New Times,
New Thinking.

  1. Business
  2. Economics
3 April 2013

Welfare cuts: how they could have been even worse

David Cameron has already outlined the draconian cuts a Conservative majority government would make.

By George Eaton

The left has rightly expressed its outrage at the welfare reforms introduced this week but it’s worth remembering that they could have been much worse. Were this a Conservative government, as opposed to a coalition, ministers would be imposing even deeper cuts. As George Osborne and Iain Duncan Smith noted in their joint article in Monday’s Telegraph, “The Prime Minister has already set out some of the things that a Conservative government [emphasis mine] would do to create a fairer system and move people into work.” 

The speech in question, delivered by David Cameron last summer, was one of the most detailed he has given since becoming Prime Minister. Among the measures proposed were:

  • The abolition of housing benefit for under-25s.
  • The restriction of child-related benefits for families with more than two children.
  • A lower rate of benefits for the under-21s.
  • Preventing school leavers from claiming benefits.
  • Paying benefits in kind (like free school meals), rather than in cash.
  • Reducing benefit levels for the long-term unemployed. Cameron said: “Instead of US-style time-limits – which remove entitlements altogether – we could perhaps revise the levels of benefits people receive if they are out of work for literally years on end”.
  • A lower housing benefit cap. Cameron said that the current limit of £20,000 was still too high.
  • The abolition of the “non-dependent deduction”. Those who have an adult child living with them would lose up to £74 a week in housing benefit.

What all of these policies have in common is that they would further squeeze those on low incomes, while doing nothing to address the deep structural reasons for the rising welfare bill, such as the lack of affordable housing and falling real wages. As I noted yesterday, while complaining about the surge in housing benefit payments, George Osborne made no mention of the causes, preferring to concentrate his fire on the (five) families who received £100,000 or more in landlord subsidy. By prioritising housebuilding and ensuring more employers pay the living wage, Labour can argue that it, rather than the Conservatives, is best placed to reduce the benefits bill in a responsible and sustainable way.  

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

Content from our partners
The road to clean power 2030
Why Rachel Reeves needs to focus on food in schools
No health, no growth