Yes, David Cameron, cutting the benefit cap tells us a lot about modern Britain

http://www.theguardian.com/commentisfree/2015/jan/27/david-cameron-cutting-benefits-cap-britain-work

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There are few policies the Conservatives love more than the benefit cap “crackdown”. They rejoice in its apparent public popularity, its supposed commonsense simplicity, its seeming ability to persuade the workshy to visit the jobcentre. That it is ineffectual, cruel and overhyped does not dampen their enthusiasm in the least.

David Cameron wheeled the cap out again today (coincidentally, just as an independent study concluded that coalition tax and benefits policy had done nothing to reduce the deficit but had switched money from the poor into the pockets of the already well-off). Lowering the cap from its current level of £26,000 to £23,000 was an “issue of fairness”, Cameron said. Benefit cuts have been a “success”, he claimed. They have “changed people’s lives”.

And yet this is almost a fantasy policy. Just 51,000 households in Britain were capped in the 15 months to August 2014. The number who can be shown to have been persuaded into work directly as a result of it are marginal, and the financial savings to the taxpayer – if indeed there are any at all – are negligible. For all the talk of savings (that the Tories say will go towards funding apprenticeships), benefits withheld as a result of the cap amounted to just 0.08% of total social security expenditure on working-age adults and children in 2013-14.

The move is undoubtedly popular – pollsters report unheard-of 70% approval ratings – but this is approval for a policy that at the macro level is almost theoretical, given its limited scale and reach. Outside London, whole swathes of the country (in fact, almost anywhere where rents are not astronomical) will know of no one affected by the cap. More than half of those capped are in London. In Bradford, for example, in a population of 500,000 just 309 households have been capped.

When Tory politicians talk of a “crackdown” on welfare they invoke the benefit cap as if preparing a huge national blitz, but in reality this is a niche pursuit undertaken in high rent areas, often where local unemployment is high. Unsurprisingly, such crackdowns never invoke the bedroom tax (which has 70% disapproval ratings), which affects more than 10 times as many people. In terms of deficit reduction the benefits cap is a pea-shooter of a policy.

The cap is also highly subsidised. Cameron talks of it saving the taxpayer £135m by 2020, but this figure presumably does not take into account the annual £50m a year given to local authorities in discretionary housing payments – effectively, cash given to councils to enable them to pay the rents of thousands of capped families to prevent them being evicted. Cameron boasted that the “bad consequences” many predicted for the cap have not come to pass, but the reality is that ministers have not been prepared to unleash its full force. There are presumably limits to the number of evicted, homeless and starving families even this government can countenance.

Ministers rarely talk about the money the cap will save (because they know it won’t save anything), which makes it surprising that Cameron was prepared to put a figure on it (even a low one). Instead, they prefer to talk about its value in terms of behavioural change – meaning persuading unemployed claimants to go back to work. With customary hype, Cameron told the Telegraph that the cap had triggered an unlikely “stampede to the jobcentre” and “got a lot of people back to work”. Neither is true.

Indeed, for the first 18 months the policy was a source of embarrassment with the work and pensions secretary, Iain Duncan Smith, unable to show that the cap pushed people back to work (he was reduced to excruciating declarations of evidence-free faith in the policy). This changed just before Christmas, when an IFS report found that capped unemployed adults were marginally more likely to move into work than uncapped jobless adults.

This enables politicians to insist the cap is a success, but most readings of the IFS report will not come to the same conclusion. Indeed, the IFS said that “the large majority of affected claimants responded [to being capped] by neither moving into work nor by moving house [to a lower rent area that would take them out of the cap]”.

Ministers love the alleged transformative powers of the cap. It’s true that when capped individuals move into work they often report that they prefer working, but then most were actively looking for a job anyway. Duncan Smith says people are always materially better off working. However, as the government’s own research shows, the majority are no better off financially as they move into part-time and low-paid jobs.

What ministers will never talk about is which capped households move into work and why, and what happens to those who cannot easily move into work. Detailed qualitative research by the east London charity Community Links has shown that those capped individuals who were closest to the jobs market anyway went out and got jobs; the more vulnerable individuals – who suffered, say, from mental illness, or language problems, or had young children and could not find affordable childcare – did not.

For those trapped by the benefit cap the reality (as the government’s own qualitative evaluation showed) is far from theoretical or consequence free: debt, rent arrears, going without food, and borrowing from loan sharks and payday lenders. In some cases families have had to move, pulling children out of schools where they were settled. Far from making them more likely to get a job, the cap has brought poverty and stress and little hope of a way out. Community Links concluded that the welfare reforms “did not have a considerable impact on respondents’ attitudes to work, or indeed the likelihood of them finding work”.

And yet the benefit cap fantasy rolls on: lowering the cap to £23,000 enables Cameron to act tough and sustain the myth that the country is awash with benefit scroungers. In practice it will randomly catch a few thousand more low-income jobless households (often large ethnic minority families and single parents) who find themselves, mostly through no fault of their own, living in areas where rents are high. A few thousand more will move into work, as they (most likely) would have done anyway. There will be no net savings to the taxpayer. It will, however, bring avoidable stress and misery to those least able to cope.

But then as Cameron told the Telegraph: lowering the cap “tells you everything you need to know about our values”.