Welfare reform

Kiran Stacey

Justin Welby outside the LordsThis morning we reported in the FT that bishops in the House of Lords are leading an attempt to exempt children from the below-inflation rise in benefits. This follows on from the comments of Justin Welby, the Archbishop of Canterbury, over the weekend, who said:

By protecting children from the effects of this bill, they can help fulfil their commitment to end child poverty.

But just as interesting as the bishops’ response to government attempts to slash the welfare bill has been the reaction of Tory MPs to the archbishop’s comments. Read more >>

Kiran Stacey

Here’s a sentence to set alarm bells ringing: the Department for Work and Pensions is currently undertaking a rather large and important IT project to change the way people can claim benefits.

As part of the project to roll up all the various benefits and tax credits people receive into one “Universal Credit”, DWP is creating a new system that would allow people to log in online, fill in some basic details and quickly calculate how much they can claim. The money will then be paid automatically into their bank account. Read more >>

Kiran Stacey

Last week, Ed Miliband came under a torrent of criticism for missing two open goals at PMQs. He managed to fail to take advantage of government U-turns on both the NHS and sentencing, partly because he tried to do both and partly because his own party wasn’t united, especially on sentencing.

This week, he played a cleverer game. By bringing up the issue of cancer patients losing out because of welfare reforms, he chose a topic that lots of people identify with, where the prime minister was unlikely to know the full facts and which could unite his own MPs. Read more >>

Iain Duncan Smith declared this morning that “nobody will be worse off” under Universal Credit.

That is quite a claim, particularly given 1.7m households will lose out, at least in terms of their notional entitlement to benefit.

He was referring, of course, to the protection that will be provided so no family loses in cash terms at the point of transition.

This promise is both the midwife to this dramatic reform plan, and one of the most tricky measures to implement. Read more >>

Here are some of the highlights from the DWP impact assessment:

1) Higher bill: The reforms in total will add £2.6bn to the welfare bill overall. There could be other “dynamic benefits” not included in the model. 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 >>