The Department for Work and Pensions (DWP) benefit cap is pushing low-income families into destitution while trapping them in shoddy, squalid housing. It’s leaving some to live off of as little as £3 per day per person, in damp, overcrowded homes.
These are the findings from a new analysis by the London School of Economics (LSE). Crucially, the studies have emphasised that scrapping the two-child limit alone would still leave a majority of low-income households below the poverty line, and many destitute, without the new Labour government committing to scrap its disastrous sister policy.
DWP benefit cap
In 2013, the Tory-Lib Dem coalition government introduced the benefit cap. This limits the amount of money the DWP gives social security claimants. Originally, it was tied to the average household income, but the government reduced it below this in 2016. In April 2023, the Tories raised it, so the cap is currently at:
- £22,020 per year (or £14,753 for single adults with no children) nationally
- £25,323 per year (£16,967 for single adults with no children) in Greater London
Alongside regressive welfare policies like the bedroom tax, the two child limit, and local housing allowance (LHA), the benefit cap has punitively pushed many families into poverty.
Moreover, despite the change in 2023, the government has not raised the cap in line with annual inflation – meaning it has continued to grow. This is because, while the DWP has increased benefits, it hasn’t done the same with the cap. For instance, the benefit cap has meant that when the DWP has uprated benefits – such as the £20 uplift for the Covid pandemic – it clawed this back when this pushed claimants above the cap’s thresholds.
Of course, DWP increases to benefits have also fallen far short of inflation and the cost of living anyway, amounting to real-terms cuts. But the benefit cap has therefore only added to this burden for claimants.
Now, a pair of studies by LSE has sought to investigate the impact of the cap on families living under the policy.
Toxic Tory narratives on benefits and housing
In particular, the analyses interrogated the cap in the context of housing.
This was because, as the reports pointed out, the Tory-Lib Dem coalition introducing the cap played up demonising and divisive narratives surrounding claimants. Housing was one key part of this disparaging message. When setting the policy in motion in 2013, George Osborne’s speech encapsulated this:
we’re simply asking people on benefits to make some of the same choices working families have to make every day. To live in a less expensive house. To live in a house without a spare bedroom unless they can afford it. To get by on the average family income. These are the realities of life for working people. They should be the reality for everyone else too.
In effect, it’s the classic right-wing frame that people are in poverty as a result of their own bad choices. In this instance, it suggested that benefit claimants should move to affordable housing – and that choosing not to is what’s keeping them in poverty.
Naturally, this set the tone for successive Tory governments to bash claimants with this rhetoric.
Only, it’s palpable nonsense – and conveniently avoids a host of obvious reasons people can’t move. Of course many of these will be things successive governments could have done something about, but consistently, deliberately chose not to. The LSE studies has now challenged this harmful rhetoric. Notably, it has set out the reasons the new Labour government should scrap the harmful policy.
Profiteering private rental sector and a punitive policy
The LSE analysis assessed opportunities for families living under the DWP benefit cap to move into more affordable housing. In particular, this analysed the availability of housing that family’s benefits would cover under the cap. Significantly, it found that:
one big reason capped families are not moving is because there are simply not enough affordable private rental properties. In fact, there are actually more capped families than there are affordable properties in the whole country.
In other words, the extortionate rates landlords are imposing in the private rental sector mean that families simply do not have options to move to more affordable housing.
Alongside this, it identified that even if all families under the DWP benefit cap moved to the cheapest properties available within their area, 44% would still face destitution. The report used the Joseph Rowntree Foundation’s definition for this level of extreme poverty.
As the Canary’s Steve Topple has previously illustrated, the JRF explains this as:
1. Lack of access to at least two of six items needed to meet your most basic physical needs to stay warm, dry, clean and fed (shelter, food, heating, lighting, clothing and footwear, and basic toiletries) because you cannot afford them.
2. Extremely low or no income indicating that you cannot afford the items described above.
In some areas of the country, the levels of destitution would be significantly worse. For instance, of the 309 capped households in South West Essex, the analysis found that 99% of these would be destitute if they were to move to the cheapest housing in the area.
On average, if families moved to the cheapest housing available in their area, the DWP benefit cap would push them into destitution. In monetary terms, this meant £6.60 a day per household member to live on.
Again, in certain areas, this was much worse. In Greater London, the benefit cap would leave families with as little as £4 per person per day. For some parts of London, it would be lower – just £3 for each family member to live on daily.
Even in areas with more available and affordable housing, the cap left individual family members with just £9.10. The report noted that this was still well below the poverty line.
‘State-imposed hardship’ via the DWP benefit cap
Alongside this, the analysis looked at the impact of scrapping the two-child limit to benefits if the DWP benefit cap remained in place. It found that:
Removing the two-child limit makes no difference to the average destitution risk. This is because for those moves that leave families with social security entitlements that exceed the benefit cap, the additional living costs entitlement from removing the two-child limit would be effectively removed again by the benefit cap.
Essentially, ditching the two-child limit, while retaining the cap would keep the majority of social security claimants in destitution.
Ultimately, the authors concluded that:
Contrary to the popular, political narrative, individuals are routinely relatively powerlessness to change their situations, and instead experience state-imposed (and arguably state-designed) hardship. It is vital that the overarching narrative is dismantled, along with the Benefit Cap itself.
In short, the analysis made clear that to stop children and families living in poverty, the new Labour government must scrap the Tories’ punitive DWP benefit cap. Anything less will consign thousands of households to destitution.
Of course, this alone won’t end the sordid state of UK poverty. The overlapping problems with the profiteering private rental sector in the analysis demonstrated this fact. Despite this, the authors suggested that ditching the brutal DWP benefit cap would be vital step nonetheless.
Featured image via the Canary
