-size-fits-all” cap be fair to working people in both London and Rotherham?’

All very reasonable, you might think. Except that housing benefit rates are already not just regionalised but localised in broad rental market areas and as anyone who reads Inside Housing knows only too well there are bedroom-size caps on what anyone can receive. The maximum for a one-bedroom flat anywhere in the country is not £500 a week but £250 a week. 

So Byrne was talking nonsense (and not for the first time) about a cap that is being imposed on top of a housing benefit system that has already been reformed. But he is not the only one.

On Sunday, Iain Duncan Smith appeared on the Andrew Marr Show and said that the government will look to reverse all its defeats in the Lords when the Welfare Reform Bill comes back to the Commons. You can watch from about 45 minutes in on iPlayer but you may want to move any heavy objects out of throwing range of your computer first.

Pressed by Marr about the cap and the Labour plan, IDS said: ‘The overall level is critical because we’ve got some people living in London in some cases in flats that are costing over £100,000 a year in rent. I know that’s at the extreme but that’s the kind of nonsense we got into under the last government. So it’s important we settle the London issue.’

That line about people on £100,000 a year has been trotted out again and again. The amount paid to the landlords of five families in London has been a devastatingly effective weapon in the debate on welfare reform. 

Except of course that the bedroom caps that IDS himself introduced mean that the maximum that anyone can now receive in housing benefit is £400 a week or £20,800 a year.

In fairness, Byrne did a rather better job of explaining Labour’s position on Murnaghan on Sky on Sunday and IDS did signal that there would be concessions when the Bill returns to the Commons this week. ‘I’ve always been clear from when I made the speech at third reading that we will be looking at transitional measures and where there are people falling out of work we will be looking at grace periods,’ he said.

However, with even some Labour MPs arguing that the cap should be set lower than £26,000, the debate continues to take place in ignorance or disregard of the facts. Little wonder that there is overwhelming public support for the apparently fair proposition that nobody should receive more on benefit than the average amount earned by someone in work. Even as the Lords were voting to exclude child benefit from the cap last week, Lib Dem peer Lord Kirkwood was virtually alone in declaring that he opposed the cap in principle because it distorts the whole basis of the benefit system.

As I’ve argued before, the apparently simple logic for ‘fairness’ that has built a seemingly unstoppable momentum behind the cap is deeply flawed. For starters, that ‘hard-working family’ earning £26,000 a year may well also be receiving thousands of pounds in housing benefit, child benefit, working tax credit and tax credit.

If you still disagree, you might want to read this brilliant blog by Declan Gaffney first about the ‘bait-and-switch’ tactics employed by ministers: the seemingly pragmatic principle that is based on a rigged comparison. Or take a look at this blog by Alex Marsh on the way that ministers have framed the narrative behind the cap by creating division and sowing dischord.

Gaffney argues that ‘the only truly honest proponents of the benefit cap are those who are too ignorant or too far out of the loop to be party to the backroom consensus: the only truly honest critics are those who refuse to say they support it in principle’. 

That backroom consensus sees that the political impetus behind the cap is so strong that it is better to accept false arguments in a pragmatic bid to prevent some of the most arbitrary impacts of the cap. ‘But there are costs attached to this strategy, in terms of the quality of political debate and more generally in the endorsement it gives to a big untruth about the social security system and those who are relying on it. On balance, I think the latter considerations should win out. A little dishonesty only helps if you’ve already decided to go along with the big lie.’

Marsh notes the way the argument has been framed by setting claimants against ‘hard working families’ while ignoring the fact that poverty is dynamic and people’s circumstances change. ‘Yesterday they were the “hard working families” that politicians are so concerned about and so in favour of. Then their luck changed. They haven’t suddenly become benefit-scrounging pondlife overnight. Yet the government proposes to penalise many of them further for their misfortune by rendering them unable to afford to stay in their homes.’

The consequences of all this will be felt not just by claimants and hard-working families and not just in the welfare system. More later on the impact of welfare reform on housing and a report out today from the CASE group of housing associations.