Editorial: Welfare reform cannot be an excuse for cuts


Fact File
  • £2 to 3 billion The amount government could save by scrapping universal benefits for the well-of
Related Topics

Reform of Britain’s expensive and cumbersome welfare system is long overdue.  The ideas’ behind the approach of the work and pensions welfare secretary Iain Duncan Smith – to make the system less complicated and to provide people with more incentives to find work or work for longer – are laudable. But today’s news that a typical family will lose £600 a year under the plan to replace jobseeker’s allowance, tax credits, income support, employment and support allowance and housing benefits with a single Universal Credit should give pause for thought.

So too should the concerns of 70 charities and lobbyists who have warned that the new system will disadvantage the 8m Britons who have no access to the internet and 14 million more who lack computer skills.  Those are not the only worries. There are anxieties in Whitehall that the computer system to be installed to cope with the reforms may not be up to the job but is rather, as one civil servant put it, a “car crash waiting to happen”. (Whitehall does not have a good track record on the efficiency of its new huge computer systems.) There are worries that the new system will alter the dynamics within families, skewing control and autonomy away from women. And moving from fortnightly to monthly benefits payments could increase the grip of pay-day loan sharks on those in society who lack budgeting skills. Fair and sustainable reform must take account of such factors.

The government has said that from Day One of the new system no individuals will see their benefits fall – and that any longer term squeeze, as benefits rise less than the real rate of inflation – will be offset by shifts elsewhere in the tax and benefits system. That should be taken with more than pinch of salt. Rates which were previously based on the Retail Prices Index are now to be tracked against the Consumer Prices Index which is a far less accurate measure of how prices will rise for the low-to-middle income families who qualify for Child Benefit or in-work tax credits. There are always losers when changes are introduced to any complex financial system. That is a hard fact of political life. But the shift to the Consumer Prices Index will hit the least well-off disproportionately as prices rise faster than benefits will.

Moving from fortnightly to monthly benefit payments could increase the grip of pay-day loan skills on those in society who lack budgeting skills

But there is another, far bigger, political reality which cannot be ignored. It is that in a time of economic austerity the temptation will grow increasingly less resistible for reform to be used as cover for all round cuts in welfare. The Chancellor George Osborne has made no secret of the fact that he wants £10bn cuts in the welfare bill. But reforms like those proposed by Iain Duncan Smith, though they might eventually produce savings, will initial cost more up-front. Reforms usually do. The Work and Pensions Secretary knows that, which is why he dug his heels in when the prime minister asked him to switch jobs in the Cabinet reshuffle. He suspected that a new occupant of his post would be far less able than him to resist pressure from the Treasury for wider and deeper cuts.

If welfare is to be reformed it is vital that Mr Osborne and his Treasury number-crunchers are not effectively allowed to take charge. Reform must be driven by principle, not by deficit-reducing pragmatism. What is needed is shifts in incentives, not the slashing of payments to the least well-off.

Mr Osborne should bite a more potentially explosive political bullet and take another looking at stopping the payment of universal benefits – winter fuel payments, free bus passes and the like – to the comfortably-off. It will not raise the £10bn it wants, but it will save the Treasury between £2bn and £3bn, and that is a start. Whatever form reform takes it must not sacrifice the central principle that our welfare system needs radical changes on incentives. It cannot be a mask for big cuts which would hit the poorest hardest.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Recruitment Genius: Technical Author / Multimedia Writer

Negotiable: Recruitment Genius: This recognized leader in providing software s...

Recruitment Genius: Clinical Lead / RGN

£40000 - £42000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: IT Sales Consultant

£35000 - £40000 per annum: Recruitment Genius: This IT support company has a n...

Recruitment Genius: Works Engineer

Negotiable: Recruitment Genius: A works engineer is required in a progressive ...

Day In a Page

Read Next

An unelectable extremist who hijacked their party has already served as prime minister – her name was Margaret Thatcher

Jacques Peretti

I don't blame parents who move to get their child into a good school

Chris Blackhurst
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent