Will Grayling and IDS stand up to Osborne over £10bn DWP cuts?


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George Osborne may face a fight over the planned £10 billion cuts to the Department for Work and Pensions, with DWP ministers Chris Grayling and Iain Duncan reportedly at odds with the chancellor.

Iain-Duncan-Smith-George-Osborne
Today’s Financial Times reports (£):

Plans by the chancellor to take £10bn a year, or almost £1 in £20, out of the welfare budget are being openly resisted by the department for work and pensions in the first sign of government infighting over the coming spending round.

Employment minister Chris Grayling told the FT:

“What the chancellor did in his budget was set out a framework for government as a whole and that £10bn is a figure that applies across government. He expressed the desire that we make further savings in welfare as part of that, but… we haven’t begun that kind of discussion yet.”

With an aide to Work and Pensions secretary Iain Duncan Smith adding:

“From our perspective, we wouldn’t see this as simply £10bn off the DWP budget, and I’m pretty sure we’ll be making that point as and when we sit down with the Treasury.”

As IPPR’s Richard Darlington explained on Left Foot Forward last week, a cut of “£1 in £20” will hit hard:

[As Chart 1 shows], two-fifths (42%) of welfare spending goes on pensioners: a whooping £77bn in total. And more than 15% – £31bn – goes on children, via child benefit and the child tax credit. That’s almost £6 out of every £10 of welfare spending accounted for and, so far, not a “scrounger” in sight.

Then we’ve got another 10% going on support for disabled people – and this should not be confused with incapacity benefit, now called employment and support allowance, or ESA. A further 5% goes to carers and boosting the incomes of the working poor.

Only a shade over a 10th of the benefits bill – and a far smaller share of total public spending – is actually spent on directly replacing the incomes of those not in work, through jobseeker’s allowance, income support and ESA (£21bn in total). The remaining large items of spending are council tax benefit (£5bn) and housing benefit (£20bn).

Chart 1:

Breakdown-of-welfare-spending-2009-10

 


See also:

Budget 2012: Breaking down the benefits bill 21 Mar 2012

The DWP’s ‘scrounger’ rhetoric is causing real harm 26 Feb 2012

Exposed: The six myths of IDS’s benefits cap 23 Jan 2012

The human cost of the government’s inhumane welfare reforms 20 Jan 2012

Yes, but are you REALLY disabled? 20 Jan 2012


 

Still, the row aside, it appears Grayling has finally grasped the simple concept that getting people into work and off benefits is the best way to bring down the deficit – not slashing spending, rising unemployment and a looming double-dip:

“If we are successful in getting people off benefits and into work, that will generate a saving for the nation and that’s not accounted for at this moment in time.”

 


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  • Anonymous

    Still, the row aside, it appears Grayling has finally grasped the simple concept that getting people into work and off benefits is the best way to bring down the deficit – not slashing spending, rising unemployment and a looming double-dip:

    ==========

    It isn’t.

    If it costs 15K a year in benefits and lost taxes for a person who is unemployed, then getting a million back to work gets 15 bn out of a deficit of 150 bn. The savings are even less if you spend lots of money getting them back to work.

    It’s not the best way by a long way.

    Unless you think that the unemployed are receiving lots more money, and the savings are larger. In which case the argument will be why are we paying them so much money.

    The way to bring down the deficit is to cut wasteful spending in government.

    So, level the pay levels between private and public, now.

    Stop accruing off the book debts such as the pension debts. (The hidden deficit, 350 bn last year)

    Get the government out of large areas of life. However, it still has to tax for services not rendered, to pay off its debts by eliminating the deficit.

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  • Anonymous

    Absolutely. Pay them the going rates for their qualifications.

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