Welfare cuts: how they could have been even worse

David Cameron has already outlined the draconian cuts a Conservative majority government would make.

The left has rightly expressed its outrage at the welfare reforms introduced this week but it's worth remembering that they could have been much worse. Were this a Conservative government, as opposed to a coalition, ministers would be imposing even deeper cuts. As George Osborne and Iain Duncan Smith noted in their joint article in Monday's Telegraph, "The Prime Minister has already set out some of the things that a Conservative government [emphasis mine] would do to create a fairer system and move people into work." 

The speech in question, delivered by David Cameron last summer, was one of the most detailed he has given since becoming Prime Minister. Among the measures proposed were:

  • The abolition of housing benefit for under-25s.
  • The restriction of child-related benefits for families with more than two children.
  • A lower rate of benefits for the under-21s.
  • Preventing school leavers from claiming benefits.
  • Paying benefits in kind (like free school meals), rather than in cash.
  • Reducing benefit levels for the long-term unemployed. Cameron said: "Instead of US-style time-limits – which remove entitlements altogether – we could perhaps revise the levels of benefits people receive if they are out of work for literally years on end".
  • A lower housing benefit cap. Cameron said that the current limit of £20,000 was still too high.
  • The abolition of the "non-dependent deduction". Those who have an adult child living with them would lose up to £74 a week in housing benefit.

What all of these policies have in common is that they would further squeeze those on low incomes, while doing nothing to address the deep structural reasons for the rising welfare bill, such as the lack of affordable housing and falling real wages. As I noted yesterday, while complaining about the surge in housing benefit payments, George Osborne made no mention of the causes, preferring to concentrate his fire on the (five) families who received £100,000 or more in landlord subsidy. By prioritising housebuilding and ensuring more employers pay the living wage, Labour can argue that it, rather than the Conservatives, is best placed to reduce the benefits bill in a responsible and sustainable way.  

David Cameron and George Osborne have signalled that the Conservatives would be making deeper welfare cuts were they not in coalition. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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How tribunal fees silenced low-paid workers: “it was more than I earned in a month”

The government was forced to scrap them after losing a Supreme Court case.

How much of a barrier were employment tribunal fees to low-paid workers? Ask Elaine Janes. “Bringing up six children, I didn’t have £20 spare. Every penny was spent on my children – £250 to me would have been a lot of money. My priorities would have been keeping a roof over my head.”

That fee – £250 – is what the government has been charging a woman who wants to challenge their employer, as Janes did, to pay them the same as men of a similar skills category. As for the £950 to pay for the actual hearing? “That’s probably more than I earned a month.”

Janes did go to a tribunal, but only because she was supported by Unison, her trade union. She has won her claim, although the final compensation is still being worked out. But it’s not just about the money. “It’s about justice, really,” she says. “I think everybody should be paid equally. I don’t see why a man who is doing the equivalent job to what I was doing should earn two to three times more than I was.” She believes that by setting a fee of £950, the government “wouldn’t have even begun to understand” how much it disempowered low-paid workers.

She has a point. The Taylor Review on working practices noted the sharp decline in tribunal cases after fees were introduced in 2013, and that the claimant could pay £1,200 upfront in fees, only to have their case dismissed on a technical point of their employment status. “We believe that this is unfair,” the report said. It added: "There can be no doubt that the introduction of fees has resulted in a significant reduction in the number of cases brought."

Now, the government has been forced to concede. On Wednesday, the Supreme Court ruled in favour of Unison’s argument that the government acted unlawfully in introducing the fees. The judges said fees were set so high, they had “a deterrent effect upon discrimination claims” and put off more genuine cases than the flimsy claims the government was trying to deter.

Shortly after the judgement, the Ministry of Justice said it would stop charging employment tribunal fees immediately and refund those who had paid. This bill could amount to £27m, according to Unison estimates. 

As for Janes, she hopes low-paid workers will feel more confident to challenge unfair work practices. “For people in the future it is good news,” she says. “It gives everybody the chance to make that claim.” 

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