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15 July 2013

Labour’s disastrous new line of attack on the benefit cap: it’s too soft

By denouncing the government for still allowing some families to "live a life on welfare", the party has begun an arms race it can only lose.

By George Eaton

Aware that the £26,000 benefit cap is one of the government’s most popular policies (a recent YouGov poll found that 79 per cent of people, including 71 per cent of Labour voters, support it), Labour has long struggled to settle on a response.

It initially (and rightly) opposed the policy altogether but later agreed to support a cap provided that it took into account regional variations in housing costs. As shadow work and pensions secretary Liam Byrne argued, “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 now, as the policy is introduced nationally, Byrne is pursuing a new line of attack: the cap isn’t tough enough. He declared today that “ministers have bodged the rules so the cap won’t affect Britain’s 4,000 largest families and it does nothing to stop people living a life on welfare.”

The reason 4,000 families are unaffected by the cap is because until they are transferred to Universal Credit (which may be some time), only housing benefit will be deducted, meaning that they can still receive more than £26,000 in other benefits. Labour notes that “under the government’s plans, workless lone parents with 7 or more children or workless couples with 6 or more children will slip through the full benefit cap because of way the system is designed. An out of work couple with 10 children will still receive benefits £15,000 over the limit, meaning they earn £41,000 in out of work benefits a year.”

It’s easy to see why this line of attack appeals to Labour. It allows the party to simultaneously denounce the coalition as hopelessly incompetent and to present itself as ‘tougher’ than the government on benefits. But it is both politically and morally dubious. By attacking the government for allowing some families to claim more than £26,000, Byrne undermines his own policy of a regional benefit cap, which would almost certainly mean a higher allowance for London residents. It’s also dismaying to see him echo George Osborne’s rhetoric and take aim at those “living out a life on welfare.” The truth is that the majority of the unemployed are desperately trying to find work (with little support from the government) and, in most cases, will have been employed and paid taxes for years before the recession. The number who choose benefits as a lifestyle (or appear to do so) is so small as to be almost statistically irrelevant. As I noted earlier, the arbitrary cap of £26,000 will mostly punish large families who fall on hard times through no fault of their own.  

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While rightly seeking to bring down social security spending through measures such as the living wage and more affordable housing, Labour must at all costs avoid entering an arms race with the Tories on welfare (one it can only lose). But with his opportunistic attack on the cap, that is precisely what Byrne has done. 

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