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Ten things you need to know about historic Tory plans for welfare reform

By Tim Montgomerie

IDS The full details are not yet available but newspapers are already going online - reporting Tory plans to reform welfare. The 9pm BBC News also reported what had been leaked to them.

  1. In the News of the World, David Cameron is claiming the biggest shake up in the war on poverty since Beveridge created the welfare system more than sixty years ago.
  2. Iain Duncan Smith, the Work and Pensions Secretary, and George Osborne, the Chancellor, have agreed, reports The Sunday Telegraph, to sweep away most benefit payments and replace them with a “universal credit”.
  3. The much simpler system will mean (a) that every person who takes work is better off (b) it will be cheaper to administer and (c) there will be less possibility for fraud.
  4. The reform will be introduced over two parliaments rather than in one big bang. This will ensure the significant up front costs are spread over time and ease the risk of large numbers of very vulnerable people not getting their benefits on time as they migrate from the old, complex system to the new simpler system.
  5. A long introduction of the reform - which will reverse sixty years of increasing complexity and perverse incentives - should also give time for a healthier employment market to re-emerge.
  6. There have been clashes between George Osborne and Iain Duncan Smith and the two men may never love each other but it would be an exaggeration to say that the Welfare Secretary has forced the Chancellor to embrace this reform under threat of resignation. Early in his time as Chancellor Mr Osborne said that central to his mission was to help the person who went out to work and end the fact he/ she currently subsidises the work shy. The Treasury have rightly feared that a bodged reform could leave hundreds of thousands of people worse off and cause social disruption.
  7. Oliver Letwin and Nick Clegg have performed crucial behind-the-scenes roles as Iain Martin blogged overnight. Oliver Letwin is key to the detail of all big policy decisions taken by this government and he has overseen the hard slog through the numbers that has closed the gap between the DWP and Treasury positions. Just as important has been Nick Clegg. He sided with the IDS view that the Coalition shouldn't cut without leaving a better welfare system in place. 
  8. There remain many gaps in our understanding of this still-to-be-formally-unveiled reform. Will, for example, there be sticks as well as carrots? What will happen to the small minority of claimants who really don't want work, even when it is incentivised?  Will certain poorly targeted benefits such as the Winter Fuel Payment be trimmed in order to help finance these reforms?
  9. This reform is a proud moment for the Conservative Party. Under Labour it seemed to be deliberate policy to increase the number of people dependent upon the state. Conservatives believe that human dignity is enhanced when men and women are free of the state, in charge of their own destinies. Like Margaret Thatcher's council house reforms this is a landmark reform that will move hundreds of thousands of people towards independence.
  10. It is a particularly proud moment for my former boss Iain Duncan Smith. The former Tory leader has been working on these issues for a decade but intensively for six years through his Centre for Social Justice. The CSJ, which still has a big agenda on prisons, housing, family and addiction, is the most influential think tank of its era. Enormous credit must go to its incredible staff and its two directors, first Philippa Stroud and now Gavin Poole.

Welfare Minister Chris Grayling will be writing for ConservativeHome in the morning.


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