Is the benefit cap enough?

assesses the impact of the new benefit cap and asks whether more changes need to be made

Photo Credit:  mattk1979

Photo Credit: mattk1979

Earlier this week the coalition government introduced a £500-a-week cap on benefits with aims to reduce the number of people receiving excess money. Predictably this cap has been talked about for a whole host of reasons, statistics have been thrown around, many have come out in outrage and David Cameron has even managed to tweet a fake Ian Duncan Smith account. Yet it still seems hard to determine what it really means for us. So the basic idea seems to make sense – they’ve cut benefits to ensure that money received in tax can go as far as possible. However I don’t think it’s really as clean cut as this.

Okay, the idea that people on JSA can afford a Sky box or flashy holidays when many working people cannot does seem a bit absurd. Certainly I would class these sorts of items as a luxury which people invest in if they have the money. Yet for most of us technology is an important way in which we can gain information about the world, a way to keep up with current affairs and culture which otherwise might be difficult.

In addition we expect now to be able to have a choice about what we consume and what we don’t. Perhaps the idea of a Welfare State is to give people a lifestyle where they can afford to choose what to spend their money on, and who are we to judge? The problem isn’t really that if people want the item they shouldn’t save their benefits, it’s that some people actually get enough to buy these products in excess. Indeed some people would argue that having even the savings to buy luxury goods means they are getting too much in benefits.

I think it is a fine line, one which is almost impossible to get right with the cost of living varying hugely across the UK. But if you’re earning £26,000 a year on benefits and the living wage averages at around £17,000 something is not quite right.

Mark Hoban, the Tory minister for work, claimed that the £500-a-week ban would be too much for those living in less prosperous areas. Of course it is a flaw of the system if people are earning more than the average working wage in that area. The idea of the Welfare State should be to help those in need, not to be an alternative for people who don’t want to work. In fact a programme on BBC One this week showed one person who thought he was ‘too good’ to work on a shop floor because he had a degree and thus was happy to live off benefits. This does not seem right and I think we should be trying to foster an attitude of work as much as we can, getting people to aspire and achieve.

However, it isn’t as simple as that. Some people can’t just get on, often through no fault of their own. If you have a large family to support or if you’re a single parent life becomes a lot harder and £17,000 doesn’t seem like enough. Indeed it is often hard to imagine living a life where you need to think about every penny. Perhaps then it would make sense to raise the national minimum wage – to make work a more viable living option.

Certainly benefits are not the only things that need to change. If people are really expected to enter the world of work, especially in this climate, they may need more support than a simple money incentive. Some form of education or childcare schemes seem like a good start. A benefits cap ultimately does not change the underlying issues and is most likely to disproportionally hit single parents, who receive an even lower £350-a-week. Although employment is rising there is still a way to go and benefits are just a start.

2 comments

  1. This really is an appalling piece. The bias and ignorance of the writer speaks volumes about UK education stamdards and by association York University.
    The introduction of the cap was not about reducing the number of people receiving ‘excess money’. The Government never said it was – instead they have made it clear the intention is to encourage (by stealth) people on low income, whether it be benefits or benefits and earnings, to either find more work, find better paid work or move (or some combination of those).
    They have not cut benefits to ensure money received goes as far as possible – that comment does not even follow any kind of basic logic! They have cut benefits to reduce public expenditure and borrowing – and thereby justify cuts in taxation rates (essentially aimed at those in the highest tax bracket). The Government is following it’s own political inclination (though failing in it’s attempts to cut public borrowing).
    On what basis are you claiming that people on JSA can afford a Sky box or have one? Have you met all 2-3 million unemployed? Are you including those who lost their jobs in the last few years? Have you done any research to back up your assumption? How do you know that people who are working cannot afford a Sky box? Do you actually understand that people on low wages are also on benefits – child benefit working tax credit – and that more people who are working claim benefits than claim JSA?
    Why do you place so much value on Sky boxes? Is it a status symbol for you? – if it is why assume it means anything to anyone else? Do you base all your beliefs on one or two extreme cases that the mass media conjure up especially for you?
    Nobody ‘earns’ £26000 a year on benefits – I can only guess that what you are trying to say is that the total value in benefits that is granted in respect of some people because of their circumstances (having children and/or disabilities) might amount to that figure. This figure has indeed been bandied about, largely for political gain, but the reality is that the largest part of the figure relates to housing costs – which goes to the landlords. The welfare system in the UK does not now nor has it ever paid claimants £26000 a year – they do not get that money and they cannot chose how it is spent! Most of those affected are placed in homeless accommodation – because local authorities have a statutory duty to provide accommodation for some people in some situations.
    Do you understand the difference bewteen the words earning (remuneration for work) and benefits (which may be instead of or as a top up to earnings)? Do you understand the way housing benefit is claimed and paid? Do you understand anything about anything?
    Mark Hoban – if you must refer to him perhaps a better example might be to mention this:
    ‘The employment minister Mark Hoban has been allowed to keep nearly all of the six figure profit he made on his taxpayer funded second home, it has emerged. ‘ (The Telegraph).
    It is very hard to follow what you are trying to say but if you are going to attempt to make some kind of critique of welfare benefits policy in the UK at least ensure you have grasped the fundamentals about how things work and the political reasoning (which is not all it appears) for change.

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  2. Two years ago JSA totalled £4bn out of a DWP benefit spend of £160bn and a total government spend of £659bn. You could end all JSA and it would not make any impact on national debt. It is a rounding error on the national budget. Pocket change. As are other benefits such as maternity pay, income support, and council tax benefit. Granted they all add up eventually. But the attack on benefits that help the most vulnerable in society (employed or unemployed) are driven by class and ideology.

    As for housing benefit, the cost of this is a reflection of the cost of rent, which post Thatcher is almost entirely set in the private sector (and matched by the public). Had the Government not shed almost all social housing the bill would be much cheaper.

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