Mark Hoban’s new definition of fairness
This morning’s Today interview with Financial Secretary Mark Hoban provided a revealing insight into the Government’s definition of fairness. In response to an IFS analysis (that is based on DWP figures of the impact of Housing Benefit cuts, and HMT’s figures for how social security changes – specifically indexing benefits with CPI – will affect poor households in 2013/14) he informed us that the IFS’s work, which in fact takes account of the majority of the third of social security changes that the Budget’s distributional analysis chose to exclude, is ‘selective’ as it ‘ignores the impacts of economic growth’.
If fairness and economic growth are the same thing, then Britain has been an increasingly fair society for the vast majority of the post-war period and the post-recession decade in 1980s (when unemployment hit three million, and the number of children living in poverty rose from one and a half million to three million) saw a positive fairness rise. By this definition the Government need not even bother with policies on social mobility and and the child poverty targets might as well be scrapped – all that fairness will require is a non-recessionary economy.
Mark Hoban did have a few other arguments to make. He maintained that Housing Benefit cuts would not amount to a change in income as if people moved to cheaper properties they would have the same amount of money. The problem with this view is firstly that money to pay for housing costs is generally considered as part of people’s income (it is certainly considered by the Government when they leak stories to the press about the levels of benefit that families are entitled to), and secondly that around half of housing benefit claimants already have a shortfall in their entitlements, which means they have to use income other than Housing Benefit to pay their rents. For these households benefit cuts will lead to real reductions in other income. In addition, the interview failed to discuss the full detail of the cuts in Housing Benefit that are being proposed – linking rents to CPI, limiting the amount that is payable to properties in the lowest percentiles of local rents and cutting the maximum number of rooms that families can claim for will have clear negative impacts for low income families: the DWP’s own analysis shows that these changes will ‘have an adverse impact on work to reduce child poverty’.
Mark Hoban also argued that the changes that are being proposed to Disability Living Allowance will change entitlements based on health conditions, not on income levels. But this misses the point. HMT’s own analysis shows that the changes the Government plan to introduce are expected to cut DLA for 20 per cent of claimants. We know that disabled people are over twice as likely as adults in the general population to be living in poverty – cuts in DLA will mean that poor people are worse off.
By any accepted measure of whether fairness is improving – for example change in levels or rates of poverty, change in rates of inequality or distributional changes in income – the Budget has failed. There is no way to maintain the pretence that these cuts are progressive.