Monday, 29 April 2013

Benefits, Bluster... and Betraying Beveridge


Today, with much contrived fanfare, saw the launch of the government’s flagship welfare reform – the Universal Credit. The aim is to simplify the benefits system by combining six confusing and often overlapping entitlements into a single, personalised payment.

It’s a big change – perhaps a little too big – with embarrassingly humble beginnings.

Not that anyone should be surprised. Over the last few years, the authorities have had enough trouble implementing new infrastructure designed merely to bring Britain’s tax and benefits system up to scratch for the 21st century; this new system has required further investment – and governments do not exactly have a good track record of delivering major IT projects.

Consequently, the timescale that has been talked about by the Work and Pensions Secretary, Iain Duncan Smith, since the election and beyond has slipped; so have the budget targets. Today, the scheme came into force with a whimper – a pilot in a single town near Manchester.

That didn’t stop the former Conservative leader trumpeting the move as the epitome of the government’s strategy to get more people off benefits and into employment by making work pay; this is to be achieved by preventing individuals from being able to claim a multitude of benefits that were intended for the particular circumstances of different groups of people.

The reform, he said, is about “changing people”.

In reality, though, it’s what happens to the benefits themselves – rather than how they are claimed – that will stimulate changes in behaviour. Genuinely tough policies such as the (bafflingly controversial) benefits cap will have a far greater impact on people’s disposable incomes and hence their cost-benefit calculations.

The minister’s bluster, though, was vastly outdone by his opposite number, Liam Byrne. “What on earth have they been doing for the past three years?” he asked, either oblivious or just plain ignorant of the hypocrisy of his question. (This is the man whose last act as a Treasury minister was to leave a crass note to his successor informing him that “there’s no money left”.)

On Labour’s watch, not only did the welfare budget spiral out of control, but it did so in such a way as to cultivate a deep-rooted sense of entitlement that is proving far more difficult to tackle than the coalition probably ever imagined.

Benefits ceased to be helping hands, instead being seen as a staple of household budgets.

This habit of taking the welfare state for granted grips not only those who benefit from it, but their sympathisers elsewhere in society and especially in the media. Any proposed cut to a handout that half of us never knew existed and which never did exist until the last government decided it was essential, is met by a public outcry with tabloids full of hard-luck stories about families plunged into poverty by Westminster pantomime villains.

It’s an appealing narrative, but the poverty is in being trapped in a livelihood that is dependent on the state, not in being weaned off it – no matter how abruptly.

Opponents say the welfare state is under attack from the actions being taken by the current government under the veil of austerity. But social security was intended to be a safety net, not a lifestyle choice. It is this manipulation of the values of the modern Labour Party’s forebears that presents the real danger to the institution’s integrity.

Squalor may have been one of Beveridge’s five ‘giant evils’, but idleness was another.

Make no mistake, there are many other reforms that are necessary but which politicians on all sides daren’t even contemplate for fear of the political consequences; such cowardice the Sage greets with disappointment but not surprise. If only Mr Duncan Smith would admit that what he has achieved is merely a scratching of the surface rather than the breakthrough he proclaims.

“This is not the big shake-up we need in the benefits system,” bemoaned Mr Byrne. He’s right, but he’s the last person entitled to say it.

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