Iain Duncan Smith continues to refuse to say where the axe will fall when massive cuts are made in welfare benefits if the Conservatives win the next election. Speaking on the Andrew Marr show on Sunday, IDS said that that ‘categorically yes’ savings of £9 billion will be made.
However, a select committee found only last week that since 2010, welfare reforms that were supposed to save £19 billion have saved only £2.5 billion. Given that pensions are largely protected, this raises doubts about the chances of savings being made without very deep cuts to working age benefits.
Marr: “Of the undiscussed, unmentioned savings to come in the next government, if it’s a Conservative government: £9 billio. That is equivalent to the entire budget for disabled people, most of the budget for housing benefit. It’s a huge amount of money, I’m just asking you where that is going to come from. Where are your targets?”
IDS: “Well, I’m not going to start discussing exact specifics. We have already one thing which is we will continue that freeze on benefit growth as we have done already, we’ll extend that. And that will save a significant sum of money.
“But what I will say that as we come forward we will talk more about what we are going to do to save this money. People should not doubt our intention to get the deficit down. If we don’t get the deficit down we don’t get borrowing down people pay more in taxes.
“You don’t do it necessarily by cheeseparing or cutting. What you do is you do it by changing the way that people go about their lives, more people in work, more people getting a sustained income, more people off housing benefit as a result, more people in full time work. That’s the way that you really reduce the budget overall. And that’s the way that we’ll be approaching the savings.
“But if you ask me are we going to be able to make those savings, my answer is categorically yes. And I’ve already discussed this with the chancellor.”
However, only last week the Treasury Select Committee found that welfare reforms made since 2010 by the coalition that were expected to save £19 billion have, in reality, only saved £2.5 billion.
Savings from getting people into work are especially hard to achieve. Even with the much higher than expected rise in employment, JSA spending is only expected to fall by £0.6 billion a year. In the meantime, spending on tax credits is expected to be £0.2 billion a year higher, because many people moving into work are on low wages which entitled them to tax credits.
The committee also found that some of the growth in self-employment was due to the JSA sanctions regime pushing claimants into “non-genuine” self-employment.
Overall, the committee found that because of problems and delays with disability benefits and universal credit, plus the rise in housing costs and continued low wages:
“Welfare reforms that were originally expected by both the Government and the OBR to yield savings of £19 billion have in fact resulted in only £2.5 billion of savings.”
It is against this background that IDS’ claim that he can cut the benefits bill by getting more people into full-time work should be viewed. The reality is likely to be very different indeed.