Another myth about ‘welfare’
Sheila Gilmore, until last May MP for Edinburgh East, reminds us that Labour MPs never voted for a restriction on welfare spending in the last Parliament, despite what both the Tories and the SNP were so keen to spin.
Remember the ‘Red Tory’ posters? The ones that spread all over social media? The ones that lined up most of Scotland’s Labour MPs as the guilty and cruel men and women who were consigning people on benefits to … Well quite what was never spelled out. The implication was to savage cuts in benefits.
The truth was somewhat less dramatic. But a reasoned explanation was drowned out by the constant repetition of those two words. This followed a vote on what was called the ‘Welfare Spending Cap’.
Now the Department of Work and Pensions (DWP) has used the word ‘cap’ in a number of different contexts. There is a ‘cap’ on the amount of housing benefit that can be paid to people in private tenancies, which varies from area to area. Then there is the ‘household benefit cap’. This has an automatic effect on a single person whose total weekly benefit income reaches £350, and a couple or anyone with children whose income reaches £500. At any one time there are around 20,000 households in the UK affected by this, many of them in areas of very high private rents or in temporary accommodation during a housing crisis.
Labour voted against the household benefit cap which was part of the Welfare Reform Act 2012. There was understandable confusion when, in 2014, the Government introduced its ‘Charter for Welfare Responsibility’ which had a target for a maximum spend in any one year, based on their forecasts of spending in the next few years. This was a confusion which the SNP and others were happy to allow to continue, even if only by failing to explain the difference.
So at first sight it might look as if as soon as the forecast spend (the ‘cap’ ) was reached benefits might be cut. For example, if the cap was breached a few weeks before the end of the financial year, might claims might be refused or cuts made to particular benefits?
Not so. The Charter for Budget Responsibility stated that in the event of the overall cap being breached, the Secretary of State for Work and Pensions would have to lead a debate in the Commons on a vote-able motion, giving an assessment of the reasons for the breach. He or she could then propose one of three options:
- Explain what steps they propose to take to get spending back into line. This could involve cuts to some benefits, but the wording equally allows for proposals for other action to reduce spending.
- Increase the cap.
- Explain why a breach in the cap is justified. For example it might be argued that to try to cut some kind of benefit spending would only produce a rise in public spending elsewhere.
Now if you have stuck with me so far (and that I realise is not a given – and illustrates the problem of why ‘reasoned explanation’ so often fails against a two word put down) you may wonder why I am returning to this issue now? It is because, barely noticed just before Christmas, the Secretary of State, Ian Duncan Smith, had to come to the Commons and seek agreement that his Welfare Spending Cap, in only its second year, would be breached for the next 3 years; but that this was all fine and nothing needed to be done.
Up to 90 minutes (Order of 14 December)
Secretary Iain Duncan Smith
That, pursuant to the Charter for Budget Responsibility: Summer Budget 2015 update, which was approved by this House on 14 October 2015, under Section 1 of the Budget Responsibility and National Audit Act 2011, this House agrees that the breach of the Welfare Cap in 2016-17, 2017-18, and 2018-19 resulting from the decision not to pursue proposed changes to tax credits, as laid out in the Autumn Statement 2015, is justified and that no further debate will be required in relation to this specific breach.
This happened because, under pressure from the successful opposition campaign on Tax Credits, the proposed tax credit cuts would not be happening. So faced with changing circumstances, even a Tory well known for his ‘mission’ to cut benefits simply flexed his own rather bendy and pointless welfare spending cap.
Does this mean that benefit cuts aren’t happening? Far from it. As I argued in 2014 the absence of a welfare spending cap hadn’t prevented the Tories making many benefit reductions. Nor will ignoring his own cap mean that cutbacks stop – £30 per week reductions for some people unable to work through sickness, accident or disability are on the way. The original plans for Universal Credit have been changed even before UC really got off the ground, meaning that the tax credit reductions defeated for current recipients at the end of last year, will reapply once (if? ) UC rolls out properly .
The ‘welfare spending cap’ was always largely a piece of political theatre rather than something serious. But it certainly wasn’t the same as voting for benefit cuts, as so many dishonestly claimed and still do claim.
Having the procedure in place is not a bad thing. If spending rises against forecast it isn’t wrong to investigate why. For instance, we need to control the constantly rising cost of housing benefit. Under the Office for Budget Responsibility’s current forecasts, spending on this will increase from £19.9 billion in 2012-13 to £24.2 billion in 2018-19. This is clearly unsustainable, and the only way this can be brought under control is by addressing our chronic shortage of affordable housing and the high level of private rents. The National Audit Office has just reported that the DWP is spending more on assessing claimants than it is saving, with assessment costs having risen sharply in the last year. (See my Huffington Post blog on this subject.)
I find myself hesitating before sending this. Is it worth stirring up the Red Tory stuff again? But don’t be too surprised to hear that or something similar in the forthcoming Scottish elections. And if we don’t counter these ‘myths’ we end up with them becoming ‘fact’ to be thrown back at us endlessly.