The benefits cap

I have to say, I was taken aback by the organised rage against the proposed £26,000 cap in benefits payable to one family in a year. As others have pointed out, you'd have to be earning about £35,000 gross to see that much net income. Surely anyone sane would have realised that paying that much taxpayer money to one family, let alone tens of thousands is basically indefensible and would have picked a different battle to fight.

Apparently not.

The opponents have done their best to sidestep the essence of the cut by addressing instead its effects: "you'll force families to move out of their houses", "children will suffer most", and in the less temperate opinion pieces "it's just ethnic cleansing". I have not seen a piece to date where someone actually addressed the issue of why it was right to pay that much money to a single family. Play the man, not the ball, seems to be the order of the day.

Tim Leunig's piece in CiF is a great example. He actually has a couple of nuggets of rational argument:

It takes no account of your employment history or family size. So a central London couple who have never worked are unaffected, because they currently receive less than £26,000 in benefits. But a large family – even in a cheap house – will be hit. That is not sensible.

I'd take issue with this, because the whole point about the cap is that it addresses the total benefits, not just the size and cost of house that the family lives in; the large family in a cheap house is receiving much more in child benefit than in housing benefit. Since money is fungible, it doesn't matter if they receive 1% in housing benefit and 99% in child benefit, or vice-verse

But then Tim ventures out further into the quicksand:

...a four bedroom house [in Tolworth, London] will give you little change from £400 a week. Cutting housing benefit to £100 a week – which is broadly what the cap means if you have four children – makes life impossible. After rent, council tax and utilities, a family with four children would have 62p per person per day to live on. That is physically impossible.

This is where he crosses the line to outright misleading. This family, even after the cap, is receiving £500 per week in benefits - housing plus child. That's over £2000/month, net income. You could argue that it's hard for a working family with £35,000 gross income to live in London, and you're probably right; but those families don't have anyone picking up the tab for their decisions, and have to do the best they can with what's available. Why should a non-working family benefit to the working family's detriment (i.e., more taxes paid)?

I did like EvaWilt's suggestion in the comments that the Government should introduce rent controls. What could possibly go wrong?

Update: and the Lords have decided to think of the children and turned it down 252-237. I guess the Government's next moves are to a) remove child benefit from the cap calculation and b) reduce the cap by, say, 2 x annual value of benefit for an additional child (£13.40 * 52 * 2 == £1400 per annum) to represent the typical 2 adult + 2 child family. Get this bill through, then mount a separate ongoing devaluation of child benefit for child number 3 and upwards.