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4 July 2011

Commons misled over impact of benefit cap on homelessness

Ministers repeatedly claimed that the risk was "not quantifiable" despite clear warning from Eric Pi

By Samira Shackle

Ministers have been accused of repeatedly misleading the Commons about the impact of their £26,000 cap on welfare payments.

Yesterday, we noted the incongruence between David Cameron’s claim that the cap would not lead to greater homelessness, and the warning in a leaked letter from the Communities Secretary, Eric Pickles (written by his private secretary Nico Heslop). The letter warns that welfare cuts could make an additional 20,000 families homeless (on top of 20,000 already anticipated because of other changes to housing benefit). It also warns that the plan will cost more than it saves because of the bill for temporary housing.

Now, Labour has highlighted several instances where ministers have acted disingenuously, given that this letter was sent in January. In February, the Department for Work and Pensions (DWP) published an impact assessment saying it was “not possible to quantify” the cost to local councils of the welfare cap, and the likelihood of greater homelessness. Grant Shapps, the Housing Minister, and others, quoted this assessment when asked about the impact on homelessness — despite the fact that a specific estimate is included in Pickles’ letter. Maria Miller, a welfare minister, told a Labour MP to “get real” when asked if the benefit cap would increase homelessness, while Chris Grayling said that it would not “exacerbate” the problem.

It is profoundly worrying that these concerns were not only ignored by government but repeatedly kept secret. The reason is easy enough to see – a dogged ideological commitment to encouraging work by punishing those on benefits. The Guardian quotes a governmental source pointing out that entering part time work exempts families from the cap, adding:

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There might be some people who have to move to a less expensive area. But that doesn’t mean they won’t have anywhere to live. We are very optimistic about the behavioural change that this will bring about.

However, it is worth noting that the letter does not argue with the underlying principle that a family on benefits should be better off than a family that works. Rather, it suggests measures which would mitigate the negative effects while still retaining this fundamental aim. These include excluding child benefit from the cap, which would reduce the homelessness and child poverty risks, while still ensuring that most families with four children would not be able to live in “London or the south east” (Boris Johnson referred to this as “Kosovo style social cleansing” of poor people from cities).

Labour will try to force Pickles and the Welfare Minister, Iain Duncan Smith, to respond to an urgent question in the Commons today.

Unless it is modified, this policy risks failing on two counts: is not only inhumane but impractical and expensive too.