End of her tether

Sarah Teather’s outburst over the benefit cap is one of the most remarkable attacks on a government by a former minister in years.

Yes, the coalition makes this an unusual situation and this is a Lib Dem attacking a policy that was originally announced at the Conservative conference. Yes, this is an MP with a marginal seat with 2,000 families who stand to lose at least £50 a week and she needs anti-Tory votes to keep it. Yes, she had already signalled her attitude to the cap when she infuriated the Conservatives by missing a key vote in parliament.

However, there are three other things that make this something more significant than just revenge by someone who was sacked.

First, she is a former minister for children and families. The cap will clearly have a huge impact on schools – she talks in the interview about kids coming home saying ‘my friend has just disappeared’ as a result – but she was not a minister for housing or for welfare reform. Yet, according to Toby Helm’s Observer interview:

‘Teather is convinced that the benefits cap was never intended to save money. When in government she says that she saw work showing that the policy would not save any money because emergency accommodation would have to be found for people who would inevitably be thrown out of current homes.’

Is it just me or does this sound familiar: exactly what the leaked Pickles letter warned about? The letter to the private secretary to David Cameron warned that homelessness could increase by 20,000 and that the cap could cost more than it saved once the costs of homelessness and temporary accommodation were taken into account.

Once the letter was leaked in July 2011, ministers argued that this was merely ‘an internal office-level exercise’ at the DCLG that ministers did not believe was accurate and pointed instead to impact assessments arguing that the effects were impossible to model because of the difficulty of predicting how people would react to the cap. However, the fact that the same information was circulating externally at the Department for Education suggests something very different.

Second, this is confirmation from inside government of what those outside have been arguing all along on the cap. As Sarah Teather puts it:

‘The policy was essentially conceived as a political device. It is simply not in the same league as other policies that are challenging in their consequences but done for a good purpose. I don’t think it was even remotely conceived as a financial cost-cutting device. I think it was conceived as a political device to demonstrate whose side you are on.’

The benefit cap is indeed a political device that does not stand up to serious scrutiny as a policy. It’s been highly effective politically but that does not change the fact that it is fundamentally dishonest: the apparent ‘fairness’ of comparing benefits with average earnings is nothing of the sort because the comparison should be with average incomes of those in work (including tax credits and housing benefit, for example). For more on the DWP’s benefit cap misinformation, see Declan Gaffney’s blog here.

Alongside the bedroom tax and a range of other cuts, the cap promises disastrous effects for tenants and landlords alike. Combined with changes in the homelessness legislation, the result could be homeless families exported from London around the country with potential increases in deprivation and increased costs in the destination authorities.

Third, Teather clearly intends the interview to set down a marker on Lib Dem opposition to further cuts in benefits. As speculation continues about a coalition deal on exactly that in return for new council tax bands on homes worth over £1 million in next month’s Autumn Statement, that could be significant. She tells the Observer:

 ‘I think it is really important that the Liberal Democrats fight extremely hard in the negotiations in the lead-up to the autumn statement to safeguard as much as possible. I am realistic and realise that the welfare budget is not going to escape completely unscathed but it simply cannot take another pounding as it has already.’

Whether that Lib Dem opposition will translate into more than a handful of Lib Dem votes against a potential benefit freeze or removal of housing benefit from the under-25s remains to be seen. A spokesman for Iain Duncan Smith may have predictably called Teather’s criticisms ‘hugely misinformed’ and ‘needless scaremongering’ but they are coming from someone who until two months ago was part of the same government. As more than one person has reminded me on twitter, she could have resigned rather than wait to be sacked. I wonder if she now wishes the same.