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| Benefit cap: is it persuading more people to get a job? | Benefit cap: is it persuading more people to get a job? |
| (2 months later) | |
| To accompany the roll-out of the benefit cap on Monday morning, the work and pensions secretary Iain Duncan Smith gave an interview on the BBC Today programme in which he claimed that the policy was working because the threat of being hit by the cap had persuaded more people to move off benefits and into a job. | To accompany the roll-out of the benefit cap on Monday morning, the work and pensions secretary Iain Duncan Smith gave an interview on the BBC Today programme in which he claimed that the policy was working because the threat of being hit by the cap had persuaded more people to move off benefits and into a job. |
| But is he right? | But is he right? |
| What is the benefit cap? | What is the benefit cap? |
| Essentially, the benefits cap proposes that no out-of-work household should have a benefits income of more that £26,000 a year (£500 a week for families, £350 for single people), which the government says is the average household income of working families. Approximately 40,000 households in the UK will be affected, according to the Department for Work and Pensions (DWP). | Essentially, the benefits cap proposes that no out-of-work household should have a benefits income of more that £26,000 a year (£500 a week for families, £350 for single people), which the government says is the average household income of working families. Approximately 40,000 households in the UK will be affected, according to the Department for Work and Pensions (DWP). |
| Over half of the households are in London, where high private sector rents (and consequently, housing benefit payments) mean that one in three of the households affected by the cap in the capital will lose at least £100 a week as a result. | Over half of the households are in London, where high private sector rents (and consequently, housing benefit payments) mean that one in three of the households affected by the cap in the capital will lose at least £100 a week as a result. |
| Households will avoid the cap if an adult member can find a job that offers at least 16 hours a week (for single parents) or 24 hours (for couples). The government says the threat of the cap will be to incentivise more people into work, cutting the benefits bill. | Households will avoid the cap if an adult member can find a job that offers at least 16 hours a week (for single parents) or 24 hours (for couples). The government says the threat of the cap will be to incentivise more people into work, cutting the benefits bill. |
| Does the benefit cap work? | Does the benefit cap work? |
| Duncan Smith claimed in the BBC interview that benefit claimants had been galvanised to get a job by the threat of the cap. He said: | Duncan Smith claimed in the BBC interview that benefit claimants had been galvanised to get a job by the threat of the cap. He said: |
I believe we are already seeing people go back to work who were not going to go back to work until they were short of the cap | I believe we are already seeing people go back to work who were not going to go back to work until they were short of the cap |
| He added: | He added: |
I believe that this will show as we go forward that people who are not seeking work are now seeking work because that's the way to avoid the cap | I believe that this will show as we go forward that people who are not seeking work are now seeking work because that's the way to avoid the cap |
| This line was trailed in the Telegraph, which reported: | This line was trailed in the Telegraph, which reported: |
These figures show the benefit cap is already a success and is actively encouraging people back to work | These figures show the benefit cap is already a success and is actively encouraging people back to work |
| Duncan Smith said in the interview that although he had no statistical evidence yet to back up his claim, the DWP had published polling which supported his view. The poll, by Ipsos Mori, consisted of telephone interviews in May and June with 500 people who had been notified over the past 12 months that they would be affected by the cap, but who had subsequently moved into work. | Duncan Smith said in the interview that although he had no statistical evidence yet to back up his claim, the DWP had published polling which supported his view. The poll, by Ipsos Mori, consisted of telephone interviews in May and June with 500 people who had been notified over the past 12 months that they would be affected by the cap, but who had subsequently moved into work. |
| The survey was carried out to attempt to find out from claimants whether being told they would be affected by the cap specifically "encouraged them to find work". | The survey was carried out to attempt to find out from claimants whether being told they would be affected by the cap specifically "encouraged them to find work". |
| The DWP report states: | The DWP report states: |
There is evidence that the policy has encouraged some claimants to take action to avoid the benefit cap before implementation | There is evidence that the policy has encouraged some claimants to take action to avoid the benefit cap before implementation |
| But how many is "some claimants"? In order to be motivated by the threat of a cap on benefits, you need to know that the threat exists in the first place. Only 57% of claimants remembered getting written notification that they would be affected by the cap. Of those who remember getting the letter, 37% found it very or fairly difficult to understand. This suggests that the cap may have been a hazy presence for many recipients. | But how many is "some claimants"? In order to be motivated by the threat of a cap on benefits, you need to know that the threat exists in the first place. Only 57% of claimants remembered getting written notification that they would be affected by the cap. Of those who remember getting the letter, 37% found it very or fairly difficult to understand. This suggests that the cap may have been a hazy presence for many recipients. |
| The poll then asked those who recalled being notified of the cap what actions they subsequently took, if any. Strikingly, the biggest category, almost half of claimants (46%), said: | The poll then asked those who recalled being notified of the cap what actions they subsequently took, if any. Strikingly, the biggest category, almost half of claimants (46%), said: |
Nothing | Nothing |
| So how many looked for a job? According to the poll, 31%. But asked what they were doing before they were told about the cap, 52% said they were already looking for a job (A separate poll question said that 71% recalled actively attending job interviews and submitting CVs in the weeks before notification). | So how many looked for a job? According to the poll, 31%. But asked what they were doing before they were told about the cap, 52% said they were already looking for a job (A separate poll question said that 71% recalled actively attending job interviews and submitting CVs in the weeks before notification). |
| According to the poll, notification of the cap had remarkably little impact on a range of behaviours, whether taking benefits advice, increasing the number of hours worked, or moving to a cheaper property (although marginally more claimants said the letter persuaded them to contact to the Job Centre). | According to the poll, notification of the cap had remarkably little impact on a range of behaviours, whether taking benefits advice, increasing the number of hours worked, or moving to a cheaper property (although marginally more claimants said the letter persuaded them to contact to the Job Centre). |
| The report says that of those who recall being notified of the cap (or being aware of it), 47% took "some sort of action". Asked what that action might be, 62% said they looked for a job. According to the DWP: | The report says that of those who recall being notified of the cap (or being aware of it), 47% took "some sort of action". Asked what that action might be, 62% said they looked for a job. According to the DWP: |
That equates to 29% of all those ... who were aware they would be affected | That equates to 29% of all those ... who were aware they would be affected |
| That suggests that just under a third of all those threatened with the cap looked for a job. | That suggests that just under a third of all those threatened with the cap looked for a job. |
| But was it the threat of the cap specifically that spurred them on? The report notes that of those who remember being formally notified, 61% said they found their current job after they had been formally told they would be threatened with the cap. That sounds promising. | But was it the threat of the cap specifically that spurred them on? The report notes that of those who remember being formally notified, 61% said they found their current job after they had been formally told they would be threatened with the cap. That sounds promising. |
| But the report issues a firm rider to this claim: | But the report issues a firm rider to this claim: |
This analysis is confined to correlation and does not show causation | This analysis is confined to correlation and does not show causation |
| In other words, it would be wrong to claim that the poll finds a clear link between the benefit cap and moving into work. Some people may have been persuaded to go out and get a job but it is equally likely that they may have found work anyway. | In other words, it would be wrong to claim that the poll finds a clear link between the benefit cap and moving into work. Some people may have been persuaded to go out and get a job but it is equally likely that they may have found work anyway. |
| And the report makes it clear that most people threatened by the cap were not "workshy". The vast majority of respondents reported that they have always worked (10%), mostly worked (43%) or sometimes worked (29%). Only 5% had never been in paid employment. | And the report makes it clear that most people threatened by the cap were not "workshy". The vast majority of respondents reported that they have always worked (10%), mostly worked (43%) or sometimes worked (29%). Only 5% had never been in paid employment. |
| This suggests that work was a part of the lives of the vast majority of these households before the cap, as well as after. | This suggests that work was a part of the lives of the vast majority of these households before the cap, as well as after. |
| So, is Duncan Smith right? | So, is Duncan Smith right? |
| The employment secretary "believes" the cap is working. But as his own poll report shows, there is very little evidence that it may be working as he intends, and certainly no proof of a link. In summary, the poll shows that: | The employment secretary "believes" the cap is working. But as his own poll report shows, there is very little evidence that it may be working as he intends, and certainly no proof of a link. In summary, the poll shows that: |
| • Given the draconian consequences of the cap, remarkably few of those affected even remembered even being notified of it. | • Given the draconian consequences of the cap, remarkably few of those affected even remembered even being notified of it. |
| • Of those that were aware of the cap, most said they were actively looking for work anyway. | • Of those that were aware of the cap, most said they were actively looking for work anyway. |
| • Of those who found work, 61% entered work after notification – but there is no evidence that the cap played a role in getting them into employment. | • Of those who found work, 61% entered work after notification – but there is no evidence that the cap played a role in getting them into employment. |
| A DWP spokesperson accepted that while the poll did not show absolutely that the cap was having the effect intended, it did offer "quite compelling evidence". | A DWP spokesperson accepted that while the poll did not show absolutely that the cap was having the effect intended, it did offer "quite compelling evidence". |
| Duncan Smith has made similar claims about the efficacy of the cap before. In April, he claimed that the cap had stung 8,000 affect people into work, clearly demonstrating the cap had the desired impact. However, statisticians pointed out that while it was true that 8,000 people had moved into work, there was no evidence that this was caused by the threat of the benefit cap. | Duncan Smith has made similar claims about the efficacy of the cap before. In April, he claimed that the cap had stung 8,000 affect people into work, clearly demonstrating the cap had the desired impact. However, statisticians pointed out that while it was true that 8,000 people had moved into work, there was no evidence that this was caused by the threat of the benefit cap. |
| The work and pensions secretary was subsequently admonished by the UK Statistics Authority, which said the claim was "unsupported by the official statistics". | The work and pensions secretary was subsequently admonished by the UK Statistics Authority, which said the claim was "unsupported by the official statistics". |
| Duncan Smith may yet be proved right on the cap. But the latest polling does not offer that proof. | Duncan Smith may yet be proved right on the cap. But the latest polling does not offer that proof. |
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