You are here:   Conservative Party > Something For Nothing Just Won't Do Any More
Work and Pensions Secretary Iain Duncan Smith: Will he be bold? (photo: Julian Parker/UK Press/Getty Images)

Among the many manifesto promises the Conservative party now unexpectedly finds itself in a position to deliver after May’s startling election result is to tackle Britain’s spiralling benefits bill, a challenge the Work and Pensions Secretary, Iain Duncan Smith, made a fighting start at in the last parliament.

The problem the UK faces is more serious than the immediate arithmetic. It is not just about where, in the empire of the needy, the next cuts can be made; whether they will pass muster with Duncan Smith’s colleagues; or how then they can be pushed and dragged through parliament and come out intact. None of this will be easy. The real problem is not that the benefits system is broke financally; it is that it is conceptually and structurally bankrupt. Worse, it is morally corrupt and corrupting. Without “regime change” to restore the original Beveridge principles linking benefit to — and making it depend on — contribution, there can be no real cost control: for every group “capped” or “cut back”, another waits in the wings to take its place. And for every benefit paid without contribution, the signal goes out that the state is still in the business of taking on the whole or partial responsibility of the household breadwinner. So if Britain is to meet the costs of its ageing society and the needs of other new claimants, regime change will be needed.

Duncan Smith is for now focused on the more pressing task: to cut the benefits bill of around £180 billion a year, just under a third of all current public spending, by £12 billion. So far the focus is on further cuts to working-age benefits, with total benefits for a family to be capped £23,000 a year and other benefits frozen, while housing benefit for 18-21-year-old jobseekers will end. These reforms will shave more than £1.5 billion off the bill. The rest will be no easy matter. Trouble is already brewing even on Duncan Smith’s own side. The Prime Minister has ruled out a plan to limit child benefit to the older two children in a family. Another plan, to tax disability benefit, is controversial, while the probable freeze on the tax credits which top up the wages and income of working families has already drawn flak from some Conservatives who object to the impact on “in-work” families with children. Further cuts to the housing benefit seem an obvious move, but they could, in the case of larger families, be an own goal for a government keen to end to child poverty. All the same, squalls blowing from the government’s own benches will be nothing to the storms to follow from across the political spectrum as the media shifts its focus to the hardship suffered by poorer people and families with young children, trying to score debating points by emphasising that many such families are indeed in work.

Duncan Smith has been over this lonely territory before. He won the day against his Lib Dem coalition partners, without much help from many of his own officials in the Department for Work and Pensions, or the full support of his own party. Backed as before by the Chancellor, he will probably see through what in fact amounts to the lightest of pruning. Even if he does, Britain’s real problem will remain the fact that successive governments have stripped the benefit system of the features which William Beveridge, its founder, designed so as to ensure its survival and success.

First and foremost, Beveridge conceived the system as one of contributory insurance, which would therefore pay for itself. Employees and their employers would pay a weekly sum, to be augmented by the state if it so decided. Designed to meet the consequences of hard luck in life, when earnings were temporarily interrupted (through sickness, disability or unemployment) and to provide income for retirement, contributions would accrue in a social fund from which benefit would be paid.

View Full Article

Post your comment

This question is for testing whether you are a human visitor and to prevent automated spam submissions.