Iain Duncan Smith. Secretary of State for Welfare Pensions. Still. Photo: Getty Images
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What would real welfare reform look like?

Britain's welfare bill can be reduced without eliminating the safety net - but not with a series of crude caps or freezes, explains Spencer Thompson.

Today’s public finance statistics show progress towards reducing the deficit. Net borrowing has fallen by almost a quarter on a year ago, partly driven by better than expected income tax figures. But the Chancellor of the Exchequer will not be able to reach his fiscal targets with a few months of above-average receipts. Indeed, outside of its claim that £5bn can be raised from tax avoidance, the government’s so-called ‘tax lock’ will largely prevent him from using tax levers to close the deficit. Instead, he is going to have to cut deep into public services and the welfare bill in order to come up with the required savings. The upcoming budget and subsequent spending review, where we will get more detail on his plans, are where the real business of deficit reduction will happen.

The centre-piece of the Chancellor’s fiscal strategy is an aim to cut a sizable chunk (£12bn) off the welfare bill by 2017/18. The options floated so far, of a freeze in the value of working-age benefits, a reduction in the benefit cap and the withdrawal of housing benefit from 18-21 year-olds, are likely to save only a little over £1bn. That leaves more than £10bn of welfare reductions unaccounted for. Even if the chancellor were able to reduce this figure by arguing that low inflation has reduced the need for cuts, this may also impact on the OBR’s receipts forecasts, meaning they are still going to need huge savings.

The UK currently spends around £220bn on welfare. Just less than half goes towards pensioners and child benefit, both declared off-limits by the government. This means that the cuts will need to make significant in-roads into the remaining £113bn, of which the largest items by far are tax credits (£30bn), housing benefit (£26bn), disability benefits (£22bn) and incapacity benefits (£15bn). Some combination of cuts to these benefits will be required if the government are to achieve their £12bn target. Focusing exclusively on out of work benefits wont cut it – we currently spend just £5bn a year on jobseeker’s allowance and income support, the two key working-age benefits for those not in a job.

The IFS have taken a look at some of the specific choices the government could make to these benefits to generate savings; the government could require housing benefit claimants to contribute 10 per cent of private sector rents (a saving of £0.9bn), or they could abolish housing benefit for all 18-25 year-olds (saving £1.5bn). If they started to tax the key disability benefit (formerly Disability Living Allowance, now the Personal Independence Payment), they could raise £0.9bn. More sweeping changes could generate larger savings; if they reduced the basic amount of child tax credit families can claim to its 2003/04 levels (in real terms), they could save £5bn.

If these options sound harsh, that’s because they are. Every pound saved will be a pound in lost income for an eligible family, with predictable consequences for living standards and child poverty. While these options may be presented as generating incentives for families to move into work, remember that around 80 per cent of benefits outside pensions go to families in work, meaning that cuts are likely to hit the working poor. But it is changes of the kind listed above that the DWP and Treasury will currently be looking at in their search to identify savings. If, as has been rumoured this week, they are exploring a further £3bn of welfare cuts on top of the £12bn already mooted, the impact will be even more severe.

IPPR has argued consistently that the working-age welfare bill can be sensibly controlled, but not by a crude process of freezing or cutting entitlements. This does nothing to combat the economic and demographic forces acting to increase demands on the welfare system; rising rents increase the need for housing benefit to paper over the cracks in our broken housing market, endemic low pay inflates the tax credit bill, and the need for both parents to work in order to reach a decent standard of living puts upward pressure on the price of childcare to meet caring needs. There are more examples, but the overall picture is of a system that does little to tackle the underlying causes of welfare receipt.

Instead what are needed are very difficult choices about where public funds are best spent. Rather than lining the pockets of landlords through housing benefit, we should be unlocking those same funds to invest in social housing. Similarly, instead of topping up the pay of working parents so they can afford extortionate childcare fees, we should recognise the need for more hours of cheap or free childcare at all ages. Across a range of policy issues, we throw good money after bad instead of investing in more sustainable solutions for the long-term.

Realising these opportunities to switch money from cash welfare into services and investment requires some long-term leadership and vision from policymakers. The upcoming spending round represents a perfect opportunity to be thinking of creative solutions to reduce the welfare bill in a way that is both fair and sustainable. But the overwhelming focus on cutting to meet a self-imposed target of a balanced budget by 2017-18 is likely to take precedence over genuine reform.

Spencer Thompson is economic analyst at IPPR

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"We repealed, then forgot": the long shadow of Section 28 homophobia

Why are deeply conservative views about the "promotion" of homosexuality still being reiterated to Scottish school pupils? 

Grim stories of LGBTI children being bullied in school are all too common. But one which emerged over the weekend garnered particular attention - because of the echoes of the infamous Section 28, nearly two decades after it was scrapped.

A 16-year-old pupil of a West Lothian school, who does not wish to be named, told Pink News that staff asked him to remove his small rainbow pride badge because, though they had "no problem" with his sexuality, it was not appropriate to "promote it" in school. It's a blast from the past - the rules against "promoting" homosexuality were repealed in 2000 in Scotland, but the long legacy of Section 28 seems hard to shake off. 

The local authority responsible said in a statement that non-school related badges are not permitted on uniforms, and says it is "committed to equal rights for LGBT people". 

The small badge depicted a rainbow-striped heart, which the pupil said he had brought back from the Edinburgh Pride march the previous weekend. He reportedly "no longer feels comfortable going to school", and said homophobia from staff members felt "much more scar[y] than when I encountered the same from other pupils". 

At a time when four Scottish party leaders are gay, and the new Westminster parliament included a record number of LGBTQ MPs, the political world is making progress in promoting equality. But education, it seems, has not kept up. According to research from LGBT rights campaigners Stonewall, 40 per cent of LGBT pupils across the UK reported being taught nothing about LGBT issues at school. Among trans students, 44 per cent said school staff didn’t know what "trans" even means.

The need for teacher training and curriculum reform is at the top of campaigners' agendas. "We're disappointed but not surprised by this example," says Jordan Daly, the co-founder of Time for Inclusive Education [TIE]. His grassroots campaign focuses on making politicians and wider society aware of the reality LGBTI school students in Scotland face. "We're in schools on a monthly basis, so we know this is by no means an isolated incident." 

Studies have repeatedly shown a startling level of self-harm and mental illness reported by LGBTI school students. Trans students are particularly at risk. In 2015, Daly and colleagues began a tour of schools. Shocking stories included one in which a teacher singled out a trans pupils for ridicule in front of the class. More commonly, though, staff told them the same story: we just don't know what we're allowed to say about gay relationships. 

This is the point, according to Daly - retraining, or rather the lack of it. For some of those teachers trained during the 1980s and 1990s, when Section 28 prevented local authorities from "promoting homosexuality", confusion still reigns about what they can and cannot teach - or even mention in front of their pupils. 

The infamous clause was specific in its homophobia: the "acceptability of homosexuality as a pretended family relationship" could not be mentioned in schools. But it's been 17 years since the clause was repealed in Scotland - indeed, it was one of the very first acts of the new Scottish Parliament (the rest of the UK followed suit three years later). Why are we still hearing this archaic language? 

"We repealed, we clapped and cheered, and then we just forgot," Daly says. After the bitter campaign in Scotland, in which an alliance of churches led by millionaire businessman Brian Souter poured money into "Keeping the Clause", the government was pleased with its victory, which seemed to establish Holyrood as a progressive political space early on in the life of the parliament. But without updating the curriculum or retraining teaching staff, Daly argues, it left a "massive vacuum" of uncertainty. 

The Stonewall research suggests a similar confusion is likely across the UK. Daly doesn't believe the situation in Scotland is notably worse than in England, and disputes the oft-cited allegation that the issue is somehow worse in Scotland's denominational schools. Homophobia may be "wrapped up in the language of religious belief" in certain schools, he says, but it's "just as much of a problem elsewhere. The TIE campaign doesn't have different strategies for different schools." 

After initial disappointments - their thousands-strong petition to change the curriculum was thrown out by parliament in 2016 - the campaign has won the support of leaders such as Nicola Sturgeon and Kezia Dugdale, and recently, the backing of a majority of MSPs. The Scottish government has set up a working group, and promised a national strategy. 

But for Daly, who himself struggled at a young age with his sexuality and society's failure to accept it, the matter remains an urgent one.  At just 21, he can reel off countless painful stories of young LGBTI students - some of which end in tragedy. One of the saddest elements of the story from St Kentigern's is that the pupil claimed his school was the safest place he had to express his identity, because he was not out at home. Perhaps for a gay pupil in ten years time, that will be a guarantee. 

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