Iain Duncan Smith confirmed today that the current welfare system will be replaced by a universal credit.
It’s a significant victory for the Work and Pensions Secretary, who has been locked into a lengthy tussle with the Treasury over the plans, which will initially cost more to implement. The Chancellor, George Osborne, hinted at the move in his address to conference yesterday.
Announcing the move, Duncan Smith promised it would “restore fairness and simplicity to a complex, outdated and wildly expensive benefits system.”
This is a huge shake-up to the structure of the welfare state, supposedly aimed at reducing long-term dependency and benefit fraud. The new credit will replace a range of benefits — including housing and incapacity benefits, and income support — with a single payment. The scheme will begin in 2013, with the hope of transferring a large number of people over by the end of this parliament in 2015.
In a heartfelt address, to an enthusiastic crowd (he received a standing ovation both at the beginning and end of his speech), IDS promised that “If you are genuinely sick, disabled, or retired, you have nothing to fear”.
“The Conservative Party now has concern for the poor running through its DNA,” he told delegates, while also playing to the audience by saying that their hard-earned tax money going on those who “can’t be bothered” to work is the flipside of the fairness issue.
The former party leader — who has undergone a considerable political transformation in the last few years — expressed many honourable aims, such as making work pay to end cycles of welfare dependency:
No longer will they be able to say it isn’t worth their while going to work. No longer will they be trapped in a complex system which means they have to ask an advisor if they will better off in work than on benefits. We will change this broken system to help those at the bottom end make a new start and change their lives through work.
However, it’s important to remember that this is a juncture when jobs are at risk across the board. Duncan Smith briefly addressed this, saying that he understood that jobs can be hard to come by, but that work remained the best way out of poverty. This may be, but as public sector cuts hit, entire towns in the north-east and elsewhere may have no jobs available to them at all.
In this context, the moralistic diction about those who choose to do the “right thing” (working) and those who don’t is somewhat distasteful. It is simply not always a choice, even for those who wouldn’t qualify as the “most needy” under normal circumstances.
NOTE: He also announced a new enterprise scheme, offering up to £2,000 and business mentoring to help unemployed people start small businesses.
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