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Benefit cap: in defiance of logic Benefit cap: in defiance of logic
(6 months later)
As George Osborne's benefit cap bites, he should count his lucky stars that in Britain – unlike in many democracies – primary legislation is not prone to being struck down by the courts. Many social security cuts may be inescapable, all are painful. This cap, however, is unique – in the mismatch between its claimed and its actual effect, in the deceit with which it is being peddled, and its failure to further any plainly stated objective. It is laced with improper purpose, and "so outrageous in its defiance of logic" – the test of unreasonableness the courts apply to regulation – that had it been made by ministerial order, it would surely be open to challenge as irrational.As George Osborne's benefit cap bites, he should count his lucky stars that in Britain – unlike in many democracies – primary legislation is not prone to being struck down by the courts. Many social security cuts may be inescapable, all are painful. This cap, however, is unique – in the mismatch between its claimed and its actual effect, in the deceit with which it is being peddled, and its failure to further any plainly stated objective. It is laced with improper purpose, and "so outrageous in its defiance of logic" – the test of unreasonableness the courts apply to regulation – that had it been made by ministerial order, it would surely be open to challenge as irrational.
As things stand, however, it is safely on to the statute book – and the court that counts is the court of public opinion, where it appears to be winning hands down. The chief principled opposition has come from the bishops, which hardly helps, but there is more to the cap's triumph. Right from the off, when the chancellor's wheeze emerged on the Tory conference platform, it has been sustained by two rhetorical questions that sound unanswerable – why should anyone not working bring in more than the typical £26,000 wage? And why should folk who don't toil be funded to live in homes that lowly grafters could never afford?As things stand, however, it is safely on to the statute book – and the court that counts is the court of public opinion, where it appears to be winning hands down. The chief principled opposition has come from the bishops, which hardly helps, but there is more to the cap's triumph. Right from the off, when the chancellor's wheeze emerged on the Tory conference platform, it has been sustained by two rhetorical questions that sound unanswerable – why should anyone not working bring in more than the typical £26,000 wage? And why should folk who don't toil be funded to live in homes that lowly grafters could never afford?
The response to both, though fiddly to explain, is that the alleged abominations are an illusion. There are state top-ups to low wages which already ensure take-home income is virtually always higher in work. One element of that top-up is housing benefit, which pays a sufficient contribution towards rent in any given home to ensure that working disposable incomes are higher – albeit sometimes only by a miserable margin. If the intricacies of social security tangles the argument, all hopes of sensible debate are blown out of the water by that eye-catching £26,000 figure, with its implication of slobs in string vests enjoying the comforts of salaried life on the sofas. In reality, in London – where the big payments are concentrated – most of the money disappears in rent before it is ever received; if you doubt it, consider that Westminster's standard rate for temporary accommodation is precisely £26,000 per year, leaving precisely zero left for everything else. Even when rents are lower, it is not of course £26,000 each – this is a policy targeted on big families, and for a couple with four kids the relevant figure is a less shocking £4,333 per head. Bean-counting by a respected LSE economist has shown that after essential bills some children will be left being raised a third-world-style stipend of 62p a day.The response to both, though fiddly to explain, is that the alleged abominations are an illusion. There are state top-ups to low wages which already ensure take-home income is virtually always higher in work. One element of that top-up is housing benefit, which pays a sufficient contribution towards rent in any given home to ensure that working disposable incomes are higher – albeit sometimes only by a miserable margin. If the intricacies of social security tangles the argument, all hopes of sensible debate are blown out of the water by that eye-catching £26,000 figure, with its implication of slobs in string vests enjoying the comforts of salaried life on the sofas. In reality, in London – where the big payments are concentrated – most of the money disappears in rent before it is ever received; if you doubt it, consider that Westminster's standard rate for temporary accommodation is precisely £26,000 per year, leaving precisely zero left for everything else. Even when rents are lower, it is not of course £26,000 each – this is a policy targeted on big families, and for a couple with four kids the relevant figure is a less shocking £4,333 per head. Bean-counting by a respected LSE economist has shown that after essential bills some children will be left being raised a third-world-style stipend of 62p a day.
If you had set out to make children poorer for being born into large families, then this might be a sensible way to do it; perhaps that is the objective, in which case it is an appalling breach of process that the government has never come out and said it. As things stand, mothers whom no one warned not to have a third or fourth baby will discover on the Monday morning after the birth that the consequence of the new life will be an arbitrary cut in living standards for their family. Other necessary ambitions – such as controlling overall expenditure, curbing rent subsidies in particular, and sharpening work incentives – could be and often are being pursued by other more narrowly tailored cuts. The cap will further these goals only modestly and inefficiently, contributing more materially to unintended outcomes such as marital breakdown – by punishing big families for sticking together.If you had set out to make children poorer for being born into large families, then this might be a sensible way to do it; perhaps that is the objective, in which case it is an appalling breach of process that the government has never come out and said it. As things stand, mothers whom no one warned not to have a third or fourth baby will discover on the Monday morning after the birth that the consequence of the new life will be an arbitrary cut in living standards for their family. Other necessary ambitions – such as controlling overall expenditure, curbing rent subsidies in particular, and sharpening work incentives – could be and often are being pursued by other more narrowly tailored cuts. The cap will further these goals only modestly and inefficiently, contributing more materially to unintended outcomes such as marital breakdown – by punishing big families for sticking together.
There is a big lie at the heart of this policy, and scrutiny of it is met with statistical fictions that go way beyond the bounds of anything ordinarily called spin. For example, ministers hail the cap's consequences by citing an official tally about 8,000 families having moved into work even though the accompanying official press release explicitly said it was "not intended to show" this. For the opposition it is laborious and often thankless to pick such deceits apart – but the only hope for progress in public policy is for them to do so. They should, as the lady once put it, make it their mantra to say "where there is error, may we bring truth".There is a big lie at the heart of this policy, and scrutiny of it is met with statistical fictions that go way beyond the bounds of anything ordinarily called spin. For example, ministers hail the cap's consequences by citing an official tally about 8,000 families having moved into work even though the accompanying official press release explicitly said it was "not intended to show" this. For the opposition it is laborious and often thankless to pick such deceits apart – but the only hope for progress in public policy is for them to do so. They should, as the lady once put it, make it their mantra to say "where there is error, may we bring truth".
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