Why Iain Duncan Smith needs to get his facts straight

The Work and Pensions Secretary insists that “almost everyone” can find work. The statistics tell a

Iain Duncan Smith, the Work and Pensions Secretary, is interviewed by Mary Riddell and Andrew Porter in the Daily Telegraph today.

Discussing the much-feted universal credit welfare reform, the article notes that there will be a "marked shift" away from Britain's generous welfare system to a "more punitive, American-style one" that punishes "those who refuse to work".

This is the passage that caught my attention:

"The message will go across; play ball or it's going to be difficult," he says.

Pressed on the penalty regime and the gradual taking away of benefits from the most recalcitrant, Mr Duncan Smith first offers lengthy and detailed explanations about why almost all people will get back into work if they can.

But some, he acknowledges, will refuse. What will happen to these people and how will the system come after them?

"I think most of the public think that progressively you send them signals. They have a bit withdrawn, then a bit more, then eventually [you] have to say you will eventually lose all your benefit.

"The signal will get round very quickly that you are serious about this. We may have to do it initially to some of the more recalcitrant people. But I have a view about human nature: most people, once you start to show them the right way out, I think most people move.

"Those who won't play get lost in the system at present and they infect everyone else."

Let's just recap on the facts here. There are currently just under 2.5 million people claiming Jobseekers' Allowance in the UK. Analysis by the TUC in the summer found that dole claimants outnumber job vacancies by five to one. In London, it's more like seven to one, and in some boroughs even higher – in Hackney, it's 24 to one.

The number of job vacancies across the country has fallen consistently over the past 12 months. It is unlikely this will change. The government itself estimates that about 490,000 public-sector jobs will be lost as a result of the cuts set out in the Spending Review.

While ministers suggest that this will be offset by growth in the private sector, there is no indication of why this would be the case. A report by PwC last month argued that cuts would hurt the private sector, too, and forecast a further 500,000 job losses here – bringing the total to one million. Another estimate this week put the figure as high as 1.6 million.

Sadly, the interview does not elaborate on the "lengthy and detailed explanations" that Duncan Smith gave as to why everyone can get back into work. Given these figures, I would certainly be interested to know: getting "on your bike" to find work is irrelevant if there are five people for every job – if not dramatically more, once the cuts hit.

If the new system is going to be, as the article says, more akin to the punitive American system, one need only look across the Atlantic to see that this is difficult to maintain in such straitened times. President Obama has had to extend the 99-week limit on claiming benefits several times because of the dearth of jobs in some states.

A simpler benefits system that doesn't trap people in a dependency cycle is a commendable aim. Yet the continued suggestion that people are "choosing" not to work in the present economic climate is not only unreasonable; it indicates a worrying view of the poor. It also shows a wilful misunderstanding of current times, given that many, many more people will soon be forced to claim state support, whether they want to or not.

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

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How austere will Philip Hammond be?

The Chancellor must choose between softening or abandoning George Osborne's approach in his Autumn Statement. 

After becoming Chancellor, Philip Hammond was swift to confirm that George Osborne's budget surplus target would be abandoned. The move was hailed by some as the beginning of a new era of fiscal policy - but it was more modest than it appeared. Rather than a statement of principle, the abandonment of the 2019-20 target was merely an acceptance of reality. In the absence of additional spending cuts or tax rises, it would inevitably be missed (as Osborne himself recognised following the EU referendum). The decision did not represent, as some suggested, "the end of austerity".

Ahead of his first Autumn Statement on 23 November, the defining choice facing Hammond is whether to make a more radical break. As a new Resolution Foundation report notes, the Chancellor could either delay the surplus target (the conservative option) or embrace an alternative goal. Were he to seek a current budget suplus, rather than an overall one (as Labour pledged at the last general election), Hammond would avoid the need for further austerity and give himself up to £17bn of headroom. This would allow him to borrow for investment and to provide support for the "just managing" families (as Theresa May calls them) who will be squeezed by the continuing benefits freeze.

Alternatively, should Hammond merely delay Osborne's surplus target by a year (to 2020-21), he would be forced to impose an additional £9bn of tax rises or spending cuts. Were he to reject any further fiscal tightening, a surplus would not be achieved until 2023-24 - too late to be politically relevant. 

The most logical option, as the Resolution Foundation concludes, is for Hammond to target a current surplus. But since entering office, both he and May have emphasised their continuing commitment to fiscal conservatism ("He talks about austerity – I call it living within our means," the latter told Jeremy Corbyn at her first PMQs). For Hammond to abandon the goal of the UK's first budget surplus since 2001-02 would be a defining moment. 

George Eaton is political editor of the New Statesman.