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How Duncan Smith's departure would help Osborne

The pair are divided over where future welfare cuts should be made.

The pair are divided over where future welfare cuts should be made and Universal Credit.
Iain Duncan Smith arrives in Downing Street on September 5, 2012. Photograph: Getty Images.

Is Iain Duncan Smith set to resign his post in next Monday's reshuffle? Westminster has been abuzz with speculation all day after a commuter wrote on Facebook that she overheard a "20 something brunette, with a very posh voice" remark on a train to London that "someone called Ian [sic] is leaving the DWP (apparently he wants to go and has agreed to go)." Rumour links Duncan Smith with a move to Defence as part of what the BBC's James Lansdale reports will be a "far wider reshuffle" than initially thought. 

It's worth recalling that the Work and Pensions Secretary previously turned down the offer of Justice in the 2012 reshuffle in order to "see through" the reforms he had started (albeit with little success since). One person who pushed for his departure then was George Osborne. As Matthew d'Ancona's In It Together revealed, the Chancellor believes that Duncan Smith is "just not clever enough". He has long been sceptical of his grand plan to transform the welfare system, Universal Credit (involving the merger of six benefits into one), fearing that the costs will outweigh any gains (hence why the Treasury still hasn't signed off the business case for it). To date, the DWP has written off £40.1m of assets developed for the programme and expects to write down a further £91m by March 2018, prompting the National Audit Office to warn that it has has "not achieved value for money". 

The pair previously clashed over Osborne's announcement at the 2010 Conservative conference that child benefit would be removed from high-earners, which Duncan Smith was not briefed on in advance and which he regarded as a punitive raid on families.

Further disagreement has come over post-2015 welfare cuts. While Osborne is committed to achieving £12.5bn of savings through further reductions to working-age benefits (in addition to the £21.5bn already announced), Duncan Smith believes that "you can’t keep hacking at the same people" and that wealthy pensioners cannot remain exempt from austerity. He would like to see universal payments such as the Winter Fuel Allowance, free TV licences and free bus passes means-tested in order to achieve a more "balanced" approach. But dismissing the prospect of cuts, Osborne has stated that pensioner benefits are "not where you need to make the substantial savings required". Another consideration is the electoral importance of the over-65s (the age group most likely to vote) and the risk that a raid on their benefits would allow Ukip to outflank the Tories by promising to safeguard all payments. 

Ahead of negotiations over the Conservative manifesto, then, the departure of Duncan Smith from the DWP, and his replacement with a more compliant figure, would help Osborne to secure the welfare policies he wants. 

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