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The Welfare Reform Bill has been passed. Congratulations to Iain Duncan Smith. But now the computers must work.

By Paul Goodman
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David Cameron won't write an article to celebrate the passing of every Government bill.  (For example, Number 10 will want to see the health bill smuggled through its final stage with as little fuss as possible, presuming it gets there.)  But he is shouting from Downing Street's rooftop this morning about the Welfare Reform Bill, which passed through the Lords yesterday.

The Daily Telegraph and the Financial Times (£) pick up on the Prime Minister's statement.  It is printed in full in the Huffington Post (which describes Cameron as the "Prime Minister of Great Britain").  Cameron honours Iain Duncan Smith, "who has worked tirelessly and with real moral purpose in tackling the blight of welfare dependency", and highlights the two aspects of the bill:

  • "The "Benefits Cap" which ensures no one can get more that £26,000 in benefits (that's the equivalent of a taxed income of £35,000).
  • "The "Universal Credit" which will ensure that work always pays more than being on benefit.

"Past governments have talked about reform, while watching the benefits bill sky rocket and generations languish on the dole and dependency. This government is delivering it. Our new law will mark the end of the culture that said a life on benefits was an acceptable alternative to work."

The Universal Credit will seek both to amalgamate and taper means-tested benefits, in order to simplify the system, cut costs and improve incentives to work.  It is the fruit of Duncan Smith's long labour at the Centre for Social Justice, and Cameron is right to laud his one-man mission to modernise the Conservative Party's One Nation tradition.

Duncan Smith's route back to office after losing the Tory leadership is the most unusual and admirable of our time.  Lesser figures have commanded biographies and I am surprised that one of the Work and Pensions Secretary has not been published (as far as I know).  Putting him into the post from the backbenches was not a cosy option and Cameron deserves credit for taking it.

This doesn't mean that the Universal Credit will be all plain sailing.  It is dependent on people reporting earnings in real time, and those reports going on to Government computers - indeed, on to a new computer system.  When a backbencher, I participated in a Select Committee enquiry into the Child Support Agency.  When a front bencher, I shadowed the tax credit system.

The second experience left me with a horror of such real-time reporting and both with one of Government computer systems.  I heard Duncan Smith patiently explain at a fringe meeting at last year's party conference that since the Universal Credit isn't a big bang reform - it won't be up and running fully until the next Parliament - it will all be different this time.

Maybe.  He was right to point out that since the credit will be introduced in stages there will be more time to test and tweak the system.  But the proof of the pudding will be in the etcetera.  Duncan Smith is moving from the concept stage to the delivery stage, and the latter is always more hazardous than the former.

P.S: Have a look at this Public Accounts Committee Report from last year into PAYE and tax credits to get a flavour of what can go wrong: "a huge challenge to resolve long-standing problems" will take until 2013 before all processing backlogs are cleared"..."the level of uncollected debt will continue to rise to an estimated £7.4 billion..."

And at Sue Cameron's report in today's Telegraph into how we're losing over £30 billion a year while you're at it: "Two departments are at the centre of the losses: HM Revenue and Customs and the Department for Work and Pensions."


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