Benefits

Righting the wrong of sickness benefits

He may no longer be an MP, but the spirit of James Purnell lingers on. It was, after all, the former Work and Pensions Secretary who introduced the Employment Support Allowance as a replacement for Incapacity Benefit in 2008, with the idea of encouraging people – the right people – away from sickness benefits and into the labour market. And now we have one of the strongest indications yet of just how that process is working. According to figures released by the DWP today, 887,300 of the 1,175,700 claimants who applied for ESA between October 2008 and August 2010 failed to qualify for any assistance – with 458,500 of them

The battle over universal benefits continues on the local front

Here’s a question for you: should free school meals (FSM) be given to all pupils, regardless of their parents’ income? I ask because this is precisely what the Labour-led council of Southwark is proposing for its primary schools. As the Evening Standard reports, the councilmen’s thinking is that by giving “healthy” FSMs to every pupil, every day, they might help “reduce childhood obesity.” Oh, and the measure will cost some £4 million a year. Even if we put aside the question of whether the local praetorians should — or even could — tackle obesity on behalf of middle-class parents, this is still needling stuff. Southwark council has to find savings

At last, Grayling takes on the Ancien Regime

To disguise the radical nature of reform, one need only make it boring. And here Chris Grayling has succeeded spectacularly. Today he has announced further details on the ‘Work Programme’ and the ‘Benefit Migration’, which sound like the type of well-intentioned but doomed reforms that ministers tried over the Labour years. The welfare state has incubated the very ‘giant evils’ it was designed to eradicate. There are, scandalously, 2.6 million on incapacity benefit right now – a category which ensures they don’t count in unemployment figures. Brown didn’t care much, but Grayling is taking this head-on. In tests on 1,700 IB claimants in Burnley and Aberdeen, it was found that

Sharing the burden will enable tax cuts in the future

The elderly have been sheltered from cuts, so far at least. New research from the IEA suggests that the government could save an additional £16bn a year simply by cutting the various non-means-tested benefits older people receive and by making some minor changes to the pensions system.   Such a cull would include: the abolition of free bus travel (which would save £1.3bn per year), free TV licences (£0.7bn) and the winter fuel allowance (£2.1bn). In addition to those cuts, the state pension age should be raised to 66, which would save an extra £5bn. Abandoning the “triple lock” policy for pension increases from 2011 would save another £5.6bn, and

Reforming welfare: a mixed bag

Last week, Reform published its 2011 scorecard of the coalition government’s public service reform programme. Yesterday, Thomas Cawston explained how the coalition can get NHS reforms back on track. Today, Patrick Nolan, Chief Economist at Reform, discusses why the government’s welfare reforms scraped through with a pass. The government’s welfare reforms are significant. The 2010 Emergency Budget and Spending Review announced cuts of £18 billion to benefits, so the DWP had to respond with a radical agenda. The Work Programme aims to incentivise providers to deliver better outcomes from welfare to work services and the Universal Credit promises to create a simpler system where “work always pays.” Also, the Government

How to warm your mansion with other people’s money

Let no one say this is not a redistributive government. It is taking benefits away from the poor and giving them instead to people with large houses and a bit of spare capital. How? Through a great green energy scam, originally devised by Labour, which could not be better designed to penalise the poor and reward the rich. In fact, the government might just as well have come up with Spat Credits or a Top Hat Top-Up Allowance. Here is a brief guide to benefits for the better-off. Got a roof space the size of half a football pitch? You can coin it by covering it with 4kW worth of

There is a lot more to immigration than simply totting up the net migration figures

The good news is that most people in Britain think that people in their local area mix pretty well  regardless of differences in race, religion and the rest of it. According to the latest Citizenship Survey from the Department for Communities and Local Government for April-September last year, about 85 percent of people think that their neighbourhood is cohesive, community-speak for the absence of overt ethnic and religious tension. But when it comes to attitudes to immigration a slightly different view emerges. About 78 percent of Brits would like to see immigration reduced; well over half, or 54 percent, want to see it reduced a lot. That’s roughly the same

Five more things you need to know about the IDS reforms

Last November, I put together a ten-point summary of IDS’s benefit reforms – so why add five more points now? Two reasons. First, it’s worth dwelling on what, I believe, will be one of this government’s defining achievements. Second – and far more prosaic – the Insistute for Fiscal Studies released a report on the matter yesterday. The following points have all been harvested from that document, and represent the IFS’s judgement, so to speak. Only one judgement among many, but one that warrants some attention. Here goes: 1. Who gains and who loses (in financial terms)? This question courses through most of the IFS report, and stands out in

Cameron and Clegg play the expectations game

You know the drill by know: a Cameron and Clegg joint press-conference, so plenty of easy bonhomie and political japery. And today was no different. The Lib Dem leader set the tone with his opening gag, aimed at Vince Cable: “I haven’t seen as many journalists in one room since my constituency surgery.” After that, it was pretty much a gag a minute. Underneath all that, though, was some serious business. Cable came up (“very apologetic,” apparently), along with his claims about Winter Fuel Allowance (“not true”). But, as Iain Martin has noted, the most intriguing moment was when Cameron claimed only that he “expects” the Tories and Lib Dems

Leaked Cable

Loose lips sink ships – but can they sink sages too? Probably not, but Vince Cable has certainly entered tumultuous seas with the publication of candid remarks he made to a couple of Telegraph journalists posing as Lib Dem voters. In the tapes – which you can listen to above – the Business Secretary rattles on unrestrainedly about the inner workings of the coalition. The stand-out line is his claim that “If they push me too far then I can walk out of the government and bring the government down” – but there’s more, including: 1) The arguments that are being waged, and won. “We have a big argument going

Too clever by half, Miliband pitches for the squeezed middle with the vacuous promise of change

Ed Miliband has made an inauspicious start to his second political relaunch of the week. The Sun has dubbed him Buzz Lightweight, after he adopted the Pixar-inspired catchphrase ‘Beyond New Labour’ to describe his vision for the party. Miliband’s media presence is already wooden; migrating to plastic is hardly a promotion. Miliband and his elders have arrived at Labour’s national policy forum. In so far as it’s possible to determine what he stands for, Miliband is not aiming for the middle ground of British politics, as David Cameron and Tony Blair did. But he is courting the ‘squeezed middle’ with the promise of change. So far, that promise is more vacuous than profound

The Big Squeeze

The media pack is often blind to an impending political car-crash.  For instance, very few in Westminster, or the media, noticed the scrapping of the 10p tax band until the screech of twisting steel turned heads. The same is happening now in relation to living standards. The media and political establishment are yet to wake up to the fact that working families in Britain are about to become poorer (though hat-tip to Allister Heath for being quick off the mark on this front). The gathering wisdom is that, with the recession now behind us, household budgets will start to recover.  We have just published a new report – Squeezed Britain 

Abolish National Insurance Contributions

Government plans for a universal state pension of £140 per week were reported in the media in late October. We should be getting more information in a Green Paper soon. While this announcement was most welcome, it raises two important questions which go to the heart of our tax and benefit system: what should happen to National Insurance Contributions (NICs)? And should we now recognise that the contributory principle behind benefit payments is effectively redundant? NICs are an important source of government revenue. The total paid in 2009/10 was £97bn, significantly more than VAT (£84bn), and over 20 percent of government receipts for that year. Yet how the NIC system

Flight’s loose tongue

Has Howard Flight just done a Keith Joseph? The latter’s run for Tory leader ended when he made a speech about poor people breeding.  As David said earlier, plain speaking can have its problems. But Flight’s danger is in being mistranslated. He sought to make a simple point: that many working families can’t afford to expand their families, while the state provides a substantial cash incentive for those on benefits to do so. But his use of the word “breeding” sounds like he’s into eugenics, and the language – talking about the poor – sounds dodgier still. Given his struggle with foot-in-mouth disease, it’s surprising that Cameron ennobled him.  But

IDS shows how arguments are won

For years, I have complained that the Conservatives have timidly stayed within Labour’s intellectual parameters, arguing that they need “permission” to make certain arguments and need to stay within the limits of what the public find acceptable. Such intellectual timidity confined them to opposition: they can never win, playing by Labour rules. Iain Duncan Smith is breaking free of this. It may be rash to predict it now, but I believe he is on the brink of a breakthrough in the way that welfare is regarded in Britain. This victory in a battle of ideas could be the greatest single blow against poverty in a generation. The extent of this

The pledge divide

Over at the FT’s Westminster blog, Alex Barker asks why it is that David Cameron’s expensive personal pledge on pensioner benefits has survived the spending review while Nick Clegg’s personal pledge to scrap tuition fees, which would have cost roughly the same amount, has been spectacularly ditched. As Alex argues, one reason is that Clegg himself was not particularly attached to his pledge on fees. Indeed, he had tried to change the policy several times in opposition. The other is that George Osborne, who is the Tories’ chief election strategist as well as the Chancellor, is determined to protect the Cameron brand. When one right-winger made the case to him

Going beyond the IDS reforms

Iain Duncan Smith deserves credit for fully understanding the nature and scale of the welfare problem. But that’s the easy bit. Finding a solution with the right balance of carrot and stick and making it somehow affordable in these austere times is the tougher part of the equation. And it’s not at all clear that the IDS proposals have either enough carrot or enough stick.   He has certainly gone some way to tackling the lunacy of huge withdrawal rates – if by entering the workforce your new post-tax pay packet is less than the benefits you stand to lose, then don’t be surprised when an entrepreneurial work ethic fails

Ten things you need to know about the welfare White Paper

I’ve sifted through yesterday’s welfare White Paper, and thought CoffeeHousers might appreciate a ten-point guide to its contents. This is by no means the entire picture – and some of it will be familiar from past Coffee House posts – but hopefully it should capture the broad sweep of IDS’s reforms: 1) The problem. Fundamentally, the issue is that there are a lot of people stuck on out-of-work benefits: around 5 million at the last count. This means different things for different groups. For the Treasury and taxpayers it contributes towards an unwieldy working-age welfare budget that has increased by 45 percent, in real terms, over the past decade –

A considerable achievement

This morning’s welfare event was one of the great “Who’da thunk it?” moments of this government so far. Here we had the Lib Dem leader providing backing vocals for a former Tory leader who has not only become a minister, but who is implementing an agenda that only a few months ago was little more than an idea in a think-tank report. Reviewing that Centre for Social Justice report for Coffee House at the time, I said it deserved to influence welfare policy for years to come. Now, it looks as though it will do just that. The immensity of Iain Duncan Smith’s achievement should not be underestimated. No doubt,

The coalition pins a number on its welfare reforms

The coalition has few better defenders of its cause than Nick Clegg. And if you need proof, then I’d point you in the direction of his article for the FT when the IFS first called the Budget “regressive”; his article on welfare reform for the Times in September; or his summertime speech on social mobility, which, along with his 2009 conference speech, is perhaps the defining statement of his politics. I mention all this now, because there’s another effective Clegg article in the papers this morning – again on welfare reform, and again dripping with punchy arguments in the coalition’s defence. Rather than buckle to the charges made by the