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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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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.