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 They have a bit withdrawn, then a bit more, then eventually [you] have to say you will eventually lose all your benefit.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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Donald Trump promises quick Brexit trade deal - but the pound still falls

The incoming President was talking to cast out Brexiteer, Michael Gove. 

The incoming President, Donald Trump, told the Brexiteer Michael Gove he would come up with a UK-US trade deal that was "good for both sides".

The man who styled himself "Mr Brexit" praised the vote in an interview for The Times

His belief that Britain is "doing great" is in marked contrast to the warning of current President, Barack Obama, that Brexit would put the country "at the back of the queue" for trade deals.

But while Brexiteers may be chuffed to have a friend in the White House, the markets think somewhat differently.

Over the past few days, reports emerged that the Prime Minister, Theresa May, is to outline plans for a "hard Brexit" with no guaranteed access to the single market in a speech on Tuesday.

The pound slipped to its lowest level against the dollar in three months, below $1.20, before creeping up slightly on Monday.

Nigel Green, founder and chief executive of the financial planners deVere Group, said on Friday: "A hard Brexit can be expected to significantly change the financial landscape. As such, people should start preparing for the shifting environment sooner rather than later."

It's hard to know the exact economic impact of Brexit, because Brexit - officially leaving the EU - hasn't happened yet. Brexiteers like Gove have attacked "experts" who they claim are simply talking down the economy. It is true that because of the slump in sterling, Britain's most international companies in the FTSE 100 are thriving. 

But the more that the government is forced to explain what it is hoping for, the better sense traders have of whether it will involve staying in the single market. And it seems that whatever the President-Elect says, they're not buying it.


 

 

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.