Social Justice and the Housing Benefit Cap

The Labour left and the Guardian are getting very worked up about the perfectly reasonable housing benefit cap proposal

“for example Louise Ryan, 41, who lives with her husband and two children in Islington, north London, will see the £438-a-week benefit, which covers the rent, reduced to £340 under the changes to housing benefit introduced this month.”

To just afford that £438 rent those of us who work would have to earn as below:

Yearly Monthly Weekly
Gross Income £30,000.00 £2,500.00 £576.92
Pension Deductions £0.00 £0.00 £0.00
Taxable Income £22,525.00 £1,877.08 £433.17
Tax £4,505.00 £375.42 £86.63
National Insurance £2,733.00 £227.75 £52.56
Student Loan £0.00 £0.00 £0.00
Take Home £22,762.00 £1,896.83 £437.73

That rent alone is higher than median wages. It takes the taxes of four people on median wages to cover Louise’s rent. Add on her other benefits and Louise has a household income equivalent to a working family with a household income of over £40,000.  Where is the social justice in paying welfare benefits to people that are higher than the majority of the tax paying working people’s take home pay? This simply cannot continue.

To be fair the Labour shadow work and pensions secretary Liam Byrne recognises this, so the Labour left have begun excoriating him as “a reactionary”. The ubiquitous Owen Jones, author of “Chavs, is representative of the Labour left. He thinks it is “progressive” to pay out to welfare recipients more in benefits than the majority of working people earn:

The Guardian reckons thousand of benefit recipients will have to move out of Kensington and Chelsea. Doesn’t your heart bleed? Guido really hopes that Owen Jones succeeds in getting the Labour Party to go into the election with a manifesto commitment to reverse the cap. It will be a huge electoral liability on the doorstep…



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