The Benefit Cap: poverty, and continuity and change in social security policy

Dr Chris Grover

The Welfare Reform Act 2012 introduced a benefit cap in Britain from April 2013. The cap applies only to working age people and means that, unless a household contains a disabled person (as defined by the receipt of particular disability benefits), it cannot receive from certain means-tested benefits more than £500 per week for households with dependent children and childless couple households, and £350 per week for single person households.

The benefit cap was introduced as an austerity measure by the Coalition government and was justified through a particular notion of ‘fairness’ that prioritises relativities between wage earners and benefit recipients, and which, therefore, suggests average wage levels should have at least some role in determining the level of benefits that people receive. In a recent press release the government announced that by November (2013) 33,000 households in Britain had seen their benefits capped. The Minister for Welfare, Lord Freud, noted that this represented ‘returning fairness to the system by ensuring that families on benefit can no longer get more money than the average family earns’.

The benefit cap has popular appeal. An IPSOS MORI survey, commissioned by the Department for Work and Pensions, for example, demonstrates a majority supports the cap in principle and its current level. Given this, it is perhaps not surprising that the benefit cap is also supported by the Labour Party. While, for example, being concerned with what has been described as a ‘one cap fits all’ approach, it is committed to the principle of restricting the amount of weekly benefit that households can receive. The current Shadow Secretary of State for Work and Pensions, Rachel Reeves, for instance, reiterates the Coalition argument that: ‘I think it is right that those people who are in work do not feel that those who aren’t in work are getting something that they couldn’t dream of getting’.

Concerns have been expressed about the potential impact of the benefit cap. The Children’s Society, for instance, notes the disproportionate effect the benefit cap has on children compared to adults and, therefore, that it represents a ‘blunt instrument trying to solve a complex problem’. Research done in Haringey (one of the first local authority areas to face the benefit cap) suggests that a ‘number of unintended consequences are becoming apparent’, which include ‘exacerbation of mental health problems, women left unable to flee abusive partners, children now in danger of being taken into care, and pre-emptive evictions of some private tenants’.

Debate about, and evidence of, the effects of the benefit cap are important. However, what is rarely discussed is the location of the benefit cap in social security policy that, since its poor law predecessor, has in many senses been controversial. In fact, it is possible to argue that the benefit cap both challenges and confirms traditions in collective responses to economic distress in Britain.

Let us take the challenge first. It has been a principle of poverty relief in Britain for many years that levels of support should be related to the familial needs, where the number of people in a household has been taken as a proxy for that need. The Speenhamland System, introduced by magistrates in the county of Berkshire in 1795, for example, noted that:

“When a gallon loaf of bread cost one shilling… every Poor and Industrious Man should have for his own Support 3s weekly, either produced by his or his Family’s Labour, or an Allowance from the Poor rates, and for the support of wife and every other of his Family, 1s 6d…  When the Gallon loaf shall cost 1s 4d then every Poor and Industrious Man shall have 4s Weekly for his own, and 1s and 10d for the Support of every other his Family.  And so on in proportion as the price of bread rises or falls.”

Even following the introduction of the New Poor Law in 1834 – often interpreted as the low point in British social policy – relief whether inside or outside of the workhouse was related to family size. In the case of outdoor relief, for instance, scales of relief developed at a local level took account of the number of people in a household who could be considered ‘dependent’. Such scales often caused consternation between Boards of Guardians and between Boards of Guardians and central poor authorities. With the introduction of Unemployment Assistance in 1934 national scales rates, again, that relieved the needs of each ‘dependent’ member of a household were developed.

The benefit cap challenges this principle – that in order to relieve need social security scales rates need to be related to the number of people in a household – because it removes from households often substantial proportions of income. This means that the people in those households subject to the cap are forced to live on less than the benefit rates that the government itself sets as the minimum, particularly if they are to keep up with the payments for their housing costs.

It is also the case, however, that the benefit cap reinforces another of the long standing principles of poverty relief; that recipients of it should not be discouraged from taking employment at prevailing market wages. So, for example, the New Poor Law from 1834 was structured by the notion of ‘less eligibility’. This was the idea that, as the Poor Law Commissioners noted in 1834, the situation of the indigent ‘shall not be made really or apparently so eligible as the situation of the independent labourer of the lowest class’. While, because the condition of the ‘lowest class’ was so miserable, it was often difficult for this to be enforced, the notion of ‘less eligibility’ is basically that people must be forced to live in poverty if they can be expected to labour.

Between 1936 and 1975 the operation of what became known as the Wage Stop arguably carried the ‘less eligibility’ thrust of poor relief to social assistance benefits. It was designed to ensure that social assistance claimants did not receive more in benefit payments than they could expect to earn in paid work.

In this historical concern the benefit cap can be understood as restating the principle of ‘less eligibility’. This is because benefit systems, like those in Britain, that try to relate benefit payments to familial needs (using the number of people in a household as a proxy) are likely to be in conflict with a wage system that is premised upon an economic orthodoxy that relates the level of remuneration to scarcity of skill and productive value, rather than familial responsibility.

It is easy to see why the benefit cap is attractive to both the public and politicians in a period when the majority of the former are facing stagnating incomes and increasing living costs, and the latter are involved in a concerted effort to reduce public spending and the reach of the state. However, it is the case that the benefit cap represents a pernicious attempt to force lower incomes on people who up until the imposition of the cap were seen as having legitimate reasons (e.g. having children and/or cost of their housing) for having higher levels of benefit income. It is known from research on Minimum Income Standards that benefit levels were not adequate for their recipients to access an ‘acceptable standard of living’ even before the introduction of the cap. The imposition of a benefit cap will merely exacerbate this in the hope of modest benefit savings, but more importantly, enforcing a work ethic that demands individuals work for low and stagnating wages. In doing so, the benefit cap both challenges and reinforces principles that have been central to the relief of poverty for many years in Britain.

Chris Grover is a Senior Lecturer in Social Policy in the Law School at Lancaster.  He researches in the areas of social security policy.  He has written widely in this area, with his most recent books focusing upon crime, social security policy and inequality, and the loaning of social security payments.

 You can find out more about Chris’ research at: http://www.lancaster.ac.uk/fass/law/profiles/chris-grover

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s