Duncan Smith can't hide the death of "compassionate conservatism"

The Work and Pensions Secretary wanted welfare reform to be defined by Universal Credit. It has been defined by the bedroom tax.

After George Osborne began the year by promising to scythe another £12bn from the welfare budget in the next Parliament, Iain Duncan Smith's speech at the Centre for Social Justice, the think-tank he founded 10 years ago, is an attempt to reaffirm his original "compassionate conservative" mission. The message from the Work and Pensions Secretary will be that reform is not about saving money but about saving lives. In a conspicuous rebuke to Osborne, who frames welfare almost entirely as a fiscal issue, he will say: 

We would have wanted to reform the welfare state, even if we had no deficit. As Conservatives, we should hate the idea of people with unfulfilled potential languishing on welfare. Welfare reform is fundamentally about opportunity and life change.

The rhetoric is admirable but, nearly four years into this parliament, the reality is not. After multiple management and IT failures (with £40.1m of assets written off), the introduction of Universal Credit, Duncan Smith's masterplan to transform welfare and "make work pay", has been so slow as to render it almost invisible. At the end of last September, just 2,150 people were claiming the new benefit, 997,850 short of the original target of one million. When Duncan Smith complains today that "the present system makes criminals out of those trapped in its clutches" by "withdrawing up to 94 pence of every pound they earn" through means-testing, it will be a reminder of his failure to reform it in office. 

Rather than Universal Credit, it is Osbornite welfare cuts such as the benefit cap and the bedroom tax that have defined the government's approach. Duncan Smith will again defend the abolition of the "spare room subsidy", but it is something no "compassionate conservative" should. His claim that it has forced people to move to smaller council houses, freeing up space for larger families, ignores the reality that, in most cases, such properties simply don't exist.

In England, there are 180,000 social tenants "under-occupying" two bedroom houses but just 85,000 one bedroom properties free to move to. Rather than reducing overcrowding, the policy has simply become another welfare cut, further squeezing families already hit by the benefit cap, the 1 per cent limit on benefit and tax credit increases (a real-terms cut) and the 10 per cent reduction in council tax benefit. A survey by the National Housing Federation of 51 housing associations found that more than half of those residents affected by the measure (32,432 people), fell into rent arrears between April (when the policy was introduced) and June, a quarter of those for the first time ever.

Worse, the policy takes no account of those for whom additional space is not a luxury but a necessity, most obviously the disabled. Of the 660,000 social housing tenants that have been affected by the bedroom tax, the DWP estimates that 420,000 are disabled. They now face the unpalatable choice of either falling into arrears (by paying an average of £728 extra in rent)  or downsizing to a property unsuitable for their needs. Yet, absurdly, Duncan Smith will claim that his welfare cuts "have helped people feel that bit more secure about their futures, feel more hopeful about their children’s lives and rekindle their pride in their communities". 

The effects of the household benefit cap have been similarly pernicious. To date, there is little evidence that the measure is achieving its stated aim of moving claimants into work (principally because few choose to live "a life on benefits"). In Hackney, one of the London boroughs where the benefit was piloted, a study found that just 74 of the 740 households affected had found work, a number no greater than one would expect without the cap given the regular churn of claimants. In many cases, the lack of affordable childcare continues to represent a insurmountable barrier to employment. Indeed, by requiring councils to relocate families hundreds of miles away, the cap actually reduces work opportunities by forcing them to live in an area where they have no employment history. 

Yet for all the human misery they have caused, these policies will save just a few hundred million between them (merely a rounding error in the social security budget of £201bn). But to judge the cuts on these terms is to misunderstand Osborne's motives. The benefit cap is less a serious act of policy than a political weapon designed to trap Labour ("the welfare party") on the wrong side of the argument and to perpetuate the belief that the unemployed are to blame for their own misfortune. With new proposals such as the abolition of housing benefit for under-25s and the restriction of child benefit to two children, the Chancellor is doing all he can to sharpen the divide between "the strivers" and "the scroungers". It is this poisoning of the debate, more than anything, that means today's speech is not the rebirth of "compassionate conservatism" but its funeral. 

Iain Duncan Smith speaks at the Conservative conference in Manchester last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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After Richmond Park, Labour MPs are haunted by a familiar ghost

Labour MPs in big cities fear the Liberal Democrats, while in the north, they fear Ukip. 

The Liberal Democrats’ victory in Richmond Park has Conservatives nervous, and rightly so. Not only did Sarah Olney take the votes of soft Conservatives who backed a Remain vote on 23 June, she also benefited from tactical voting from Labour voters.

Although Richmond Park is the fifth most pro-Remain constituency won by a Conservative at the 2015 election, the more significant number – for the Liberal Democrats at least – is 15: that’s the number of Tory-held seats they could win if they reduced the Labour vote by the same amount they managed in Richmond Park.

The Tories have two Brexit headaches, electorally speaking. The first is the direct loss of voters who backed David Cameron in 2015 and a Remain vote in 2016 to the Liberal Democrats. The second is that Brexit appears to have made Liberal Democrat candidates palatable to Labour voters who backed the party as the anti-Conservative option in seats where Labour is generally weak from 1992 to 2010, but stayed at home or voted Labour in 2015.

Although local council by-elections are not as dramatic as parliamentary ones, they offer clues as to how national elections may play out, and it’s worth noting that Richmond Park wasn’t the only place where the Liberal Democrats saw a dramatic surge in the party’s fortunes. They also made a dramatic gain in Chichester, which voted to leave.

(That’s the other factor to remember in the “Leave/Remain” divide. In Liberal-Conservative battlegrounds where the majority of voters opted to leave, the third-placed Labour and Green vote tends to be heavily pro-Remain.)

But it’s not just Conservatives with the Liberal Democrats in second who have cause to be nervous.  Labour MPs outside of England's big cities have long been nervous that Ukip will do to them what the SNP did to their Scottish colleagues in 2015. That Ukip is now in second place in many seats that Labour once considered safe only adds to the sense of unease.

In a lot of seats, the closeness of Ukip is overstated. As one MP, who has the Conservatives in second place observed, “All that’s happened is you used to have five or six no-hopers, and all of that vote has gone to Ukip, so colleagues are nervous”. That’s true, to an extent. But it’s worth noting that the same thing could be said for the Liberal Democrats in Conservative seats in 1992. All they had done was to coagulate most of the “anyone but the Conservative” vote under their banner. In 1997, they took Conservative votes – and with it, picked up 28 formerly Tory seats.

Also nervous are the party’s London MPs, albeit for different reasons. They fear that Remain voters will desert them for the Liberal Democrats. (It’s worth noting that Catherine West, who sits for the most pro-Remain seat in the country, has already told constituents that she will vote against Article 50, as has David Lammy, another North London MP.)

A particular cause for alarm is that most of the party’s high command – Jeremy Corbyn, Emily Thornberry, Diane Abbott, and Keir Starmer – all sit for seats that were heavily pro-Remain. Thornberry, in particular, has the particularly dangerous combination of a seat that voted Remain in June but has flirted with the Liberal Democrats in the past, with the shadow foreign secretary finishing just 484 votes ahead of Bridget Fox, the Liberal Democrat candidate, in 2005.

Are they right to be worried? That the referendum allowed the Liberal Democrats to reconfigure the politics of Richmond Park adds credence to a YouGov poll that showed a pro-Brexit Labour party finishing third behind a pro-second referendum Liberal Democrat party, should Labour go into the next election backing Brexit and the Liberal Democrats opt to oppose it.

The difficulty for Labour is the calculation for the Liberal Democrats is easy. They are an unabashedly pro-European party, from their activists to their MPs, and the 22 per cent of voters who back a referendum re-run are a significantly larger group than the eight per cent of the vote that Nick Clegg’s Liberal Democrats got in 2015.

The calculus is more fraught for Labour. In terms of the straight Conservative battle, their best hope is to put the referendum question to bed and focus on issues which don’t divide their coalition in two, as immigration does. But for separate reasons, neither Ukip nor the Liberal Democrats will be keen to let them.

At every point, the referendum question poses difficulties for Labour. Even when neither Ukip nor the Liberal Democrats take seats from them directly, they can hurt them badly, allowing the Conservatives to come through the middle.

The big problem is that the stance that makes sense in terms of maintaining party unity is to try to run on a ticket of moving past the referendum and focussing on the party’s core issues of social justice, better public services and redistribution.

But the trouble with that approach is that it’s alarmingly similar to the one favoured by Kezia Dugdale and Scottish Labour in 2016, who tried to make the election about public services, not the constitution. They came third, behind a Conservative party that ran on an explicitly pro-Union platform. The possibility of an English sequel should not be ruled out.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.