I don’t want to write a blog about the benefits cap. It would be a very easy thing to do. I could point out that, while £26,000 a year of course sounds like a lot of money, it doesn’t go very far when rents in London and the south east are so high.
Or raise concerns about the Prime Minister’s claim that the cap has created a “stampede to the Job Centre”.
But I don’t want to do that, because the public debate on welfare shouldn’t be about the benefit cap. The Prime Minister has said that the Conservatives’ plans to lower the cap to £23,000 if re-elected ‘tells you everything you need to know about our values”; but a debate focused on a narrow and arbitrary cut off point (such as Labour’s suggestion to appoint a Commission to set the level of the cap) means we duck the real debate on welfare reform entirely.
Counterproductively it also gives the impression that the majority of households needing support are receiving anything close to £26,000 a year. In fact less than one per cent of the housing benefit caseload were capped as of last summer. Lowering the cap to £23,000 will draw in more families in the high rent areas of London and the south east (and is concerning for that reason), but it’s still establishing an income cut off far above that received by most people supported by the safety net.
And therein perhaps lays the appeal of the cap for the Government. We know that the public do support the welfare state in principle, but have serious concerns about some perceived excesses and perverse incentives. We also know that most people, while supporting the idea of reform, get very nervous when the impacts begin to make themselves known. For example very high initial support for the cap drops considerably if people think affected households will have to move area.
But, by restricting the cap to a small number of households, the Government can be relatively confident that the average person won’t have a friend or neighbour who finds themselves adversely affected. The cap remains an abstract and narrow debate about “our values” without having to tell the stories of those impacted.
And the truth is we do need an urgent debate about our values, but we need to have it on much broader terms. The Chancellor has identified the need for an additional £12 billion in welfare savings over the first two years of the next parliament. It’s perhaps hard to appreciate just what this would entail. The Emergency Budget in 2010 set out plans for savings worth £18 billion over the entire period to 2014-15. This resulted in a series of cuts to housing benefit – including the controversial bedroom tax, but also severe cutbacks to Local Housing Allowance which have created a quiet crisis for those trying to rent privately. During this period any easy savings that could be made (and MPs may now laugh hollowly at the idea the bedroom tax was easy) were made. Further cuts would require more drastic reform.
The Prime Minister has already signalled that pensioner benefits will remain protected under a future Conservative government. This is problematic if you have a Treasury intent on large savings, as spending on pensioners accounts for half the welfare bill. The cuts announced yesterday – £135 million from lowering the benefit cap and £120 million from withdrawing housing benefit from 18-21-year-olds – would barely make a dent in the £12 billion. And what’s more the Prime Minister has already said the savings would be redirected into apprenticeship schemes, suggesting the whole £12 billion is still to find.
Making savings on this scale would require some radical changes to the way in which the government supports families on low incomes. And that means we need to have an open debate about our values, as well as looking seriously at the nature of need and risk in the 21st century to make sure we’re crafting a safety net that is fit for modern lives. If any future government is going to claim a mandate for large and sweeping cutbacks then it is essential that this is off the back of an honest debate, not a proxy war fought over the totem of £26,000. It cannot be legitimate that a benefit cap that saves just £135 million a year is used to justify sweeping cuts to young people, working families, homeless households and many more.