Iain Duncan Smith asks wealthier pensioners to hand their benefits back

The Work and Pensions Secretary says he “would encourage” those who don't need the money to return it to the state.

Iain Duncan Smith has said that he "would encourage" wealthier pensioners to hand back benefits like the Winter Fuel Allowance, free TV licences and free bus passes voluntarily.

In an interview with the Sunday Telegraph, Duncan Smith said: "I would encourage everybody who reads the Telegraph and doesn’t need it, to hand it back." He did stress, however, that beyond his plea for the voluntary return of "unneeded" benefits, there are no plans to make changes to the welfare system to enforce that idea.

Whether or not the principle of univeralism should remain in the welfare system is a significant point of difference between the Work and Pensions Secretary and the Prime Minister. David Cameron pledged to defend universal benefits for a whole parliament in his party's 2010 manifesto, and is understood to have ruled out removing them in 2015. Iain Duncan Smith has previously called the pensioner benefits scheme an "anomaly", while Nick Clegg has termed them "difficult to defend" in a time of spending cuts.

It's highly doubtful whether any Telegraph readers will accede to Duncan Smith's request and hand back their benefits, but the minister has raised what is going to be a key political argument going into the next election - whether any political parties will take the plunge and abandon universalism in our welfare state. My colleague George Eaton has made a powerful and persuasive case here for defending it - not only does it help ensure that benefits are received by those who truly need them, the projected cost of means-testing has been shown to outweigh the savings recovered from the fraction of pensioners who are wealthy enough not to need the benefits. For now, the political consensus around universalism is such that it would seem that asking wealthy pensioners not to claim is the furthest Duncan Smith is able to go. If we don't see substantial economic recovery before the next election, though, it might be that he is given the political latitude to be able to go a lot further.

Iain Duncan Smith. Photograph: Getty Images

Caroline Crampton is web editor of the New Statesman.

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Brexit is the beginning of the end for Northern Ireland

The age-old bid for a unified Ireland is now wearing utilitarian clothes. 

Brexit has presented British politics with something akin to a "reverse West Lothian Question". Instead of worrying why Scots should get a vote on English laws, we now have English voters telling Scotland and Northern Ireland they must leave the European Union, despite the people in both small countries opting to stay. 

Sinn Fein could hardly believe its luck that 56 per cent of Northern Ireland’s voters chose to remain in the EU, but are nevertheless being forced out by the weight of English votes for Brexit. Their immediate call for a "border poll" on Irish unity is opportunistic and will, for now, go unheeded. 

What is different, though, is their age-old bid for Irish re-unification now comes wearing neutral, utilitarian colours, responding to a genuine, contemporary issue. Moreover, the threat of Brexit to Northern Ireland has seen the Irish establishment, in the shape of Irish Taoiseach Enda Kenny, and his opposite number, the Fianna Fail leader Micheál Martin, echo calls for an (eventual) poll on Irish unity.

Brexit is, indisputably, a game-changer. We are now plausibly witnessing the beginning of the end of Northern Ireland. Not least because the economics of leaving the EU are so utterly disastrous for it. 

Back in March, Northern Ireland’s Department of Enterprise, Trade and Investment calculated that the risks of Brexit would be much more serious for Northern Ireland than the rest of Britain. Whereas Britain’s economic losses will be measured in the region of 0.1-4 per cent of GDP, for Northern Ireland that increases to up to 5.6 per cent.

In short, if Britain catches a cold by leaving the EU, Northern Ireland will get flu. Even if Theresa May eventually manages to negotiate ongoing single market access, the loss of agricultural subsidies and regeneration cash will be an unmanageable burden for the fragile cross-community executive to deal with.  

Last year, the devolved assembly's enterprise committee commissioned a report that showed the province received £2.4bn from the EU between 2007-13, and that continued funding deals up to 2020 are "central to Northern Ireland[s] economic and innovation strategies".

The report's author, Dr Leslie Budd from the Open University, argued that as well as damaging Northern Ireland's attractiveness as an entry route into the single market, transaction costs for trading into the EU would "rise significantly" and inhibit economic co-operation with the neighbouring Irish Republic. 

This is important because the Northern Ireland Executive plans to harmonise corporation tax rates with it in 2018. It is hoped the move will make the North a leaner competitor to the South in the foreign investment stakes, however it will still fall short if the Republic remains in the single market and Northern Ireland does not. 

Worries about any deterioration in North-South relations and being cut-off from the EU are very real. The Northern Ireland Chambers of Commerce have recently signed a ‘formal affiliation’ with Chambers Ireland to bolster all-Ireland business co-operation "in the current period of uncertainty." 

Meanwhile, there has been a rush to apply for Irish passports, so much so, in fact, that it’s said Belfast’s post offices have run out of application forms. Indeed, no less a figure than Democratic Unionist MP, Ian Paisley Junior, suggested his constituents should think of applying for one. A genuine "through the looking glass moment" to hear that from a Paisley.

The obvious effect of Brexit-inspired instability in Northern Ireland is that it will become an even larger burden on the British Exchequer. Already, one in three works in the engorged public sector and its fiscal deficit is so large the Treasury has to pump in £9 billion a year. Will hard-pressed English taxpayers prove willing to continue to bail out a place of which they know and care little?

But this is only half the story. If these are the obvious pressures as a result of Northern Ireland leaving the EU, what, then, are the benefits of joining with the Irish Republic? 

A major US academic study by the University of British Columbia last year modelled various scenarios and concluded that Irish unity could drive out €36bn euros of value during the first eight years, with the benefits disproportionately felt in Northern Ireland. 

So a clear, existential economic problem has emerged and with it a convincing, evidence-based economic solution. The only snag with Northern Ireland, though, is the politics.

The principle of consent, that there can be no change in its constitutional status unless a majority wishes it, is hardwired into the Good Friday Agreement and there is, so far, precious little interest among unionists in joining the Irish Republic.

But as the old saying goes, unionists are not so much loyal to the Crown as the half-crown. Maybe they will look more positively on the idea after suffering the very real economic effects of Brexit for a few years. A decision Eurosceptical unionists voted for in large numbers.

And in a decade’s time, perhaps we will look back and see these past few weeks were the beginning of the end for Northern Ireland.
 

Kevin Meagher is associate editor of Labour Uncut and a former special adviser at the Northern Ireland office.