The welfare cap replaces political judgment with spin


I was sitting last week in the Royal Courts of Justice, a gloomy Victorian monument from the English Gothic revival. At the same time, the UK parliament was voting on a proposal to impose a legal limit on annual welfare spending. The conjunction caused me to reflect on the meaning, as well as the majesty, of the law.

Law sets rules that govern our behaviour. If we fail to do what we must do, or do what we may not do, we are called to account in the courts. But the provision in the finance bill that parliament was debating was not a law of this kind. That clause required the government to spend no more than £119.5bn on certain social security benefits in the fiscal year 2015-16. It is no accident that £119.5bn is the amount the government has already decided to spend in the fiscal year 2015-16. The legislation has no practical effect and is not intended to have any practical effect.

If a government changes its mind, or is unable to fulfil its current intention, it has the power to repeal this kind of legislation, and will do so. The Fiscal Responsibility Act of 2010 was passed in the dying days of Gordon Brown’s Labour government. This ponderously titled statute obliged the government to cut the budget deficit by half by this year. There was never any realistic prospect that this target would be met, and it has not been met.

When the bill was introduced by Alistair Darling, then chancellor of the exchequer, it was described by George Osborne, then Conservative shadow chancellor, as “vacuous and irrelevant”. But today Mr Osborne is chancellor, and the minister responsible for the proposed cap on benefits. Mr Darling, now in opposition, explained in his memoirs that he privately shared Mr Osborne’s earlier opinion of this sort of legislation. If you hold one of the great offices of state, he said, “you don’t need law to ensure that you act as you should”. Mr Darling went on to observe: “Legislation is no substitute for sound judgment.”

That does not prevent legislation being repeatedly used precisely in this way. The government to which Mr Darling belonged was particularly keen on such “declamatory legislation”, representing aspiration or exhortation rather than instruction or restriction. The 2008 Climate Change Act supposedly sets a “legally binding” obligation to reduce greenhouse gas emissions by 80 per cent by 2050. The 2010 Child Poverty Act requires that child poverty be eliminated by 2020. Neither piece of legislation makes provision for how these outcomes will be achieved. As Gavin Kelly of the Resolution Foundation, a think-tank focused on living standards, has explained, the poverty target will be missed “by a country mile”. Most of those who voted for the Climate Change Act will not be around to see if its provisions are fulfilled. As for the Fiscal Responsibility Act 2010, that was quietly repealed in 2011. These acts of parliament are essentially sound bites rather than real legislation. They are introduced to cause embarrassment, either to the current opposition or to a future government of different political complexion. The object of the welfare cap seems to have been to create difficulties for the opposition, which tried to sidestep the problem by supporting the government proposal. In their excellent recent book, The Blunders of Our Governments, Anthony King and Ivor Crewe document the decline of the quality of official decision-making. “All governments spin in some degree,” they say. “All of them engage from time to time in symbolic politics. But symbolism and spin are always dangerous, including to the spin and the spinners.” Politicians may, for a time, be able to create their own reality. They may persuade gullible supporters that passing a law to the effect that child poverty will be eliminated by 2020 in some way resembles actually eliminating child poverty by 2020. It is harder to imagine that markets will believe a Fiscal Responsibility Act that states the budget deficit will be reduced by half is equivalent to reducing the budget deficit. Whatever initial misconceptions spin doctors may promote, reality will out. It will be many years before the memory that there were no weapons of mass destruction in Iraq fades from the mind of a public that has never been more sceptical of its governments and their public declarations.

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