The poorest deserve a change from our broken benefits system

Iain Duncan Smith says the coalition’s plans for reforming welfare are based on a sound new social c

Everything this government does sits in the shadow of our need to cut the deficit we inherited from Labour. The simple reality is that we are spending £120m a day servicing the interest on a deficit of the same size as the one run up by Greece.

Yet even if this deficit hadn't existed, we would have had to do something about our high level of social breakdown. About 1.4 million people spent almost ten years on out-of-work benefits under the last government, while, for an abandoned group of 16-to-17-year-olds no longer in school or college, employment rates declined significantly even before the recession started. Progress on child poverty has been pursued through huge increases in child-related welfare payments, yet improvements in the past decade have been minimal and Labour left office with income inequality at a record high.

At the heart of this is an entrenched work­lessness, produced by a welfare system that penalises positive behaviours while rewarding destructive ones. At the Centre for Social Justice, we worked hard to highlight these damaging structures, from the punitive withdrawal rates to the complexity that left people struggling to understand whether they would be better off in employment. Alongside this were myriad complicated work schemes, which too often measured success in terms of processes carried out, rather than numbers helped back
to work.

Universal picture

Our response to this broken system is based around two pillars - the universal credit and the Work Programme. The universal credit will simplify the welfare system and make work pay, replacing an array of benefits and tax credits with one payment set at a single taper of around 65 per cent. This will make work worthwhile at any number of hours, rather than clumping support around the 16- and 30-hour points.

Almost 85 per cent of the gains from these reforms will go to those in the bottom 40 per cent of the income distribution, and we expect to pull almost a million adults and children out of poverty.

Linked to the universal credit, and fundamental to its success, is the Work Programme, which will pay the best of the private, public and voluntary sectors for getting people into work and keeping them there. It is worth bearing in mind that, with jobcentre support, 75 per cent of claimants are back in work six months after becoming unemployed and 90 per cent are back after a year. That's when the Work Programme kicks in to provide specialist support.

The key to the Work Programme is that we will pay for what works, and in so many cases this will be the local expertise brought to bear by voluntary and community groups - almost 300 of which will be involved in delivery of the Work Programme, amounting to a sub­stantial investment in the sector. This is what the "big society" is all about: investing in voluntary organisations when they are the best at what they do.

Alongside these changes, we are also making disability benefits work better by reforming incapacity benefits and the disability living allowance. On the former, we are building on an approach started under the previous government, reassessing all claimants to build a better understanding of who needs support and who may be able to take steps towards work. We are constantly reviewing the assessment criteria with Professor Malcolm Harrington to ensure that they are fair; but the principle remains that disability support should be based on clear, objective and regular assessments of need.

This is a principle we are also applying to disability living allowance, where we are introducing an objective assessment to ensure financial support is getting to those who face the greatest challenges to taking part in daily life. I am pleased that, in many of these areas, there is some all-party support for the changes.

Not fair

At the same time we are getting to grips with housing benefit, bringing fairness to a system that has run out of control. Under the previous system it was possible for someone to be claiming around £100,000 in housing benefit a year, but to pay such a rent when not on benefits you would have to earn nearly £500,000 a year. This is unfair and unaffordable, and it's why we are re-forming the system by clarifying limits to the amount of housing benefit a claimant can receive. It isn't kind to a benefit claimant to put them in a house they couldn't afford to pay for if not on benefits, only adding to the disincentive for them to take a job. It is also unfair to hard-working families that commute to work and pay for those on housing benefit to have to pick up the spiralling bill, one that has nearly doubled from £11bn to £21.5bn in ten years.

There are two people in this new welfare contract, the taxpayer and the claimant. Taxpayers seek only fairness, accepting their obligation to help when someone falls on hard times, but expecting those on benefits to do their best to move off them and contribute where they can. While they know there are some who are severely sick or disabled, they have become angry at the level of abuse in the system, where some find ways to stay on benefits rather than work.

Claimants must be helped and we will do this through the reforms I have outlined, but on behalf of the taxpayer we have a right to expect full co-operation in return. They must try to break the dependency culture by working with us to prepare for work and take work when it is offered. Failure to co-operate will result in a series of penalties, surely reasonable after so much effort has been made on their behalf? In short, we seek life change for a group in society that has been left behind for too long.

Iain Duncan Smith is Secretary of State for Work and Pensions. He founded the prominent think tank the Centre for Social Justice in 2004

This article first appeared in the 13 June 2011 issue of the New Statesman, Rowan Williams guest edit

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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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