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The Benefits Cap: Four Things We Have Learned

The Conservatives’ only hope is an improvement in economic growth, and as their actions have cut rather than encouraged consumer spending, this grows ever more unlikely.

A picture of scissors

Benefits claimants – don’tcha just hate them?

Less likely to vote than pensioners and less terrifying than bankers, they are ideal fodder for the government’s cuts-at-all-costs policy, all rooted in the magical thinking that if you cut spending, economic growth and private sector employment will spontaneously occur.

Yet the debate, culminating in last week’s benefits cutting vote in the Commons, was revealing in many ways. If anything, Secretary of State for Work and Pensions Iain Duncan Smith and his fellow cabinet members have done a great service to the nation. It is possible now to see very clearly what the real lessons of this controversy are – and they do no favours to the government, or the country.

For example, did you know that..?

1. Being on benefits is not like being on a salary

The main problem with the government’s plans to cut benefits in real terms is that it is based on a false argument.

While it may engage the knee-jerk instincts of the British public (namely that bit of the collective UK reptile brain that enjoys lynching paediatricians), the claim that ‘hard working families’ are worse off than ‘scroungers’ is rot.

regardless of whether your benefits go up in line with inflation or not, it’s still a pittance

 

 

 

Firstly, regardless of whether your benefits go up in line with inflation or not, it’s still a pittance. If you’re REALLY lucky, single and live in North London, and are over 35, you might get £282.22 a week, or £14,725.83 a year, based on an overly optimistic projection care of the Turn2Us benefits checker.

The average housing and council benefit recipient, however, receives £105.14 a week, according to the DWP, plus £71.00 JSA, or £56.25 if you’re under 25 [source: DWP]. The totals to a grand sum of £176.14 or £161.39 for the under-25s.

Average rents in England and Wales are £166.74 a week. Assuming an average shopping budget of £15 and utility bill costs of £20 (an optimistic figure at best), the average single person is now facing a deficit of over £25 a week.

According to the Office of National Statistics, meanwhile, the average weekly earnings for employed earners is £471 a week. Which is to say, regardless of whether your wages or salary does or doesn’t go up, you’re still far better off with a job than out of work.

Strangely, the government doesn’t point this out.

2. It will make the recession worse

People on benefits spend their money – a fact unbearable to some, though a necessary evil – what with the basic human desire to not live in a shed and subsist on raw hedgehog.

Being on benefits, of course, means needing to budget, a reason why the old industrial north suffers from declining local economies. With less money to spend, benefit claimants aren’t able to support local businesses at the same level; when your local customer base has a larger than usual number of people on benefits, they will have less to spend.

Now, factor in a real term cut in benefits and you will make the situation even worse in deprived areas. With more businesses going to the wall or laying off workers, there will be less and less able to invest in their area.

The Coalition government is, of course, keen on cuts, and have slashed budgets for local government spending. This has cost 370,000 public sector workers their jobs, while freezing the pay of those left (relatively) unscathed.

Suffice to say this was a bad idea, especially in areas (like the most deprived ones) which also just so happen to rely more on the public rather than private sector. Less public sector workers, and more people on reduced benefits, means even more poverty for these areas.

Perhaps not coincidentally, we have just had a double-dip recession as government cuts have slashed money going back into the economy. As the benefit cuts take hold, expect a triple dip recession. (It’s for your own good.)

3. The public are idiots

While the government has demonstrated that singling out scapegoats helps sell bad policies, and can even make IDS look like a successful politician, the UK public does not come out of this so well.

According to a recent report commissioned by the TUC, the public supports benefit cuts at a rate of 48% until the real nature of the cuts is explained, at which point support drops to 30%. Still, even in a best case scenario, that’s a lot of mean-spirited arseholes, and shows a shocking lack of engagement in politics, public affairs and some of the most pressing issues facing our society. The government knows this and has exploited it with years of gutter press stereotyping to great effect.

Put simply, it’s a divide and conquer tactic at its most blatant; you have to be a fool to fall for it, and an even bigger fool to take the government at face value (I mean, really?).

What this has proved is that a sizeable chunk of the UK is more than happy to do in others on the somewhat faint basis that it will never happen to them. But as the benefit cap threatens incomes in up to 30% of UK households, it should be obvious that the ‘undeserving poor’ will not be the only ones that are collectively punished.

Indeed, what the public doesn’t seem to realise is that many people on full time employment rely on benefits too. Women in particular, as the Fawcett Society notes, rely on benefits and low-paid work, meaning that the cap will make an already parlous situation even worse for them.

More pertinent, perhaps, is the lack of recognition that the only real difference between being a ‘striver’ and a ‘shirker’ is a pink slip, and as the recession continues, the number of unemployed will continue to rise.

 

4. The Tories have lost the 2015 election

With this in mind, are the real winners of the benefit cuts the Conservative party? Having won the vote in Parliament, it would certainly seem so. And with a large chunk of the public in support of the cuts, it would seem it have won the argument.

But has it? The Labour party has retained its considerable lead in the polls, while the debate has also given David Miliband a golden opportunity to present his party as a clear alternative to the Conservatives, and, perhaps, himself as an alternative to his brother. Never has the word ‘rancid’ ever made a choice between two schools of thought so clear.

And as the effects of the cuts take hold and the economy continues to falter, a sizeable swathe of the electorate will be disabused of their sanguine notions regarding government policy. Others will be reminded, if they ever needed to be, that for the Conservatives, politics is something you do to other people.

The Conservatives’ only hope is an improvement in economic growth, and as their actions have cut rather than encouraged consumer spending, this grows ever more unlikely.

Of course, by 2015, the damage will have been done. It’s almost as if they’re doing it deliberately….

 

Article by Alexander Hay
Sidebar Image: FreeDigitalPhotos.net/olovedog

6 Replies to “The Benefits Cap: Four Things We Have Learned”

  1. Avatar Sarah CB says:

    I agree that one of the main points that the mainstream media have failed to pick up on is that a high proportion of those claiming means tested benefits are actually in work and therefore taxpayers are subsidising employers (often large corporations who pay very little tax in the UK) who pay appalling low wages. However I would disagree that most people are “idiots”. I think that most people have little time to read about these things in detail, when they are often working longer hours than ever, sometimes juggling childcare too and only hearing soundbites in the predominantly right wing press.

    Capping housing benefit is completely disgusting when most tenants have no choice but to pay overpriced rents to private landlords. Of course this situation could have been avoided if there was adequate social housing rather than it having been sold off(originally to tenants but now mostly ending up in the hands of buy-to-let landlords who are the real recipients of housing benefit, rather than the tenants, thereby representing a huge redistribution of income from the public purse to private wealth), which was of course a flagship of the Thatcher government. It’s about time that there was a cap on rents, not benefits.

    • Avatar Alexander Hay says:

      I think that most people have little time to read about these things in detail, when they are often working longer hours than ever, sometimes juggling childcare too and only hearing soundbites in the predominantly right wing press.

      In an age where information has never been so readily available, one cannot make such excuses.

      • Avatar Sarah CB says:

        Maybe not in middle class circles, but many working class people don’t have access to the internet, etc. and simply don’t have the time or opportunity to avail themselves of information.

        • Avatar Alexander Hay says:

          The radio is free. If you have freeview (and it’s pretty ubiquitous these days), you can keep up with the news. A newspaper doesn’t cost much and the Web is all over the place. You can make time if you choose, and I speak as someone from a pretty lowly ‘working class background’.

          We should be very cautious in viewing things through a class prism. In part, because it suits a lot of people to keep these divisions going, but also because class is as much a construct as most of the bullshit people choose – and the word here is ‘choose’ – to swallow.

          The flipside of living in a democracy is engaging in it. Otherwise, just let an aristocracy run things and… Oh, we already are.

        • Avatar Col. Jon Burrows Jr says:

          Let’s not forget the smoke and mirrors.

          • Avatar Sarah CB says:

            The smoke and mirrors is a good point, it’s important to look at who controls the media and the influence they exert on the mainstream information that is transmitted. Class is still the main defining characteristic of capitalist society, it influences not only the opportunities people have in terms of housing, education, career, etc. but even basics such as health and life expectancy. These benefit cuts will impact on people’s most basic human rights.

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