Welfare

Kiran Stacey

Job Centre

I was interested to read the piece by Alex Massie in this morning’s Scotsman, in which he argued:

Scots may take an even tougher line on welfare than voters elsewhere in the UK… Visit any working-class pub in Scotland and you will hear opinions that make IDS seem like Polly Toynbee.

If this is true, it makes the SNP position problematic. The party has consistently opposed the coalition’s welfare cuts, and when Johann Lamont, Labour’s Scottish leader, suggested axing certain universal benefits, such as free prescriptions, the SNP called it her “speech of madness”.

So what does the polling suggest? A fairly comprehensive look shows us two things: 1) Scottish voters are less hostile to the welfare system than elsewhere in the UK; but 2) they remain in favour of benefit cuts. 

Kiran Stacey

One of the biggest announcements from the Budget was one that may not happen, and if it does, is unlikely to be implemented for several years. George Osborne told parliament:

If in the next spending review we maintain the same rate of reductions in departmental spending as we have done in this review, we would need to make savings in welfare of £10bn by 2016.

 

A new means test. A savers penalty. A hit in income for 600,000 prudent households. Is this really Tory policy?

Buried in the welfare reform bill, published tomorrow, is a new rule that will achieve just that. You have to wonder whether it will survive in its current form.

Iain Duncan Smith’s ambitious plan to create a new Universal Credit will extend a savings means test — applied to those on out of work benefits — to working families that would currently be eligible for tax credits.

This will mean any working family with savings of more than £16,000 will have no entitlement to universal credit, once the system is in place.

That affects around 400,000 working households, taking in some cases more than £100 a week from their wallets. 

Chris Grayling on Wednesday launched a full-frontal assault on Labour’s flagship welfare-to-work programme. Whether you agree with him or not, his chutzpah has to be admired.

Remember these Flexible New Deal contracts — that he condemned as “costing massive amounts of money and delivering very little” — are based on the very same principles as the coalition’s replacement “Work Programme”. And those Labour “payment by results” contracts were also designed with the help of one Lord Freud, who now serves as a welfare minister.

Grayling’s case against them is worth looking at in detail, at least to examine whether the coalition’s break with the past is as clean as he claims.

But, before doing that, it is important to give some background and highlight a potentially worrying trend.

Although it is too early to make a final judgement, at this point the welfare-to-work providers are falling well short of expectations. On average, they’re missing the government’s target by around 50 per cent.

The big concern for the coalition should be that Grayling’s critique doesn’t really relate to these potential problems. If he’s right about providers seriously underperforming, the Work Programme — the great hope for moving people off unemployment benefits — is likely to fare just as badly. 

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. 

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.