From the TUC

Queen’s Speech: Welfare reform bill

25 May 2010, by in Society & Welfare

Across Whitehall, happy politicos are enjoying the excitement of a new government. Politicians, especially those who are new to office, are proclaiming the start of a new epoch and the end of the old corruption. Everything is new and explaining the changes is a wonderful job creation project for the political class.

Except in one place: Caxton House, head office of the Department for Work and Pensions. Here there’s an unusual air of continuity. As Nicola pointed out on Left Foot Forward, the welfare section of the coalition agreement was very similar to the policies of the Labour government.

There’s a startling illustration of this on the Number 10 website’s pages on the Queen’s Speech: visit the briefing on the Welfare Reform Bill and scroll down. You’ll find a series of background documents to help readers understand the policies – and they are all policy documents produced by the last government!

There are 24 bills in the Queen’s Speech; this is the only one where the new government feels that its predecessor’s policies are the best way to explain their intentions. It is true that the briefing on the Identity Documents Bill links to the Identity Cards Act and various explanatory documents, but that is clearly to help readers understand what the government plans to repeal.

The Welfare Reform Bill (even the title is the same as its predecessors) is designed to “simplify the benefits system in order to improve work incentives.”

Fair enough. In nineteen hundred and frozen-to-death, when I first became interested in social security, there were two Child Poverty Action Group Handbooks each about 250 pages long. The single volume on my shelves now (still the best guide to the system) is over 1600 pages long and wears out my arm muscles if I have to take it to a meeting. The incredible complexity of the modern benefits system is responsible for most of the extra pagination, and it has been a cumulative development, with new complications added each year.

Getting to grips with complexity layered upon complexity was also one of the last government’s objectives – they even set up a Benefits Simplification Unit, which produced a guide for policy makers on avoiding unnecessary complications.

And they have been committed in principle to the idea of a single working age benefit for some time – in 2007 the idea was presented at two welfare reform seminars held by Jim Murphy, the then Minister for Employment. Roy Sainsbury at the University of York, an enthusiastic proponent of the idea, spoke at those seminars and has been carrying out research on the subject for DWP. There is even a formal ‘in principle’ commitment to eventually introducing this ultimate simplification in a couple of the old government’s policy papers referenced on the Number 10 website. 

I’ve always been an agnostic on this subject. There’s plenty of advantages to a simpler system, but the complexities didn’t come about by accident. Most of them, and especially those created by means-testing, are the result of political limits on the social security budget and the need to make sure that as much of this limited budget as possible is spent on the people who need it most. My number one concern is to increase the incomes of people in poverty and my fear has always been that the extra costs of a simpler system would be paid for by levelling down benefit rates.

I was impressed by the report on Dynamic Benefits produced by Iain Duncan Smith’s Centre for Social Justice when the Conservatives were in Opposition. Strip out the socially conservative attitudes and there is a good idea here: a Universal Credit withdrawn at a single rate, a higher earnings disregard and variable expenses covered with a Life Credit.

If that is what the new government plans to do, with no compensating reduction in benefit rates, then I’ll be an enthusiastic supporter. But I think the devil lies in one paragraph in that report, where it is noted that these changes “would increase the total annual benefits bill by £3.6 billion.”

That is why Dynamic Benefits never appeared in the Conservative manifesto, and its why I fear that Iain Duncan Smith is going to find that, like his predecessors, he has to square the circle of simplifying the system when he doesn’t have the resources to do it fairly. Indeed, given that the watch word for this government is going to be ‘savings’, he will be hard pushed merely to stop things getting worse.

3 Responses to Queen’s Speech: Welfare reform bill

  1. joe
    May 26th 2010, 10:24 am

    richard in the document dynamic benefits.

    they have proposed the combining housing benefit, ctb and dla ect. dla will become will become a means tested benefit.

    those with an household income over the proposed means test level ie working partner will not be entilled to dla, a benefit introduced in recognition of the higher cost of living with a disablilty.

    this would mean those with a working partner earning min wage would be pushed into poverty also the universal credit allthough paid on an indervidual basis would also be tapered to the houshold income.

    the outcome of the introduction of such a system would mean abject poverty for many.

    i am not against a swab but not the cutting of benefits to the most vunerable.

  2. Richard Exell

    May 26th 2010, 10:30 am

    Dear Joe,

    This is a very good illustration of the reason why I’m a pragmatist about the idea of a SWAB – I’ve upset some people by refusing to sign up for the idea in principle, but I think you have to look at concrete proposals. The key point is whether people on low incomes are ghoing to be better or worse off, and a SWAB could produce either result.