Tories’ specious scaremongering on welfare reform

So, cutting child benefit for the rich was just to provide cover.  The real meat of Osborne’s speech was the announcement to place a cap on benefits for families of £500 per week.  Based on all the figures being bandied about today, this means rich families are facing a 4% loss in weekly income, while poor families will lose 16% of theirs.

But this announcement amounts to specious scaremongering of the worst kind.  It is populist politics without substance that will send many families- some of them the most vulnerable and most marginalised in our society – into a tailspin.

First, the figures on which the Conservatives have based their policy are an empty vessel.  According to the Daily Telegraph (you have no idea how much it hurt to provide a link) 100,000 families in the UK earn more in benefits than they would do if they worked.  The figures are based on the Family Resource Survey but the figures being used are well out of date, from 2008-09 to be exact.  Moreover, this is a survey, a snapshot taken of a number of families around the country.  The results are then hypothecated and are not actual.  Also, the methodology is suspect.  I know, for I took part in last year’s survey.  A researcher comes in and asks you a series of questions.  If you can find the paperwork, you give the actual amounts of benefits and tax credits you receive.  If you can’t, you guess.  How many people know off the top of their head how much they receive in tax credits on a weekly basis?  Exactly.

So the burd decided to work it out for herself.  Using the DWP tabulation tool to create my own statistics, as the website helpfully says.  These are based on actual benefit figures and are not hypothecated.  They are the most accurate statistics government provides.  Three scenarios for you:

(A number of caveats: the scenarios are based on the last available statistics from February 2010 as the ConDem government has discontinued the tool;  they are based on old benefits not the new employment and support allowance;  they do not include tax credits income as only people with Phds in applied statistics could work this out;  some of the benefits like income support, housing and council tax benefit are income related and the amounts received are affected by the value of other benefits – my calculations may in fact be overly generous)

Scenario one – a family, 2 parents, 1 disabled and not in work, 1 a full time carer, both aged 35 – 44, with 2 dependent children both of primary school age, living in rented accommodation.   By my reckoning, their income might be made up of a combination of these average weekly amounts of benefit:

Disability Living Allowance  £66.20 (both types at higher level awarded);  Carers Allowance  £55.15;  Incapacity Benefit  £51.33;  Income Support £99.59;  Housing Benefit £108.66;  Council Tax Benefit £19.63;  Child Benefit £33.70

Weekly total = £434.26, annual total = £22,582

Scenario two – a family of 2 parents, both aged 32, with 2 children, 1 of whom is severely disabled, neither parent works though one is actively seeking employment, the disabled child is under 5, the other child is at primary school and they live in rented accommodation.  Their income might be made up of a combination of these average weekly amounts of benefit:

Disability Living Allowance £71.76;  Carers Allowance £54.72;  Job Seekers Allowance £82.08;  Income Support £96.67;  Housing Benefit  £98.86;  Council Tax Benefit £18.17;  Child Benefit £33.70

Weekly total = £455.96, annual total = £23,710

Scenario three – 1 adult aged 23, not in work, with 2 children, 1 under 5 and 1 at primary school, living in rented accommodation.  This family’s income might be made up of a combination of these average weekly amounts of benefit:

Job Seeker’s Allowance £84.26;  Income Support £65.69;  Housing Benefit £103.09;  Council Tax Benefit £14.57;  Child Benefit £33.70

Weekly total = £301.31, annual total = £15,668.12

There are probably lots of flaws in my scenario packages but they are a darn sight closer to the truth of the situation than the Conservatives’ version.  Scenario 2 has been included simply to show that in any numbers, the only families likely to be above the cap are those with a disabled child.  Yet the Conservatives have promised not to include them in the measure.  So who will it impact on?

Some households with a disabled adult might be included if they are receiving either Incapacity Benefit or the new Employment Support Allowance.  Otherwise, we are looking at a very small number of families living in areas of high housing costs, as Jason Beattie highlights.  Or with a high number of children.  It will certainly be nothing like the 100,000 families headlined in the Telegraph.

Which begs the question, what is the point of such a big conference announcement?  Specious scaremongering indeed.


5 thoughts on “Tories’ specious scaremongering on welfare reform

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  2. Not at all. I acknowledged the original post was inaccurate and adjusted it accordingly. But the scenarios show that the announcement doesn’t add up to a bag of beans. Osborne said families affected by disability would not be within the cap but the detail makes clear that households with someone on industrial injuries benefit and carers allowance will be included.

    Based on DWP’s own data, using the average weekly benefit payable, scenario 3 shows that an atypical benefit recipient will not come close to the £26,000 cap. The only families who receive benefits to that level are those with a disabled person – the announcement just does not add up. And certainly not to the 100,000 families touted by the Telegraph today. £1billion not going to be saved with this measure so why was it given central stage in his speech?

    Unless there is more to come that we don’t know about yet?

  3. You seem to have moved from criticising the proposals because they will hit families including a disabled person to saying they may actually affect some disabled people and/or that the measure will affect hardly anyone at all .
    Methinks the scaremongering is purely yours on this issue .

  4. Osborne specifically and clearly excluded families with disabled members from the cap on benefits , you have simply wasted your time in producing meaningless calculations which will not apply .

    • Thanks for your comment – I have adjusted the blog post to take account of what he said. But I do think the scenarios highlight how unlikely it is that other families will reach the cap. DLA and carers allowance are the biggies. In any event, Incapacity Benefit and ESA will be included so some disabled people actually will be affected.

      Also the point about the flawed data from the FRS definitely holds true – we expect better than cod policy making from our government.

      There is no way 100,000 families reach this cap without including households with a disabled person. We’ll see how long their exemption lasts….

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