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1 December 2016

Is this the final end of Iain Duncan Smith’s schemes?

The resignation of David Freud has observers wondering if Duncan Smith's universal credit is to be killed off at last. 

By Stephen Bush

David Freud, the Conservative peer and junior minister at the Department for Work and Pensions, has resigned.

Freud is the last minister to still be in the post David Cameron appointed him to back in 2010 and is in many ways the true architect of the universal credit, Iain Duncan Smith’s flagship scheme for the reform of the welfare system.

The idea behind the reform is that, instead of claiming multiple benefits, whether they be tax credits, jobseekers’ allowance or housing benefit, you would claim one benefit that would be topped depending on your needs and eligibility. By simplifying the benefits system, it would, at a stroke, cut down on administration and make it easier to make sure that no-one is punished for working, eliminating the so-called “benefits trap”.

It’s a lovely idea in theory, but in practice, it hasn’t worked. Most complex cases have proved too much for the system, which was supposed to be rolled out to six million people by this year. It has instead reached a mere 400,000 claimants, overwhelmingly single young men without dependents, as they are the easiest benefit claimants to process.

The scheme’s problems were the cause of numerous turf wars in the government, between the Treasury, which regarded the plan as a waste of time and money, and the DWP, where a handful of true believers around Duncan Smith saw the scheme as the way to “make work pay”.

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By the time that Duncan Smith flounced out of the government, morale – and the reputation of the DWP on Whitehall – was on the floor. Stephen Crabb, who was sent there with a brief to repair the damage, made a start on turning things around, but his frontbench career was brought to an abrupt and unexpected end – or, at least, a significant pause – after stories emerged that he had sent explicit texts to a young woman.

Damian Green, a longtime ally of Theresa May’s, was sent in to continue fixing Duncan Smith’s mess. Green has known May since the two were at university, though their political friendship rests more on his time as a junior minister at the Home Office. May can be difficult to work with, but Green managed well, and along with Karen Bradley and James Brokenshire, also her juniors in the Home Office and now at the trouble spots of Culture (negotiating the renewal of the BBC’s charter) and Northern Ireland (negotiating Brexit and its impact on the peace process).

Many believed that Green’s brief was to give universal credit the last rites, though he has told friends that it is a “good benefit” that is “worth saving”. That Freud, its architect, has left the stage, however, means that once again, people are wondering if the scheme is to be scrapped.

However, I’m told by several well-placed sources that Freud’s exit is the result of a genuine desire to retire rather than because Green has been tasked with killing off the reform, though one unnoticed aspect of the autumn statement was that it made it significantly easier for the government to do so. Why? Because Philip Hammond abandoned any pretence that the Conservatives will hit a surplus by 2020. Meeting that target meant driving through substantial working-age welfare cuts, and the promised “savings” that universal credit being implemented would bring. Now, neither is necessary, meaning that the scheme is far easier to kill.

What is more likely, however, is that the department continues to spend money advertising the benefit, that vanishingly small numbers continue to move across to it, at least for this parliament, before it is quietly smothered after 2020.