Coalition plans to cap benefits will not work as intended, and are unnecessarily draconianby Tim Leunig / November 17, 2010 / Leave a comment
Policies designed to hit people who never work and have child after child will hit others too—not least children themselves. Photo: Paul Box/Reportdigital
Housing benefit is suddenly newsworthy. It costs £20bn a year and will rise to £25bn without reform. The government’s planned changes are sweeping. The most prominent is an absolute cap on rent: £250 for a one-bedroom property, £400 for a four-bedroom one. London’s mayor Boris Johnson says it will lead to “ethnic cleansing”; London’s former mayor Ken Livingstone that the Tories are gerrymandering, Shirley Porter-style. The Guardian’s Polly Toynbee worries that central London will run out of cleaners. All are wrong.
Yes, the changes will force some people to leave central London, but this is not ethnic cleansing. Provided that childrens’ educations are not disrupted, and excepting a few special cases, it is reasonable for society to refuse to fund people living in London’s best addresses. Ken’s gerrymandering argument is self-evidently absurd, as every voter moving out of one constituency moves into another. And cleaners can commute from zone three, just like other workers. If companies are short of cleaners, they can raise wages. Make no mistake: outside London people are shocked at anyone claiming £400 a week for rent.
But other changes are more brutal. Forcing all single people under 35 on benefits to share a flat, for example, is pretty harsh on the dyslexic child who didn’t do well academically despite trying and left at 16. After ten years of working in a supermarket he’s still got nine years to go before allowed a place of his own. Is that fair?
Even worse is the new £500 a week cap on all benefits for the unemployed, to apply from 2013. “Why should someone who isn’t working get more than the average person in work?” the department for work and pensions press officer asked me, adding: “it’s about fairness.” At first sight that argument is compelling, yet it is flawed. If a person in work receives the average wage and has a partner and four children, and lives in outer London, they will receive their earnings plus around £490 a week in benefits, giving a total weekly income of about £870. It simply isn’t the case that the unemployed get more than the employed.
Imagine this person now loses their job. Under the current system, they receive £715 a week in jobseeker’s allowance, child benefit,…