The latest plans of the government are to introduce an overall cap on welfare spending, over and above the standard budgetary controls. This was announced by Chancellor George Osborne in last week’s budget.
Mr Duncan Smith told the BBC that the cap would stop politicians in the future from saying welfare spending "was under control when it was rising". Labour leader Ed Milliband has backed the cap but it would appear that back bench MP’s are expected to defy the party whip.
Why should we be concerned about a further benefits cap?
As proposed, the cap will include spending on the vast majority of benefits, including pension credits, severe disablement allowance, incapacity benefits, child benefit, both maternity and paternity pay, universal credit and housing benefit.
Housing benefit has already been slashed as a result of the “bedroom tax” and the individual benefit cap. With more and more people reliant on a form of housing benefit, many of those working on low incomes, a further cut in housing benefit could plunge households in to abject poverty. If people can not afford to pay their rent they can’t work and can not contribute to the economy.
What we need the government to do is understand and address the root cause of the recent and continuing increase in homeless households. There is already a widening gap since the benefit caps and cuts introduced in 2013, between private sector rent due and housing benefit (housing allowance) paid. Families are becoming homeless living in accommodation which is not affordable and so are evicted. Rents will continue to go up, housing benefit down, private sector landlords can not be expected to fund the difference. The cost to the government of an increase in homelessness is extensive and wide reaching. It includes not just the obvious cost of processing homeless applicants and providing temporary accommodation, but also the hidden costs of multi disciplinary intervention by local authorities such as an increased burden on social services.
The proposed central benefit cap is not an astute step to control a spiralling welfare budget, but a political move to cut welfare spending on an arbitrary basis.