Benefits

David Cameron has announced some genuinely tough penalties for jobseekers who step out of line. But it is no revolution in benefit management. Here are five reasons to take the latest crackdown on the workshy with a big pinch of salt:

1. Sanctions are as old as benefits. The first powers to dock the benefits of the workshy were introduced in the 1913 bill that created Unemployment Benefit. Yes, before the First World War. This “radical” Cameron plan is as old as the welfare state. Read more

Jim Pickard

The most striking finding from today’s IFS research (aside from the poorest half getting hit harder) is that young families get punished while pensioners escape relatively lightly.

Anyone wondering why this is the case should read this research from De Montfort University and Age UK showing that 4 in 10 votes cast are by the over-55s. Read more

There’s been lots of speculation over the Treasury’s plans on sickness benefit. The Times flagged up a proposal to “means test”, while the Observer has a letter pointing to £2.5bn of incapacity benefit savings from an unspecified reform.

No final decisions have been taken. But reading between the lines, it sounds like moves are afoot to scale back “contributory incapacity benefit” (which I’ll explain in a second).

If so, it blows a rather big hole in George Osborne’s claim that a he’ll be finding savings from ending the “lifestyle choice” of those determined to “pull down the blinds” and scrounge on benefits. These reforms largely take money from people who have worked and fallen ill, rather than those who’ve allegedly chosen a life on the “sickie”. Read more

No one can question the decency of Iain Duncan Smith’s vision for overhauling the welfare state. His message of “making work pay” is winning plenty of disciples. It is a revolution to simplify a fiendishly complex system and make the benefits of employment clear. To some, it is the only way of ending the welfare dependency blighting British cities.

But conservatives should be on guard. Grand schemes are intoxicating. The allure of sweeping change can overpower. The IDS reforms require real, unavoidable sacrifices, even if George Osborne pays billions of pounds upfront. This is not a case of hidebound Treasury bureaucrats blocking change to keep the poor tethered to the state. If the overhaul goes ahead, the risks and trade-offs are considerable.

Here are some of the hurdles that I’ve identified from speaking to people in Whitehall and Ian Mulheirn, an expert on this area at the Social Market Foundation. They prompt two questions. Is it worth it? And is there a simpler way?

Winners and losers Without additional funding, the IDS plan involves raising the tax rate on millions of workers. To “make work pay” for the few he will need to make work pay less for the many. Read more

Jim Pickard

You may have noted the mock horror from Labour about IDS’s comments to the Sunday Telegraph yesterday that those on benefits may need to travel to work. It’s described by the Labour-supporting Mirror as an “extreme Norman Tebbit-style ‘on yer bike’ policy“.

Here is a link to the interview when Caroline Flint two years ago suggested that unemployed people getting housing benefit should, in effect, be turfed out. She was, of course, the Labour housing minister. It appears to be exactly the same policy. What goes around comes around. Read more

Politics for the next five years will be dominated by painful public spending cuts. But in this election every time a politician speaks, it seem to be in order to protect one more benefit perk. So far, in terms of new spending guarantees vs new cuts, the campaign score is at least £25bn to 0.

Take the appearance of Liam Byrne and Philip Hammond on Newsnight last night, which turned into the most expensive interview of their political careers. Without blinking, the two would-be guardians of the public purse ruled out means testing child benefit.

Price tag? Around £5bn to ensure millionaires (in fact anyone family earning more than £25,000) can still pick up their benefit perk. That’s roughly the size of the defence equipment budget.

Any cuts to match that? Of course not. If you try our Deficit Buster online tool, you’ll see that means testing child benefit is one of the easiest of a horrible set of choices. The public surely deserve to know where the Tories and Labour will find that £5bn. Read more