Five reasons why the benefit cap is wrong

The £26,000 cap, which is introduced in four London boroughs today, will raise child poverty, increase homelessness and cost more than it saves.

Whichever Conservative first came up with the line that "no out-of-work family should receive more in benefits than the average family receives from going out to work" probably deserves some sort of prize. The policy to which it refers - the benefit cap of £26,000 - has been framed so as to make reasonable disagreement appears impossible. Who can argue that it should pay more to be on welfare than in work? It’s unsurprising, then, that the policy is one of the coalition’s most popular (perhaps even the most popular). A YouGov poll published earlier this month found that 79 per cent of people, including 71 per cent of Labour voters, support the cap, with just 12 per cent opposed. But while politically astute, the cap, which is introduced in four London boroughs today (Bromley, Croydon, Enfield and Haringey), before being rolled out nationally from July, may be the most flawed of all of the coalition’s welfare measures. Here are five reasons why.

1. An out-of-work family is never better off than an in-work family

The claim on which the policy rests - that a non-working family can be better off than a working one - is a myth since it takes no account of the benefits that an in-work family can claim to increase their income. For instance, a couple with four children earning £26,000 after tax and with rent and council tax liabilities of £400 a week is entitled to around £15,000 a year in housing benefit and council tax support, £3,146 in child benefit and more than £4,000 in tax credits.

Were the cap based on the average income (as opposed to average earnings) of a working family, it would be set at a significantly higher level of £31,500. The suggestion that the welfare system "rewards" worklessness isn’t true; families are already better off in employment. Thus, the two central arguments for the policy - that it will improve work incentives and end the "unfairness" of out-of-work families receiving more than their in-work equivalents - fall down.

(And it will hit in-work families too)

Incidentally, and contrary to ministers' rhetoric, the cap will hit in-work as well as out-of-work families. A single person must be working at least 16 hours a week and a couple at least 24 hours a week (with one member working at least 16 hours) to avoid the cap. 

2. It will punish large families and increase child poverty

The cap applies regardless of family size, breaking the link between need and benefits. As a result, most out-of-work families with four children and all those with five or more will be pushed into poverty (defined as having an income below 60 per cent of the median income for families of a similar size). Iain Duncan Smith has claimed that “[at] £26,000 a year it's very difficult to believe that families will be plunged into poverty” but his own department’s figures show that the poverty threshold for a non-working family with four children, at least two of whom are over 14, is £26,566 - £566 above the cap. The government's Impact Assessment found that 52 per cent of those families affected have four or more children.

By applying the policy retrospectively, the government has chosen to penalise families for having children on the reasonable assumption that existing levels of support would be maintained. While a childless couple who have never worked will be able to claim benefits as before (provided they do not exceed the cap), a large family that falls on hard times will now suffer a dramatic loss of income. In view of this, the House of Lords voted in favour of an amendment by Church of England bishops to exclude child benefit from the cap (which would halve the number of families affected) but the defeat was subsequently overturned by the government in the Commons.

The DWP has released no official estimate of the likely increase in child poverty but a leaked government analysis suggested around 100,000 would fall below the threshold once the cap is introduced.

3. It will likely cost more than it saves

For all the political attention devoted to it, the cap is expected to save just £110m a year, barely a rounding error in the £201bn benefits bill. But even these savings could be wiped out due to the cost to local authorities of homelessness and housing families in temporary accommodation. As a leaked letter from Eric Pickles’s office to David Cameron stated, the measure "does not take account of the additional costs to local authorities (through homelessness and temporary accommodation). In fact we think it is likely that the policy as it stands will generate a net cost. In addition Local Authorities will have to calculate and administer reduced Housing Benefit to keep within the cap and this will mean both demands on resource and difficult handling locally."

4. It will increase homelessness and do nothing to address the housing crisis

Most of those who fall foul of the cap do so because of the amount they receive in housing benefit (or, more accurately, landlord subsidy) in order to pay their rent. At £23.8bn, the housing benefit bill, which now accounts for more than a tenth of the welfare budget, is far too high but rather than tackling the root of the problem by building more affordable housing, the government has chosen to punish families unable to afford reasonable accommodation without state support.

The cap will increase homelessness by 40,000 and force councils to relocate families hundreds of miles away, disrupting their children's education and reducing employment opportunities (by requiring them to live in an area where they have no history of working). 

5. It will encourage family break-up

Iain Duncan Smith talks passionately of his desire to reduce family breakdown but the cap will serve to encourage it. As Simon Hughes has pointed out, the measure creates "a financial incentive to be apart" since parents who live separately and divide the residency of their children between them will be able to claim up to £1,000 a week in benefits, while a couple living together will only be able to claim £500.

Work and Pensions Secretary Iain Duncan Smith speaks at the Conservative Party conference in Birmingham last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Show Hide image

Can Trident be hacked?

A former defence secretary has warned that Trident is vulnerable to cyber attacks. Is it?

What if, in the event of a destructive nuclear war, the prime minister goes to press the red button and it just doesn't work? 

This was the question raised by Des Browne, a former defence secretary, in an interview witht the Guardian this week. His argument, based on a report from the defence science board of the US Department of Defense, is that the UK's Trident nuclear weapons could be vulnerable to cyberattacks, and therefore rendered useless if hacked. 

Browne called for an "end-to-end" assessment of the system's cybersecurity: 

 The government ... have an obligation to assure parliament that all of the systems of the nuclear deterrent have been assessed end-to-end against cyber attacks to understand possible weak spots and that those weak spots are protected against a high-tier cyber threat. If they are unable to do that then there is no guarantee that we will have a reliable deterrent or the prime minister will be able to use this system when he needs to reach for it.

Is he right? Should we really be worried about Trident's potential cyber weaknesses?

Tangled webs 

The first, crucial thing to note is that Trident is not connected to the "internet" we use every day. Sure, it's connected to the main Ministry of Defence network, but this operates totally independently of the network that you visit Facebook through. In cyber-security terms, this means the network is "air-gapped" - it's isolated from other systems that could be less secure. 

In our minds, Trident is old and needs replacing (the submarines began patrolling in the 1990s), but any strike would be ordered and co-ordinated from Northwood, a military bunker 100m underground which would use the same modern networks as the rest of the MoD. Trident is basically as secure as the rest of the MoD. 

What the MoD said

I asked the Ministry of Defence for a statement on Trident's security, and while it obviously can't offer much information about how it all actually works, a spokesperson confirmed that the system is air-gapped and added: 

We wouldn't comment on the detail of our security arrangements for the nuclear deterrent but we can and do safeguard it from all threats including cyber.

What security experts said

Security experts agree that an air-gapped system tends to be more secure than one connected to the internet. Sean Sullivan, a security adviser at F-secure, told Infosecurity magazine that while some hackers have been able to "jump" air-gaps using code, this would cause "interference" at most and a major attack of this kind is still "a long way off". 

Franklin Miller, a former White House defence policy offer, told the Guardian that the original report cited by Browne was actually formulated in response to suggestions that some US defence networks should be connected to the internet. In that case, it actually represents an argument in favour of the type of air-gapped system used by the MoD. 

So... can it be hacked?

The answer is really that any system could be hacked, but a specialised, independent defence network is very, very unlikely to be. If a successful hack did happen, it would likely affect all aspects of defence, not just Trident. That doesn't mean that every effort shouldn't be made to make sure the MoD is using the most secure system possible, but it also means that scaremongering in the context of other, unrelated cybersecurity scares is a little unjustified. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.