Is a bust-up due at the DWP?
Here’s a question for anyone interested in drawing parallels between 2010 and 1997: is Iain Duncan Smith fated to be this administration’s Frank Field? He could be another minister appointed to push through radical welfare reforms who comes up against an immovable obstacle. Frank Field retired hurt after taking on Gordon Brown. IDS may also find himself in trouble with his Chancellor if he can’t contribute to cutting the deficit.
There are resemblances once you start thinking in this way. Duncan Smith, like Field, attracts the respect of many people on the other side of the political divide for his serious thinking on the subject, and he’s certainly put in the spade work before getting the job. In 2007, his think tank, the Centre for Social Justice, produced a genuinely interesting report on Dynamic Benefits. This combined reactionary social attitudes with potentially progressive ideas about a simpler system that would increase the support for people on low incomes whilst at the same time reducing disincentives to work.
Unfortunately things are a bit more complicated than this.
The complexity of the benefits system exists for a reason: it is highly targeted, to make sure that money is spent on people who need it most and not on those who need it less. A government that wants to simplify has a number of options but they all depend on an important initial choice. One option is to cut the entitlements of people who currently benefit – and, given the high level of targeting, some of them will be genuinely needy.
Or the government must be prepared to spend more money. One of the reasons many people on the Left were drawn to some of the Centre for Social Justice proposals was that they clearly and unambiguously took this approach; Dynamic Benefits accepted that they “would increase the total annual benefits bill by £3.6 billion.”
Significantly, this aspect of the report was never accepted by David Cameron and there wasn’t much about these ideas in either the Conservative manifesto or the Coalition Agreement.
But the Welfare Reform Bill looks as though it is very much IDS’s baby. We still don’t have much concrete detail about this Bill, but we are promised that it will “remove the confusing complexity of the benefits system”, “make people see a gain when entering work through simplifying the benefit system” and “reduce the scope for fraud and error by making the benefits system simpler.”
If the new Secretary of State means what he said in Opposition these proposals will run counter to the government’s plans for drastic cuts. The Coalition Agreement emphasises that “the deficit reduction programme takes precedence over any of the other measures in this agreement, and the speed of implementation of any measures that have a cost to the public finances will depend on decisions to be made in the Comprehensive Spending Review.”
During the election campaign, the Institute for Fiscal Studies calculated that the Conservative plans for deficit reduction involved £57 billion of cuts. In a world in which social security accounts for about one third of total central government expenditure, it is very hard to imagine George Osborne accepting that spending on this item should go up, not down.
But, at the same time, the Coalition Agreement promises “arrangements that will protect those on low incomes from the effect of public sector pay constraint and other spending constraints”. This seems to rule out simplification by cutting entitlements.
Of course, a helpful civil service can find dozens of ways to head off a bust-up, most of which would involve scaling down parts of the Dynamic Benefits proposals, while others are ‘reviewed’ into non-existence. One reason for Frank Field’s noisy departure was his unwillingness to accept office in return for giving up on his ambitions for reform; will Duncan Smith accept that his duty involves cutting back his ambitions?