POLITICS

David Cameron Pushes For £23k Benefits Cap, Despite All The Evidence It Doesn't Actually Work

27/01/2015 09:15 | Updated 27 January 2015
Dave Thompson/PA Archive

David Cameron has insisted that reducing the annual benefits cap to £23,000 would cause a new "stampede to the job centre", despite a swathe of evidence suggesting the current £26,000 limit has actually had a limited effect.

The Prime Minister pledged to lower the cap by £3,000 immediately if the Tories win a majority at May's general election, telling the Telegraph it "tells you everything you need to know about our values".

However, mounting official evidence undermines the suggestion that the benefits cap, introduced by the Tories in 2013, has caused any "stampede to the job centre".

Sir Andrew Dilnot, head of the UK Statistics Authority, warned last December that it was not possible to directly link the benefits cap to any move by those affected into work.

He wrote; "The available numerical evidence does not demonstrate a particularly strong causal link between the benefit cap and the decisions made by individuals about moving into work."

On top of this, the respected Institute for Fiscal Studies (IFS) has issued a damning verdict of the cap, which is currently set at £500 a week for couples and families and £350 for singles.

Using the Department for Work and Pensions' own figures, the IFS concluded: "What the quantitative analysis does tell us is that the large majority of affected claimants responded neither by moving into work nor by moving house."

Labour's Sheila Gilmore, a member of the Commons Work and Pensions committee, told the Huffington Post UK: "As in all developed economies, people in the UK regularly move into and out of work, so it’s hard to claim the benefits cap is solely responsible for individuals taking up one job or another.’

"And even if you do buy the Tories’ line on the benefits cap, any savings are well outweighed by spending increases elsewhere because they have failed to tackle the root causes of high social security spending. Labour would do so by boosting the minimum wage, building more houses and helping more people with disabilities into work."

Cameron indicated that the benefits cap change would pay for three million apprenticeships, allowing young people to get “the chance to make the most of their God-given talents”.

Downing Street estimates that the stricter benefits cap would save the public purse £135 million a year, while the apprenticeships boost will cost around £300 million a year. The shortfall will be made up by removing housing benefit from unemployed 18 to 21-year-olds.

He said: “This is about being ambitious for Britain. We can give many more young people the chance to get on. We can help people into work and out of poverty. We can secure a better future for everyone in Britain – but only if we stick to our long-term plan.”

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