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. 

http://emsyblog.wordpress.com/2014/03/23/the-tories-making-children-pay/ …

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.