Work and pensions secretary Iain Duncan Smith. Photo: Getty
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The Tories are set to breach their own welfare spending cap – here’s why

Despite all the distress and financial hardship caused by a malfunctioning assessment process, spending on the government’s main sickness and disability benefit is set to rise.

The BBC are reporting that spending on Employment and Support Allowance (ESA) – the benefit for those who are unable to work as a result of a health condition or disability – is rising to the extent that the work and pensions Secretary Iain Duncan Smith could breach his own self-imposed welfare spending cap.

ESA was a response to the sharp rise in the numbers claiming its predecessor – Incapacity Benefit – under Thatcher and Major in the 1980s and 1990s. Unfortunately controversy has dogged it since its introduction in 2008. The test to determine entitlement – the Work Capability Assessment (WCA) – has produced thousands of incorrect decisions, with at least 15 per cent of those declared “fit for work” having this overturned on appeal.

Although the Tories knew about these issues when they came to power, they actually increased the number of assessments – moving beyond just looking at new claimants (as Labour had done) to the reassessment of the 2.2 million existing Incapacity Benefit claimants.

And yet the internal memo seen by the BBC today predicts that the cost of ESA will rise by nearly £13bn between the current financial year and 2018-19.

This could reflect a trend that I first identified in a House of Commons debate in April. I noted that although the total number of ESA/Incapacity Benefit claimants was set to fall by 150,000 between 2011 and this year, figures that isolate the impact of the Incapacity Benefit reassessment reveal that between the start of the process and March last year, 235,000 claimants had been reassessed as “fit for work”.

So over a shorter time period, 235,000 people were kicked off benefits, and yet the overall reduction in claimants was only 150,000. Clearly something was and is awry. What?

The leaked document suggests that the severity of ESA claimants’ illnesses and disabilities had been underestimated and noted that a new contract for the face-to-face part of WCAs could cost three times as much as the £100m per year currently paid to the much-criticised French IT firm Atos.

However I would argue that another key factor is the failure of the government’s Work Programme, where contractors are paid to support people into jobs. Figures from March 2014 show that between June 2011 and December 2013, only 2,500 of the 24,620 former Incapacity Benefit claimants declared fit for work and on the Work Programme had found a job. Perhaps unsurprisingly, those left behind will simply reapply for ESA for a second time round.

This demonstrates that despite the excessive severity of the test and all the distress and financial hardship this has caused claimants, the government’s attempt to reduce the numbers on benefits and control spending will have fallen well short.

If Labour win power in 2015 we have committed to overhauls of both the test and the support given to people to find work – both of which, as today’s reports demonstrate, are clearly needed.

Sheila Gilmore is MP for Edinburgh East and a member of the Work and Pensions Select Committee. She keeps a record of her work and research on ESA on her website.

Sheila Gilmore is Labour MP for Edinburgh East

Photo: Getty Images
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Autumn Statement 2015: How should Labour respond?

The government always gets a boost out of big setpieces. But elections are won over months not days. 

Three days in the political calendar are utterly frustrating for Her Majesty’s Loyal Opposition – the Queen’s Speech, the Budget and the Autumn Statement. No matter how unpopular the government is – and however good you are as an opposition - this day is theirs. The government will dominate the headlines. And played well they will carry the preceding with pre-briefed good news too. You just have to accept that, but without giving in or giving up.

It is a cliche that politics is a marathon not a sprint, but like most cliches that observation is founded in truth. So, how best to respond on the days you can’t win? Go to the fundamentals. And do the thing that oddly is far too little done in responses to budgets or autumn statements – follow the money.

No choices in politics are perfect - they are always trade offs. The art is in balancing compromises not abolishing them. The politics and the values are expressed in the choices that you make in prioritising. This is particularly true in budgets where resources are allocated across geographies - between towns, cities and regions, across time - short term or long term, and across the generations - between young and old. To govern is to choose. And the choices reveal. They show the kind of country the government want to create - and that should be the starting point for the opposition. What kind of Britain will we be in five, ten, fifteen years as these decisions have their ultimate, cumulative impact?

Well we know, we are already living in the early days of it. The Conservative government is creating a country in which there are wealthy pensioners living in large homes they won, while young people who are burdened with debts cannot afford to buy a home. One in which health spending is protected - albeit to a level a third below that of France or Germany – while social care, in an ageing society, is becoming residualised. One where under-regulated private landlords have to fill the gap in the rented market caused by the destruction of the social housing sector.

But description, though, is not sufficient. It is only the foundation of a critique - one that will succeed only if it describes not only the Britain the Tories are building but also the better one that Labour would deliver. Not prosaically in the form of a Labour programme, but inspirationally as the Labour promise.

All criticism of the government – big and little – has to return to this foundational narrative. It should connect everything. And it is on this story that you can anchor an effective response to George Osborne. Whatever the sparklers on the day or the details in the accompanying budgetary documentation, the trajectory is set. The government know where they are going. So do informed commentators. A smart opposition should too. The only people in the dark are the voters. They feel a pinch point here, a cut there, an unease and unfairness everywhere – but they can’t sum it up in words. That is the job of the party that wants to form a government – describing in crisp, consistent and understandable terms what is happening.

There are two traps on the day. The first is narrowcasting - telling the story that pleases you and your closest supporters. In that one the buzzwords are "privatisation" and "austerity". It is the opposite of persuasion aimed, as it is, at insiders. The second is to be dazzled by the big announcements of the day. Labour has fallen down here badly recently. It was obvious on Budget Day that a rise in the minimum wage could not compensate for £12bn of tax credit cuts. The IFS and the Resolution Foundation knew that. So did any adult who could do arithmetic and understood the distributional impact of the National Minimum Wage. It could and should have been Labour that led the charge, but frontbenchers and backbenchers alike were transfixed by the apparent appropriation of the Living Wage. A spot of cynicism always comes in handy. In politics as in life, if something seems to be too good to be true then … it is too good to be true.

The devil may be in the detail, but the error is in the principle – that can be nailed on the day. Not defeated or discredited immediately, but the seeds planted.  

And, if in doubt, take the government at their word. There is no fiercer metric against which to measure the Tories than their own rhetoric. How can the party of working people cut the incomes of those who have done the right thing? How can the party who promised to protect the health service deliver a decade of the lowest ever increases in spending? How can the party of home ownership banish young people to renting? The power in holding a government to account is one wielded forensically and eloquently for it is in the gap between rhetoric and reality that ordinary people’s lives fall.

The key fact for an opposition is that it can afford to lose the day if it is able to win the argument. That is Labour’s task.