The Government has had to navigate choppy waters in coping with the impact of the 2008 banking crisis. Despite the frequent taunts that David Cameron and George Osborne are posh boys who have no idea what it is like to be short of money, they are not being unreasonable when they say that the Department for Work and Pensions, which consumes more than a quarter of government spending, must take a share of the cuts in government spending.
Combine this with the crusading commitment of the Secretary of State Iain Duncan Smith to get people off benefits and in work, and cuts in benefits were inevitable. If the real effect of taking nearly £14bn off the projected welfare budget was to get the unemployed back into the workplace, it would be an admirable project.
It supposedly operates on the principle that people will be motivated to find work if every low-paid job brings a greater financial reward than living off benefits. The introduction of universal credit, the phasing out of disability benefit, and the imposition of a benefit cap are all, theoretically, geared to that purpose.
The Government calls it fairness. But this is “fairness” achieved not by making people who are in work better off, but by making claimants worse off. That may cause people on benefits to wish they could find jobs, but inevitably the majority of the workless are concentrated in places where vacancies are scarce but housing is cheap. Only a few will uproot themselves to where jobs are easier to find but living costs are higher.
The reduction in income from benefits further depresses the local economy in unemployment black spots. The political loss to the Government is minimal – because these places are almost all in the Labour heartlands – but the social cost is high.Reuse content