Cameron considers a further £25bn in welfare cuts

Such a move would be unfair and unsustainable.

David Cameron barely makes a speech without referring to hardworking people who “do the right thing” and don’t claim benefits. This language implies that claimants are, by default, doing the wrong thing – a convenient position given unprecedented cuts to the welfare budget.

While the government has already indicated an £18bn reduction in welfare spending by 2014, it is being reported that the Prime Minister is looking at plans that would see a further £25bn in cuts.

The proposals have been drawn up in a policy paper for David Cameron and are understood to have come from Steve Hilton, No 10’s outgoing policy chief. Hilton, who has just departed Downing Street to take up an academic post at an American university, has suggested that a further £25bn can be cut. The Work and Pensions Secretary Iain Duncan Smith – who told the Times last month that the government had a duty “to support people in difficulty” – reportedly thinks that this level of extra savings is unfeasible.

Where exactly would these extra savings come from? The suggestions on the table are even further cuts to housing benefit and a tougher system for the universal credit to push people into full-time rather than part-time work.

Let’s take these one by one. The housing benefit cap is already having a devastating effect, in what Boris Johnson termed “social cleansing”. The BBC reported last month that Newham council was trying to evict 500 families to Stoke – 135 miles north – as it could no longer afford to house them in private accommodation. As rents rise unfettered but wages are frozen across the board, 93 per cent of new housing benefit claimants are in employment - doing Cameron’s feted “right thing”. There is no denying that housing benefit has ballooned and rents are too high, and that this is in part due to successive governments choosing to subsidise private landlords rather than build more social housing. But slashing housing benefit without attempting to provide alternatives unfairly penalises tenants. The Chartered Institute of Housing has estimated that 800,000 homes will already be put out of the reach of poor families, and that many may be forced to move to areas where there is less employment (ie. out of big cities), thus compounding the problem. The housing issue is already one of the most radical and inhumane of the governments’ policies; it is difficult to see how further cuts could be sustained or justified.

Secondly, it is all very well to encourage people into full time work, but only if there are full time jobs for people to do. A system which helps people to end benefit dependency is a good thing – but it is disingenuous to pretend that unemployment is a choice. There are 5.7 people for every job vacancy in the UK. You do not need to be a mathematician to understand that you cannot squeeze five people into one job. Most people are unemployed or working part-time because that is their only option.

The fact remains that cuts to welfare are popular with the public. The British Social Attitudes survey in December showed that half of Britons believe that unemployment benefits are too high and discourage people from finding work. The benefit cap – for all its cruelty in practice – was broadly supported. With Liberal Democrats saying there is no way they would support these £25bn extra cuts, and Duncan Smith saying that this level of saving is “absolute nonsense”, let’s hope that Cameron “does the right thing” and throws these plans out.
 

Does David Cameron any idea of how many young people in the UK are looking for employment? Miss Dynamite (5th L) does. October 10, 2011

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

Photo: Getty
Show Hide image

The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.