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.

Photo: Getty
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Ignored by the media, the Liberal Democrats are experiencing a revival

The crushed Liberals are doing particularly well in areas that voted Conservative in 2015 - and Remain in 2016. 

The Liberal Democrats had another good night last night, making big gains in by-elections. They won Adeyfield West, a seat they have never held in Dacorum, with a massive swing. They were up by close to the 20 points in the Derby seat of Allestree, beating Labour into second place. And they won a seat in the Cotswolds, which borders the vacant seat of Witney.

It’s worth noting that they also went backwards in a safe Labour ward in Blackpool and a safe Conservative seat in Northamptonshire.  But the overall pattern is clear, and it’s not merely confined to last night: the Liberal Democrats are enjoying a mini-revival, particularly in the south-east.

Of course, it doesn’t appear to be making itself felt in the Liberal Democrats’ poll share. “After Corbyn's election,” my colleague George tweeted recently, “Some predicted Lib Dems would rise like Lazarus. But poll ratings still stuck at 8 per cent.” Prior to the local elections, I was pessimistic that the so-called Liberal Democrat fightback could make itself felt at a national contest, when the party would have to fight on multiple fronts.

But the local elections – the first time since 1968 when every part of the mainland United Kingdom has had a vote on outside of a general election – proved that completely wrong. They  picked up 30 seats across England, though they had something of a nightmare in Stockport, and were reduced to just one seat in the Welsh Assembly. Their woes continued in Scotland, however, where they slipped to fifth place. They were even back to the third place had those votes been replicated on a national scale.

Polling has always been somewhat unkind to the Liberal Democrats outside of election campaigns, as the party has a low profile, particularly now it has just eight MPs. What appears to be happening at local by-elections and my expectation may be repeated at a general election is that when voters are presented with the option of a Liberal Democrat at the ballot box they find the idea surprisingly appealing.

Added to that, the Liberal Democrats’ happiest hunting grounds are clearly affluent, Conservative-leaning areas that voted for Remain in the referendum. All of which makes their hopes of a good second place in Witney – and a good night in the 2017 county councils – look rather less farfetched than you might expect. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.