A cap on the total amount of benefits that people receive begins rolling out across England, Wales and Scotland today. The cap applies to those aged 16 to 64 and means that couples and lone parents will no longer receive more than £500 a week, with single people limited to a maximum of £350 a week.
A cap on the total amount of benefits that people receive begins rolling out across England, Wales and Scotland today. The cap applies to those aged 16 to 64 and means that couples and lone parents will no longer receive more than £500 a week, with single people limited to a maximum of £350 a week.
Extraordinarily popular, the policy is supported by some 70 per cent of the electorate, meaning one risks the charge of elitism in pointing out that in this instance the mass is probably of lower intelligence than its constituent parts.
The fact the benefit cap is popular in fact makes it all the more likely that it is bad policy; for what politician can resist pandering to the crowd when it chimes with their political leanings?
The problem is that the cap tackles a real problem from the wrong end.
Clearly it is undesirable for people to be claiming large amounts in benefits rather than earning their keep through a job. But when commentators and politicians wax lyrical about the amount of benefits being paid to individuals and families they are in reality talking about something quite different.
We, the taxpaper, are often not subsidising claimants at all, but rather handing large sums of money to private landlords who don’t particularly care whether it is the state or the individual who pays their rent – they know that benefit claimants will be conveniently on hand to take the flack which should by rights be directed at them.
Just this morning a new report came out detailing how a third of Britain is now effectively off-limits to lower income families because of the increasing cost of rent. This being the case, it shouldn’t be a surprise to learn that the benefits bill has also been increasing – the key point which the government has seemingly missed is that the state is subsidising landlords, rather than tenants.
Another non-sequitur is the idea that driving down the living standards of the unemployed is what makes work pay.
Ministers insist on repeating those three precious words: “making work pay”. It’s a clever rhetorical trick but it’s also an inversion of the truth. Reducing the living standards of the unemployed is not the same as ensuring that job pay what they should; and declining living standards for those without work is more likely to have a downward effect on the wages of those in work than it is to make anything pay.
In this sense, ‘making work pay’ is a bit like snatching away a homeless person’s cardbox box and claiming that in the process you’ve made mortgages more affordable for everyone else.
The benefit cap will also punitively hit families with lots of children; or more accurately, it will hit children who are unfortunate enough to be born into large families.
In the pilots for the cap around 80 per cent of those hit were single parent families. The idea that it is possible to put a set cap on how much money a family requires regardless of how many children there are also defies logic. More children cost more money, obviously.
It goes back to politics, though. It’s popular to be seen to be ‘cracking down’ on the entitlements of poor people with children, probably not unrelated to the fact that our society has always been terrified of the poor breeding too much.
We should, however, stop trying to think that there is some easy solution on child benefits. You either provide adequate money for parents to feed and clothe their children or you don’t. By paying less money to parents the government may think it is punishing them but it is in reality punishing their children.
The question then is this: is it ok to punish children for the behaviour of their parents or isn’t it?
Don’t hold your breath in waiting for the correct (and no doubt unpopular) answer.
One thing that is clear from all this is that the Tory view that rich people will not work unless they are given money whereas poor people will only do so if they are not is now a majority one.
In combating this the left has to be honest – it is a bad thing for people to be on benefits when they could be in work – but it also mustn’t sacrifice principles for popularity: the benefits bill is a consequence of much larger failures and won’t be significantly reduced by indulging narratives about “fecklessness”.
44 Responses to “The benefit cap tackles a real problem from the wrong end”
John
t’s not too high or too low. It’s the market price. That’s set by supply
and demand. Demand is so high because of 5 million migrants. Even
students coming here demand housing. End result because supply has gone
up, but not as fast, the price goes up. That’s economics 101.
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Yes. Another thing which is economics 101 is people go where there is work. Yet… they’re all in the SE. What does that tell you?
The article makes the comment that the SE is pricing out of Low-income families. Yet rent is meant to be the alternative to buying your own home. These are working people in some, if not many, cases. While still working they cannot afford their rent. Either, then, rent is too low, whether due to economics 101 or the fact landlords feel they can get away with it, or due to abnormally low wages or, more likely, a bit of both. The point is something must be done about it, and this government is unwilling to invest. Therefore the problem will become only more acute. It will not ‘work itself out’ any more than the skills gap our schools is producing ‘will work itself out’. In all likelihood this country will have to encourage skilled migrants to immigrate in order to fill the vacancies our own education fails spectacularly in creating a supply for.
So what does it matter if its economics 101? The price is too high. Market forces are, yet again, failing to address the underlying problem and, yet again, outside intervention is needed. Perhaps we should stop worshipping at the alter of capitalism and introduce a dose of common sense to the equation.
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Yep, its supply and demand. The way to deal with it is to cut demand.
There is another factor. What matters is take home pay. You’re paying
for property out of take home pay. Increase that and you might be able
to afford it. That means cutting taxes. I suspect your biggest expense
is the state. Total up all your taxes, employer’s NI too, IPT, VAT,
Income tax, Council tax, … That will be your biggest expense. How
about capping that?
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Oh dear. well lets look at last years YTD totals shall we? I’ll round the figures since I don’t want to post my finances publicly
Total YTD NI Net for two jobs: £1,000 (Low income band)
Total YTD IPT Net for two jobs: Nil
Total YTD VAT Net: I have very few ways of calculating this, but I’ll estimate it around £1,500
Total Income Tax: £1,750 (thanks to Freepay)
Total Council Tax: Nil
Biggest expense personally? NOT Council tax. I live with my parents, I don’t pay it. Since I don’t buy food I don’t pay VAT on that, SLASHING my VAT spending. I can, indeed, afford a place to rent however where I to do so I couldn’t afford anything else. Not Council tax, Not even food. Forget council tax, I couldn’t afford to feed myself.
You can claim, with accuracy, that costs are too high, supply is too low, but reducing the assistance given to those who struggle with those two simple facts, coupled with the third fact of wage freezes/reduction almost across the board does NOT help. Not anyone, including the government as it will, ultimately, reduce their tax income.
Thats economics 101
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OK, its free. Lets not pay for teachers, they must be free. Schools
maintenance happens by magic. No need to fund. Get real, education has a
cost. 99.3 billion. It’s coming out of people’s pockets. So whose
pockets? its not coming out of welfare claimants pockets is it? Other
people are funding their kids education on top of fund their health care
and all the other things too. When the left claims they are only get
60 quid a week, they are in fact costing other people tens of thousands.
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So only the rich get schooling? Einstein thanks you. As do many more geniuses I’m sure.
So you’ve enumerated the cost of education. Lets flip that round and look at the profit of education. A skilled worker earns (and pays tax) on salaries well in excess of £25k. I, myself, should be earning far more than that and would if the recession hadn’t stalled my career by 7 years. As it is I, like many others, are earning far less than I should. That doesn’t change the point that my education has raised my worth and my potential tax contribution.
So, make people pay for education. Especcially in the Southeast where so many are struggling to pay the rent this will inevitably lead to people simply pulling their kids from school. Can’t afford. They legally need to be in school? Well someone has to pay. Oh wait. Thats us again. So little has changed there. If we don’t have skilled workers increasing our tax contributions those who ARE skilled will pay a greater and greater proportion of their income, reducing their own tax contributions as a result.
Lowering the standard of education hurts everyone. Making people pay for education will simply reduce that amount of people getting a high standard of education.
Yes, education costs money. I never claimed it didn’t. I just don’t think making people pay at the point of delivery helps anyone. Quite the reverse. Once again, however, it is the system which is broken. Education should, as the name implies, educate people. Leading them to become productive members of society generating an ever greater amount of tax revenue. Rather than penalising them for being in education and not learning perhaps we should look at why they aren’t learning. Is it a cultural thing? Do they believe an education not a thing worth having? Is it a idealogical thing? Is it that, contrary to the theories of many a socialist, all children can NOT be taught equally the same and be equally as educated as a result? Is it a legistlative problem? Are we asking too much of our teachers, forcing them into focusing on the weakest members of their classes to raise their grades rather than encouraging the brighter children? What?
Again, you seem to like shooting the messenger
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The end result is they are bust. 1,2 trillion borrowing. 6.5 trillion pensions. 0.4 trillion PFI, ….
They can’t pay that on income of 0.6 trillion and spending of 0.722 trillion.
Ideology doesn’t matter. They have defrauded people out of lots of money.
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Oh indeed. They cannot continue to run at a deficit. I’m sure this current government is working hard to redu… oh. Well, maybe if we give them a few yea…. oh.
This government is either incapable of reducing said deficit or unwilling to attempt to do so. Either way reason is ruining this country. As for defraud… We voted them in. Unless, of course, you voted Labout. in which case your vote was wasted. Although in many wards your votes are wasted anyway as it’s always the same party voted in time and again due to the demographic delineation of the areas. But our voting system is a whole seperate issue.
Defrauding. How? The legislation is clearly announced, publicly available and up for discussion both with your local MP and in forums such as this one and likely many other ways I’m not aware of. Or do you mean that the this government misleads people? Well yes. Of course they do. This article, which sparked our debate, clearly states that this is so.
Clearly then the government needs either to reduce costs or increase revenue. Reducing housing benefits will not, I suspect, reduce costs any more than reducing unemployment benefit did. It just meant people could (and did) claim other benefits instead. Benefits which require people to administer (increasing costs). It’s the whole point of the universal credit system; have it all in one single, simple system as it requires less manpower. It’s a good idea. I just hope they don’t use it to reduce the amount of money awarded to those who need it as, sure as Politicions lie, they will simply claim on something else.
John
1. True. Bad tenants are something that needs to be addressed.
2. Thats far and away the sole cause. Why do so many stay in the SE? Why aren’t more houses being built? Why is there an excess of large multi-bedroomed properties?
3. The economy. Interest rates being raised increases the cost of borrowing money for the government. Financial crash nearly inevitable.
blarg1987
Beveridge?
OldLb
It’s simple. Just legislate.
Employer’s NI to be paid to the Employee, who then pays the state.
So the Employer is in exactly the same place.
Employee is in the same place.
State is in the same place – almost.
I say almost, because when people see the extent of taxation, they will get alarmed.
Council tax is the cost of the state. It’s a tax.
Add up all the taxes, and I bet Katheryns biggest expense will be government, and you’ve agreed. That’s just the point I was making.
So here are some choices for making housing more affordable.
1. Cut taxes. Then she has more money to spend on housing.
Entirely within the government’s control. No need to force anyone to do anything. They could do this tomorrow.
2. Regulate rents.
Force councils, housing associations, and landlords to cut rents. You have to do this to all landlords – EU law.
Look at regulated tenancies in New York for some of the consequences. End result, it will favour the rich renter in Knightsbridge more than the poor.
3. Increase supply.
Build lots of houses. Or force councils like Southwark to do something with the Heygate estate. Expensive and difficult. Remember the state is bankrupt.
4. Decrease demand.
The easiest. Remove low paid migrants and stop them coming. That creates jobs for the unemployed. Reduces demand on housing. The simple option. Reduces demand on government services. ie. Do you pay more tax than the average government spend? 12K a year. Yes – you are welcome. No, you are not and you have to leave. Simple non racist test.
OldLb
He was in favour of controlling the breeding class. H was a eugenicist.