The Telegraph and Mail should stop buying DWP briefings hook, line and sinker

People leave housing benefit all the time, but the DWP managed to turn no news into good news

This morning the Telegraph and Mail ran stories claiming the the government’s benefit cap was already proving a success nine months before it comes into effect. According to the Telegraph

Iain Duncan Smith, the Work and Pensions Secretary, is due to release figures which show that 1,700 people who would have been affected by the £26,000-a-year limit have taken up work since being warned about next year’s cap ...

"These figures show the benefit cap is already a success and is actively encouraging people back to work," Mr Duncan Smith said. "We need a welfare state that acts as a safety net and encourages people back to work." Mr Duncan Smith said that the figures would embarrass Labour, which had opposed the cap.

The statistics on which the stories were based were released by DWP this morning after the press stories had appeared, a form of sharp practice for which they have already been ticked off by the UK Statistics Authority. Even had Labour opposed the benefit cap (unfortunately, they didn’t), there would be little for them to worry about in today’s figures, which should rather be an embarrassment to the government and to the gullible journalists who faithfully wrote up what they had been briefed. In fact, the data shows roughly the opposite of what Mr Duncan Smith claims.

The figures are based on contact made by JobcentrePLus with 58,000 claimants who it was believed would be affected by the cap when it comes into effect, assuming they were still claiming at that point. Over the two month period since letters were sent to affected claimants warning them of the policy change, 1,700 are said to have moved into work. That’s 2.9 per cent of the total.

But the obvious question seems not to have been asked: how many would have moved into work in any case?

We can get an idea from data on benefit flows. These are a lot higher than is usually realised: even in this period of weak labour demand, 89 per cent of claims for Jobseekers' Allowance and 73 per cent of claims for Employment Support Allowance end within a year (pdf). But surely claimants receiving payments high enough to hit the cap spend longer on benefit? In fact, there’s no evidence for this, as the table shows.

Duration on benefit as percentage of caseload All out of work Subject to cap
Total:    
Up to six months 23 19
Six months up to one year 11 12
One year and up to two years 11 14
Two years and up to five years 16 23
Five years and over 40 32

 

Source: Nomis and Commons Hansard

 

The main contribution to benefit entitlement exceeding the cap level of £26,000 a year pro rata is high housing benefit payments. The average monthly off-flow rate from housing benefit over the last year was 2 per cent. If we take this as a proxy for people moving into employment, then over a two month period, other things being equal, we would have expected about 2,300 out of 58,000 people (4 per cent) to have taken up work. So an off-flow into employment of 1,700 is no indication whatsoever that the cap is affecting behaviour. The government is claiming this figure as a "success", when all it shows is that people receiving high housing benefit payments sometimes move into employment. Who knew?

I don’t think Duncan Smith is being disingenuous here. I fear it is much worse than that: he is genuinely self-deceived. If he thinks that an off-flow of this scale offers any evidence of the effect of policy, it is because he and his government are fixated on long-term benefit claimants, largely for ideological reasons.

Thus the fact that people actually leave benefits in very large numbers every month without being forced is routinely airbrushed out of the presentation of government policy, while ministers make ludicrous claims about "families where nobody has worked for three generations" (a misleading claim addressed by Lindsey Macmillan and Paul Gregg).

So I suspect that the ideological message has been so profoundly internalised that the Secretary of State simply cannot conceive that anyone on this level of benefits could move into work other than in response to the threat of compulsion from his department, so any off-flow must count as evidence that the policy is succeeding.

Of course, I could be wrong. Maybe Duncan Smith is being disingenuous after all and knew exactly what he was doing when he sold the Telegraph and Mail this particular pup. That might even be less disturbing than the thought that he really believes this stuff.

A row of houses in Bath, England. Photograph: Getty Images

Declan Gaffney is a policy consultant specialising in social security, labour markets and equality. He blogs at l'Art Social

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We still have time to change our minds on Brexit

The British people will soon find they have been misled. 

On the radio on 29 March 2017, another "independence day" for rejoicing Brexiteers, former SNP leader Alex Salmond and former Ukip leader Nigel Farage battled hard over the ramifications of Brexit. Here are two people who could be responsible for the break-up of the United Kingdom. Farage said it was a day we were getting our country back.

Yet let alone getting our country back, we could be losing our country. And what is so frustrating is that not only have we always had our country by being part of the European Union, but we have had the best of both worlds.

It is Philip Hammond who said: “We cannot cherry pick, we cannot have our cake and eat it too”. The irony is that we have had our cake and eaten it, too.

We are not in Schengen, we are not in the euro and we make the laws that affect our daily lives in Westminster – not in Europe – be it our taxes, be it our planning laws, be it business rates, be it tax credits, be it benefits or welfare, be it healthcare. We measure our roads in miles because we choose to and we pour our beer in pints because we choose to. We have not been part of any move towards further integration and an EU super-state, let alone the EU army.

Since the formation of the EU, Britain has had the highest cumulative GDP growth of any country in the EU – 62 per cent, compared with Germany at 35 per cent. We have done well out of being part of the EU. What we have embarked on in the form of Brexit is utter folly.

The triggering of Article 50 now is a self-imposed deadline by the Prime Minister for purely political reasons. She wants to fix the two-year process to end by March 2019 well in time to go into the election in 2020, with the negotiations completed.

There is nothing more or less to this timing. People need to wake up to this. Why else would she trigger Article 50 before the French and German elections, when we know Europe’s attention will be elsewhere?

We are going to waste six months of those two years, all because Prime Minister Theresa May hopes the negotiations are complete before her term comes to an end. I can guarantee that the British people will soon become aware of this plot. The Emperor has no clothes.

Reading through the letter that has been delivered to the EU and listening to the Prime Minister’s statement in Parliament today amounted to reading and listening to pure platitudes and, quite frankly, hot air. It recalls the meaningless phrase, "Brexit means Brexit".

What the letter and the statement very clearly outlined is how complex the negotiations are going to be over the next two years. In fact, they admit that it is unlikely that they are going to be able to conclude negotiations within the two-year period set aside.

That is not the only way in which the British people have been misled. The Conservative party manifesto clearly stated that staying in the single market was a priority. Now the Prime Minister has very clearly stated in her Lancaster House speech, and in Parliament on 29 March that we are not going to be staying in the single market.

Had the British people been told this by the Leave campaign, I can guarantee many people would not have voted to leave.

Had British businesses been consulted, British businesses unanimously – small, medium and large – would have said they appreciate and benefit from the single market, the free movement of goods and services, the movement of people, the three million people from the EU that work in the UK, who we need. We have an unemployment rate of under 5 per cent – what would we do without these 3m people?

Furthermore, this country is one of the leaders in the world in financial services, which benefits from being able to operate freely in the European Union and our businesses benefit from that as a result. We benefit from exporting, tariff-free, to every EU country. That is now in jeopardy as well.

The Prime Minister’s letter to the EU talks with bravado about our demands for a fair negotiation, when we in Britain are in the very weakest position to negotiate. We are just one country up against 27 countries, the European Commission and the European Council and the European Parliament. India, the US and the rest of the world do not want us to leave the European Union.

The Prime Minister’s letter of notice already talks of transitional deals beyond the two years. No country, no business and no economy likes uncertainty for such a prolonged period. This letter not just prolongs but accentuates the uncertainty that the UK is going to face in the coming years.

Britain is one of the three largest recipients of inward investment in the world and our economy depends on inward investment. Since the referendum, the pound has fallen 20 per cent. That is a clear signal from the world, saying, "We do not like this uncertainty and we do not like Brexit."

Though the Prime Minister said there is it no turning back, if we come to our senses we will not leave the EU. Article 50 is revocable. At any time from today we can decide we want to stay on.

That is for the benefit of the British economy, for keeping the United Kingdom "United", and for Europe as a whole – let alone the global economy.

Lord Bilimoria is the founder and chairman of Cobra Beer, Chancellor of the University of Birmingham and the founding Chairman of the UK-India Business Council.