he is going to float plans for significant benefit cuts affecting under-25s on housing benefit or benefit claimants with large families. Patrick Wintour has written an analysis saying it is partly about the coalition parties needing to spend more time talking to themselves.Did someone announce the start of the 2015 general election campaign and I just not notice? Last week Michael Gove appeared to confirm reports that he wants to scrap GCSEs and replace them with a new version of O-levels and CSEs and, when the Lib Dems popped up to say “over our dead bodies” (of which there may be quite a few come 2015, but that’s another story), Tories briefed the papers to say that that did not matter much because this could be an idea for the 2015 manifesto. And today David Cameron is at it too. As we report in the Guardian splash,
There is a wonderfully lachrymose country and western song by Sara Evans in which she sings “sometimes loving me just means leaving me alone”, and sometimes in coalitions political parties need some time with themselves. So it seems with David Cameron on welfare and, in a different way, Nick Clegg on Lords reform.
After eight dreadful weeks, stumbling from one mistake to another, Cameron wants to spend some time on his own with the Conservative party making a speech on welfare, a kind of Conservative comfort blanket. By giving a sign of what the Conservatives will do after 2015 on welfare, it cheers a fed-up party that they know their values.
Liberal Democrat officials, in wonderfully patronising mode, said on Sunday that they understand that Cameron, after what he has been through, needs space to talk to his own side. As Cameron will not attempt to put any of these welfare reforms on to the statute book before 2015, the Liberal Democrats can afford a relatively relaxed attitude.
The speech has been well trailed in advance, but I’m sure there’s some more juice to be squeezed from the lemon. I’ll be covering the speech in detail, as well as all the reaction that comes in.
Here’s the full agenda for the day.
10am: The Leveson inquiry resumes. Lord Justice Leveson is expected to comment on the Mail on Sunday story claiming he threatened to quit after Michael Gove criticised the inquiry. Simon Walters, the Mail on Sunday political editor, is appearing, as well as Peter Riddell, Andy Grice, Phil Webster and Jon Snow.
11am: Alistair Darling launches Better Together in Edinburgh, the cross-party campaign to keep Scotland in the UK.
12.30pm: David Cameron delivers his welfare speech.
2.30pm: Iain Duncan Smith, the work and pensions secretary, takes questions in the Commons.
As usual, I’ll be covering all the breaking political news, as well as looking at the papers and bringing you the best politics from the web. I’ll post a lunchtime summary after the Cameron speech and another at about 4pm.
If you want to follow me on Twitter, I’m on @AndrewSparrow.
And if you’re a hardcore fan, you can follow @gdnpoliticslive. It’s an automated feed that tweets the start of every new post that I put on the blog.
Iain Duncan Smith (pictured), the work and pensions secretary, and Chris Grayling, the employment minister, have both been giving interviews this morning ahead of David Cameron’s speech on welfare.
Here are the main points they’ve been making.
• Iain Duncan Smith said that Cameron was trying to start a debate about the principles that should determine the next stage of welfare reform.
These are the principles for debate: questions about whether somebody should automatically have the right, for example, to social housing below the age of 25; whether someone should automatically have the right to support for their children regardless of what their circumstances are, and regardless of the size of their family.
These were questions to consider “as we get into the next parliament”, he said.
• Duncan Smith suggested that Cameron was not proposing to remove housing benefit from all under-25s. “The details of these, of course, we have to be careful about,” he said. “We have to be sensitive to the different reasons people have housing – people coming out of care, being in difficulties in foster care.”
• Duncan Smith said that the average age at which people enter social housing was getting younger. “It’s on average now 21 years old when people first enter into social housing,” he said.
• He said he and Cameron were not blaming people for taking advantage of the welfare system.
This is not about blaming [claimants] by the way because, of course, it was politicians who set these systems up that have made them available to be able to be unchanged and abused.
• Duncan Smith said this was not the end of compassionate conservatism. “There’s no kindness in saying to someone we don’t really care whether you work,” he said.
• He said the Conservative party’s commitment not to cut benefits that go to welfare pensioners, like the winter fuel allowance and free TV licences, only applied for this parliament.
Everything will have to be announced in detail as we run towards the next election but you shouldn’t assume anything by that one way or another. The reality is, as in all these areas, these are matters we have to decide in the context of what we can afford and ultimately what is the right thing to do.
• Chris Grayling said the benefits system had become “a place in which people live”.
All too often over the course of the last decades, as our current welfare state has built up, it has become a place in which people live. What we want to do is to rebalance between those people who are on benefits and those people who are in work to make sure that really we are not creating a different world for those people on benefits.
I’ve taken some of the quotes from PoliticsHome.
the Nick Clegg “bring on the hatred” tour. It should be back to normal now.Apologies for launching the blog without the comments turned on. That was pure cock-up, not an attempt to stop people taking a whack at David Cameron or preventing some of my regular readers expressing their enthusiasm for
If David Cameron’s welfare speech is partly designed to make life uncomfortable for Labour, it’s succeeding. Liam Byrne (pictured), the shadow work and pensions secretary, was wary of saying whether he agreed or disagreed with Cameron’s proposals when he was interviewed on the Today programme this morning. He said it was unfair to expect Labour to have a position because the plans were “pretty hazy and half baked”.
Instead, he is arguing that the government’s welfare plans are already in chaos. Here’s the statement that he has sent out to journalists this morning.
David Cameron has put worklessness to a record high and he’s inviting us to believe that it’s the fault of everyone except him.
It’s now very clear that a welfare revolution was all talk. Out of work benefits are going through the roof. Each week we hear of another new initiative, another crackdown, another test.
Meanwhile in the real world, the cost out of work benefit is up nearly £5 billion, housing benefit over £4 billion, the work programme is failing and the multi-billion pound universal credit scheme is running late and over budget.
Welfare spending is going up under this government because too many people are out of work, but at the last budget the chancellor’s priority was not help to get people into work but a tax cut for millionaires.
Byrne’s claim that out-of-work benefits are going “through the roof” is based on the fact that estimated spending on jobseeker’s allowance and housing benefit from 2011 to 2015 is now £9bn higher than it was in the autumn of 2010.
His claim that the work programme is failing is based on reports like this one.
And his claim that universal credit is late and over budget is based on a parliamentary written answer suggesting it is £100m over budget and on the revelation that all new claims for out-of-work benefit will be paid through universal credit from mid 2014, not from October 2013 as originally planned.
the Mail on Sunday’s “Leveson threatened to quit” story. As usual, he is taking a while getting to the main point. You can follow the proceedings on our Leveson live blog.The Leveson inquiry has resumed, and Lord Justice Leveson is now telling the world what he thinks about
the GMB wants to kick Progress out of the Labour party by inviting the Blairite pressure group to attend the Lib Dem conference in Brighton this year if they want to debate progressive politcs in an environment where it will be welcome.This is interesting. Tim Farron (pictured), the Lib Dem president, has responded to the news that
Here’s his letter, which he has sent to Lord Adonis, the Progress chairman.
On behalf of the Liberal Democrats, I would like to invite Progress and its members to attend Liberal Democrat Autumn Conference in Brighton.
I have noted the moves from the GMB and others within the Labour Party to sideline Progress and force its members out of the party. This is a great shame. I do not mean to patronise you or your members by suggesting your response should be to join the Liberal Democrats. I know that you very much consider yourselves a part of the Labour movement. But you are modern, progressive reformers and you deserve to be a part of the political debate in this country. In the Liberal Democrats we pride ourselves not only on being a modern, progressive reforming party, but also as an open democratic one that never shies away from debate. We are also a party that is prepared to work with others for the good of the country.
Whether it is the economy, political reform, climate change, health, education or any of the other major issues facing us as a country, we will be debating them at our conference. You and your members are welcome to join us and I’m sure the debate will be all the richer for it.
President of the Liberal Democrats
Now the Lib Dems are proposing that voters should have a new type of politico – a “senator” – with his or her own direct mandate and constituency. This will be confusing for the voters, who will be wondering whether they should be writing to their local councillor, their MP, their Euro-MP or their senator; and it will be even worse for the egos of these bozos. Consider for a second who is likely to seek election to the Lords/Senate. People who have never made it to Parliament; people who have been flung out of Parliament; has-beens; never-wozzers; people who can see the opportunity to avenge their rejections by finding an alternative route to power. Once ensconced in the Lords they will remain there for three solid parliamentary terms, swanking, swaggering and using the headed stationery for their shopping lists …
This plan is a bunch of tidy-minded Lib Dem nonsense. It would create a new, grandiose, expensive and unnecessary class of political hack. It would turn Parliament into a chronic feud between two types of elected representative. Clegg’s scheme needs to be liquidated, vaporised and generally terminated with extreme prejudice.
a preview story about the Better Together launch in Edinburgh this morning. Here’s a quote from Alistair Darling (pictured), who is leading the cross-party anti-independence campaign.My colleague James Meikle has written
[Alex Salmond] is saying we will keep the pound, be in a currency union with the rest of the United Kingdom, by the way not asking the rest of the UK whether they want that, and entering into the sort of currency union you have got in the eurozone right now.
My argument is why on earth would you want to do that when everybody knows currency union inevitably takes you to closer economic and fiscal union? In other words you end up where you started. To argue in some way it is not going to change anything at all, well, what is the point of it?
As for the rest of the papers, I’ve already mentioned Boris Johnson’s eruption over Lords reform. (See 10.19am.) Here are some other articles that are particularly interesting.
Tax loopholes uncovered by The Times will be investigated by Parliament, the chairman of the powerful House of Commons Public Accounts Committee will reveal today.
Abuses uncovered by a series of articles looking into income tax avoidance “wouldn’t look out of place in a banana republic”, says Margaret Hodge. Writing in this newspaper today, she confirms her committee will demand to know what work the taxman is doing to identify rogue methods and how accountants circumvent the system.
Officials from Revenue & Customs face being hauled before MPs to explain what action they are taking, after revelations that thousands of wealthy people in Britain are able to pay as little as 1 per cent income tax using aggressive financial schemes.
Alex Salmond has warned David Cameron that he will press ahead with his own two-question referendum on independence if he fails to get Westminster’s legal backing for the poll planned for 2014.
The First Minister has also made it clear that he will hold that referendum on the day of the 2015 General Election — apparently to cause as much disruption as possible to the Prime Minister’s chances of re-election.
Senior Scottish government sources have disclosed that the First Minister has dramatically upped the stakes over the independence referendum.
The Scottish and UK governments cannot agree on the question to be put or the voting system. But they have to come to an agreement by the autumn or there will not be enough time for all procedural work to be done to deliver a legally binding vote by the Scottish government’s previously-announced date of the autumn of 2014. Because there are only a few months left to settle matters, Mr Salmond has decided to issue his ultimatum.
I’m off to the Number 10 lobby briefing now. I’ll post again after 11.30am.
I’m back from the lobby briefing, which lasted longer than usual. Normally I write a post about what we’ve learnt. Today it might be more helpful to post one about what we didn’t learn, but I’m not sure that I’ve got the time. Summary coming up soon …
Here are the key points from the No 10 lobby briefing.
• Downing Street refused to say when the welfare reform plans being floated by David Cameron in his speech today might be implemented. Asked which of them happen before 2015 and which might happen after, the prime minister’s spokesman said: “It is not possible for me to put a timescale on these proposals.” The ideas are likely to be included in the next spending review, but the spokesman would not say when that would take place. And he would not say how many of the proposals were being floated by Cameron in his capacity as prime minister (ie, which ones – if any?- were agreed within the coalition) and which were being floated by Cameron in his capacity as leader of the Conservative party.
• No 10 confirmed that Cameron was interested in introducing more regional flexibility into welfare. That was because benefit levels affected work incentives, the spokesman said. “Clearly wage rates vary around the country,” he said. “What someone receives in benefits compared to what they potentially get by going into a job has an impact on the incentives they face.”
• Cameron’s spokesman refused to say whether Cameron knew about Michael Gove’s plan to abolish GCSE before it was revealed in the Daily Mail last week. Nick Clegg said last week that Cameron was not warned in advance, but reports at the weekend said Cameron did know what Gove was planning. The spokesman just said that Cameron knew that Gove wanted to reform the education system. “He appointed him with that mandate,” the spokesman said.
• Downing Street refused to respond to Jimmy Carr’s recent attack on Cameron. The spokesman said he did not know if Cameron watched Carr on TV.
• No 10 said Cameron did not agree with the archbishop of Canterbury’s claim that the Big Society could be seen as “aspirational waffle”. (But there is some overlap between Rowan Williams and Cameron. Williams says the Big Society is seen by many as “aspirational waffle designed to conceal a deeply damaging withdrawal of the state from its responsibilities to the most vulnerable”. Cameron’s speech today is explicitly about the state withdrawing from certain tasks, like housing the under-25s without pressing needs. But Cameron, of course, would challenge the idea that this was “damaging”. When I raised this with the spokesman, he said Cameron’s speech was about promoting responsibility.)
• Cameron has written to Mohamed Morsi congragulating him on his election as Egypt’s president. “We welcome President Morsi’s statement that he intends to form an inclusive government that will govern on behalf of all Egyptians,” the spokesman said.
• No 10 refused to condemn the paying of employees through private companies in all public sector organisations. The Treasury has already taken steps to stop this practice – which can be used by individuals as a means of cutting their tax – in central government. But, when asked if Cameron would condemn it in organisations like the BBC, the spokesman said: “There are different issues for different organisations.
David Cameron has started his welfare speech.
Cameron says welfare needs radical reform. Almost £1 of every £3 spent by government goes on welfare.
The system the coalition inherited in 2010 trapped people in welfare, he says.
Iain Duncan Smith has embarked on reform on a scale not seen since 1945.
More people are now in work. The work programme has been established. Housing benefit has been tightened. Benefits have been capped. And universal credit is being introduced, he says.
Duncan Smith has achieved something “truly remarkable”.
But the job of reforming welfare is “not yet complete”.
Cameron says there are three components in the welfare system.
First, pensions. If you work hard all your life, you deserve dignity in retirement, he says.
The government has delivered the biggest cash increase in the state pension.
And it has unveiled plans for a universal state pension. That would give pensioners more peace of mind. They will know what they are going to get.
There is a debate about means-testing benefits for pensions.
Cameron says he made a promise two years ago to protect those benefits. He will keep that promise.
Cameron is now talking about the second element to the system – disability benefits.
Two thirds of disability living allowance claimants are paid for life, he says.
The new system will be fairer and simpler. And there will be proper, objective assessments, with more for the severely disabled.
Cameron turns to the third element of the system, out-of-work benefits. This is where the system has gone awry, he says.
He says a couple who are working – say, a care worker and a hospital porter – may decide they cannot afford children, even though they are both working. But they could be living next to a family of four receiving more than £27,000 a year in benefit.
He gives another example – a woman working as a receptionist after going to college.
She’d love to get her own place with a friend – but with high rents in her area, the petrol to get to work and all the bills, she just can’t afford it.
So she’s living at home with her mum and dad and is saving up desperately to move out.
Then there’s another woman living down the street.
She’s only 19 years-old and doesn’t have a job but is already living in a house with her friends.
Because when she left college and went down to the Job Centre to sign on for Job Seeker’s Allowance, she found out that if she moved out of her parents’ place, she was automatically entitled to Housing Benefit…
…so that’s exactly what she did.
There is a “welfare gap” between those living in the system and those outside it, he says.
What these examples show is that we have, in some ways, created a welfare gap in this country…
…between those living long-term in the welfare system and those outside it.
Those within it grow up with a series of expectations: you can have a home of your own, the state will support you whatever decisions you make, you will always be able to take out no matter what you put in.
This has sent out some incredibly damaging signals.
That it pays not to work.
That you are owed something for nothing.
It gave us millions of working-age people sitting at home on benefits even before the recession hit.
It created a culture of entitlement.
And it has led to huge resentment amongst those who pay into the system, because they feel that what they’re having to work hard for, others are getting without having to put in the effort.
Cameron says good intentions created this system.
Why do we have people on big salaries living in council houses?
Because governments wanted social housing to support hard-working people, so the eligibility criteria were set wide and the tenures long.
Why has it become acceptable for many people to choose a life on benefits?
Because governments wanted to give people dignity while they are unemployed – and while this is clearly important, it led us to the wrong places.
Cameron says the government cannot afford to spend more money on welfare.
The time has come to go back to first principles; to have a real national debate and ask some fundamental, searching questions about working-age welfare…
…what it is actually for…
…who should receive it…
…what the limits of state provision should be…
…and what kind of contribution we should expect from those receiving benefits.
Cameron says he is not proposing answers now.
I want to stress now that these are not policy prescriptions; they are questions that we as a country need to ask in a sensible national debate.
Cameron turns to working-age welfare.
[The last government] treated working-age welfare as part of the huge income transfer industry they ran from the Treasury, pushing tax credits and benefits around in a bid to try and hit the poverty targets they’d set up.
It’s what the Deputy Prime Minister has rightly called the poverty plus a pound approach: push people one pound over the poverty line and consider the job done.
As Iain Duncan Smith has argued so powerfully, that might look good on the government spreadsheet but it means next to nothing on the ground.
Cameron says that, although “money is vital”, giving money to the poor does not address the causes of poverty.
We’ve got to recognise that in the end, the only thing that really beats poverty, long-term, is work.
Working-age welfare should be a safety net, he says.
Cameron is still talking about working-age welfare.
If it is a real safety net, then clearly it’s principally for people who have no other means of support, or who have fallen on hard times.
But there are many receiving today who do not necessarily fall into these camps.
For example, the state spends almost £2billion a year on housing benefit for under-25s.
There are currently 210,000 people aged 16-24 who are social housing tenants.
Some of these young people will genuinely have nowhere else to live – but many will.
And this is happening when there is a growing phenomenon of young people living with their parents into their 30s because they can’t afford their own place…
…almost 3 million between the ages of 20 and 34.
So for literally millions, the passage to independence is several years living in their childhood bedroom as they save up to move out…
…while for many others, it’s a trip to the council where they can get housing benefit at 18 or 19 – even if they’re not actively seeking work.
Cameron says the current system actually penalises parents for letting their adult children live with them.
If a family living on benefits wants their adult child to stay living at home they are actually penalised – as soon as that child does the right thing and goes out to work.
You get what’s called a non-dependent deduction, removing up to £74 off your housing benefit each week.
I had a heartrending letter from a lady in my constituency a few weeks ago who said that when her son leaves college next month, her housing benefit will drop significantly, meaning her family may have to split up.
This doesn’t seem right.
Cameron says other EU countries put more emphasis on family responsibility in their welfare systems.
In Holland, for instance, the welfare system doesn’t provide for under-21s as a default – and where it does, it expects their family to contribute if they can.
So if they’re on means-tested benefit and are getting about 230 Euros a month, it’s usually for their parents to top that up.
Cameron questions whether the wealthy should be able to live in subsidised social housing.
Today there are between 12,000 and 34,000 households with incomes of over £60,000 living in council houses.
Between 1,000 and 6,000 council house occupants earn over £100,000.
This is a difficult area.
We don’t want to stop people striving and climbing up the ladder in case they lose their home.
But when you have people on £70,000 a year living for £90 or so a week in London’s most expensive postcodes…
…you have to ask whether this is the best use of public resources.
Cameron turns to the need for a debate on the limits of state provision.
This year we increased benefits by 5.2 per cent.
That was in line with the inflation rate last September.
But it was almost twice as much as the average wage increase.
Given that so many working people are struggling to make ends meet…
…we have to ask whether this is the right approach.
It might be better to link benefits to prices unless wages have slowed – in which case they could be linked to wages.
He also says there should be a debate about time-limiting benefits.
Back in the 90s the Clinton administration in the US started time-limiting benefits, and they saw federal case-loads fall by over 50 per cent.
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.
It is extraordinary that there are 1.4 million people in this country who have been out of work for at least nine of the past 10 years.
So softer time-limits – that increase the incentive to work, that stop people getting stuck in that welfare trap – could be something we consider.
I don’t deny that these are big, tough questions.
But when you have got 300,000 children living in households where no one has ever worked, then you cannot shy away from them any longer.
Cameron turns to housing benefit. The benefit cap is going to put a stop to “the most outrageous cases”, he says. But there is a case for going further, he argues.
People can still seek support for housing up to a rate of £20,000 a year – that’s actually over 25 per cent higher than the average rent paid in London.
Just think what that figure means.
What would someone in work have to be earning to afford rent of £20,000 a year?
If rent is typically about a third of post-tax income, they’d have to be on a salary of at least £80,000.
That is in the top five per cent of the population.
Surely we should ask if it’s fair that the maximum amount that you can get on housing benefit is set at a level that only the top five per cent of earners would otherwise be able to afford.
Cameron turns to benefits for out-of-work families with children.
There are more than 150,000 people who have been claiming Income Support for over a year who have 3 or more children…
…and 57,000 who have 4 or more children.
The bigger picture is that today, one in six children in Britain is living in a workless household – one of the highest rates in Europe.
Quite simply, we have been encouraging working-age people to have children and not work, when we should be enabling working-age people to work and have children.
So it’s time we asked some serious questions about the signals we send out through the benefits system.
Yes, this is difficult territory.
But at a time when so many people are struggling, isn’t it right that we ask whether those in the welfare system are faced with the same kinds of decisions that working people have to wrestle with when they have a child?
Cameron says there should also be a debate about what people on out-of-work benefits are expected to do.
For example, it is still possible to stay on benefits for years without gaining basic literacy and numeracy skills…
…but isn’t this something we should expect of people, considering these skills are almost essential to getting work?
Bizarrely there is also no requirement to have a CV…
…but shouldn’t this be the very thing that’s asked of people before they even walk into the job-centre?
Cameron says other countries adopt a more robust approach.
In Australia robust, rigorous activity such as ‘work for the dole’ is standard after just six months.
Cameron says there are some other issues that have not been covered in his speech.
There’s a number of questions I haven’t addressed…
…like if it’s right that people continue to have the option of leaving school and going straight onto benefits, without ever having contributed to the system in any way…
…or if it’s right that we are paying non-contributory benefits to those people who don’t even live in this country…
…or if it’s right that we continue to pay the vast majority of welfare benefits in cash, rather than in benefits in kind, like free school meals.
But for all, there are broader questions about timing…
…about whether, if they were to happen, these changes would be made in one go and affect existing recipients – what is called ‘the stock’…
…or whether it is right that these changes would just affect future recipients – or what is called the ‘flow’ – so people coming in to the system would know more clearly what is expected of them.
For now, both stock and flow options should be there on the table.
Cameron says that he hopes to work with the Lib Dems on some of these issues.
Cameron is concluding.
Raising big questions on welfare, as I have today – it might not win the government support.
Frankly a lot of it might rub people up the wrong way.
But as I’ve argued, the reform of welfare isn’t some technocratic issue.
It’s not about high-level accounting to get the books in order.
It’s about the kind of country we want to be – who we back, who we reward, what we expect of people, the kind of signals we send to the next generation.
Cameron is taking questions.
Q: Are you saying you can’t do these things within the coalition? That, even though you are prime minister, you can’t change the system?
The question comes from the BBC’s Nick Robinson. Cameron says he hopes the BBC will engage in this debate.
Cameron says he does not accept this. The government has not dodged tough questions on welfare.
He says he would like to take “many” of these steps before the election. There should be a debate, he says. “Let’s see which policies survive.” The government has a history of radicalism, he says.
Q: Which of these measures will the Lib Dems support?
Cameron says he is the wrong person to ask. But he thinks there are elements all parties could support, such as requiring people to have a CV before they can claim JSA.
This has not been a government that has shied away from difficult decisions, he says.
This government delivers “for both halves of the coalition”. And it is delivering for the country.
It’s hard to remember a speech so bursting with policy ideas. There were at least half a dozen Daily Mail splashes in there. I’ll post a summary shortly.
During the 1997 election campaign I was one of the reporters on Tony Blair’s election bus and it meant that I heard his standard stump speech every day. It included a line about having to say unpopular things. You might not like this, Blair said, but Labour won’t be spending money on a new Royal Yacht. This line was always greeted by strong applause. As Blair knew full well, people were all in favour of saving money by not replacing the Royal Yacht.
David Cameron played the same trick today towards the end of his wefare speech.
Raising big questions on welfare, as I have today – it might not win the government support.
Frankly a lot of it might rub people up the wrong way.
Actually, as he knows perferctly well, the polls suggest that calling for widespread cuts in welfare will be hugely popular. Just look at the figures in this YouGov/Prospect survey. I wouldn’t be at all surprised if Cameron gets a significant poll bounce from today’s speech, although that is not, of course, a proof that his proposals are all wise or practical.
But they are bold. Cameron does seem to have a new vision of the welfare state. He wants benefits to be a safety net – and nothing more; less Scandinavia, and more USA. At one level it was quite a light speech, because it did not actually announce any new government policy. Cameron was just floating ideas, in what appears to be a genuine desire to kick off a debate. But it was stuffed full of policy options, making it one of the richest policy speeches I can remember hearing from a politician. Earlier I said there must be at least half a dozen Daily Mail splashes in it. Having counted them, I see there are 17. Here they are – the welfare reforms Cameron is clearly considering.
• Stopping most under-25s claiming housing benefit. Cameron said the government was spending almost £2bn a year on housing benefit for this group, and that 210,000 people aged 16 to 24 were social housing tenants. Many of them could live with their parents, he suggested.
• Scrapping the non-dependant deduction. Cameron said people could lose up to £74 a week in housing benefit if they have an adult child living with them. That “doesn’t seem right”, he said.
• Cutting benefits for the under-21s. Cameron said that in Holland the benefit system does not normally help the under-21s. When it does, benefits are set at a low level, and parents are expected to top them up.
• Ending subsidised social housing for the wealthy. Cameron said that between 12,000 and 34,000 families on more than £60,000 a year, and between 1,000 and 6,000 families on more than £100,000 a year, were living in council homes. “When you have people on £70,000 a year living for £90 or so a week in London’s most expensive postcodes you have to ask whether this is the best use of public resources,” he said.
• Uprating benefits in line with wage inflation instead of price inflation when price inflation is much higher. Cameron said in September benefits went up by 5.2% (inflation) even though workers were getting much lower pay rises. “Given that so many working people are struggling to make ends meet we have to ask whether this is the right approach,” Cameron said.
• Cutting benefits for the long-term unemployed. Cameron said that when the Americans decided to time-limit benefits in the 1990s, case-loads fell by more than 50%. “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,” he said.
• Cutting housing benefit further. The government has already introduced a benefit cap to stop a relatively small number of families claiming exorbitant sums in housing benefit. But Cameron said this would still allow people to receive up to £20,000 a year in housing benefit. “Surely we should ask if it’s fair that the maximum amount that you can get on housing benefit is set at a level that only the top five per cent of earners would otherwise be able to afford,” he said.
• Stopping people from claiming child-related benefits if they have more than a certain number of children. Cameron did not say how many children, but he quoted the number of people on income support with three or more children (150,000) and four or more children (57,000), implying benefits could be capped at two children.
• Requiring people on out-of-work benefits to gain basic literacy and numeracy skills.
• Requiring people on out-of-work benefits to prepare a CV.
• Requiring able people on out-of-work benefits to do full-time community work after a certain period. In Australia this was standard after just six months, Cameron said.
• Requiring people on sickness benefits to improve their health. “Today if someone is signed off work with a bad back there’s no requirement to take steps to get well to keep on receiving that benefit – even if they could be getting free physiotherapy to get back to health and start working again,” Cameron said.
• Requiring more single parents to work – or at least to prepare for work. Cameron said the government was already forcing single parents to look for work when their youngest child reaches five, not seven as before. But, with free nursery care available from the age of three, there was a case for changing the rules again, he said. “Even if there’s no scope for actually working, there should at least be for preparing to work: getting down to the job centre; writing a CV; learning new skills.”
• Imposing tougher restrictions on people claiming benefits if they have never worked than if they have paid tax and national insurance for years before submitting a claim.
• Stopping teenagers from claiming benefits as soon as they leave school. Cameron said he wanted to ask “if it’s right that people continue to have the option of leaving school and going straight onto benefits, without ever having contributed to the system in any way.”
• Stopping paying winter fuel payments and other non-contributory benefits to people who live abroad.
• Stopping paying some benefits in cash and paying them instead in benefits in kind, like free school meals.
The lobby being the lobby, journalists are also focusing on one idea not in the speech – introducing regional benefit levels. That’s because Number 10 confirmed that Cameron was interested in this at the morning lobby briefing. According to PoliticsHome’s Paul Waugh, this was in early drafts of the speech, but cut from the final version.
Cameron said that he wants to work on this agenda with his Lib Dem colleagues. But, when asked during the Q&A what ideas Nick Clegg might actually support, he mentioned requiring JSA claimants to prepare a CV, which is about the least contentious idea on the list. That suggests that this is really a post-2015 agenda.
In reality, we’ve probably just heard the first draft of the welfare section in the next Conservative manifesto.
Jenny Willott, a Lib Dem MP and a member of the government (she’s a whip) has told Sky’s Boulton & Co that she has “serious concerns” about some of David Cameron’s welfare proposals. Here’s the key quote, which I’ve taken from PoliticsHome.
I think some of the proposals that have been floated today I would have serious concerns about. Particularly, for example, removing housing benefit from the under-25s – there are lots and lots of people for whom it is the only way they can get a roof over their head. What about care leavers, people who are estranged from their parents, young people with disabilities where their parents live somewhere that is not appropriate for them? There are lots of people who really, really rely on that benefit.
I’ll post a full round up of reaction to the speech shortly.
This battle between “strivers versus skivers” has underpinned British attitudes to poverty since the Poor Laws. Ministerial rhetoric about scroungers, benefit cheats and what Kenneth Clark recently called “the feral underclass” presses the point.
There are two problems with this argument. First, those in poverty are not part of some clearly defined group. Many people move in and out of welfare all the time as their circumstances change. Secondly, because it is not that simple, there is a significant risk that measures designed to kick the feckless up the backside end up hurting the poorest and most vulnerable.
Given the scale of what is proposed here, can we be confident that any of it will survive its passage through the mill of special-pleading and media opprobrium? Consider what is contemplated: benefits could vary depending on where the claimant lives, says a Prime Minister who is backing away from setting regional pay for the public sector; entitlements for pensioners may be reviewed in the 2015 election, when it is precisely during general elections that Tories go wobbly on the subject; capping welfare payments to a limited number of children, from a party that still frets about Thatcher the Milk-snatcher. You see the difficulty.
A recent YouGov poll for Prospect magazine suggested a startling 74% of the public – including 59% of Labour voters and 51% of those on the lowest incomes (below £10,000) – thought that welfare payments should be cut. The most popular cuts are for, you guessed it, the unemployed and never-married single parents. The least popular cuts are for the elderly.
The prime minister is using his position to spark a debate which he already knows he’s won. Asked about the specifics he will, no doubt, do as Iain Duncan Smith did this morning and say “these are the details… that’s the challenge… we’ll have to be careful …etc”
From Lord Bassam, Labour’s chief whip in the Lords
It looks as though Cameron has decided to hit the button marked ‘tack to the ideological right’ to win back voters supporting UKIP.>
— Steve Bassam (@SteveTheQuip) June 25, 2012
From Nigel Farage, the Ukip leader
Cameron’s welfare proposals are excellent. The main problem is that he’ll never bring them in.
— Nigel Farage (@Nigel_Farage) June 25, 2012
It is really important that Nick Clegg – and it has to be him – condemns these proposals in the strongest language imaginable. The very idea that the under-25s could be stopped from claiming Housing Benefit, which costs £2 billion per year, is particularly ridiculous given that unemployment within that age group is still so disproportionately high. Nick Clegg’s £1 billion Youth Contract will help young people get jobs, but that generation is bearing the biggest brunt of the economic crisis.
For the millionaire prime minister – who has never suffered a day’s hardship in his life – to label such people as scroungers and benefit cheats sickens me to my core. The Labour Party should not be afraid to come out and say that this is wrong. Yes work should pay and it should never be the case that people have a financial incentive not to get a job, but we tackle this by ending poverty wages and clamping down on soaring rents in the private rented sector, not by removing benefits from some of the most disadvantaged and marginalised people in our society. So much for compassionate conservatism.
(Actually, I think Peel is wrong about Cameron labelling people as scroungers and benefit cheats. One of the interesting things about the speech is that Cameron avoided moralising about benefit claimants. He said the system was wrong, but he implied that claimaints were just responding rationally to incentives created by the system. Referring to one notional housing benefit claimant, he said: “She found out that if she moved out of her parents’ place, she was automatically entitled to Housing Benefit. So that’s exactly what she did.” Iain Duncan Smith made the same point this morning. See 9.01am.)
From Simon Walker, director general of the Institute of Directors
Reducing the amount the state spends on benefits is imperative if we are to set our country’s finances back on the right track. The rising cost of an ageing population means that we need to get a grip on spending before it is too late.
However, the prime minister should be aiming for wholesale reform rather than changes in a few selected areas. There can be no sacred cows, and means-testing benefits like free TV licences and bus passes for the elderly should also be considered.”
From Nick Pearce of the IPPR thinktank
Whatever else it does, Cameron’s speech makes a full spending review before the next election more unlikely. These are Tory, not Govt plans.
— Nick Pearce, IPPR (@IPPR_NickP) June 25, 2012
From Fiona Weir, chief executive of single parent charity Gingerbread
The prime minister is trying to sound tough on welfare reform at a time when his promises to make work a route out of poverty are stalling. Most single parents work and most who don’t work want to but can’t get a job. One in five of those working full-time still lives in poverty.
The prime minister needs to focus on delivering the welfare reform changes already enacted, not thinking up a new round of punitive measures that will stoke up financial hardship, relationship strain and stigma for hundreds of thousands of families.
From Matthew Reed, chief executive of the Children’s Society
Financial help through the benefit system provides a vital lifeline for hundreds of thousands of children. Taking this away in yet further cuts to welfare would be a complete disaster for so many children up and down the country. We welcome the prime minister’s assurances that housing benefit will not be taken away from young people leaving the care system. But there are significant numbers of under-25s who simply won’t have the option of staying with friends or family. Many young people could be forced into homelessness.
From Brendan Sarsfield, chief executive of Family Mosaic, a social housing provider
If housing benefit is stopped what will happen to those under 25? The assumption is that they can all live with their families. The truth is that the young people we traditionally house do not have that option. They have either come from a care or foster home, or have a mental health issue and/or have been kicked out of the family home. Where do these people go? Not housing these people will end up costing the state more.
[Cameron] hasn’t reached conclusions on many of these issues but he makes it clear that his preferred direction of travel is towards a more demanding, more conditional and a more time-limited welfare system – especially for the young and physically able. Some of this might be achievable during this parliament, in collaboration with the Liberal Democrats but Cameron will also make it clear that much will only be possible if the Conservatives can win the next election and govern on their own. “I am exploring these issues,” he will say, “not just as leader of a coalition but as a leader of the Conservative Party who is looking ahead to the programme we will set out to the country at the next election.”
Here’s an afternoon summary.
• David Cameron has alarmed his Lib Dem colleagues with a radical speech suggesting a wide range of benefit cuts that would reduce the benefits system for working-age adults to a “safety net” aimed just at those in the most dire need. Under his vision, millions of people who now receive benefits could be left more reliant on their families. Cameron floated 17 specific ideas, but none of them represent goverment policy and he admitted that many of them are really at best submissions for the 2015 Conservative manifesto. This is what he said in one “party political” passage omitted from the text of the speech released by Number 10.
There is also a question of timing about when these questions will be asked – in this parliament or the next. On some of them I hope to work with our coalition partners over the next few years. But given the scale of change I’ve suggested, and the long time-frames involved, I am exploring these issues not just as leader of a coalition but as a leader of the Conservative party who is looking ahead to the programme we will set out to the country at the next election.
Jenny Willott, a Lib Dem member of the government, said she had “serious concerns” about some of the ideas. (See 3.09pm.) Brendan Barber, the TUC general secretary, accused him of “attempting to undermine the whole basis of social security and national insurance by pretending that our welfare state only serves the very few who abuse the system – while instead it provides vital support to millions of families across the country.”
• Chris Grayling, the employment minister, has told MPs there should be a “proper national debate” on whether benefit rates should vary regionally. He made the statement in the Commons after Cameron delivered his welfare speech without mentioning the idea. The proposal was included in an early draft, but dropped from the final version.
• Alistair Darling has described Scottish independence as “a one-way ticket to send our children to a deeply uncertain destination”. He made the claim at the launch in Edinburgh of the Better Together campaign. David Cameron issued a statement backing the campaign.
Politics is too often about division. But today, three political parties are joining forces to celebrate the United Kingdom and say it is something worth fighting for.
We all know Scotland can stand on its own two feet. We just believe the UK is special and we would all lose if separation happened. We treasure our United Kingdom and Scotland’s place in our family of nations.
So this week marks a significant step in the debate over Scotland’s destiny as it faces the historic choice: a separate Scotland or a United Kingdom?
• Lord Justice Leveson has denied trying to “gag” education secretary Michael Gove following a speech in which Gove warned about the inquiry creating a “chilling atmosphere” towards freedom of expression. But, as Lisa O’Carroll reports, Leveson confirmed he did make a call to the cabinet secretary, Sir Jeremy Heywood, in February following Gove’s speech to question whether David Cameron still supported the judicial inquiry the prime minister established in July last year in response to the News of the World phone-hacking scandal. Leveson also said he had no “hidden agenda” to stifle press freedom.
• Cameron has welcomed the EU’s decision to impose an insurance ban on all EU ships carrying arms to the country. He made the comments as he made a statement in the Commons on last week’s G20 summit.
On Syria, where the regime continues to pound civilian areas with mortar attack and snipers, the EU is today, as the result of UK efforts, extending sanctions to ban any EU companies from insuring ships taking arms to Syria. We will continue to work with our international partners, including the UN, to stop the appalling slaughter and help forge a political transition to a democratic future that protects the rights of all its communities.
• Ministers have decided to slash the pay of members of a future largely-elected Lords, the BBC has revealed. As James Landale reports, the maximum earnings level could be about £45,000 a year – down from the original proposal of about £60,000.
• Labour has announced that it will hold a vote tomorrow on Michael Gove’s plan to abolish GCSEs and replace them with a new version of O-levels and CSEs. Stephen Twigg, the shadow education secretary, said he was inviting Lib Dem MPs to vote with Labour on this issue.
• Labour have urged the government to reverse cuts to spending on flood defences. Asking an urgent question on the issue in the Commons, Mary Creagh, the shadow environment secretary, said:
Every pound invested in flood defences saves £8 in costs further down the line. This weekend we had a reminder once again that floods are the greatest threat climate change poses to our country. You [Caroline Spelman, the environment secretary] mentioned how much the government is investing in flood defences, but this is a 30% cut from the 2010 baseline. In the light of the events, will you undertake to review that figure?
Spelman said the government was spending £2bn on flood defences.
That’s it for today. Thanks for the comments.