From The Telegraph, June 2012:
The Prime Minister was expected to unveil plans to set benefit payments on a regional basis during a speech in Kent today.
He was due to say: "We are looking at whether public sector pay should be more responsive to local pay rates and that is something we should look at for benefits too."
However, the remarks were cut from the final version of his speech setting out plans to overhaul the “out-of-control” benefits system.
I don't know why he cut that bit, but I do remember that The Daily Mirror and other left wing sources were up in arms about this at the time. Having regional benefit levels is a terrible idea of course, but it's one of those dumb ideas which keeps coming back to haunt us.
Next, the Tories actually did something sensible (not realising what they were doing, I assume) and introduced a cap on the total amount of benefits which any household can claim of £500 a week. Clearly, no household gets anywhere near £500 in non-housing related benefits; the only households nominally receiving more than that were those living in expensive areas claiming Housing Benefit (the worst benefit of all, as it actually goes to private landlords and pushes up rents and prices for the working population). Cue much squealing from Labour MPs with seats in London.
So the benefit cap reduces the north-south differential in the amount of welfare payments households which can get; it is the opposite of regional rates for welfare payments; and it is primarily a cap on Housing Benefit. Win win win!
So, the Tory government having otherwise made a complete mess of welfare reform, the Labour opposition continued the journey round the clock of stupidity.
From the BBC, June 2013:
This was the week Labour looked to show it could be trusted to control the welfare bill, with speeches by both Ed Miliband and Ed Balls.
But one aspect of what Ed Balls called "iron discipline" has already run into trouble within the party. The shadow chancellor floated the idea of regional caps on benefits. He suggested the Low Pay Commission could advise on where to set the cap in different parts of the country.
The result could see the current £26,000 benefit cap maintained or raised in London and the South East, but lowered in areas like the North East, Yorkshire, the North West and South West. The argument is that housing costs vary widely across the country, and it would make sense to differentiate.
But the idea has gone down like a lead balloon amongst Labour MPs in the North East.
Northern Labour MPs opposed this for exactly the same reason they had opposed the Tory suggestion of a year earlier; they were saying the right thing for the wrong reasons, but never mind.
And now Labour has re-suggested the original shit idea of differential regional welfare caps, but instead of opposition coming from northern Labour MPs, it's coming from southern Tory MPs:
Shadow Chancellor Ed Balls has floated the idea of setting "regional" rates for maximum welfare payments to dilute the strict cap introduced by the coalition.
He has suggested the current £26,000 annual limit on a household's benefit claims could be raised in areas with high rental costs such as London. But new analysis released by the Tories showed that the figure could rise to £54,000 a year in wealthier London boroughs like Kensington and Chelsea...
Tory Culture Secretary Sajid Javid said: "Labour still stand for dependency and benefits as a lifestyle choice. We will do everything we can to prevent Labour turning the clock back."
To a large extent this is Indian Bicycle Marketing, but in a bizarre sort of way, northern Labour MPs and southern Tory MPs have come to the right conclusion here, albeit from completely different starting points.
What is more puzzling is that UK politics is all about keeping rents and house prices as high as possible; this is the government party's main responsibility and its best chance of being re-elected, so why any large party would oppose a cap on Housing Benefit is a mystery to me.
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