The “Benefits Cap” Shames Britain
Posted: 24/03/2014 | Author: The Political Idealist | Filed under: Uncategorized | Tags: benefits, Budget 2014, Conservatives, IDS, Labour, Politics, social justice, socialism, society, The Economy, Welfare |Leave a commentLater this week, Conservative, Lib Dem and a large number of Labour MPs will mill through the “Ayes” lobby in Parliament to vote for a measure highlighted in George Osborne. Which is the lucky measure that attracts the unanimous support of the frontbenches? That would be the legislation that will require every new Parliament to set a “cap” on the annual figure spent by the government. The cap, which will rise by the (lower) CPI inflation rate and excludes Job Seekers’ Allowance and the Basic State Pension, will therefore bind governments for five years until a general election and the new Parliament sets a new cap.
Should the cap be exceeded in a given year, the Chancellor will have to explain to Parliament why. That explanation will be followed by a vote by MPs on whether to authorise the continued payment of benefits for the rest of the financial year. The risk does not so much lie in Parliament failing to ratify an emergency rise- although I can imagine the Tory daydreams about wrangling in Parliament (similar to Congress and its artificial cliffs and sequesters) in which some future government is forced to make brutal, sudden reductions in benefit rates in order to gain Parliamentary assent. No, more likely scenario is that future governments set a low cap at the beginning of each Parliament, for fear of the political fallout surrounding any big increase on the previous Parliament’s cap. Then the government would be perpetually stingy on benefits spending, adverse to the risk of breaching the cap. In the event of a recession, as demand for income support and JSA-linked benefits rocketed, the government would impose cuts to avoid Parliament forcing it to do so anyway.
Then there are cumulative factors that will erode the true value of the cap. Britain is a country with a growing population and economy. Yet the cap will be set in cash terms, meaning there is no automatic link between an increase in the number of families needing Child Benefit; pensioners needing Fuel Payments, etc., and the cash value of that cap. But I guarantee that a future Chancellor seeking a 5% rise in the benefits cap in response to 5% population growth wouldn’t get a fair hearing. S/he will be vilified by the media and the Conservatives as wanting a “multibillion pound benefits binge”. Any response to demographic changes will be portrayed as throwing £50 notes at tracksuit-wearing, foreign born, unemployed single mothers with twelve criminal children. Little by little, spending on social security will be eroded because the political cost of doing anything else will be too high.
And in the future, when government finances are in surplus, the economy is flourishing and a government wants to expand the benefits system in the interests of social justice, for example in introducing universal free social care, they will be almost unable to do so because they must brave a political mudstorm at the beginning of the Parliament to make room for it in the benefits cap.
The Conservatives know exactly what they are doing with this cap. The cap is not about tackling growth in a massive section of public expenditure- indeed, at 10.4% of GDP spent on pensions and social security in 2011, spending is actually low by postwar standards. No, this is about a stealthy attack on the welfare state that will draw in future governments for decades to come, long after IDS and his cuts have become a distant memory.
What is so shameful is that the Labour leadership, which has had some success in turning the tide of public opinion against the Conservatives and their toxic attacks on the young, the poor and the disabled people who rely on the welfare system, is not only too cowardly to oppose the scheme, but is now instructing its MPs to vote for the measure. The Labour Party should display the moral fibre needed to resist this populist move: if Labour highlighted the problems with the Bill now, opposition to it might not be popular but it would not be unpopular either. That’s why I’m backing the large backbench rebellion that is brewing on the Opposition benches. The Labour leadership is right on so many issues, but any MP who collaborates with the Conservative Party on this rancid measure is letting Britain down.
