Osborne secretly plans £2.5bn cut to sickness benefit

Leaked document shows that the Chancellor wants to slash support for people too ill to work.

Leaked document shows that the Chancellor wants to slash support for people too ill to work.

Leaked documents have shown that George Osborne is secretly planning to cut sickness benefits by £2.5bn.

The plan is detailed in a confidential letter from Osborne to the Work and Pensions Secretary, Iain Duncan Smith, which was seen by the Observer.

Written on 19 June (three days before the Emergency Budget) and also sent to David Cameron and Nick Clegg, the letter says:

Given the pressure on overall public spending in the coming period, we will need to continue developing further options to reform the benefits as part of the spending review process in order to deliver further savings, greater simplicity and stronger work incentives.

Reform to the employment support allowance is a particular priority and I am pleased that you, the prime minister and I have agreed to press ahead with reforms to the ESA as part of the spending review that will deliver net savings of at least £2.5bn by 2014-15.

The employment and support allowance (ESA) is the successor to incapacity benefits, and is paid to those who are unable to work because of disability or illness.

Duncan Smith is currently locked into negotiations with the Treasury over his proposed reform to the welfare system, which will require immediate investment in order to incentivise working in the long-term.

This revelation has done little to ease the tension. The Department for Work and Pensions insisted that nothing has been decided, stressing that "our reforms will ensure that the most vulnerable in our society are protected." Some within Duncan Smith's camp have even accused the Treasury of leaking the letter to force them into accepting the plan.

The proposed cuts are disturbing, but hardly surprising. Just last week, Osborne launched an astonishing attack on people who have made the "lifestyle choice" to be on benefits, announcing an extra £4bn cuts.

A government spokeswoman dismissed the leak, saying that the £2.5bn figure was "totally out of date", and that negotiations on ESA were ongoing. Possible changes could include means-testing recipients, and limiting the amount of time that people can spend on ESA.

The Institute for Fiscal Studies showed unequivocally last month that the Budget was regressive, and would disproportionately affect the very poorest in society. To this already punitive Budget, with its drastic cuts to housing benefits, add the extra reductions that Osborne announced last week and this latest news. You have a picture of an assault on the welfare state and a worrying propensity to go after the most vulnerable in society.

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

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Constitutional expert: Scottish independence “sweet deal” for EU

The remaining member states know a bargaining chip when they see one. 

An independent Scotland could succeed in staying in the European Union, despite legally having little power to block Brexit, a constitutional expert has argued.

His comments come after the German MEP Elmar Brok, an ally of Chancellor Angela Merkel, said the EU27 could “make a fuss” over Scotland in the Brexit negotiations. 

Jeff King is a professor of law at University College London, and a specialist in the UK constitution.

He said that the Supreme Court ruling on Article 50 had confirmed that Scotland would be unable to veto Brexit from within the UK. 

But he argued this did not mean Scotland would need to leave the EU. 

“Independence for Scotland could very well be a sweet deal for the rest of the European Union,” he told a European Commission event.

“The independence movement, which has some extremely good politicians in it, is going to be in the strongest position they have been for a long time.”

A multi-layered game of bluff

The SNP's Brexit negotiations currently resemble a rather wooden play. It is being acted out for the benefit of Scotland’s sceptical majority, who, polls suggest, would not vote for independence just because of Brexit. They have to be convinced. 

The latest act is the Scottish government’s paper, Scotland’s Place in Europe. First, it asks for a Brexit Britain to stay in the single market (Theresa May has already ruled this out). Second, it asks for a different deal for Scotland, along the lines of the “Norway option”. And third, it asks for a share of the EU powers now being repatriated to be devolved to the Scottish Parliament.

According to Tasmina Ahmed-Sheikh, the SNP’s trade spokeswoman at Westminster, the ball is now in the UK government’s court.

“As far as what happens next, we are really waiting for the government to confirm what their position is in relation to our document, Scotland’s Place in Europe,” she told me. “Are they going to agree to a differentiated agreement for Scotland, and if not, then a decision will require to be taken.”

If the SNP are reading their lines for the benefit of Scottish voters, they are doing so with one eye on Germany. As I’ve written before, at the time of the 2014 independence referendum, it wasn’t clear that an independent Scotland could stay in the EU. The SNP believe an intervention from Angela Merkel could provide the reassurance they need. They will be cheered by Brok’s words. 

But Germany is a negotiator too. As The Daily Record reports, there is goodwill towards Scotland in the EU27, but also an awareness that a constitutional crisis could blow up in the UK government’s face. 

If Merkel’s friends and allies continue to talk about their sympathy for Scotland, the idea that the EU considers keeping an independent Scotland in to be a "sweet deal" will seem commonplace. The question for Scottish voters then will be: but how sweet is it for us?

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.