The square root of nothing

Apart from one piece for Left Foot Forward last year http://www.leftfootforward.org/2011/05/lib-dem-opposition-to-george-osbo... I’ve generally refrained from writing about the coalition’s proposal for a ‘household benefit cap’. That’s partly because the issue has received a disproportionate share of media attention compared to other aspects of the Welfare Reform Bill which will have wider and deeper impacts, such as the abolition of Disability Living Allowance.

But it’s also, I have to admit, because I find the prospect of engaging in a debate which starts from false premises distasteful. The political etiquette which has developed among all the main parties on this issue demands that even to get into the discussion you have to begin any intervention by saying that you support the principle of the cap. I’m not in a position to say that, which leaves me with no point of engagement with most opposition spokespeople and other critics of the cap - with some notable exceptions who we’ll get to in a moment.

I don’t support the principle because there is no principle to support. The benefit cap policy is a confidence trick on the part of the government which nobody with a serious interest in social security reform would recognise as addressing any identifiable problems with the system. It is the welfare reform equivalent of clause 28, a symbolic policy which is primarily intended to build public belief in the problem it claims to address. Although ministers like to boast about its popularity, it is based on complete contempt for the public, as seen in the ‘bait-and-switch’ tactics employed by ministers in promoting it.

The ‘bait’ is a seemingly uncontroversial normative and pragmatic principle- people shouldn’t generally be better off on benefits than working. But people are not generally better off on benefits than working: that’s the effect of having a minimum wage to which levels of in-work support (tax credits and housing benefit) are calibrated. As long as someone is working 16 hours a week at the legal minimum hourly wage, they are better off in work. So the principle that the public approves – the one they are in fact approving when they give their support to the cap- is already built in to the social security system. But as the public is not generally familiar with the workings of the system (why should they be?), they are not necessarily aware of this.

The ‘switch’ involves shifting the comparison from the incomes of those in or out of work to ALL the income of those out of work compared with with SOME of the income of those in work. Specifically, the benefit income of those out of work is compared with the average after-tax earnings of those in work, ignoring any in-work benefits that comparable working households are entitled to. So child benefit, child tax credit and housing benefit are included on one side of the comparison (out of work) and excluded on the other (working). You can demonstrate anything if you’re prepared to rig the comparison in this way, and that is precisely what the government has been doing.

Now most of the people involved in the legislative debate on the benefit cap - those in political parties at any rate- know all this. But as all the main parties believe the government’s bait-and-switch is an unbeatable strategy, even those who despise the policy prefer to engage in the pretence that they are on the same side as the government in order to increase their chances of getting amendments through which would alleviate its impacts. There are exceptions, among them I am relieved to say some Labour peers and M.P.’s who have refused to go along with the charade of ‘support in principle’ for one of the most unprincipled pieces of legislative rascalry on record. And Lord Kirkwood, the highly respected LibDem former chair of the Commons Work and Pensions Committee went further than anyone in last week’s Lords debate in stating his opposition to the cap and laying bare the shabby calculations to which debate is now reduced: his words are worth quoting at length.

‘I want to make it clear that I am implacably opposed to a household benefit cap in principle. People's eyes glaze over when I try to explain my main reasons. I tried it in Grand Committee and by the end people looked at me as though I was possessed.....

'What I should really like to do with Clause 94 is vote against the whole thing. However, my noble friend Lord German and one or two others took me into a dark room, sat me down and said, "That wouldn't be sensible because the great British public know the square root of next to nothing at all about the detail of the technicalities". He has persuaded me that I should mitigate Clause 94, and I am prepared to do that.’ (Lords Hansard 23 January 2012 column 843)

This unusually honest account of the backroom logic of the benefit cap debate deserves to be cited whenever any representative of any of the main political parties says that a cap is right in principle. For all parties have based their position on the same calculation: ‘the great British public know the square root of next to nothing at all’ when it comes to this issue, and have been comprehensively hoodwinked by the government’s bait-and-switch. Whether they are government ministers spouting inanities about ‘fairness’, LibDem critical friends seeking exemptions of some benefits from the cap or members of the opposition saying they support the cap in principle and want to ensure its success, their positions all derive from backroom discussion about the ignorance of the public and how best to exploit it or adapt to it.

The only truly honest proponents of the benefit cap are those who are too uninformed or too far out of the loop to be party to the backroom consensus: the only truly honest critics are those who refuse to say they support it in principle. Of course, this is politics, pitched at a somewhat more dispiriting level even than what we are used to but still the only process by which the worst effects of the coalition’s policies can be mitigated. So those who judge that an inoculation with a small dose of intellectual dishonesty is a price worth paying for the chance of preventing some of the most arbitrary impacts of the cap have a point. But there are costs attached to this strategy, in terms of the quality of political debate and more generally in the endorsement it gives to a big untruth about the social security system and those who are relying on it. On balance, I think the latter considerations should win out. A little dishonesty only helps if you’ve already decided to go along with the big lie.