Many readers will have watched the Welfare Reform Bill (WRB) debate this week from the House of Commons like I did. Just as many tweeted about it with the general consensus being that the Tories are heartless bastards for the WRB, the Lib Dems spineless bastards for voting with them and Labour heroic bastards for fighting against the callous WRB. The invective on twitter has indeed been ferocious.
Yet the WRB is woefully thought out won’t work and will cost far more than it attempts to save and all 3 main parties are incompetent and especially Labour who were outflanked initially and then argued the wrong case.
Outflanked – From the start the Tory-led coalition spun the WRB as all benefit claimants get £26k per year tax-free, which they don’t at all and used the principle that the WRB was developed with a strong principled purpose to ensure that all those ‘in-work’ received more than those ‘out-of-work.’ Labour belatedly appeared to agree with that sentiment yet chose to have a party line of a regional cap was needed. This was inept.
Why Labour argued the wrong case – Labour’s correct underlying point was that the high private rent costs especially in London was the main reason why anyone in-work or out-of-work would exceed the overall benefit cap of £500pw. Many impassioned speeches and correct speeches in the debate mentioned the huge private rent costs and the HB caps introduced last year cap LHA at a maximum £20,800 per year which is fully 80% of the total overall benefit cap and leaves just £100pw in all other welfare benefits
Labours arguments were good and powerful, which I discuss below, but they should have argued for housing benefit to be taken out of the national cap altogether and have a national overall benefit cap at a much lower rate – a case of arguments being good but the case for them being ineptly argued. Individually, Liam Byrne as shadow minister for DWP argued well as did many other Labour MPs, yet all Labour MPs were hamstrung by the inept regional argument.
Liam Byrne told the House of a couple with 5 children who lived in London in private rented accommodation. He didn’t say whether they were working or not but let’s assume for the sake of argument they are not. This is one of the large families the Tories and the Tory media like to vilify as benefit scroungers. He said they receive a total of £743pw in all benefits which is almost £39k per year net and 50% above the ‘more than generous’ cap of £500 per week. Yet £350pw of that was HB and so the amount of benefit this very large family receive was £393pw plus their rent costs. In many places outside of London the £107pw left out of the £500pw limit or cap would pay for a large 4 bed social housing property.
So in Liverpool or Newcastle or Stoke or Hull this same large workless, workshy, benefit-scrounging and feckless et al ‘family type’ that are the subject of such media scorn and Tory invective WILL still come UNDER the national cap of £26k per year or £500pw.
The overall benefit cap (OBC) is a crude yet ineffective instrument and will only curb these ‘excesses’ where the ‘benefit-scrounging feckless’ live in London or in private rented accommodation. The OBC won’t save the public purse a penny with this extreme example of benefit largesse and shows that the OBC is an incompetent policy.
Yet benefit largesse to the feckless is at the core of the government spin and stated purpose of this policy. Would the 74% of the general public quoted as being solidly behind the government to ‘reform’ this benefit largesse to the feckless be such a high figure if this reality was made known? Joe Public would surely have been baying for a lower cap. Yet Joe Public would have been made aware that the issue is not the level of welfare benefits such as JSA/IS/WTC/CTC/ESA but that the issue is housing benefit which is a critical and correct distinction. Joe Public would also have been aware that the real issue is housing benefit paid for private rented accommodation too.
Labour therefore failed to show that the policy was incompetent.
Liam Byrne who individually argued his case well also used my research when he asked Chris Grayling the DWP Minister was he aware of what the CLG were doing to rents. They were going up by 41% he said and ran totally contradictory to the purpose of benefit savings.
Surely I should be quite pleased with myself that my research has been used. Yes but no, as these government plans increase the overall HB bill by £5.2 billion per year by 2015 whereas the WRB projected savings are about £300m per year or less than £1 billion by that time. Labour failed to make the point.
The benefit largesse issue was admirably discussed here in the IFS paper ‘Thoughts on a Benefit Cap’ and this says:
“Crucially, is a benefits cap the best approach to take to deal with benefit payments that the Government deems excessive? If it thinks that the benefit system is giving some families a level of entitlement that is too high, it must believe that some benefit rates are inappropriately high. The best-targeted response would surely be to change those benefit rates. In this particular case, the logic underlying the Government’s belief that no family should receive more than £500 per week in benefits would point towards cutting the amount families receive for having large numbers of children and/or reducing the value of housing costs against which people can claim Housing Benefit.
The apparent simplicity of instead just placing a cap on total benefit receipt might look appealing, and may well be politically expedient. But it seems incoherent for a Government to set a system of benefits which it evidently thinks gives some families excessive entitlements, and to then attempt to ‘right this wrong’ with a cap”
I agree fully with the above question as a starting point – Is a benefits cap the best approach to take to deal with benefit payments that the Government deems excessive? As I stated ahead of the debate we didn’t hear the Government stating JSA was too high or ESA was too high or any other welfare benefit. And that is a fault of the Labour strategy to not highlight these points. It would have forced debate on the levels of welfare benefits, which of course this or any Government avoids, and especially on the cost of housing benefit paid to private landlords.
I also commented on Inside Housing discussion site ahead of the debate to say
“As for Labour’s idea of a regional cap that is pure nonsense. Currently every benefit apart from HB is set at a national rate. Much easier to remove HB from the overall benefit cap and set it much lower. Unfortunately that would expose the ridiculous rent levels of the PRS in London and draw attention to that, something Labour ought to be doing and something the coalition don’t want. Moreover reducing the cap to £16k doesn’t have the same negative spin potential of £26k which this coalition has used without explaining that it is only PRS LHA levels that take it over the £26k cap.”
The week before I commented there in response to an article on Cameron attacking Labour’s stance on the overall benefit cap in which he called them hypocritical that
“So please tell me why your government is only capping IN-WORK BENEFITS?
Is JSA/IS (ie dole) being capped or reduced? No
Is ESA (ie the sick) being capped or reduced? No
Is HB /LHA the only benefit being capped and reduced? Yes, as Universal Credit takes all benefits away from cap leaving a maximum residual amount to pay towards housing cost”
Labour weren’t being hypocritical they were ignoring the real argument that it was always going to be ONLY Housing Benefit that would be reduced and no welfare benefit would be. Not only did Labour not see the real issues, they were being taunted by the PM on the very same issues Labour should have been arguing for the past year.
The IFS paper above says quite correctly that the false issue of an overall benefit cap if highlighted and considered must mean the Government would have had to argue and detail which individual welfare benefits were too high as this “would also force the Government to think carefully about (and be explicit about) the features of the current benefits system that it considers inappropriate.” It goes on to say “Apart from improving the quality of its solution to the perceived problem, this may also improve the quality of wider debate about the issue. After all, it would make it crystal clear what precisely the debate is about”.
Making clear what the debate was about or making clear what the real issues were and are is where Labour failed in its strategy. It simply didn’t get the reality of the WRB out to Joe Public and then it compounded that error by limiting their argument to the regional cap nonsense.
In summary Labour didn’t do what any opposition should, they didn’t oppose because they chose an inept strategy. Other issues from the debate were revealing and not just because they should individual Labour MPs did understand the real issues but were constrained in arguing them because of the inept and constraining strategy of a regional cap.
Karen Buck MP was amongst many MPs who constantly reminded the Coalition that Housing Benefit was an ‘in-work’ benefit. Dame Joan Ruddock was another and she went on to say that Croydon are looking to house their homeless in the North of England. As did John McDonnell who said his council in Hayes was persuading people to move to Leicester and Manchester. Frank Dobson correctly identified their majority of benefit went into the ‘grasping hand’ of private landlords a point many more Labour MPs correctly made.
Many MPs made the point that the added homelessness costs would outweigh any savings and the leaked letter from Pickles PPS which said it would be a net cost was mentioned on numerous occasions.
All of the above correct points show that Labour MPs knew the real issues but were constrained by the regional cap policy which was easily unpicked by cheering Coalition MPs – So what would Labours cap be in London as it must be much higher than £26k? or Tell me what it will be in Liverpool or Hull as it must be lower?; or if you want a regional cap how about regional welfare benefit levels or regional pay! My labelling this strategy as inept is giving it false praise!!
One of the good arguments some Labour MPs put forward despite the regional cap straightjacket. Andy Slaughter (Hammersmith) made a compelling argument in response to the baying Tory charge of ‘Why should the unemployed live in high-cost central London that those working can’t afford?’
So he said, we move them to outer London say to Croydon, who will then move them to Hull, where there are no jobs and so they will return to where they have local connection in Central London and be re-housed in the same council house area in a temporary property which the council now lease from a private owner at a cost much greater than the original starting position!
That argument was one of a number of likelihood arguments that demonstrated the overall benefit cap would not and could not work. A DUP member for example asked the House; does anyone know how many people in Northern Ireland would be affected by this? It was a rhetorical question to which the answer was given – one! It seems there is only 1 scrounging bastard (aka feckless, workshy, et al) in the province
In summary – as this is already overlong and rambling – the overall benefit cap is an inept policy that is so superficial the minute you look at the implications of it becomes a shambles. It was developed by the heartless bastard Tories. It was allowed to pass by the spineless bastard Liberal Democrats. But it was allowed to pass because of the inept bastard of a strategy adopted by Labour.
Frank Field for once issued a telling contribution. By the time Universal Credit and its overall benefit cap part is introduced in 2013, Tory MPs will be looking for Labour to help them when their Tory constituents realise the real implications of this cap. Labour has 12 months or so to remind the electorate it was against the cap and hammer those points home, to show not just as Liam Byrne said that the Coalition announced one-third of the planned saving back towards the extra homelessness it will create, but also to show that it will cost more and far more than it ever intended to save. If they don’t want to remain in opposition after 2015 they need to argue the real issues and not be constrained by inept strategies such as regional caps.
UPDATE Saturday 4 February 2012
For the avoidance of any doubt and after a few messages and emails regarding the above, my argument is NOT that Labour MPs or Labour Party didnt have the arguments against this woeful Bill, its that the strategy of regional caps taken as the party line was (a) wrong and (b) constrained the arguments against the BIll, and in doing so it failed miserably in highlighting the many wrong, costly and mythical aspects of the WRB.
Finally, there is acute irony in many ‘leftish’ campaigns praising the House of Lords and how undemocratic the House of Commons has been in reversing the losses in the Lords. Financial privilege aside, If that doesnt show the complete and utter muddle the Labour Party and the ‘left’ got into over WRB I dont know what does. One can only hope someone can take a step back from this emotive subject and adopt a strategy to demonstrate the ineptitudes of this Bill, not for the lefts sake, but for the poor vulnerable bastards it will impact upon.