Sunday 23 March 2014

Benefit Caps

Before I type another word, I'd like to make it clear that I think the idea of an overall benefit cap is ridiculous.

When times are hard, say during recessions, you actually want to spend MORE on social security. It boosts the economy and is the best way of making sure money is spent locally and directly. When times are better and jobs are plentiful you can reform and cut back.

So the very idea of an overall benefit cap is utterly counter-Keynesian and, well totally pointless really.

I'd also like to make it clear that I'm dripping with contempt that Labour are going to support an overall benefit cap, not because they believe it's a good idea or because it fits in any way with a Labour concept of how to run economies. Let's be very clear : The ONLY reason Labour are going to whip their MPs to support it is because they think it would be electoral suicide NOT to. I detest political decisions that abandon all conscience, sense and principle, heaving a few million people onto the scrapheap of life, just to placate the Daily Mail

However, I do think it's important to allay a few fears over what is actually proposed. There are two benefit cap policies and I believe they are merging into one in the justifiable outrage. This might be frightening people unnecessarily, so I'll try to clear it up here. 

The benefit cap that will be approved on Tuesday is an overall benefit cap.  It WILL include DLA (disability benefit) and ESA (sickness benefit) but WON'T include JSA (jobseekers allowance). Osborne announced that it would be set at £118 billion next year. It is a common myth that sickness benefits increase during recessions. They don't and nor do disability benefits. So as long as the overall cap is realistic, then including them is not as horrific as it might sound. Jobseekers DOES increase during recessions (obviously) so excluding it makes sense. (Excluding pensions has no logic and is simply shameless vote maintenance by the Tories)

The second policy refers to a household benefit cap. The cap will be 26k which the coalition argue is equivalent to the average household income. Of course it isn't, because families brining in 26k are likely to get a whole host of tax credits, child benefit and housing benefit too, but let's not spoil a good bit of spin eh? This is also an utterly ludicrous idea, taking no account of regional variations or individual circumstances. But DLA and Support Group ESA ARE excluded from this. This also makes sense as those totally reliant on the state for all support are likely to exceed a 26k cap in almost all cases.

So to sum up, the policies are ridiculous and Labour supporting them is shameless and weak, but I don't think sick and disabled people will be unduly hurt by them.

There is a caveat of course : Many people living with very significant impairments DON'T qualify for  DLA and DON'T get assessed as needing to be in the ESA Support Group. As the assessments get ever more stringent, this gets more and more common. These people WILL be affected by both policies as exemptions won't apply to them. But it's OK. Both Labour and the Conservatives seem happy to pretend they don't exist.

UPDATE : This rather good post looks into my claim that 26k is not the average income further, making the point, that this is really ll about punishing children for the decisions of their parents. …

Also, James Bolton (@JamesABolton on twitter) makes the point that with 2% leeway built in either way, and no penalties should governments exceed the cap, the whole policy is just designed to sound tough on "scroungers" whilst in effect, having no teeth at all. If the cap is exceeded and people still have valid claims, they must be paid by law. 


  1. It's just misery upon misery isn't it ...thanks for clearing that up I consider myself relatively clued up but was worried when I saw DLA etc in a "welfare cap" and was mentally trying (and failing) to tot up and see if I'd lose money :( and I bet I wasn't the only one yet, more unnecessary stress on people who have enough to worry and be upset about :(((

    1. I've just read your comment Redliz, and am/was in the same situation as you.I have brain damage and can't concentrate/ take in one line let alone all this.Now I think it's beginning to make to make sense.I thought the government were taking money away from us but I believe I now understand it to be they are capping what we are paid. This has caused me so much stress on top of stress already there. But grateful i am to find /read this article and peoples comments. Thank you. Jules

  2. Thank you for this - the clarity and the frustration with Labour - felt by so many of us.

  3. I've never understood how Labour supporting Daily Mail policies has any hope of electoral success. Are that many of its readers ready to be converted? Will the percentage of its readers converted outweigh the number of itsown supporters disilusioned? Frankly I just don't see the numbers ever balancing out.

    Surely a stand for convictions would be a much stronger position.

  4. I'm finding it hard to get my head around this. Thank you for sharing your thoughts. Seems to me that they have already decided the budgets for each benefit included within the overall cap and the numbers of people who can receive them. I understand that spending on personal independence payments has been reduced by 20% compared to how it would have risen if DLA had not been abolished. If it's already capped is this now a cut on top of a cut? They know in advance the numbers of people expected to lose their claim. They cut ESA by time limiting and means testing and engineering PIP and ESA assessments to reduce entitlement. What they're doing is sending a message that social security will no longer be paid on the basis of need, rather how much they're putting in the piggy bank. They will have us fighting amongst ourselves for the pennies they throw our way.

    The £26k cap limiting the amount an entire household receiving benefits can be paid regardless of how many people there are, is being measured against the average income per person in the UK.

    It's not like for like at all.

    As a single person on ESA living back home with a parent receivng a state pension, my income is less than a fifth of the amount they have capped. My parent was penalised years later by having their pension credit stopped even though they were informed immediately that I was here. Now they're in debt to the DWP! In my mind they are simply persuading the public that everyone on benefits is receiving too much. In principle the cap should be opposed.

  5. It occurred to me that despite the gutter politics at work, Labour could only be doing this because the actual end effects will not cause problems. But then I think back to Labour's 1997-2010 record on social security and the determination the current leadership has towards NOT confronting it. This is just one bad policy but the norm for Labour is that they never stop at one.

  6. The overall cap is a paper tiger - I'm not surprised the Labour Party have supported it though - as doing such a thing is cowardly.

  7. Good post Sue.

    I wonder sometimes if people just see the woods & ignore the trees.

    As for Labour - I agree that they had to do this in order to appeal to the great British public. We become so immersed in seeing things through our eyes & forget that as disabled people, we are a minority & political parties have to appeal to the majority but hopefully taking us with them too.

    I shudder at the thought of another 5 yrs of a tory government yet if we don't vote them out, that's exactly what we will get ! Only a vote for Labour will get shot of the tories.

  8. My earlier comment seems to have vanished into the ether so I'll try again... I believe the term you were asking for on Twitter earlier may have been 'economic stabiliser'. I get it now I've seen the article - I get there slowly :-)

  9. Yep Bill, that was it. I was confused between fiscal multiplier and automatic stabiliser. In the end, I figured a simple plain English explanation was probably best anyway.

  10. Saying the Conservative party and Labour party are separate organisations is a bit like saying The Times and the Sun are different papers; same policies, same ideas and they are accountable to the same people: murdoch, the CBI, the civil service, etc.

  11. We are in a grave situation where 1) neither side of the House of Commons knows what to do next and 2) a country is edging little by little into a police state.

  12. DLA/PIP - if you now recieve ESA too and have an early oc pension of above £85 a week your ESA is deducted under pension income rule. In incapacity benefit if you received high rate care you were entitled to full amount and did not have IB reduced. Sort of cap on high rate care now under esa circumstance if you have an early oc pension.

    1. So not to worry people on IB and get higher rate care plus have a oc pension I believe a (TA) transitional arrangement has been put in place so you recieve the same if you migrate to esa.
      If you have a complete break in ESA the new rule applies then.
      This is how I think it works.

      Really above post relating to new claimants.

  13. does not matter one iota who is in power over the coming years the results will be the same in that if your sick or disabled or unemployed you are in the frame for an early death unless you have a superb health team behind you and will fight your corner

    if you haven't your going to die as without professional support there is no way your going to make it as we have all witnessed the past four years

    labour is not the answer as like the Tory's it is not a party of balance plus it ideology is so close to the torrys (winner take all) selfishness across the board is endemic to around 500 or so mp's so the sick and disable are a easy target hence there deaths running in to hundreds per year at this time through cuts

  14. The household benefit cap legislation was introduced as part of the Welfare Reform Bill and is already having a dire impact upon tenants in London which was it's intention: it's social cleansing through housing benefit restriction and there are lots of single parents who have been made homeless already since its introduction. It only really affects the housing benefit part of a claimant's entitlement. The decision to exempt those on DLA was welcomed at the time (the argument from Government was right in that those with ill health and disability have less flexibility in meeting additional housing costs) but this contradicted the refusal to also exempt DLA or ESA (Support) tenants from the bedroom tax.

    The fact that £26,000 is not the average income was also well covered, not least in this blog post from October 2013: and, indeed, elsewhere.
    I agree wholeheartedly that Labour need to shape up and start to trust that the British public can recognise injustice and unfairness when they see it and to be a bit braver in challenging the Government. Sue McC

  15. This afternoon the British Labour Party voted with the Tory/LibDem government to have a Benefit Cap - Labour down the plug hole and no end of tyranny for disabled people and anyone one else receiving benefits. Labour don't even deserve a thank you in sarcasm

  16. More votes for Scottish Independence

    RT alison webster @alibali50 @oldfirehazard @blacktriangle1 Old saying in Scotland: "If you fly with the crows you'll get shot" @UKLabour will find that out

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