The National Union of Ministers' target is IDS's budget - not the health and aid ring-fences

By Paul Goodman
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Theresa May was reported earlier this week to have led a Cabinet charge by the "National Union of Ministers" - herself, Philip Hammond and Vince Cable - against the protection of the health, education and aid budgets.  I have certainly heard senior figures in the Home Office suggest that the NHS might like to take a leaf out of its own lead on police reform with a non ring-fenced budget.

But tearing up party and Government pledges on ring-fencing is not the aim of the new N.U.M - or not of all of its members, at any rate.  A Cabinet Minister told me earlier this week that its real aim is the welfare budget. Indeed, my source claimed that the Home Secretary wasn't even at the Cabinet meeting in question, since she was abroad.

And now Philip Hammond breaks cover this morning, giving an interview to the Daily Telegraph in which he warns that "any further reduction in the defence budget would fall on the level of activity that we were able to carry out". (He also gave a quick interview yesterday to the Sun.)  He says:

It is the welfare budget, and other issues dear to Liberal Democrat hearts, that are in this Defence Secretary’s sights. “There is a body of opinion within Cabinet that we have to look at the welfare budget again. The welfare budget is the bit of public spending that has risen the furthest and the fastest and if we are going to get control of public spending on a sustainable basis, we are going to have to do more to tackle the growth in the welfare budget.”

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A crackdown on immigration and on benefits abuse? The Tory leadership ought to be careful…

By Peter Hoskin
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Take a run through this morning’s papers, and you’ll clatter into this story in the Mail on Sunday. It details a ‘secret Chequers summit’ that will be attended, later this week, by the ‘Fab four’ of David Cameron, George Osborne, Ed Llewellyn and Lynton Crosby. Apparently, this summit will focus on party strategy for 2015 – in particular, Mr Crosby’s notion that ‘curbing immigration and abuse of state hand-outs is key to winning the Election’.

Mr Crosby, it should be admitted, is no slouch when it comes to winning elections – and there are reasons, both practical and political, to curb immigration and benefits abuse. I won’t rattle off all of the problems with the welfare and immigration systems here, except to say that many of them are encapsulated by the report in today’s Sun about Anjem Choudary and his exhortation to claim “Jihad Seeker’s Allowance”. And then there are all the column inches expended on migration from Romania and Bulgaria, which is set to be one of the fiercest political issues of the year.

Besides, opinion polls suggest that some Crosby-approved policies go down well with the public. A recent digest by the Migration Observatory revealed that three-quarters of people want to see immigration cut. Measures such as the benefits cap remain soaringly popular.

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IDS is working to tackle real poverty, not just Gordon Brown’s idea of it

By Peter Hoskin
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What’s in a definition? An awful lot, particularly when it comes to child poverty in this country. The last Labour government defined a poor child as one living in a household earning less than 60 per cent of the national median income; and they had a target to raise all such children out of poverty by 2020. But, in practice, this just meant flushing cash—via benefits and tax credits—towards those just below the boundary to take them just above it, while thousands were left languishing in more severe poverty. A narrow definition, and the target that followed on from it, led to narrow results.

Thankfully—urged on my think-tanks such as the Centre for Social Justice and Policy Exchange—this Government is taking a broader approach to poverty and the combatting of it. The report that they commissioned from Frank Field in 2010 is a case in point. Its central proposal was that policymakers should focus on improving opportunities for poorer children, particularly those between the ages of 0 and 5. But its wider point was that it takes more than money to alleviate poverty. Everything from schooling to breast-feeding might be taken into consideration.

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David Cameron goes softly, softly on child benefit

By Peter Hoskin
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If you feel like reading something about David Cameron that isn’t related to Europe, then how about the interview with him in the latest issue of the House Magazine? The problem with these interviews conducted by Paul Waugh and Sam Macrory is that they contain too many brilliant nuggets of information, dammit, to squeeze into one blog-post. I mean, for instance, the PM says that he likely to appoint more Tory peers before the summer; that he doesn’t think Nigel Farage should be involved in the next round of TV debates; and that the Conservatives’ message for 2015 will be “very sleeves rolled-up” — and that’s not even a tenth of it.

But the passages that tugged most forcefully at my optic nerves were those relating to tax and benefits. Once again, after recent speculation to the contrary, Mr Cameron denies that he will cut universal benefits for pensioners. Also, after recent speculation to the same, he says that he will legislate to recognise marriage in the tax system in this Parliament. And he also has this to say about the Government’s child benefit policy:

“Look. I'm not saying that taking away child benefit from people is easy. I don’t think people who earn £50000, £60000 are rich. You live in an expensive part of the country, you’ve got big costs to contend with, and you’re paying for the mortgage, you’re paying for the season ticket to get to work, you're meeting all the costs of bringing up children, you know, life is very expensive. I don’t say people on £50000, £60000 are rich but they are clearly better off than people on £20000 or £30000. So as I say, I don’t relish taking money from anyone and, you know, child benefit is a popular and successful benefit. It goes to the mum, you know, it’s a good slug of money, £20 for the first child, so I don’t relish taking it away from anyone and people I’m sure put it to good use, but, you know, to govern is to choose. We have to make difficult choices about the deficit and I think this was the right choice.”

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The Government claims it isn’t thinking about cutting pensioner perks — but it should be

By Peter Hoskin
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Perhaps the most intriguing political story in today’s papers is this one in the Sun. It says that ministers are “drawing up controversial plans” to axe benefits such as the Winter Fuel Allowance, free bus passes and free TV licences for all new pensioners. The idea, apparently, is that the poorest new pensioners will be handed more money via their pension credit. Richer pensioners will get nothing. The paper goes on to say that…

Actually, at this point, I should probably relay what a senior Government adviser told me when I mentioned the Sun’s story to him. “It’s totally untrue,” he said. “We are not working on any changes.” Ah.

But if that’s genuinely the case, then it would be a shame. I have already described why I think there’s a moral and fiscal case for cutting pensioner perks, but, increasingly there’s a political one, too. It comes in two parts:

• The growing consensus around cutting universal benefits. The Sun is just one of the newspapers pushing for benefits such as Winter Fuel Allowance to be withheld from the well-off, and they’re joined by the Lib Dems, a good number of Tory backbenchers and even some Tory ministers. Labour hasn’t signed up to the same cause yet, but there’s an opportunity there if they want to take it. It will be very difficult for one party to argue in favour of pensioner perks for, says, millionaires, at the next election, when everyone else is arguing against it.
• The growing inconsistency of the Tory leadership’s argument. Over the past few weeks, the Tory leadership — including David Cameron — has defended its cuts to Child Benefit by observing that it’s unfair for well-off families to receive it when austerity is biting down on the least well-off too. But, as I’ve pointed out before, this could equally apply to other universal benefits. Mr Cameron is risking inconsistency.

The policy described in the Sun isn’t perfect in every regard. For instance, although any fallout might be diluted by making it apply only to new pensioners, I’m not sure it quite satisfies the promises that David Cameron made ahead of the last election, as the report suggests. And then, as the paper says in its leader column, simple means-testing might be preferable to another expansion of the “credit” system.

But at least that policy’s a start, and would mark an important shift away from a system that still provides hand-outs for the have-lots. The Treasury should think on it.

The Government must get the rhetoric right on welfare reform

By Harry Phibbs
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One of the useful reminders of Lord Ashcroft's polling (read his latest reflection on ConHome today) has been to remind us of the importance of language as well as policy. Often ethnic minority voters misinterpret an attack on "multiculturalism" as an an attack on a multi racial society. Voters defecting to UKIP are as often exasperated by the tone as the substance of the three main parties - a desire for straight talking rather than prissy jargon.

Wading through Government Department websites to gather items for my recent list of Coalition achievements I faced plenty of references to - front loading, fast tracking, roll outs, package of measures, toolkits, keynote speeches and so on.

There has been evidence that most voters confuse cutting the deficit with cutting the debt - and therefore back the notion that spending is being cut "too far, too fast."

So the Government should be clear in the language they use about welfare reform. But they should also remember who is to blame for mess. The "scroungers" are as much victims of the system as the "strivers." If people are better off on benefits than taking a job are they wrong to opt for benefits? They have tight budgets, often families to feed. Should they get a job if it means their family has even less to live on? Would you? Is it a rational choice?

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Cameron begins new year with defence of child benefit changes and promise of quicker deportation of likes of Abu Qatada

By Tim Montgomerie
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Cameron appeared on BBC1 wearing a light blue shirt. It's the second time in 2013 he's abandoned his normal white shirt policy. Perhaps Mrs Cameron bought him a new wardrobe for Christmas?

We have two interviews with the PM to report this morning.

In one, in The Sunday Telegraph, Mr Cameron tells Matthew d'Ancona that he wants to go on to 2020 as Prime Minister. He recommits himself to some of the policies that annoy core Tory voters - including gay marriage, climate change targets and the expansion of the aid budget but he also insists that his tough approach to immigration and human rights laws are mainstream. On Abu Qatada he suggests a tabloid-pleasing shift of policy is on its way: “I am fed up with seeing suspected terrorists play the system with numerous appeals." He continues: "That’s why I’m keen to move to a policy where we deport first, and suspects can appeal later.”

During Mr Cameron's interview with Andrew Marr he was pressed constantly on the fact that under the Government's child benefit changes single high-earner couples could be penalised relative to double high-earner couples. This appears unfair to voters and the Centre for Social Justice has attacked it as "another blow to marriage". The PM had no real answer to the single earner problem but argued that “people see it as fundamentally fair that if there is someone in the household earning £60k, you don’t get child benefit.” Polling backs him - very strongly - on that narrow measure.

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IDS, today's Wilberforce. But the latter wasn't dependent on Government computers to help abolish slavery...

By Paul Goodman
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Iain Duncan Smith might never have become Work and Pensions Secretary.  An alternative history could easily read as follows. David Willetts was made Work and Pensions Secretary in 2010.  After Theresa May had been sent to the Home Office, Mr Willetts (who's in the news today over University admissions) was the most suitable member of David Cameron's former front-bench Opposition team to occupy the post she had shadowed.  Like May, Willetts had himself held the brief.  Unlike her, he was a social affairs expert, and thus formidably well qualified for it.

Above all, he was a loyal servant of the leadership, and quietly got on with the task with which he was entrusted - namely, to cut back the growth in social security spending without frightening the horses.  His model for action was Peter Lilley, the last Conservative Social Security Secretary, whose model for finding savings was gradual change rather than radical reform: in particular, Lilley had aimed to tighten eligibility for benefits.  In other words, Willetts steered clear of big schemes and bad rows with the Treasury.

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IDS says it's unfair that benefits are rising faster than wages. Clegg agrees.

By Tim Montgomerie
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2013 starts with some good news. After repeatedly attacking his Coalition partners (on Europe, on wanting to cut welfare too much, on property taxes and general Right-wingery in recent weeks) the Deputy Prime Minister has turned his fire on Labour this morning. Let's hope it's a New Year's resolution.

Writing for The Times (£) Mr Clegg accuses the Labour Party of failing to show any leadership on the economic problems facing Britain. "The country," he writes, "has undergone the biggest economic crisis in living memory, yet they offer no explanation of how they’d get us out of this mess, nor any admission of responsibility for their part in creating it."

The topical focus of the Lib Dem leader's article is Labour's decision to oppose the 1% squeeze in benefits that is due to be voted on by MPs next week:

"They say they’ll vote against limiting the planned rise in benefits to 1 per cent. That means they believe welfare claimants should see a bigger rise than the 1 per cent that public sector workers will get on their wages — which they support. So Labour must show how they’d pay for it. Would they cut hospital budgets? Schools? Defence?"

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The benefits cap is your Policy of 2012

By Peter Hoskin
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Time for the the fifth result from our end-of year readers’ survey: those for Policy of the Year. The overall winner, by some distance, was the benefits cap, which secured 57.6 per cent of the vote. The list of runners-up reads as follows:

• The higher and higher basic income tax allowance: 24.1 per cent.
• The replacement of GCSEs: 13.1 per cent.
• The introduction of Police and Crime Commissioners: 5.3 per cent.

At which point, some of you might be thinking: which benefit cap are we talking about? There have, after all, been two in town this year. There’s the one that the Chancellor announced in 2010, but that has rumbled along in Parliament ever since, and will be introduced in 2013, to cap the amount that any one household can receive in benefits at £26,000 a year. And there’s the one that he announced in the last Autumn Statement, to cap the uprating of several key benefits at 1 per cent a year.

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