The square root of nothing

January 31, 2012 1:23 pm

Apart from one piece for Left Foot Forward last year I’ve generally refrained from writing about the coalition’s proposal for a ‘household benefit cap’. That’s partly because the issue has received a disproportionate share of media attention compared to other aspects of the Welfare Reform Bill which will have wider and deeper impacts, such as the abolition of Disability Living Allowance.

But it’s also, I have to admit, because I find the prospect of engaging in a debate which starts from false premises distasteful. The political etiquette which has developed among all the main parties on this issue demands that even to get into the discussion you have to begin any intervention by saying that you support the principle of the cap. I’m not in a position to say that, which leaves me with no point of engagement with most opposition spokespeople and other critics of the cap – with some notable exceptions who we’ll get to in a moment.

I don’t support the principle because there is no principle to support. The benefit cap policy is a confidence trick on the part of the government which nobody with a serious interest in social security reform would recognise as addressing any identifiable problems with the system. It is the welfare reform equivalent of clause 28, a symbolic policy which is primarily intended to build public belief in the problem it claims to address. Although ministers like to boast about its popularity, it is based on complete contempt for the public, as seen in the ‘bait-and-switch’ tactics employed by ministers in promoting it.

The ‘bait’ is a seemingly uncontroversial normative and pragmatic principle – people shouldn’t generally be better off on benefits than working. But people are not generally better off on benefits than working: that’s the effect of having a minimum wage to which levels of in-work support (tax credits and housing benefit) are calibrated. As long as someone is working 16 hours a week at the legal minimum hourly wage, they are better off in work. So the principle that the public approves – the one they are in fact approving when they give their support to the cap- is already built in to the social security system. But as the public is not generally familiar with the workings of the system (why should they be?), they are not necessarily aware of this.

The ‘switch’ involves shifting the comparison from the incomes of those in or out of work to ALL the income of those out of work compared with with SOME of the income of those in work. Specifically, the benefit income of those out of work is compared with the average after-tax earnings of those in work, ignoring any in-work benefits that comparable working households are entitled to. So child benefit, child tax credit and housing benefit are included on one side of the comparison (out of work) and excluded on the other (working). You can demonstrate anything if you’re prepared to rig the comparison in this way, and that is precisely what the government has been doing.

Now most of the people involved in the legislative debate on the benefit cap – those in political parties at any rate – know all this. But as all the main parties believe the government’s bait-and-switch is an unbeatable strategy, even those who despise the policy prefer to engage in the pretence that they are on the same side as the government in order to increase their chances of getting amendments through which would alleviate its impacts. There are exceptions, among them I am relieved to say some Labour peers and MPs who have refused to go along with the charade of ‘support in principle’ for one of the most unprincipled pieces of legislative rascalry on record. And Lord Kirkwood, the highly respected LibDem former chair of the Commons Work and Pensions Committee went further than anyone in last week’s Lords debate in stating his opposition to the cap and laying bare the shabby calculations to which debate is now reduced: his words are worth quoting at length.

‘I want to make it clear that I am implacably opposed to a household benefit cap in principle. People’s eyes glaze over when I try to explain my main reasons. I tried it in Grand Committee and by the end people looked at me as though I was possessed…..

‘What I should really like to do with Clause 94 is vote against the whole thing. However, my noble friend Lord German and one or two others took me into a dark room, sat me down and said, “That wouldn’t be sensible because the great British public know the square root of next to nothing at all about the detail of the technicalities”. He has persuaded me that I should mitigate Clause 94, and I am prepared to do that.’ (Lords Hansard 23 January 2012 column 843)

This unusually honest account of the backroom logic of the benefit cap debate deserves to be cited whenever any representative of any of the main political parties says that a cap is right in principle. For all parties have based their position on the same calculation: ‘the great British public know the square root of next to nothing at all’ when it comes to this issue, and have been comprehensively hoodwinked by the government’s bait-and-switch. Whether they are government ministers spouting inanities about ‘fairness’, LibDem critical friends seeking exemptions of some benefits from the cap or members of the opposition saying they support the cap in principle and want to ensure its success, their positions all derive from backroom discussion about the ignorance of the public and how best to exploit it or adapt to it.

The only truly honest proponents of the benefit cap are those who are too uninformed or too far out of the loop to be party to the backroom consensus: the only truly honest critics are those who refuse to say they support it in principle. Of course, this is politics, pitched at a somewhat more dispiriting level even than what we are used to but still the only process by which the worst effects of the coalition’s policies can be mitigated. So those who judge that an inoculation with a small dose of intellectual dishonesty is a price worth paying for the chance of preventing some of the most arbitrary impacts of the cap have a point. But there are costs attached to this strategy, in terms of the quality of political debate and more generally in the endorsement it gives to a big untruth about the social security system and those who are relying on it. On balance, I think the latter considerations should win out. A little dishonesty only helps if you’ve already decided to go along with the big lie.

  • http://twitter.com/chloeparaskeva Chloe Paraskeva

    To be fair all parties use the ‘the great British public know the square root of next to nothing at all’ principle regarding pretty much every issue, not just welfare reform. The truth does not matter, only what the public perceive to be true matters.   

  • Anonymous

    Seems to me that to expect a family to be able to live on the equivalent to a gross salary of £35,000 a year, when not actually doing anything to earn it,  is exceptionally generous of us taxpayers.

    There are many hardworking families earning much less but doing the right thing by not living off the state.

    • Anonymous

      Gosh since being told I was a Tory a number of things seem to be perfect now. I understand why Thalidomide children do not deserve to live in a Tory or labour world.

      Also all those children born to parents who are not right in the head or have funny faces that some Comedians believe are Mongs you  know.

      Then again I suspect a young soldier who comes back and lives on his massive £120 a week pension will be very happy.

      I have seen the light now since being told I was a Tory.

      I understand where Blair was coming from and Brown and Miliband, trouble is for me of Course Thatcher was the one who gave us a life really, IB and DLA all comes from the Tories, this month I will get the biggest benefit rise in fourteen years, again a Tory.

      Perhaps it may well be worth joining the Tories.

      Although to be honest it was Brown who wished to end DLA not the Tories who will call it PIPs.

      Politics at it’s best

  • charles.ward

    It’s wonderful to see the contempt that the left hold for the British people. 

    I’m sure the will be many people getting up early in the morning to
    commute into London kicking themselves that they didn’t claim the £100k a
    year housing benefit that you seem to think working people can get to
    live in central London.

    There are millions of working people in this country who will look at their pay packet and add any benefits they recieve and still be way below £26k a year.  But apparently they are just thick and “know the square root of next to nothing at all”.  Good luck getting their votes with this attitude.

  • Samuel Rushworth

    Thank you Declan for talking some sense on this issue. It infuriated me last week on Question Time to hear nobody challenge Melanie Phillips as she repeated the same lie over and over that some people are earning more on benefits than the average person does in work – completely ignoring the fact that a family earning £26k in London would also recieve help towards their rent, child tax credits and child benefit.

    I am by no means of the left when it comes to benefits and would be the first to say that the contraction of incomes between the working poor and the non-working poor has left the former feeling no better off than the latter and asking themselves why they bother working hard and get ahead when others seem to have everything they have without all the stress and effort. I felt like that many times myself raising a family of 5 on a £23k salary in a stressful job and seeing extended family and close friends out of work seeming to have more disposable cash than I do.

    But if we’re going to have a debate about something let’s at least have it based on the facts.

    • Declangaffney

      Thanks- your point about the  incomes of working & non-working poor is important & I’ll look into it. As an analyst working on welfare I’m probably a little bit more  hawkish on benefits than many on the left- but things like the cap make it more difficult to argue for sensible reform. Just a parody of reform.

  • http://www.futureeconomics.org Diarmid Weir

    Thanks for articulating what I have sensed about this issue.

    At its root is a fundamental change in the philosophy of the state’s role.

    Generally if people are disadvantaged through no fault of their own (and that includes without work despite reasonable efforts to obtain it) we have believed that those disadvantages should be compensated as much as possible. If not, these people are unable to play their full part in society.

    But the concept of a purely financial and pretty much arbitrary limit to total benefits, with no actual concern on how that impacts on people in real terms, is literally inhuman.

    • Anonymous

      Bit like the words used by Old Adolph vote for me and I will make things better, and people in the end believed it,  right now in the UK I might believe it because right now nothing in the three main parties for me or people like myself.

    • Anonymous

      So what about Education – we have a specific level of financial funding per pupil, we have a specific level of funding per university student, we have fixed levels of financial support available for pupils with special educations needs.

      In the health service, certain treatments are unavailable because the financial cost is assessed to be greater than the benefit to the individual would justify. A whole range of diagnostic techniques and preventative medicines are to some extent restricted because of their cost.

      What is it about welfare benefit and in particular housing benefit, because that’s largely where the cap takes effect, that makes it so different to all of the other services?

      The argument that arbitrary financial limits are inhuman is completely baseless given that they apply to pretty much every service the state provides.

      • http://www.futureeconomics.org Diarmid Weir

        I think you make my point. Each of these other decisions is based (ostensibly) on balancing the real needs of the individual against those of society as a whole, whereas £26,000 is just a number. It is applied arbitrarily if you suffer from a particular disadvantage (being unemployed, as opposed to other disadvantages) and irrespective of your particular circumstances. That is inhuman in the sense that it is not a decision that acknowledges or takes account of the human costs and benefits.

        The fact that so many people (and not just those out of work) need help with housing costs is certainly a problem, but dealing with it should be based on analysis of that problem and not a response to tabloid marketing.

        • Anonymous

          A root though all of the decisions, the constraints, the caps, reduce to a number, a figure.

          Most of them are not planely stated because the public do not receive the money directly, they receive the service, but the cap, the level of allocated funding is still there in the background, whether consciously acknowledged by the recipient or not.

          The £26k benefit cap is no more or less inhuman than any other cap although it is more clearly stated in financial terms than most by nature of it being a cash benefit.

          What I find surprising is that when you compare it to the level of funding provided for many key public services that people use, it is comparatively generous.

          That we allow a family more in welfare payments in one year, potentially indefinitely, than we will invest in someones whole higher education or on 4 years of their schooling seems very generous.

          • http://www.futureeconomics.org Diarmid Weir

            I did say it was in issue of the philosophy, the way these debates are framed, as much as the outcomes.

            ‘That we allow a family more in welfare payments in one year, potentially
            indefinitely, than we will invest in someones whole higher education…’

            I’m not quite sure where such comparisons lead us. As a baseline we should be aiming to provide a family with what they need to have a ‘decent’ life (whether their members are fortunate enough to find paid work or not).

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