Mary Ann Sieghart: Fairness that Miliband can't see


In case anyone was wondering whether the Government's proposed benefits cap was unfair, yesterday's Sunday Times helpfully came up with a Somali family, who have never worked, living in a six-bedroomed house in West Hampstead at public expense. Their house is worth £2m, which means that if Vince Cable has his way, they'll be claiming mansion tax benefit next.

The only people who can afford to live in expensive areas these days are the very rich and the very poor. London boroughs like Kensington and Chelsea have been hollowed out, with only wealthy investment bankers and benefit-dependent families left. The working and middle classes have been exiled.

As London property prices have soared, working people have had to move ever further out of town to have enough space to raise a family. So they don't feel a huge amount of sympathy for benefit claimants who are now being asked to follow suit. Yes, the children will have to move school and make new friends, but they'll hardly be unique in that.

What's more, the only people who can afford to have lots of children these days are the very rich and the very poor. The 95 per cent in between have to think very carefully about whether they can afford to raise more than two. No one is going to offer them a bigger house if they have another baby; and their employers aren't going to pay them any more money. All the average taxpayer is asking is that people who rely on benefits should face the same hard decisions as the rest of us do.

So, no wonder the Coalition's proposed benefits cap is popular. A YouGov poll for the Sunday Times yesterday found that 76 per cent agreed that no family should be paid in benefits more than £26,000 a year, which equates to earnings of £35,000 before tax. 36 per cent thought the cap should be set even lower, at £20,000.

This is partly a question of fairness. Why should a family, without any of its members lifting a finger, be entitled to the same standard of living as the hard-working family who live next door? But it is also a critical part of Iain Duncan Smith's welfare reform. Most of the families who are going to be hit by the benefits cap are being targeted for intensive support under the Work Programme and the Vulnerable Families initiative. But what would be the point of their going out to work if, in the process, they were likely to lose their gorgeous six-bedroomed pad in West Hampstead?

Under the reforms, they will instead move into housing which is comparable to that of low-paid working families, in the bottom 30 per cent of rents for their area. Then, if just one of the parents is prepared to work for a minimum of 16 hours a week, they will be eligible for tax credits, which won't be capped. At last, it will be worth their while to take a job.

The huge popularity of the policy has put Labour in an awkward position. In yesterday's poll, 69 per cent of Labour voters agreed with the cap. Liam Byrne, the shadow Work and Pensions Secretary, has also said he supports it in principle, but he can't resist finding reasons to oppose it in practice. As one Lib Dem puts it: "Labour used to be in the wrong place; now they're all over the place." When the cap comes to a vote in the House of Lords today, Labour peers will put down an amendment that will exempt any family that would be "threatened with homelessness or in priority need". Since most families hit by the cap will need to be rehoused, that pretty much nullifies its effect.

Yet Labour knows that, at the last election, many of its natural supporters stayed at home because they were angry with the party's positions on welfare and immigration. As one former Labour minister puts it, the refrain on the doorstep is: "Labour likes taking our hard-earned taxes and giving the money to people we don't approve of."

And it's the squeezed middle – Ed Miliband's favourite group – who mind most of all. According to a report out today from the Resolution Foundation, these people's real wages fell by more than 4 per cent last year, and they still face rising prices and cuts in tax credits. They want the pain to be more widely spread, and won't be impressed if Labour looks like it is exempting benefit claimants.

By allowing his position to be so opaque, Miliband is playing into the Tories' hands. Ministers are dying for a big row over the cap, so they can maximise their news coverage and put Labour on the wrong side of the argument. If Labour votes against it tonight, they will be delighted.

In government, Labour's uncritical admiration of bankers and its generosity to benefit claimants made it look as if it were on the side of the very rich and the very poor, but not of many people in between. If Ed Miliband means what he says about standing up for the squeezed middle, he should uncritically support the benefit cap and ask his peers to do the same. Opposition for opposition's sake is never attractive. Labour needs to show clearly whose side it is on.