Myth, anger and principle collide around the question of capping Universal Credit at £26,000 per household under the Welfare Reform Bill. I’ve sat in the Lords, hearing real expertise blend with passion in opposing parts of the Bill. The Commons were always likely to reverse the Lords amendments, and now government looks set to quash them using Parliamentary rules. Universal Credit and the cap are coming, with effect from next year.

Why the passion for the cap? It’s not economics, for its savings are a smidgeon of the total the government hopes to save through its welfare reforms. UC is predicted to save 0.5 bn annually; the cap £580m in 2013-2015. (That doesn’t take account of the costs, particularly to Local Authorities, of abruptly relocating families.) The driver seems to be a mixture of righteousness and anger: in straitened times, it’s not right that some receive so much for ‘doing nothing’. It is the nature of the anger that worries me. It diverts and divides.

Take the mother-and-son team I meet as a Citizens Advice Bureau adviser. They are supporting three younger children. They don’t run a car or have a plushy house – I know the area. Though not disabled, they’re ‘challenged’ by life. They’re bitter against benefit scroungers, and dread others’ judgment.

They live in a privately rented house. The son struggles with escalating job-seeker requirements. The only job he’ll get will be impermanent: he’ll drift on and off Job Seekers. The mother and little ones fall just short of the cap, after calculating the rent they have to pay themselves because of the housing benefit cap. But as the children get older, they’ll need and be legally entitled to more space. If (as is unlikely in practice) the family moved to a bigger place, they could claim a bit more housing benefit, which might well push them over the 26K threshold.

They live in the Cambridge area, where rents are high - though not the highest in the country. It is large families in high-rent areas who'll be hit hardest by the cap, though there’s no moral difference between them and people in cheaper areas. It isn’t just Knightsbridge and Westminster: it’s ordinary homes that have been overtaken by rocketing rents.

What grounds for anger here? Those who want to ‘rebuild the fabric’ of the nation or its battered economy should hesitate to divide and judge. This cap debate is a diversion. It allows government to shift attention from wider questions, through another wickedly effective piece of divide-and-rule.

Yet anger’s inevitable if struggling people believe that idle claimants loll in luxury. In-work poverty is real. The number of in-work households living in poverty (below 60% of median household income) has risen since 2004/05, particularly where only one adult is working. Meanwhile, the risk for out-of-work households has remained level (see Poverty Site).

But the answer to in-work poverty is not to cut benefits, and there is no clear-cut divide between hard-working families and ‘benefit scroungers’. For most people, poverty is fluid. One in sixteen people in the UK are in the poorest fifth for at least two in three years. Most move in and out of the bottom. Within four years, about a third of the population slip into the poorest fifth for at least one year. This isn’t about fecklessness. It’s about the way the market works for people.

Cuts in benefit/tax credit levels, including childcare support, and in essentials like bus subsidies, will affect mid- and low-income families, employed, unemployed and under-employed. The tragedy is that the debate sets employed against unemployed families. Yet in poverty and near-poverty, we’re all in it together.

One of the arguments for the benefits cap is that it will address the ‘problem’ of out-of-work families having more children in order to claim more benefits. Mary Ann Sieghart (the Independent, 23rd January) wrote that only the very rich and very poor can afford several children: ‘ The 95 per cent in between have to think very carefully… No one is going to offer them a bigger house if they have another baby…’ True, but no-one has been rushing for benefit-claimants either. The stats on child poverty speak for themselves. In 2006, 50% of children in 4+ child families in the UK were poor compared with 23% in one-child families (see Joseph Rowntree Foundation report).

The question of housing costs (why should out-of-work families live where working families cannot?) is already being addressed: social and private tenants face limits on what the State will pay. Giving money advice to our clients includes looking at the rent they must find. Long before the Universal Credit cap discussion, we were helping clients explore how to downsize; trouble is, affordable housing in affordable reach of Cambridge jobs is like hen’s teeth.

This is not to say that this country doesn’t need welfare reform. The benefit/tax-credit system produces perverse results: well done Iain Duncan Smith for seeking to tackle it. But people aren’t dissuaded from working because life’s cushy on benefits; it’s because employment would thrust their families into worse poverty. Or because they can’t find work, or stable work.

Poverty and insecurity haunt employed, under-employed and unemployed families. Poverty and insecurity, and above all growing income inequality, breed anger. Anger is justified, but it shouldn’t be targeted against those who share the pain.