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27 October 2010

The coalition eyes a compromise on housing benefit

Ministers consider amending benefit cap after criticism of “draconian” reform.

By George Eaton

Is the coalition, as Margaret Thatcher would put it, going “wobbly” on the housing benefit cap? The BBC reports that Iain Duncan Smith is “listening” to MPs’ concerns and that the plan may be amended. At the very least, it now looks likely that transitional arrangements – in the form of an extended time frame or a higher cap – will be made for London.

Well before the issue reached boiling point, Boris Johnson warned that the “draconian” reforms would have a “damaging effect” on households across the capital. The cap may have provoked some on the left to remarkable hyperbole (Polly Toynbee shamefully described the reforms as a “final solution” for the poor) but that should not be allowed to mask legitimate concerns.

In London, where rents and living costs are significantly higher, the £400-a-week cap would force roughly 82,000 families out of the city – the largest population movement since the Second World War.

When I spoke to Karen Buck, the Labour MP for Westminster North and a specialist on the subject, she warned that “population churn” was strongly related to negative health and social outcomes. Children’s education suffers as they are forced to move school, crime rises as established neighbourhoods are broken apart and social mobility falls as working claimants are forced out of the capital. Their migration to towns and cities such as Hastings, Liverpool and Glasgow will put enormous strain on public services in those areas.

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Add to this some Conservatives’ open acknowledgement of their political intentions, and the policy becomes toxic for the coalition. One unnamed Tory minister was quoted as describing the policy as “the Highland clearances” – and not using the phrase disapprovingly.

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Shaun Bailey, the party’s defeated candidate in Hammersmith, west London, has also argued that the Conservatives struggle to win inner-city seats “because Labour has filled them with poor people”. Tory party strategists believe that the high proportion of social housing tenants cost them several London seats in May. The cap on benefits is a none-too-subtle attempt to overcome this electoral defect.

The social and economic problems unleashed by the cap will wipe out any savings the coalition hopes to make. On this issue, ministers must think again.