The benefit cap will only succeed in harming the weakest and most vulnerable

Instead of the social vivisection currently taking place, lowering the benefits bill requires an agenda that creates jobs, arms people with skills and lowers rents.

Yesterday, four London boroughs, including Haringey, where my Tottenham constituency is located, began piloting the benefit cap before it is rolled out across the country over the course of the year.

Let's begin by confronting the elephant in the room: the cap is a popular policy. In fact, it is the coalition's most popular one by a long stretch, backed by an overwhelming 79 per cent of the public. We can speculate why it has become so popular, whether it is the symptom of an increasingly individualistic country or because the recession has increased suspicion of those in receipt of social security, but we will struggle to contend with its eminently reasonable premise: those out of work should not have a higher income than the average in-work family.
 
That entire households rely on the state to provide every last penny of their budget over many months isn't - in the vast majority of cases at least - a badge of honour but a mark of failure. The difference is who is failing and why. The government and their allies in the press see failure only in the individual. To them, claimants are a separate species, only capable of vegetating on "handouts" (which are inevitably spent on a diet of Special Brew, Golden Virginia and Sky TV) rather than finding work.
 
Our analysis has to be different. We see failure in some individuals but not all - certainly not the majority. We are more likely to find failure in a labour market that is void of jobs, in a skills sector that did not provide adequate training and a childcare system that is beyond the reach of ordinary families. Most of all, we find failure in a housing infrastructure that allows landlords to hoover up an increasingly greater chunk of the nation's welfare bill through extortionate rent increases all the while offering deteriorating conditions and even more overcrowding.
 
Our outrage at the benefit cap isn't that we cannot stand that people in work will be better off than those out of it - we ought to welcome that - but that for all of these institutional failures, it is only the weakest and most vulnerable that are being asked to change. Of the 900 families in Tottenham that are being pushed to the brink of homelessness half are single parents and a quarter are in receipt of the Employment and Support Allowance. Meanwhile, the institutions that failed them are left untouched: fewer affordable homes are being built, rents continue to rise, and many of the jobs being created are underpaid, part-time, insecure and offer no prospects of advancement or training.
 
While satisfying the desire to frame the welfare debate in the lead up to the next election around who can appear "toughest" on "skivers", the benefit cap fails almost every other ambition the government has set itself. For all the government rhetoric about families, parenting and the importance of marriage, it is this cocktail of welfare reforms that provides the formula for family break up - the party that continues to plead for tax incentives for marriage now prides itself on reforms that incentivise divorce and estrangement. For all the talk of extending opportunities to all children of whatever background, the most disadvantaged will now be fed and clothed with a stipend of just 62p a day. Any monies saved now will only boomerang back as the social bill of abject poverty - educational failure, rough sleeping, and yes, hopelessness that leads to crime and unrest - mounts for generations to come.
 
We need to treat the disease, not the symptoms. Instead of the social vivisection currently taking place in Haringey, Enfield, Bromley and Croydon, lowering the benefit bill requires an agenda that creates jobs, arms people with skills and lowers rents (a major house building programme would achieve all three, for instance). If we want to "make work pay" to incentivise people to take jobs when they are available, it is more effective to make significant upward revisions to the minimum wage (an increase of £1.20, rather than 12p, perhaps) rather than condemn families to squalor. All parties should want to lower the benefit bill and all want to make work pay. The difference between this government and ourselves is humanity: they believe homelessness and family break up is a price worth paying, we believe it never can be.

 

Homes on the Falinge Estate, which has been surveyed as the most deprived area in England for a fifth year in a row, on January 8, 2013 in Rochdale. Photograph: Getty Images.

David Lammy is Labour MP for Tottenham

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.