The questions Labour needs to answer about its regional benefit cap

Why support a regional benefit cap but not regional benefit levels? And what level would the cap be set at it in London?

With the introduction of the £26,000 benefit cap in four London boroughs this week (see my blog from Monday for five reasons why the cap is wrong), Labour has been challenged again to say whether it would keep the policy if elected. The party's answer is still that it supports a cap but one that takes into account regional variations in housing costs. 

Ed Balls said on LBC this morning that the party would "definitely keep" the cap, so long as it is "set in the right way". On Question Time last night, Caroline Flint argued:

I also believe in a benefit cap but one that can work and the problem is that because there are different housing costs around the country, the government have introduced this sort of standardised benefit cap that is going to cause problems. We argued that, actually, we should have localised benefit caps that did reflect some of the housing costs

There is logic to Labour's position. House prices in London are 61 per cent higher than the national average and, as a result, nearly half of those households affected by the cap are in the capital. As Liam Byrne argued when the policy was first proposed last year, "While all that £500 a week might get you in central London is a one-bedroom apartment, in Rotherham, Yorkshire it would get you a six-bedroom house. How can a 'one-size-fits-all' cap be fair to working people in both London and Rotherham?"

But the proposal invites the Conservative rejoinder: if you support a regional benefit cap, why not regional benefit levels? When Michael Howard made this point on Question Time, Flint replied: "There is a different issue when it comes to housing, if you look around the country, Michael, you can see that there are disparities in terms of housing costs." In other words, she dodged the question. There is a strong argument against regional benefit levels (and regional public sector pay) - that they would depress local economies at a time when they desperately need stimulus - but it is one that Labour has failed to make so far. 

The other question that the party needs to answer is what level the cap would be set at in London and elsewhere. While a regional approach would mean a cap below £26,000 in some areas, it would almost certainly mean a cap above this level in the capital. The political problem for Labour is that most voters already regard the existing cap as too generous. As the Telegraph's Iain Martin tweeted this morning, "If Labour says £500 per week benefit cap in London is too low, what should it be set at instead? £700? A grand?" A higher benefit cap in the capital would inevitably prompt the accusation that poorer areas are unfairly being asked to subsidise housing costs for Londoners. 

The overwhelming public support for the cap (79 per cent of people, including 71 per cent of Labour voters, back the policy) has convinced Labour that it can't be seen to oppose the policy unconditionally. But without further development, the alternative of a regional cap risks falling apart under Tory scrutiny.  

A general view of 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, England. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

Donald Trump vs Barack Obama: How the inauguration speeches compared

We compared the two presidents on trade, foreign affairs and climate change – so you (really, really) don't have to.

After watching Donald Trump's inaugural address, what better way to get rid of the last few dregs of hope than by comparing what he said with Barack Obama's address from 2009? 

Both thanked the previous President, with Trump calling the Obamas "magnificent", and pledged to reform Washington, but the comparison ended there. 

Here is what each of them said: 

On American jobs

Obama:

The state of our economy calls for action, bold and swift.  And we will act, not only to create new jobs, but to lay a new foundation for growth.  We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.  We'll restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost.  We will harness the sun and the winds and the soil to fuel our cars and run our factories.  And we will transform our schools and colleges and universities to meet the demands of a new age.

Trump:

For many decades we've enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

Obama had a plan for growth. Trump just blames the rest of the world...

On global warming

Obama:

With old friends and former foes, we'll work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.

Trump:

On the Middle East:

Obama:

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy. 

Trump:

We will re-enforce old alliances and form new ones and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth.

On “greatness”

Obama:

In reaffirming the greatness of our nation we understand that greatness is never a given. It must be earned.

Trump:

America will start winning again, winning like never before.

 

On trade

Obama:

This is the journey we continue today.  We remain the most prosperous, powerful nation on Earth.  Our workers are no less productive than when this crisis began.  Our minds are no less inventive, our goods and services no less needed than they were last week, or last month, or last year.  Our capacity remains undiminished.  

Trump:

We must protect our borders from the ravages of other countries making our product, stealing our companies and destroying our jobs.

Protection will lead to great prosperity and strength. I will fight for you with every breath in my body, and I will never ever let you down.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland