Department for Work and Pensions

Nicholas Timmins

Ken Clarke may be in the dog house for telling the Daily Telegraph the brutal truth – that the worst of the cuts have yet to be felt, that the government is going to find that difficult and that middle England still hasn’t properly grasped the scale of what is to come.

But that assessment pales into insignificance compared to a chilling warning that Chris Grayling, the work minister, has allowed his department to issue. Read more >>

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 >>

The axe is hovering over the £4.2bn council tax benefit bill. The details are patchy, but I’m hearing speculation that it could be cut by as much as 10 per cent. If it doesn’t emerge as one of George Osborne’s welfare savings today, it was certainly one he closely considered.

A cut is likely to involve some complex changes to some eligibility rules that are already incredibly complex. The rebate is currently paid to people on low incomes: lone parents, jobseekers and around 3.5m over-65s who are mostly on pension credit. But it is impossible to neatly sum up the criteria. Read more >>

Strange as it seems, if David Cameron succeeds in eliminating benefit fraud, it will probably end up costing the Treasury money. It is one more potential pitfall with the Iain Duncan Smith benefit reforms.

A proper crackdown on benefit cheats is only possible by dramatically simplifying the welfare system — and that will probably lead to an increase in the take-up of benefits.

Here’s the rub. Error and fraud in the welfare system costs about £5bn. It’s a big number. But it is nothing compared to the £16bn worth of benefits and tax credits that are unclaimed each year.

The sad truth is that the complexity of the benefits system actually saves the Treasury money, at least in the short term. Government studies show that convoluted rules and impenetrable forms put people off claiming a benefit, even though they are entitled to it. Up to a quarter of people eligible for housing benefit, for instance, don’t submit an application. Read more >>