The benefit cap unfairly hits people who are unable to work

Marc Francis, Policy Director

Zacchaeus 2000 has long campaigned against the Government’s Benefit Cap and so we were delighted to see that the Work & Pensions Select Committee has reopened its inquiry into this issue.  The original inquiry fell when Prime Minister Theresa May called the snap General Election back in May 2017, and with several new members on the committee, other issues have come to the fore.  We were beginning to worry it had fallen off the agenda completely and so it’s great that this will now be the focus of the committee’s work this autumn.

Z2K is opposed to the Benefit Cap on a point of principle.  We believe people should get the benefits they are entitled to, and not have those restricted by an artificial cap set according to the whims of well-healed ministers.  Despite all the claims to the contrary, we saw the original £500 a week cap forcing low-income families to make a choice between paying shortfalls in their rent or putting food on the table and turning on the heating.  Inevitably, many of those families fell into rent arrears, were evicted and made homeless.  Lowering the cap has made that even worse.

No doubt the cap’s supporters will argue this is the unfortunate consequence of the choices those families make.  Their rhetoric is all about encouraging people back into work – end of story.  And DWP’s press releases constantly crow about the numbers of households who were capped who are now in work.  The most recent quarterly statistics show that around 49,000 of the 130,000 who are no longer capped are now working enough hours to claim tax credits.

This figure sounds impressive.  But as the IFS has shown, the vast majority of those would have moved back into work in any case.  The cap itself has had just a 4.7 per cent impact in terms of getting affected households into work.  Successive ministers have refused to engage meaningfully with this fact.  For example, when asked about the IFS figure by the committee back in November 2016, the former Secretary of State said, “As I remember the IFS line, they said that was something slightly more complex, that that 5% was not just about those who had got into work, it was the difference.”  The Permanent Secretary then added, “I think they were looking at some rates of change of something. I cannot quite remember what it is.”

Unlike the Government, Z2K accepts the IFS’ statistics.  We don’t doubt the loss of benefits and threat of homelessness has forced some people into work.  Our concern is the collateral damage caused to all those who haven’t been able to do so.  In our view, the key statistic is that just 19 per cent of those capped are in receipt of Job Seekers Allowance (JSA) – meaning they are required to be actively seeking work.  Fifteen per cent are in receipt of Employment Support Allowance, which means they are disabled or seriously unwell.  And 51 per cent are in receipt of Income Support – almost all of whom are lone parents with very young children.

Perhaps even more worrying is that 27,881 of the 117,960 households who are no longer capped are now in receipt of an exempting benefit.  This will usually be either Personal Independence Payment or ESA Support Group.  This figure represents nearly a quarter of all those no longer affected by the cap, and yet, unlike the number who have opened a Working Tax Credit claim the number of people who hit by the cap who have become exempt because they have been identified as disabled or seriously unwell never features in DWP press releases.  Some of these sick or disabled claimants will have been affected by the cap for months or even years.  While they may be exempt now, they may well have accrued rent arrears and other debts while their benefit was being capped.

We want to see the cap scrapped.  But we recognise that the Parliamentary arithmetic makes that very unlikely for now.  However, we believe ministers must be challenged to justify why two-thirds of those being hit with a stick to get them into work are disabled, seriously unwell or lone parents with pre-school children.  Interestingly, this question seems now to be part of the committee’s thinking too, and it has specifically asked for evidence of the impact on claimants who are not subject to work search conditionality.

Back in 2013, the committee’s influential chairman, Frank Field, gave Z2K’s then Chief Executive, Joanna Kennedy, a tough time on the Benefit Cap when she gave evidence to its inquiry into DWP’s overall cuts to Housing Benefit.  He argued that many of his constituents who were in work were on less than £26,000 a year and so they supported the cap.  True to form, Joanna pushed back with evidence of the numbers of disabled people and lone parents who were being hit.  But Mr Field seemed unconvinced.  Interestingly, however, he has now asked a Parliamentary Question himself whether DWP has considered the merits of an exemption from the cap for people that cannot actively seek work i.e. all disabled people and lone parents with young children.

As has been shown on other issues, like PIP and ESA assessments, the select committee has the ability to really put pressure on ministers.  We look forward to the committee’s evidence sessions.

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