Complex benefits system to be replaced by one payment

By Nigel Morris, Deputy Political Editor

Friday, 30 July 2010

Britain's complex system of benefits will be swept away and replaced with a single payment to claimants under plans being trumpeted by the Government as the biggest welfare shake-up for decades.

Iain Duncan Smith, the Work and Pensions Secretary, will today unveil proposals to streamline and simplify payments, as well as improved incentives for the unemployed to swap life on benefits for work. He will describe the moves as the biggest revamp of a "broken benefits system" for a generation, but critics will argue it is just a cover for heavy cuts in welfare spending.

Related articles

Mr Duncan Smith will suggest replacing the 51 benefits currently available to the unemployed, as well as income-related benefits for the low-paid, with a single benefit covering all people of working age. It would also incorporate the cash currently paid out under Gordon Brown's flagship tax credits scheme, which would effectively be abolished.

Payments would take into account claimants' circumstances, such as numbers of children and housing needs, and could be adjusted monthly using new computer software being developed by the Government. Ministers say the planned moves would make the benefits system easier to navigate as claimants would no longer have to complete a series of forms.

There should also ultimately be a saving for the Government in administration costs, although there could initially be a sizeable bill for setting up the new single benefit.

Government sources called the plans "the most radical root and branch overhaul of the system in decades". They said five million people had been "abandoned" to live on out-of-work benefits, including 1.4 million on benefits for at least nine of the last 10 years.

The proposals will be set out in a discussion document published today by Mr Duncan Smith. It falls short of a formal white paper setting out plans for legislation, but is likely to form the basis of a reform blueprint next year. The publication follows wrangling between Mr Duncan Smith and the Treasury over how the system can be redesigned to improve financial incentives to work with few costs for the taxpayer.

In last month's Budget, the Government announced plans to cut spending on welfare by £11bn by 2014. George Osborne, the Chancellor, has also signalled a drive against the cost of benefits paid to the sick and disabled and is pressing the Department for Work and Pensions to identify further savings.

  • Guest
    We may see, as objectiveish_alien suggests below, and of course IDS is not really in the first echelon of Tory/Nat Lib leaders to carry such a vast change with the support of enough of their supporters my guess. Worth recalling that Iain Macleod (and, as he pointed out online when I mentioned this on the Dully Tele a couple of years back, Tony Barber, his successor and First Secretary) planned some such in 1970, after Heath won. Simplifying did not occur and Barber said this was not due to Macleod's premature death. It seemed like a good idea, for benefits and the tax system to be integrated. I wonder if 'just' integrating the benefits into one will stand as an objective without incorporating tax for long?
  • Guest
    True . . . some may worry, especially after the Tory opposition castigated HMG's Big Computer Schemes for so long, wether Duncan Smith should have his turn . . . .
  • Guest
    No: I voted Labour. You're quite right about confidence, Osborne may have the wit to see that IDS' reorganisations look like more riots than just making the cuts and "rationalising" will.
  • Guest
    I seem to recall that the sane economists backed Darling's plan for a lower amount of cuts to reduce the debt by 50% over 4 years beginning in 2011, while Osborne signed up all sorts of "captains" of Retail (principally) who didn't like Darling's proposed 1% NI Cont rise, and preferred Osborne's 1/2% rise for all, and 1% for some. (I gather Osborne went back on his plan on gaining to power) The Lib Dems (now National Liberals) were pretty much anti Government on anything which might squeeze them a vote. Tawdry in opposition, tawdry and reviled in Government. Their concerns for social justice led them to oppose Tax Credits, and some of them will have no problems if IDS' benefit unification scheme (such as it might one day be) cuts the welfare of most of the poor. Liberals talk of orange books, blue books, but their "policies" as malleable as Chameleon's PR.
  • Guest
    Time to invest in those: "No - I'm not here to sort your PC out" T shirts. I can see Labour's front bench having to modify the wording.
  • Guest
    I saw this on Newsnight last night and thought it sounded like a good idea in theory. It is thus far, the only good idea this Government has had, in my opinion, it did, however sound like the kind of socialism with a small S, that I like and would vote for. So I can?t quite believe a Tory, even IDS, who I like more than any other Conservative, thought of it. Where is the catch? I struggle to figure out how we would pay for it. I equally wonder is this going to become the public sector on the cheap. A kind of ?Reaganization? of the public sector. I am reminded often of Detroit and what Reagan and big businesses did there to fix the economy. This devaluation of work could be an effort to psychologically prepare us for China type wages and conditions. The economy may recover, society may not, it hasn?t in Detroit. ?John used to earn £30,000 as a mid level manager in a Healthcare Trust, now he works at a super market earning £15,000, but we supplement that so his children don?t starve. He is grateful and does his old job for free, whilst wheeling trolleys around during the day. So we get a trolley wheeler and a Health Trust volunteer thrown into the deal for not throwing John to the wolves and so he can keep what is left of his dignity, only problem is what happens to the guy who used to wheel the trolleys before overqualified John showed up? What does he downsize to?? I hope they do try some version of this, I hope it is for real, but I can?t help thinking it will be about helping out middleclass people with skills in their downsizing, It probably won?t provide the social inclusion for deprived areas it promises. It may drive working class people out of jobs to make room for the middleclass demographic. My worry is that with no jobs and thus no benefits these people will do the only thing they can to survive and become criminals. Working along with no fixed retirement age, it is likely to create even more resentment across age lines. The young could be preying on the old to get food, not to support a drug habit as they have in the past. So it might just be a new spin on the Tories imagined, firm but fair Darwinian principles of "struggle" to society. Time will tell. In this case as in most cases the devil (Multinationals, Stock market and Banks) has all the best tunes; they may be leaving everyone else little choice but to play a lonely fiddle to survive. That would be a pity. Software developers and systems developers of all kinds only change one variable in a system at a time to avoid missing unintended consequences and so they can iron out wrinkles and diagnose and fix problems quickly. The coalition seems hell bent on changing everything now. If something does go badly wrong it is likely we won?t even be able to pinpoint what, in the current raft of strategies, caused the problem. It is bad system design, but what do you expect from Idealists and philosophers.
  • So the war, sorry, the class war, is under way! So why is it that the Greek's see this and the Brits don't? Tories really do want the workhouse back and Liberals just want to run the workhouse more humanly, as usual. I know that because I have watched 'Oliver' far too many times, Charles Dicken's painted a grim picture for the working class and a modern day writer will emerge soon to do exactly the same. I always ask myself when I see this nonsense in print "why don't the rich work?" or "what do the rich do?". And by the way, high living standards are a very dodgy factor because wealthy people always have this standard, the best and to hell with the rest!
  • The "benefits of work" eh? Good old Duncan Smith. In an economy with about 20% unemployed, with companies closing by the dozen every day, Smith is going to show us all the benefits of work! Well, over the gate to Auschwitz was a big sign reminding us. Its gives freedom. Freedom to vote those suffering from megalomania, delusions of grandeur, paranoia and narcissism into positions of public abuse such as Smith. Are we all so masochistic that we give these wankers authority? Politicians are there to preserve the status quo of the money and its "market". Wake up Britain!
  • There is of course one rather large elephant in the room. Work can only pay if there is work to go to. To make any of these schemes really work requires that the unemployed, the underemployed and those completely out of the system actually have jobs to go to. And if the private sector isn't creating enough in any particular area, then the public sector must step in and redistribute work to where it is required. We can't all live in the City of London.
  • Toddy106
    My bet is he will fiddle the figures by allowing people to do part time work and still claim a % of their money , but not count them as unemployed . He will then claim that 'millions' have been helped back to work , where as the reality will be people do a day or two a week and still claiming.
  • tories and libdems will salute the 1 p[ayment will mean a massive reduction in living standards on top of the change to the way benefit increases are caculateaway from the retail price index which is the higher of the two and better reflects cost of living increases the tory I'M ALL RIGHT JACK DOGMA ISNOW FOREVER LINKED WITH THE LIBDEMS WHO HAVE SINGULARLY FAILED TO PROTECT VULNERABLE PEOPLE FROM THE MOST EXTREME ATTACK ON THEIR LIVINGSTANDArds in a generation whilke at the same time failing to object to the favours done to the wealthy and big business with the budget tax changes which were warped in favour of the wealthiest 2%I take it objectiveish_ alien is neither disabled nor unemployed and thus unaffected
  • billmarden
    "I wonder if 'just' integrating the benefits into one will stand as an objective without incorporating tax for long?"

    I doubt any efficiency and money savings will be worth tax payers stumbling upon the horrors of the dole queue... Confidence is paramount in a recovery. But of course, the Tories pay little regard to the recovery. There is a right-wing ideological agenda to implement and growth can go to pot.

    The process of 'efficiency saving' is seldom efficient and may end up costing more if done in an overzealous(if Labour made it - pull it down and rebuild it) manner. Have you ever tried to save on your insurance only to find(when you come to claim) a middle man has taken a huge cut and your switched policy is worth half it was before ???
  • RobertPrice
    Labour had pretty much the same policies and the same backers as the Tories, and would be doing the same things with the same dishonest excuses. The Lib Dems were the only party who appeared to have concern for the people in this country in their manifesto, and some idea of social justice. Sadly votes for them were as maleficent for the people of Britain as votes for the two main parties, since they are happily going along with policies to cause real harm to this country.
  • RobertPrice
    They're all going home, or to other countries
  • ...and could be adjusted monthly using new computer software being developed by the Government. Uh oh!!
  • "Hot air", "childish illusion" "act consciously". The knowledge I do have my friend I can put solidly into a reasonable argument that would stand up in any discussion. Insulting remarks do nothing to add to discussion. If you have nothing understandable and comprehensive to add then I suggest you keep silent. The World is full of hatred and your contribution is clear although far from compelling. You do nothing for your foreign cause with such rubbish. Sorry my friend but crawl back into bed.
  • We may not like it but I am afraid it's clear something has to be done. We are now getting to the stage where we have third generation benefit claimants living off the state (us) with no hope or inclination towards getting a job. Yes we need to protect the most vulnerable but the fact of the matter is that if we want to make sure those who NEED our help are getting a reasonable amount to live on then those that just WANT benefits are encouraged to actually do something to earn them.
  • You seem to suffer from paranoia, delusions of grandeur, megalomania, narcissism and a general inferiority complex with your remarks. Ego I don't have either inflated or otherwise. "Dream talk" its not either, just a general concern about the planet and people in general. But as long as we have arrogant arseholes throwing around remarks that have absolutely no solid reason or basis then I guess the World is doomed to put up with the crap that keeps you amused.
  • drahcir38
    I have never heard such a load of old toss. Economic migrants? What the fuck are they? They certainly dont come to Britain to live off the huge benefits (not) that they can get here, and in the main they work long hours for very little pay (cos its easy to rip off a foreign worker isnt it). You'll be telling me next that women have kids so they can draw benefits!!! Do you really believe these ridiculous assertions or are you just trying to perpetuate the myth that that the tories care for people? Without benefits people who could not get a job or could not work through ill health would simply steal or starve. Perhaps that is your twisted vision of Britain but it certainly isn't mine you pompous shrtsighted prat.
  • The "safety net" though has become a hammock though for some. You live in a system (capitalist) that requires 3% compound growth each year to flourish. An impossibility! Your pension has just been lost by share dealing financial institutions so don't hold your breath.
  • vhawk1951
    yeah, i've come across a lot of that dream 'talk'.it generally signifies nothing, except an inflated egoism and a little mind.the two go together.
  • When I buy a product, I look at country of origin. After me and many of our neighbors start leaving foreign products and produce on the shelves in the supermarkets, we have seen the foreign products replaced by American products. I leave small junk in the store and willingly pay for better quality American made goods. That creates jobs. When my daughter goes off to college, then we will start a home services business. We are not afraid to clean someone's house or do some painting and repairs. My mother and her friends have a service that cares for the elderly so that they can continue to live in their homes. Smart purchases and creating new business enterprises would help. I am sure that in the UK, just like the U.S. there are many immigrants buying or starting business.
  • vhawk1951
    there is 'always' work, of some sort, to do, your point is what will it pay? see Zen saying,' hew wood , draw water.' go into any house, there is' always' 'something that needs washing, cleaning, moving or mending, ask any housewife, generally only men are idle, in my experience(except mine ex-wife), women are 'always doing 'something'.
  • vhawk1951
    you familiar with 'social credit'? it posits that each citizen/member of the common wealth,inherits a share in the results of the work of our ancestors(the assets of the common wealth) and as such is entitled to a dividend. the idea was worked out between the wars and had many adherents, but smacked too much of socialism for many people. the system is riddled with practical problems, but the underlying principle is sound(the me, me, me, brigade just 'hate' it). common wealth not to be confused with the commonwealth(a multinational organisation) you could call it the common assets.
  • vhawk1951
    i 'think' it's only a consultation document, run it up the flagpole and see who salutes it kinda ting, but i'm of times wrong. sure as eggs is eggs the usual hysterics will run round in circles screaming the sky is falling in. some are habitual and 'professional 'hysterics. life usually just goes on as normal. calm, intelligent, older people, know this, we have seen it all before.compared to death it's a minor irrelevance, as are most things. a good test is, 'if i had 2 days left to love would i give 2 hoots?' as beings, the beings of the planet earth lack perspective.
  • Amazing typical Tory ethos- I'm okay, you are not okay-- Bit like the Two Ronnie sketch!
  • vhawk1951
    so, what? Pluto is light years away and the sun is quite big.
  • vhawk1951
    you live under the childish illusion that there something that can be 'done 'about' facts. there is nothing to be 'done', but the hot air artists love to huff and puff, imagining that that is doing. humans cannot 'do', full stop. of course you would have to define what you mean by 'do', do you mean act 'consciously'? , marry in that even you cannot do that either. you have neither the know ledge nor the ingredients.all you have is hot air, like most beings of the planet earth, sleeping their way to death.
  • commonsenseofletchworth
    To listen to your rantings anyone would think that there is no work/jobs to be had in the UK. Strange that all the eastern europeans that come here manage to find work.
  • commonsenseofletchworth
    Whilst it may be painful in the short term this is at least a step in the right direction. It is easy to put up excuses for not doing anything but the time has come to re-balance the benefits system/cost which has just got out of hand. Thats not to say that everyone is going to get work but more about ensuring that benefits are targeted at those that need it. Another factors is that the current system attracts far too many economic migrants, many of whom have no intention of working and are merely here to milk the system, which pampers to their profligacy to have more chiildren and hence housing needs. I suggest we scrap all benefits and start with a clean sheet of paper.
  • Slash and burn, back to the 80's. Make work pay? what work you idiot... Like hearing a retarder Robin Hood, rob the poor, pay the rich
  • billmarden
    " improved incentives for the unemployed to swap life on benefits for work. "

    Excellent!

    If ONLY the new government wasn't cutting 100,000 public sector jobs with every announcement, cutting everyone's pensions and generally dragging us along the bottom of a recovery, Iain Duncan Smith would be the first genius to emerge from this comedy double-act. :S
  • It strikes me that the easiest of all systems - a universal pension to every citizen - is the simplest and fairest structure. Before state retirement age this would be paid to all those engaged in 'useful work' pro-rata to the amount they do and in full to those retired and genuinely disabled.

    Then you just scrap everything else - including the minimum wage - and ensure that people are taxed on the 'profit' they make from their efforts (just as the self-employed are today). Work then always pays and the tax system is simply adjusted, up or down, to ensure that aggregate demand isn't spiked too high by the pension.

    We can debate what 'Useful Work' should be - whether it be normal remunerative work, volunteering or looking after children, but the principle remains: the state provides a simple straightforward safety net and that's it.
  • DKP56
    Council/Housing Association rents verses Council Housing Benefit and Council Tax Benefit are the biggest deterrent for taking the plunge. If this so called "social housing" were at all affordable, the unemployed wouldn't be so shy to jump.
  • This is a " Cathy Come Home " budget. Poverty will increases as entitlement will be reduced and poor communities will be sealed into a swollen urban underclass.
  • Allen, there is nothing objective in waiting to see what happens because then its too late to do anything about it! Apathy and ignorance is exactly why Britain (indeed the World) is in the deep crap that its in.
  • Singapore is a virtual dictatorship. From my experience, the people there are far from happy. In any case it is not a meaningful model.
  • scampy1
    Singapore with one of the highest living standards and home ownership in the world without welfare handouts? Go see for yourself Cameron?
  • vhawk1951
    having read the above, i'm none the wiser, best just wait and see i suppose. nothing bad has happened yet

Article Archive

Day In a Page

Sun | Mon | Tue | Wed | Thu | Fri | Sat

Select date