Low-income families affected by the benefit cap are living on as little as £4 for each person a day, often in overcrowded, rat-infested and damp homes with little prospect of escape, according to new studies.
The cap puts a ceiling on the amount a working-age family can receive in welfare support if no one in the household is working or they are on very low wages. Families affected by it in many parts of the country are, in effect, trapped in poor quality, private rented properties they cannot afford, even though these are often already the cheapest homes available in their local area, the London School of Economics studies said.
The benefit cap was introduced in 2013 by the former chancellor George Osborne alongside the bedroom tax, and – four years later – the two-child limit. He argued it would save taxpayer money while imposing behavioural change on benefit claimants.
The authors of the studies conclude that it should be scrapped as it pushes families into deeper poverty, while failing to persuade them to get a job or move to cheaper housing. In effect, it forces people to use everyday living expenses to cover often exorbitant rental costs, leaving them unable to provide adequate clothing and reliant on food banks.
Capped families interviewed for the studies included a family of eight living in a three-bedroom home whose four-year-old child was having to sleep in a baby cot, and a family of five left with just £500 a month to live on after the rent was paid.
None were able to move to cheaper homes because of a shortage of affordable properties and a lack of availability of social housing. Many had to shoulder substantial rent rises despite the homes being overcrowded, cold and damp.
The Labour government has so far resisted pressure from campaigners and some of its own MPs to scrap the two-child benefit limit, and much of the political debate in recent months has been about the moral and financial impact of retaining that policy.
The studies suggest that if Labour is serious about tackling growing destitution as part of its promised strategy to tackle child poverty it must also abolish the benefit cap, which it said left families trapped at the whim of private landlords with little leverage to improve their situation because of barriers to the job market.