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The Chartered Institute of Housing is the independent voice for housing and the home of professional standards

Only Parliament can resolve problems caused by benefit cap

04/06/2019


CIH policy and practice officer, Sam Lister, reviews two recent significant developments around the benefit cap.

1. The UK Supreme Court delivered its judgment on whether the effect of the benefit cap on lone parents with young children constituted unlawful discrimination in terms of their human rights.

2. Following the inquiry by the Work and Pensions select committee and their report, the Secretary of State has responded.

The Supreme Court judgment has been a long time in the making. The hearing was over two days on 17 and 18 July last year, with judgement finally delivered on 15 May.

The appellants argued that the legislation discriminates against lone parents with young children in the way that it affects their right to respect for their family life, because of the barriers they face going to work (e.g. childcare) that aren’t faced by other groups. But the Human Rights Act 1998 sets a high bar before the court will declare a piece of legislation is incompatible with a person’s human rights. The European Convention allows governments a degree of wriggle room: the right to family life isn’t absolute, some interference is allowed on public policy grounds provided it is ‘necessary’ and in the interests of the economic wellbeing of the country.

The issue the court had to decide was not, therefore, whether it interfered with the appellants’ rights, or whether it did so in a way that discriminated against them because of their status (the court agreed that it did). But, rather, how much discretion the government was allowed, considering that the decision not to exempt lone parents was a deliberate decision of social and economic policy. In line with earlier judgments, the court decided that it could only make a declaration if the interference with that right was “manifestly without justification”. The judges reluctantly concluded that it failed to reach this threshold.

What would have happened if their appeal succeeded? A declaration of incompatibility doesn’t make the law invalid – it merely confirms that the law doesn’t comply with the European Convention. It is then up to the government to legislate to comply with its treaty obligations. And to comply, the government would only have to change the law to deal with the narrow issue – i.e. exempt lone parents with pre-school children. It wouldn’t have to scrap reduced cap altogether. So, the law can be used to chip off a few of the rougher edges of a harsh government policy but it will always leave the block intact. No doubt there will be further Human Rights Act challenges to the cap – and some may succeed, but the courts won’t challenge government policy where Parliament has enacted it: only Parliament can do that.

Elsewhere, the Secretary of State published her formal response to the Select Committee’s report, on the benefit cap. The Committee made 11 recommendations, of which by far the most important were:

 

  • the cap should only be applied to claimants who are subject to the full work-related requirements (in other words, it should not apply to lone parents with young children or those who are too sick to work)
  • the cap limits should take account of in-work benefits. As it stands the level is set by reference to earned income without benefits and compares it with all the claimants benefit income.

 

Not surprisingly the Secretary of State rejected both, despite the powerful body of evidence on which the Committee had based its findings. CIH concentrated its written and oral evidence on the first two so we were pleased that the Committee accepted our arguments. We directed our evidence here because both go right to the heart of the policy and why it’s so harsh and unfair.

The government justifies the cap on the basis that (1) people on benefits should be excepted to look for work and (2) households that aren’t working shouldn’t be better off than those that are. Both are perfectly reasonable positions to take. But the cap distorts these principles in a way that is both perverse and illogical. First, it applies the cap to those that it already accepts cannot reasonably be expected to look for work for the time being. In fact, these are the same reasons why DWP accept that a person can qualify for out-of-work benefits at all!

Second, as we showed in our evidence, a couple with one child with earnings at the cap would be better off than a similar family on out of work benefits by almost £6,800 per year (£130 per week) and the more they earned the bigger that gap would be. Indeed, the benefits system has been deliberately designed that way, and it is only due to cuts made to in-work benefits that the gap has narrowed somewhat recently.

Although the Secretary of State rejected both recommendations, the Committee’s findings on which they are based are a severe blow to the credibility of the whole policy. If either had been followed, the numbers affected would be so drastically reduced as to question its existence. For example, if it applied to jobseekers only the numbers affected would fall from around 60,000 to just 10,000. But even then, doubtless there would be some anomalies where its application would be harsh. For example, these arguments don’t even touch on the obvious unfairness of being capped merely because you might live in a region where housing costs are generally higher. More recently CIH has pointed out that women escaping domestic violence whose former partners didn’t allow them to work would be affected by the cap immediately – a fact that may form the basis of a fresh human rights challenge.

All of this taken together really means that whatever the level the cap is set, no matter how many new exemptions or how many human rights challenges succeed in mitigating a harsh or unjust impact, the only way the policy can be made fair is to abolish it altogether. And as the recent Supreme Court decision has shown, only Parliament can do that. 


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