George Osborne stands with his Treasury team before the Budget. Photograph: Getty Images.
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The coalition's welfare cap puts politics before policy

Osborne has failed to design the cap in a way that will advance structural reforms to housing and wages.

As expected, today’s Budget included further details about the long-trailed "welfare cap". A rough calculation suggests it will cover over 90 per cent of benefit and tax credit expenditure, excluding the Basic State Pension, with only those most cyclical elements, linked to Jobseeker's Allowance left outside. Interestingly, the extra childcare support announced by the government yesterday will fall within its scope.

Most significantly, the Chancellor set the level of the cap, which in the first instance will simply track the current OBR projections for spending on those benefits and tax credits in scope (starting in 2015/16 and extending over the following five years). This reflects coalition reality: the Liberal Democrats have long signalled their unwillingness to sign off further social security cuts that would have been required to set a cap below the forecast. This means that, for now, the "cap" has no policy effect: the government is simply committing to operate future policy on the basis of not overshooting the (current) estimate for welfare spending over the coming years.

Of course the real political impact of today’s announcement will come as the general election draws closer. It is a racing certainty that the Conservatives will pledge to lower the cap in their manifesto, to make room for tax cuts, faster deficit reduction or even (if they wanted to make life particularly difficult for Labour) an increase in NHS spending. They will hope to paint both the other main parties as defenders of higher welfare expenditure, which polls tell them is unpopular with large sections of voters.

Labour has already taken steps to protect itself against this well-telegraphed political move, by highlighting how working families would be in the front line of further assaults on benefits and tax credits and that a plan for generating genuine savings (not just arbitrary cuts) requires reforms that address the structural drivers of social security spending – like unemployment, low pay and an inadequate supply of affordable homes.

Given this goal – shifting the balance of expenditure from the "costs of failure" to productive investments – the principle of a "welfare cap" should not be dismissed out of hand. The Chancellor is right to say that there is currently little strategic decision making about social security spending and little attention is paid to (or action following from) expenditure overshooting the forecast.

To take the most egregious example: the large rises in Housing Benefit expenditure in the twenty years before the financial crisis, at a time when the number of households receiving help to pay the rent stayed broadly flat, should have triggered a major focus on those trends, leading to serious reform of policy and spending. It did not – and the consequence was extreme vulnerability of the benefits system to an economic shock, with large numbers of people in more expensive private rented accommodation. When the crisis hit, Housing Benefit shot up and in response we have seen a series of arbitrary attempts to hack back costs (like the "bedroom tax") which are entirely unrelated to the causes of rising expenditure in the first place.

Given the medium-term pressure on the public finances, forcing more strategic decision making about welfare spending is essential. But in this context, the Chancellor has today lent too heavily on the political dividing line and not enough on designing the cap in a way that would advance structural reforms. While set over five years, on a rolling basis, the government’s cap will "bite" on an annual basis, with an OBR warning about overshooting in an Autumn Statement requiring compensating action in the following Budget. This will drive emergency cuts, not long-term savings. Also, what was sorely lacking today was any serious analysis from the OBR about the trends and drivers of welfare spending, which is vital for policy makers and the public to understand the factors underpinning why expenditure is rising (or falling).

Two other points are worth noting. First, the cap has been set in nominal (cash) terms. This means that higher expenditure driven by inflation will trigger policy action, which risks locking in lower living standards for those reliant on benefits. General prices rises, feeding though into uprating decisions, does not count as a structural driver of spending. The Chancellor set out a "margin of error" of two per cent around the forecast which will not trigger action. This is in line with forecasts for CPI over the forthcoming years.

Second, the cap makes no distinction between contributions-based and incomes-based benefit spending, consistent with the drift of social security policy over the last three decades. However they are different and should be treated so. Entitlement to contributory benefits should stand outside the mainstream of government revenues, with its financing secured by National Insurance Contributions. Taking National Insurance benefits out of the cap and strengthening the integrity of the National Insurance Fund could play a big part in advancing political aspirations to restore the contributory principle in the years ahead.

Graeme Cooke is Associate Director at IPPR

HEINZ BAUMANN/GALLERY STOCK
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With the BBC Food’s collection under threat, here's how to make the most of online recipes

Do a bit of digging, trust your instincts – and always read the comments.

I don’t think John Humphrys is much of a chef. Recently, as his Today co-presenter Mishal Husain was discussing the implications of the BBC’s decision to axe its Food website (since commuted to transportation to the Good Food platform, run by its commercial arm), sharp-eared listeners heard the Humph claim that fewer recipes on the web could only be a good thing. “It would make it easier!” he bellowed in the background. “We wouldn’t have to choose between so many!”

Husain also seemed puzzled as to why anyone would need more than one recipe for spaghetti bolognese – but, as any keen cook knows, you can never have too many different takes on a dish. Just as you wouldn’t want to get all your news from a single source, it would be a sad thing to eat the same bolognese for the rest of your life. Sometimes only a molto autentico version, as laid down by a fierce Italian donna, rich with tradition and chopped liver, will do – and sometimes, though you would never admit it in a national magazine, you crave the comfort of your mum’s spag bol with grated cheddar.

The world wouldn’t starve without BBC Food’s collection but, given that an online search for “spaghetti bolognese recipe” turns up about a million results, it would have been sad to have lost one of the internet’s more trustworthy sources of information. As someone who spends a large part of each week researching and testing recipes, I can assure you that genuinely reliable ones are rarer than decent chips after closing time. But although it is certainly the only place you’ll find the Most Haunted host Yvette Fielding’s kedgeree alongside Heston Blumenthal’s snail porridge, the BBC website is not the only one that is worth your time.

The good thing about newspaper, magazine and other commercial platforms is that most still have just enough budget to ensure that their recipes will have been made at least twice – once by the writer and once for the accompanying photographs – though sadly the days when everyone employed an independent recipe tester are long gone. Such sites also often have sufficient traffic to generate a useful volume of comments. I never make a recipe without scrolling down to see what other people have said about it. Get past the “Can’t wait to make this!” brigade; ignore the annoying people who swap baked beans for lentils and then complain, “This is nothing like dhal”; and there’s usually some sensible advice in there, too.

But what about when you leave the safety of the big boys and venture into the no man’s land of the personal blog? How do you separate the wheat from the chaff and find a recipe that actually works? You can often tell how much work a writer has put in by the level of detail they go into: if they have indicated how many people it serves, or where to find unusual ingredients, suggested possible tweaks and credited their original sources, they have probably made the dish more than once. The photography is another handy clue. You don’t have to be Annie Leibovitz to provide a good idea of what the finished dish ought to look like.

Do a bit of digging as part of your prep. If you like the look of the rest of the site, the author’s tastes will probably chime with your own. And always, always, wherever the recipe is from, read it all the way through, even before you order the shopping. There is nothing more annoying than getting halfway through and then realising that you need a hand blender to finish the dish, just as the first guest arrives.

Above all, trust your instincts. If the cooking time seems far too short, or the salt content ridiculously high, it probably is, so keep an eye on that oven, check that casserole, keep tasting that sauce. As someone who once published a magic mince pie recipe without any sugar, I’m living proof that, occasionally, even the very best of us make mistakes. 

Felicity Cloake is the New Statesman’s food columnist. Her latest book is The A-Z of Eating: a Flavour Map for Adventurous Cooks.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad