HARRIET HARMAN’s decision, supported by 184 Labour MPs, to abstain on the second reading of the Welfare Reform and Work Bill on July 20 has been widely condemned.

“We support a number of measures in the Bill,” said acting shadow work and pensions secretary Stephen Timms.

“We welcome the reporting obligations on full employment, apprenticeships and troubled families. We are committed to a cap on household benefits to help make families better off in work. We back reforms to mortgage interest support that will strengthen work incentives and deliver savings. But this Bill does some very bad things as well.”

And that’s why, after the defeat of Labour’s “reasoned amendment,” Labour MPs were whipped to abstain on the second reading. But 48 Labour MPs, including Jeremy Corbyn, defied the whip.

What did Labour support? “Reporting obligations on full employment” is anodyne and simply requires the government to report on progress towards full employment. Everyone is always in favour of apprenticeships and of helping “troubled families,” although there are some nuances that Timms failed to make. When placed against all the truly terrible things in the Bill, it is extraordinary that Labour decided it was not worth jeopardising these bland points.

What is really troubling is Labour’s support to reduce the benefit cap. Shockingly, Labour supported the benefit cap when it was introduced in 2012. Now the government wants to lower it from £26,000 a year (for single parents or couples with children) to £23,000 a year in London and £20,000 outside London. What does this mean?

The benefit cap works by reducing money paid for housing costs. A family’s total income from benefit, including child benefit, is totted up. If it exceeds £26,000 a year (or £18,200 for a single person), housing benefit is cut down, leaving the family with no money or insufficient money for rent. And so they have to pay housing costs from benefits intended to pay for other necessities: food, heating, transport. Ironically, a family claiming benefits is only likely to receive £26,000 if it is paying a high rent. But instead of private landlords being required to lower rents (through time-limited rent controls) and reduce the housing benefit bill, a family loses its home.

The government claims that the benefit cap, which does not apply to pensioners or to people who are working and claiming benefits, incentivises claimants to get a job or to move to cheaper accommodation.

The figures that it cites are controversial. A slightly higher number of claimants who were subject to the cap moved onto in-work benefits than those not subject to the cap. But 77 per cent of capped households are not currently expected to work (single parents of small children or people too ill or disabled to work). There are already benefit sanctions for claimants who can work if they are not deemed to be looking for work hard enough.

The government also claims that, as a matter of principle, claimants should not receive benefits that are higher than average earnings. This figure is disingenuous. A family that earns £26,000 would also be entitled to an additional £14,000 in benefits, including child benefit, working tax credits and housing benefit. In other words, in our economy of low wages and high housing costs, average earnings are not sufficient for a family to live on.

Councils are seeing more and more families becoming homeless because they were evicted from private rented accommodation. So a family that was securely housed and managing suddenly falls into crisis and has to be helped by the state. Those families must be placed by councils in “affordable” housing, which is very hard to find, particularly in London, so they are moved long distances and have to change schools, doctors and other services. Research shows that families who are capped cut back on food, or borrow in order to try to manage.

Reducing the benefit cap — which Labour is pleased to support — has widespread implications. Housing associations calculate that tenants in their three-bedroom properties, and some of their two-bedroom properties, would be unable to afford their rents — rents set at a level low-income families should be able to afford. This is true not only in the south-east but also in the Midlands and even much of the north of England. Private rented properties, which now house more people than social housing does, would be completely out of reach. Capped families would end up being shunted by councils into small areas of very low-cost and sub-standard housing. In effect, much of England would consist of gated communities, closed to the poor.

Labour said that it opposed the government’s pernicious policy of only paying child tax credit for two children, so that any third child born from April 2017 won’t receive that money. Labour MPs made some good points in the debate. This impoverishes children. Claimants don’t usually plan to become claimants and a family that could afford three or more children can easily fall upon hard times. And many female Labour MPs attacked the inhumanity of requiring a woman to prove that her third child was the product of a rape, in order to claim an exemption.

At the same time, the government plans to end child poverty by repealing the Child Poverty Act 2010. The current measurements of child poverty — income and deprivation calculations — will be junked. Instead there will be “indicators” that show whether parents have got jobs and how well children are doing at school. This lays bare the government’s ideology: poverty is not due to low income, but lack of effort. The poor have only themselves to blame. Helpfully for the government, they will no longer be called “poor.” The Child Poverty Act is to be renamed the Life Chances Act.
The last big measure in the Bill will freeze the levels of all benefits paid — to those in or out of work — for four years.

This is a heavy cut, coming on top of the 2012 reduction of benefits to below the level of inflation. In four years’ time claimants will have the same amount of money to spend on fewer things as inflation rises.

Stephen Timms was right. This Bill does do some very bad things indeed. Which is why it is heartbreaking that Labour refused to oppose it and indeed supported some of those “very bad things.” One of the few principled Labour MPs, John McDonnell, summed up the ideological distinction between neoliberalism and belief in a decent welfare state: “Poverty in my constituency is not a lifestyle choice; it is imposed on people.”

The housing benefit bill is high because of lack of affordable housing; tax credits are high because pay is so low; unemployment is high because the government has not invested in the economy. This Bill is “yet another way in which we blame the individual for the failings of our society.”

In a different debate, Jeremy Corbyn put it succinctly: “If this government deserves a prize, it is for subsidising the private rental system in this country.” Public money subsidises private landlords and employers paying low wages.

Meanwhile, those forced to pay high rents or earn low wages, and their children — who cannot be accused of making “lifestyle choices” — are impoverished.

• Liz Davies is a barrister specialising in housing law, representing tenants and homeless people. She writes this column in a personal capacity.