The Blog

Cameron's Top Election Priority - Take More Money Away From Poor People

Today marks the important point at which there are exactly 100 days to go until the general election. All the party leaders have marked the occasion by setting out their most important policies, knowing that they will have the eyes of the country on them...

Today marks the important point at which there are exactly 100 days to go until the general election.

All the party leaders have marked the occasion by setting out their most important policies, knowing that they will have the eyes of the country on them.

As you might expect, Ed Miliband for Labour has emphasised the importance of the NHS, pushing home his party's advantage in this area.

The Lib Dems have released a campaign poster claiming to offer a middle way between both main parties, despite the fact that they have made clear they are happy to veer to left or right to get themselves into coalition government.

And the Tories?

David Cameron has given an interview to The Telegraph saying that in the first week of a Conservative government he would introduce a new lower benefit cap, cut by £3,000 to £23,000.

His top priority for a new era of Tory rule is to take more money away from some of Britain's poorest people even as he trails tax cuts for higher earners.

The current PM might be hoping the electorate has forgotten his reasoning for setting the original cap at £26,000 was that this was the average salary in the UK at the time.

He claimed that this made sense; after all, no family should be able to get more than an average worker's income from the state (even if the pay figures were fudged by not including in-work benefits).

But he has been notably quiet on the rationale behind a cap far lower than this, presumably calculating that its popularity will overcome any lack of real reasoning.

Sadly it is likely to be popular; we wrote when it was first announced that three-quarters of people support this policy, and suggested why this was, with the endless vitriol heaped on workless people by politicians and papers the main culprit, along with ever-decreasing living standards making most workers poorer - and less sympathetic - every year.

At the time David Cameron claimed the policy would save £300 million and affect 100,000 families, but some number crunching shows just how tiny the saving is really likely to be.

Last year The New Statesman found that the PM's estimates are likely to be wide of the mark, with any savings from benefits having to be made up from costs elsewhere:

"The policy has been sold as an essential deficit reduction measure. But in practice, the savings are likely to be meagre, or even non-existent. A study of the cap's effects in Haringey, one of the boroughs where it was piloted, found that while the measure was saving the council £60,000 a week after, it was costing nearly as much to manage. The council is currently spending £55,000 a week on Discretionary Housing Payments to help claimants meet their rent and thousands more on additional welfare and employment support. None of this should be surprising. As a leaked letter from Eric Pickles's office to David Cameron warned in 2011, the cap "does not take account of the additional costs to local authorities (through homelessness and temporary accommodation). In fact we think it is likely that the policy as it stands will generate a net cost. In addition Local Authorities will have to calculate and administer reduced Housing Benefit to keep within the cap and this will mean both demands on resource and difficult handling locally.""

So it doesn't save money, and its only real aim is to further deepen the Tory-invented chasm between the interests of the working and workless poor and to misdirect attention and blame away from the bankers who caused the worldwide recession.

A key misunderstanding about the benefit cap is that those who receive more than the top rate have a huge amount of disposable income to spend.

Not so: the only variable element is housing benefit, paid direct to landlords in most cases, and this cost has risen so much only because rents have increased so hugely, beyond any other aspect of British life.

The reduction to the cap simply means a cut to the maximum housing benefit a family can receive of £3,000, cleansing many areas of the poor and leaving much of London and the south-east as a rich ghetto, a situation worsened by the lack of affordable housing as the government has missed its building target and overseen a cut in spending of more than a third.

Moving these families to poorer areas is likely to reduce their chances of finding jobs as cheaper rents correspond to higher unemployment, meaning often-unemployed people ending up in areas that hamper their life chances.

None of this matters to Cameron, who boasted to The Telegraph that the cap "tells you everything you need to know about our values".

It does indeed. We know that his government is less serious about saving money than finding cover for moving money away from the poorer and into the pockets of the richer.