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The benefit cap may be popular - but it is plunging private renters into poverty

In half of England, a family with two children living in a modest home must survive on £8 each a day.

When George Osborne first introduced the overall household benefit cap in 2013, it limited the total amount of benefits that a household working less than 16 hours per week could claim at £26,000 a year. Initial polling found that an overwhelming majority of the public supported this idea, even those who relied on the welfare safety net were in favour. In fact, it proved so popular that two years later the government lowered the cap again. It’s now at £20,000 a year outside of London, or £23,000 in the capital. 

At Shelter we have just carried out an analysis on the impact of the lower cap on private renting families. Our findings paint a pretty bleak picture: in more than half of England the cap means that, after paying rent, a family with two children living in a small two-bed home would have less than £8 per person per day to cover all their essentials like food and bills. This would leave them at least £100 a week under the UK poverty line.

For families with three children, the cap now applies in every single area of the country. In one in five areas these families would have just £2.72 per person per day to live on after paying their rent. Could you manage on just £2.72 a day if you had to put enough money in the gas meter to stop the pipes freezing, clothe your children, keep the lights on for them to do their homework and make sure you can give them a decent meal? Probably not.

I know many people reading this will be thinking £20,000 a year is a pretty decent sum, and is what many families manage to live on. But here’s the dilemma, between the Beveridge Report of 1942 and George Osborne’s party conference speech of 2010, every architect of the welfare state has acknowledged that it has to mitigate “the problem of rent”. Rents vary so hugely across the country they simply cannot be accommodated by a one-size-fits-all approach.

This means that for some, £20,000 is an adequate sum to cover their basic livings costs. But unfortunately for quite a lot of others, rapidly rising private rents mean they can’t afford to keep a roof over their head. The government knows this: that’s why even working households earning £20,000 and over are still entitled to housing benefit in many of areas of the country where local rents are higher than they can reasonably afford.

But the benefit cap means that for some families who have fallen on particularly hard times, the safety net, which the rest of us expect to catch us in a crisis, is strictly off-limits. Like a single mother with three small children living in Sunderland who recently turned to us for help. Her youngest child is only two and since her partner left, getting back into work is proving difficult for the moment. In spite of living in a modest two-bed home, she’s got to somehow find an extra £180 a month to cover the shortfall in rent created by the cap. She is absolutely terrified her family will become homeless.

While it’s right and necessary to have restrictions on housing benefit, these should be linked to local housing costs. An arbitrary, blanket national cap ignores the reality of high local rents and turns the support available into a postcode lottery. Homelessness is fast-becoming the tragic yet inevitable outcome for those families hit the hardest. I know Shelter’s workload will only increase as the cap bites deeper.

Most people desperately want to work, but not everybody genuinely can. People’s lives will always be more complicated. Unfortunately, not everyone can work the 16 hours a week needed to avoid the cap. Many of the people we are talking about will have very young children to look after or only be able to find insecure jobs that offer them a few hours per week. Imagine if you were a single parent with young children to care for whose partner had walked out on you – realistically it might take you a bit of time to get back into work.

Whatever you think of the benefit cap in principle, putting people at risk of homelessness or forcing them into emergency accommodation is not going to help anyone find a job. The rising number of people my colleagues and I meet who are facing destitution is proof of that. I refuse to believe that those who understandably want to see fairness at the core of our welfare system would consider this a fair consequence. It’s time the government committed to preventing homelessness and rethought this cap.

Jo Underwood is a children’s solicitor at Shelter. The analysis will feature in tonight’s Channel 4 Dispatches

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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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