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
‘Just’ Legislate? You’ve seen the House of Commons?
Well even if it was a case of ‘just’ legislate the government isn’t stocked with complete imbeciles. They will not surrender a stealth tax allowing them to recover money without a huge hue and cry. More to the point you are, once again, addressing symptoms not cause (like the government). Economics 101 would say that prices would adjust to once again be just affordable enough that people can just about struggle by if they cut back on, say, eating. A new, equally damaging, equilibrium would be established. After all, the landlords price their houses based not on their costs, but on supply and demand.
But the state never sees council tax. Only the local councils. It’s nothing to do with ‘the state’ as you seem to use the term. Like claiming you should reduce the amount of money schools charge for school meals to reduce the ‘taxes’ the ‘state’ recovers.
Indeed I do. I also agree the taxation is relatively too high. We differ on the solution. You seem to feel that less taxation is the way forward. I say seem as at one point you argue for less tax, and in the next greater governmental investment. I’m guessing you think they should borrow more? Yet you want interest rates to rise?
Perhaps you shouldn’t address each point seperately.
All right, lets look at those point by point suggestions
1. Cut taxes; marvelous idea! Lets take a government you agree is broke and reduce it’s income. That couldn’t have any negative consequences!
This countries finances are only just recovering somewhat, not nearly as much as the headlines lead you to believe. With China slowing down, EU imports still down to a trickle and a shaky US economy now is NOT the time to be playing with the taxes.
2. Regulate rents. Oh, I agree. Legislating the rental rates would be a disaster.
3. Yes. The state IS bankrupt. A point you should also bear in mind for some of your arguments.
Building is done by more groups than the State. It wasn’t the state who built the shard, nor the associated ‘cheap’ housing (a legislative solution to the lack of cheap housing). Perhaps some legislative encourage to further property investment would be a good way forward?
4. Decrease demand
I suspect this means you are anti-eu? We can’t just chuck the people we don’t like in our country out under EU law (nor under international law, but thats harder to enfore). We CAN discourage low-skilled immigrants, but under EU law, if they are EU citizens we can’t completely stop them.
Race doesn’t come into. EU citizens have the right to roam. We are, essentially, paying the price for English (thanks to the British Empire) being the most widely spoken language in the world. Otherwise I suspect everyone would be in Germany; an economically far stronger country at the moment.
OldLb
Local government is part of the state. The key word is government. It’s council tax. Its a tax
1. That couldn’t have any negative consequences! Cut taxes.
It has lots of beneficial effects too. People like Katheryn can then afford more things like housing, or do you ignore the huge negative effects of tax on people?
2. We’re in agreement.
3. Bankrupt.
I doubt you realise by how much its bankrupt. Debts are over 8 trillion when you include the pensions.
Now the problem that arises there, is that by and large, the debts are pensions. Either directly, such as the state pension and civil service pensions, or indirectly via pension funds.
Defaults there are disasterous.
4. I’m not anti free markets, I’m anti the corrupt EU. It won’t reform so its time to leave.
“”””””
We can’t just chuck the people we don’t like in our country out under EU law
“”””2”
Oh yes we.can. What you are referring to is this bit.
Freedom of movement of people, goods, services and capital. Hence your claim, we can’t stop the movement of people. Except its not enshirned in EU law is it? Look at Cyprus. Freedom of movement of capital? Nope, EU Troika stopped that. So its optional under EU law.
The UK needs to accept people who are beneficial to the UK, and reject those that are not. ie. Those who don’t pay 12K plus in taxes (24K a year if you include pensions)
blarg1987
if that is a general comment about the above fair enough, howeevr I did not say or imply beveridge in my comment.
OldLb
It was Jacko who commented on Beveridge’s ideas of mass sterlisation of the poor.
Now I think that’s wrong.
What should happen is that people should be forced to save for bad times and their retirement. Their NI should go into a fund in their name. Then if they need benefits they have to spend that first. If they run out of cash, then we all help but at levels way below current welfare. The exception being those who are genuinely disabled.
That way the get a kid to get a council flat doesn’t work. And before you say it doesn’t exist, I’ve seen it first hand on multiple occasions.
John
Oh it exists, although I think in most cases it’s not they get a kid to get a flat, it’s they have no reason to NOT get a kid, so don’t worry about it either way.
Addressing your idea, it seems like you are advocating an increase in NI contributions overall; one part to go to the government, one part to go into legislated and enforced savings administrered by the government. Is this accurate?