George Osborne delivers his speech at the Conservative conference in Birmingham last month. Photograph: Getty Images.
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The OBR shows why welfare cuts won't control spending

Inadequate wages and extortionate rents are pushing up the housing benefit bill. 

George Osborne prides himself on his commitment to bear down on welfare spending, but today's report from the OBR (handily commissioned by the Chancellor) shows how he's struggling. It warns that the new cap imposed on expenditure is in danger of being breached due to the botched implementation of disability benefit reforms and the surging housing benefit bill. 

Between March 2011 and March 2014, forecast spending on incapacity benefits for 2015–16 has been revised up by £3.5bn (34 per cent) due to a higher than expected caseload, slower than expected transfer from incapacity benefit to the new employment and support allowance, and a lower than expected number being found "fit for work" (and therefore ineligible for full support). 

In addition, forecast spending on housing benefit (or, as you might call it, landlord subsidy) has been revised up by £2.5bn (11 per cent) since the expected number of renters and the level of rents relative to earnings have increased at a faster rate than predicted. As wages have continued to lag behind inflation, the number forced to rely on welfare to remain in their homes has surged. The government is now forecast to spend more than £27bn on housing benefit by 2018-19, accounting for more than 11 per cent of welfare expenditure. 

As the OBR notes, one of the main causes of higher spending has been the shift from public to private rented housing. In 2012-13, the number of private renters exceeded the nunber of social renters for the first time in nearly 50 years. Since private rents are usually higher than social rents, the housing benefit bill has risen accordingly. The OBR also notes that "rents have risen faster than earnings and inflation over the past decade." 

What all of this shows is the limits of an approach that focuses on salami slicing the welfare budget (through measures such as the benefit cap and the "bedroom tax"), rather than addressing the structural drivers of higher spending. Unless problems such as inadequate wages and extortionate rents are tackled (through a significantly higher minimum wage, greater use of the living wage, more affordable housing and limits on rent increases, as proposed by Labour) then it will become ever harder to control expenditure. 

George Eaton is political editor of the New Statesman.

European People's Party via Creative Commons
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Ansbach puts Europe's bravest politician under pressure

Angela Merkel must respond to a series of tragedies and criticisms of her refugee policy. 

Angela Merkel, the Chancellor of Germany, is supposed to be on holiday. Two separate attacks have put an end to that. The first, a mass shooting in Munich, was at first widely believed to be a terrorist attack, but later turned out to be the actions of a loner obsessed with US high school shootings. The second, where a man blew himself up in the town of Ansbach, caused less physical damage - three were seriously injured, but none killed. Nevertheless, this event may prove to affect even more people's lives. Because that man had come to Germany claiming to be a Syrian refugee. 

The attack came hours after a Syrian refugee murdered a pregnant Polish woman, a co-woker in a snack bar, in Reutlingen. All eyes will now be on Merkel who, more than any other European politician, is held responsible for Syrian refugees in Europe.

In 2015, when other European states were erecting barriers to keep out the million migrants and refugees marching north, Merkel kept Germany's borders open. The country has resettled 41,899 Syrians since 2013, according to the UNHCR, of which 20,067 came on humanitarian grounds and 21,832 through private sponsorship. That is twice as much as the UK has pledged to resettle by 2020. The actual number of Syrians in Germany is far higher - 90 per cent of the 102,400 Syrians applying for EU asylum in the first quarter of 2016 were registered there. 

Merkel is the bravest of Europe's politicians. Contrary to some assertions on the right, she did not invent the refugee crisis. Five years of brutal war in Syria did that. Merkel was simply the first of the continent's most prominent leaders to stop ignoring it. If Germany had not absorbed so many refugees, they would still be in central Europe and the Balkans, and we would be seeing even more pictures of starved children in informal camps than we do today. 

Equally, the problems facing Merkel now are not hers alone. These are the problems facing all of Europe's major states, whether or not they recognise them. 

Take the failed Syrian asylum seeker of Ansbach (his application was rejected but he could not be deported back to a warzone). In Germany, his application could at least be considered, and rejected. Europe as a whole has not invested in the processing centres required to determine who is a Syrian civilian, who might be a Syrian combatant and who is simply taking advantage of the black market in Syrian passports to masquerade as a refugee. 

Secondly, there is the subject of trauma. The Munich shooter appears to have had no links to Islamic State or Syria, but his act underlines the fact you do not need a grand political narrative to inflict hurt on others. Syrians who have experienced unspeakable violence either in their homeland or en route to Europe are left psychologically damaged. That is not to suggest they will turn to violence. But it is still safer to offer such people therapy than leave them to drift around Europe, unmonitored and unsupported, as other countries seem willing to do. 

Third, there is the question of lawlessness. Syrians have been blamed for everything from the Cologne attacks in January to creeping Islamist radicalisation. But apart from the fact that these reports can turn out to be overblown (two of the 58 men arrested over Cologne were Syrians), it is unclear what the alternative would be. Policies that force Syrians underground have already greatly empowered Europe's network of human traffickers and thugs.

So far, Merkel seems to be standing her ground. Her home affairs spokesman, Stephan Mayer, told the BBC that Germany had room to improve on its asylum policy, but stressed each attack was different. 

He said: "Horrible things take place in Syria. And it is the biggest humanitarian catastrophe, so it is completely wrong to blame Angela Merkel, or her refugee policies, for these incidents." Many will do, all the same.