Here is the Guardian news story that accompanies the interview (see other posting). Below are excerpts with my comments:
Britain's welfare system is "bust", with such penal disincentives to work that many people on benefits regard those who take up job offers as "bloody morons", Iain Duncan Smith, the new work and pensions secretary, says in a Guardian interview setting out the most ambitious welfare reform plans for a decade.
Duncan Smith says he is to propose to the Treasury a radical scheme that includes simplification of the complex benefits system designed to make it financially worthwhile for unemployed people to work, including in part-time jobs.
Interesting that he says he is to "propose" his scheme to the Treasury. That makes it sound as though his scheme has not as yet been accepted. In which case, it is also interesting that he should be presenting it publicly. Is he trying to push the cabinet into accepting it?
He claims that at present it is not worth going from the dole into work if the job pays £15,000 or less. He also suggests that it is an imperative that the state retirement age rises because of growing life expectancy. The coalition agreement published last week said the state retirement age should rise to 66, although it added that this would not happen before 2016 for men and 2020 for women.
He also hints at a curtailment of welfare for the middle class, saying the government is already paring back tax credits for those earning over £50,000. "My general view is that the benefit system is a deeply ineffective and costly way of subsidising people's lives. If you want to help people above a certain income the route to do that is through tax – it is simple, straightforward and easy. The benefit system is about helping people in difficulty."
Duncan Smith says, in advance of a speech tomorrow: "What we want to do is reform the welfare system – in the way Tony Blair talked about 13 years ago, but never achieved – a system that was created for the days after the second world war."
About Tony Blair, this is right. About the system after the second world war, it is wrong. If we had kept with the post-second world war system, our current problems would not have arisen in anything like the way they have. The real problems were created by incremental changes over the years by governments which had no real understanding of the dangers of welfare benefits. The Heath and Wilson governments were probably the most to blame, not Attlee.
The former Tory party leader concedes that his proposals, initially drawn up by his Centre for Social Justice (CSJ) thinktank, will cost more in the short term, but he argues that on the basis of figures given to him since going into government he is confident that "the short-term costs are minuscule, and the potential savings are enormous". However, he acknowledges: "I have yet to arrive at the point where everyone agrees that is the way forward."
This is extraordinary. He appears to be announcing a programme for which the government has not agreed to pay.
The CSJ report proposed the merger of eight benefits into just two, the withdrawal of benefits much more slowly for low earners, and the removal of rules that stop people claiming out-of-work benefits entirely if they do only a few hours' work a week.
The scheme was thought to cost as much as £3bn, but Duncan Smith has stressed that those figures are going down since he has had access to government statistics. He says £2m-3m a year is being wasted in tax credit overpayments.
Does the Guardian mean '£2bn-3bn'?
Change would come, the CSJ report said, at the expense of some middle-income families on £30,000 a year who would lose their child tax credit.
... Duncan Smith promises to press ahead in the autumn with a review of the work capability of all 2.5 million people claiming the [incapacity] benefit.
"People basically get parked on this benefit and forgotten about. If you have been on this benefit for more than two years, you are likely to die on it."
He argues: "The present benefits system is so complex and unfair that no one understands it. It leads at the bottom end to one of the most regressive tax and benefit withdrawal rates that it is possible to imagine.
"We ask people to go to work for the first time and then tell them to pay back 70%, 80% and 90% back to the state. These are levels none of the wealthiest bankers are asked to pay – they are moaning at 50%.
This is a very good point. The upper middle class elite which runs Britain has always readily understood, when it comes to themselves, that high tax rates distort behaviour and discourage incentive when they themselves are involved. It has lacked the imagination or logic to understant that the same applies to those who are much poorer and deciding whether to work or be on benefits. It is, perhaps, the core reason why the welfare benefits system has been so badly run for the past generation.
"If you are unemployed, and you come from a family that is unemployed, all you can see when you think about work is risk. It is a real risk because for all the efforts you make the rewards are very minimal and in some cases none at all.
"Socially, everyone says: 'You are a bloody moron – why are you doing this? You don't have to do this.' So taking responsibility is a real risk for you."
Duncan Smith's ultimate aim is a single withdrawal rate for all benefits. He also discloses that he is looking at widening the definition of child poverty to include other measures besides the previous government's definition of poverty, which he says was a measure of inequality. "You get this constant juddering adjustment with poverty figures going up when, for instance, upper incomes rise."
It is good to hear Duncan Smith reject the absurd definition of poverty which was, as described in The Welfare State We're In, a deliberate plot by the Left to keep up the level of people who could be described as in 'poverty'.
He will chair a cabinet committee on social justice, saying it is ironic that it has taken the Conservative party to set up such a committee.
Duncan Smith also promises to be tougher on claimants who refuse job opportunities. "The jobseeker's allowance has a sanction at present. It just has not been used. If you simply are not going to play ball, then the taxpayer has a right to say: 'You need to know there is a limit to the amount of support we are going to give you.' The sanction comes into play."
But he stresses: "I did not come into this department to cheesepare. I came into this department to reform. My purpose in life here is to improve the quality of life of the worst off in society. If somebody tells me that I have to do something different then I won't be here any longer."
There is everything to play for and quite a lot to lose for Duncan Smith, for the coalition and for the country.
Posted by James Bartholomew • Indexed in Reform • Welfare benefits
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