Leading article: Effective reform should be the goal, not saving money

An attempt to push the unemployed into work under these circumstances will be difficult

Share
Related Topics

The Coalition Government's decision to make welfare reform one of its priorities is to be welcomed. In too many cases, the existing benefits system ends up demoralising recipients and trapping them in a life of dependency, rather than helping them back into work.

Both Labour and the Conservatives are to blame for this perversion of the original purpose of the welfare state. In the 1980s, Margaret Thatcher encouraged hundreds of thousands of unemployed people to register for incapacity benefits so she could claim that her government had reduced joblessness. And Labour failed to tackle the problem of long-term welfare dependency during the long years of economic growth when the circumstances for such an effort were much more propitious than they are now.

The thrust of the Coalition's reforms, published in a White Paper by Iain Duncan Smith's Department for Work and Pensions yesterday, is right. It is sensible to make work pay better by ending the present swift withdrawal of various benefits when someone takes a job, as Mr Duncan Smith's "universal credit" aims to do. There is also a case for requiring the long-term unemployed to take part in some form of unpaid community work as a quid pro quo for their benefits (although the carrot is likely to be much more effective in this case than the stick).

Yet there are two significant dangers with the manner in which the Coalition is going about its work. This is a time of abnormally high unemployment and the economic outlook is hugely uncertain. The Coalition's recklessly hasty spending cuts are going to result in an extra 500,000 public sector jobs disappearing over the next five years. Under these circumstances, attempting to push the unemployed into work will be difficult. And if the economy does not grow as rapidly as the Coalition expects, it will be harder still.

It is true that Mr Duncan Smith's reforms will not take effect immediately. The universal credit will be introduced only for new claimants from 2013 and for others after 2015. In theory, that should create time for the economy to recover. Yet the Chancellor of the Exchequer has demanded significant savings from the welfare budget within the course of this parliament, in order to meet his target of eliminating the entire structural deficit in just five years.

If this welfare shake-up ends up being driven by a Treasury more interested in savings than reform, the result will be the punishment of welfare recipients rather than a sustainable shift. We are already seeing this in the ill-thought-out Government plans to cap housing benefit.

The other danger is that the Government seems interested in addressing only one pincer of the work and welfare trap. The existing benefits system creates disincentives to work. But so does low pay for unskilled jobs in the private sector. The Coalition seems oblivious to the reality that the minimum wage means a life of poverty.

When ministers speak about welfare they often point out the disincentives to work in the system. Yet they never seem to mention that a large chunk of welfare payments go to those already in work in the form of income support and tax credits. The most effective way to cut that part of the welfare bill would be to make work pay. Ministers should be legislating to raise the minimum wage. And the Government needs to be prepared to stand up to the intense pressure of the business sector that such a move would provoke.

Mr Duncan Smith won an important Whitehall battle with the Treasury when he secured upfront funding for the universal credit. But the war for effective welfare reform is by no means over.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Ashdown Group: IT Support Technician - 12 Month Fixed Term - Shrewsbury

£17000 - £20000 per annum: Ashdown Group: IT Helpdesk Support Technician - 12 ...

The Jenrick Group: Maintenance Planner

£28000 - £32000 per annum + pension + holidays: The Jenrick Group: Maintenance...

The Jenrick Group: World Wide PLC Service Engineer

£30000 - £38000 per annum + pesion + holidays: The Jenrick Group: World Wide S...

The Jenrick Group: Project Manager

£35000 per annum + Pension+Bupa: The Jenrick Group: We are recruiting for an e...

Day In a Page

Read Next
 

My Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent
African elephants in Botswana photographed by television presenter Chris Packham  

We've made incredible progress, but there's still more to do to make sure we save the elephant

Hugo Campbell
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'