From the TUC

IDS is wrong, his data don’t show the benefit cap is working

16 Jul 2012, by in Society & Welfare

On Wednesday, the government will startle us with another creative interpretation of the unemployment statistics. Today, as an amuse-bouche, they treat us to some startling news: the benefit cap is “already a success”.

What’s behind this story? Iain Duncan Smith has looked at “operational data” that shows that 1,700 people have moved into work and another 5,000 asked for help getting jobs after the Department for Work and Pensions contacted people who “might” be affected by the benefit cap to offer them help. How impressive is that?

The most detailed version of the story is in the Telegraph, (don’t bother trying to find it on the departmental website, this sort of DWP story is always distributed by subterranean channels and the Telegraph‘s journalists are best at taking accurate notes of what they’re told). Originally, the DWP estimated that 67,000 families would be affected by the benefit cap (a £26,000 upper limit on a family’s social security entitlement); apparently, that has now been reduced to 56,000. The letters informing them that they were likely to be affected went out in May. The DWP calculates 1,700 have got jobs in two months – just over 3 per cent.

That is not particularly impressive. If we look at the figures for Jobseeker’s Allowance, each month between a quarter and a third of a million people leave the unemployment register, averaging 18 per cent of the total:








Of course, not everyone threatened by the benefit cap will receive JSA and people with large benefit entitlements are more likely to have serious obstacles to work, but this table shows the huge churn in benefit receipt. 3 per cent may well be the normal off-flow for this group, or it may be higher than usual – or lower, the DWP’s “operational data” simply don’t tell us how these figures compare.

What about the 5,000 people who asked for extra help getting off benefits? Well, why wouldn’t they? The UN’s World Happiness Report found that

Unemployment causes as much unhappiness as bereavement or separation.

Other studies have found that “unemployment has a strong, well-defined negative effect on life satisfaction” and being made redundant can double your risk of early death. As the TUC has noted previously, unemployed people are more likely to be poor, more likely to have alcohol and drug problems, more likely to have poor mental health and more likely to commit suicide. Who wouldn’t want help to get away from that? After all, there are more than 5 unemployed people chasing every job, anything that might give you an edge must be worth looking into.

So, I’m not impressed by these figures, but I was never the target audience. The Sun reports that

The benefits cap is driving hundreds of families off welfare and back to work — eight months before it comes into force.

The regulations implementing the benefit cap are being laid before Parliament today and Mr Duncan Smith will have been keen to make sure this is the story that is reported. And for that, these data were just right.


2 Responses to IDS is wrong, his data don’t show the benefit cap is working

  1. D. Howard
    Jul 16th 2012, 5:39 pm

    56,000 households must be about 80,000 working age adults, so 1,700 getting a few hours work doesn’t seem an awful lot. Just looks like churn, and there’s no indication that the HB cap had anything at all to do with it.

  2. AJH
    Jul 17th 2012, 12:24 am

    5,000-the same amount of receivers of CA the Government expects to be effected, who may of course also work but who do not(and should not)have to comply with any conditionality as regards paid work.