UK: Benefit cap

Proposal

As part of the 2010 Comprehensive Spending Review, the Coalition Government announced a cap on benefits of £26k. Whilst this threshold was depicted by the government as a relatively high level of income, it does not take full account of the cost of living for recipients, including the number of dependents of a particularly household. It therefore had the potential to be particularly punitive for vulnerable families with a large number of dependents without an alternative source of income.

Severity: the intention of the measure was to only target those on relatively higher levels of income. However, as IFS analysis of the measure identified – whilst the measure only affected a very small number of benefit recipients (c.1%), for those that it did affect it represented a ‘very large reductions in their income’ – and when the cap was applied to a particular family this was due to them having a large number of children or high rental costs (or both). The measure was therefore high in terms of severity, but very targeted on a small group of outsiders who were unfortunate enough to fall into a category of vulnerable people (large family, high rent) that were targeted for this spending cut.

Severityhigh

Target: outsiders (highly regressive)

Refusal

Public opposition was relatively limited, with opposition largely coming from those in formal positions within organisations, rather than from protests specifically focusedd on the cap. Criticism included calls by church campaigners to exclude child benefit from the measure, and similar opposition from unexpected quarters, such as Emma Harrison, founder and chairwoman of A4e. However, no protest movement specifically focused on the benefit cap emerged.

public opposition (non-disruptive)limited

Obstacles

Public opposition did, however, feed into the legislative process, highlighting key issues that were subsequently taken up within Parliament – for instance witnessing the Government defeated in the House of Lords over its plan to include Child Benefit in the cap, although the Government subsequently moved to invoke “financial privilege” to overrule the House of Lords and remove the amendment. Divisions therefore existed within the Government over the extent to which benefits should be cut. For instance, in 2011 Clegg was reported as ‘preparing to oppose “arbitrary and vindictive” cuts to the benefits bill’. The Liberal Democrats were also central to the defeat of the Government in the House of Lords over the proposed inclusion of child benefits in the welfare cap.

Obstacles: the main obstacles experienced by the coalition government, therefore, were indirect (inter-elite divisions) and whilst there were very minor governing problems (in the form of the defeat on child benefit) these were successfully overcome by the government.

obstaclesindirect (inter-elite divisions)

Elite response

consent-seeking: In seeking to defend its proposals the Government consistently referred to its attempt to implement necessary welfare reforms in as fair a way as possible. For instance, responding to criticism of the welfare cap (and especially the inclusion of child benefit in the cap), IDS said, “It is fair and it is popular and it helps improve the welfare system that we inherited”. Similarly, Chris Grayling, employment minister, said: “We are making principled reforms that will finally tackle the trap of welfare dependency . . . The bill will also deliver fairness for claimants and for the taxpayers who fund the system.” Indeed, in defending the move, and later suggesting a further lowering of the cap, Cameron repeatedly highlighted the way in which it shielded taxpayers from unfairly subsidising those on benefits. For instance, in 2015 when he announced plans to lower the cap further to £23k, he said: “People working 10, 11 hours a day, they don’t pay their taxes to sustain people on welfare who are able to work”. Similarly, Osborne defended the cap by stating, ““Those who campaign against a cap on benefits for families who aren’t working are completely out of touch with how the millions of working families who pay the taxes to fund these benefits feel about this.”

concessions – In doing so, however, it also moved to introduce an £80m fund to help those in emergencies, as the fear of homelessness was cited in the Lords as one reason for their opposition. The Government was moved, therefore, to introduce some (relatively minor) concessions.

Concessions: limited

Outcome

Went ahead?

Yes, the benefit cap went ahead – and, in addition, Cameron promised in January 2015 that if the Conservatives were elected in the general election of that year that they would lower the cap further to £23k.

Consequences?

In terms of the popularity of the Government, the benefits cuts had ambiguous support amongst the electorate – 75% agreed that benefits spending was a waste of public money, but around half of those believed that the government was targeting the wrong people in seeking to reform benefits. Whilst the government did cultivate an image for being ‘anti-poor’, therefore, it is not clear that this was particularly damaging.

consequences: none? (indirect reputational effect only)

SUM: only indirect obstacles (inter-elite divisions), and minor/limited concessions – slightly patchy, but almost full adoption (0.5+1=1.5)

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