Hitlist of welfare cuts facing Britain’s next chancellor

Bangla Mirror Desk:

A list of “very, highly or extremely controversial” potential cuts to benefitshave been drawn up by civil servants in response to warnings that the nextgovernment would struggle to keep welfare spending below a legal cap ofabout £120bn a year.The cuts proposed by officials at the Department for Work and Pensionsinclude abolishing statutory maternity pay and barring under-25s fromclaiming incapacity benefit or housing benefit. Money could also be raised,civil servants suggested, by increasing the bedroom tax in certain cases.In one of the DWP documents seen by the Guardian, two Whitehall officialssay colleagues who were consulted in 2014 about the potential cutsdescribed them as “very/highly/extremely controversial”, whichhighlighted that when it came to welfare spending that there was “not muchlow-hanging fruit left”.The Conservatives have proposed cutting £12bn in welfare after theelection, without specifying how. The DWP proposals were canvassed theyear before, amid warnings that the failure of the coalition to get to gripswith accelerating spending on key benefits would leave the nextadministration “vulnerable to a breach” of the welfare spending cap.Other options laid out in the DWP documents include:

• Getting employers to contribute more to the cost of statutory maternitypay – or as an alternative abolishing it entirely.

• Freezing benefit payments at current levels across the board.

• Limiting welfare payments by family size.

• Forcing single parents on income support to seek work when theiryoungest child reaches the age of three (currently five).

• Making it harder for sick people to claim state aid when they are out ofwork by introducing “stricter” fit-for-work tests and/or tighter limits on

eligibility.

• Increasing the bedroom tax on certain categories of renters.

• Barring under-25s from claiming incapacity benefit or housing benefit.

DWP sources said the same options would be presented to theConservatives, who have pledged to reduce welfare spending by £12bn by2017-18, regardless of whether the government was at risk of breaching thewelfare spending limit or not.The proposals were drafted by officials last spring after the chancellor,George Osborne, challenged Labour to back a parliamentary bill capping

the welfare spend every year for four years.The legislation, which places an absolute cash limit on almost all welfare

spend, except the state pension and unemployment benefit, was supportedin the Commons by 520 votes to 22. The limit starts at at £119.5bn in 2015-

16, rising to £126.7bn by 2018-19.Labour’s front bench supported the legislation to defend itself fromConservative accusations that it was the “party of welfare”. The bill wasopposed by the SNP and a small group of Labour rebels.

If the cap is forecast to be breached, the government must proposemeasures to reduce welfare spending, seek Commons approval for the capto be increased, and explain why the breach is justified.Should this occur, there would no longer be scope for easy cuts, the DWPdocuments warn. Some of the options for welfare have been previouslyrejected by ministers, but officials argue they would have to be put back on

the table. The documents make clear that some of the welfare money-saving optionswill be necessary because demand for benefits over the next five years ishighly likely to exceed the cap limit by billions of pounds.A Conservative spokesperson played down theleak: “These were optionsproduced by civil servants over a year ago and were never seen by the primeminister or the chancellor. If we wanted to implement policies like these,we would have, but we didn’t.”

However, the documents show that at least one Conservative minister,

Mark Harper, was briefed about risk areas as regards the welfare cap soonafter his appointment last year.A document dated in late July said the disability minister discussedpossible changes to incapacity benefits and gave a clear steer to civilservants on the importance of freezing or uprating benefit rates belowinflation as a way of controlling costs.The Conservatives have repeatedly refused to set out how the £12bn ofsavings would be achieved. Iain Duncan Smith, the work and pensionssecretary, told the Daily Politics show on Tuesday that he could not releasedetails before the election because “we would have to have done the workon it and we’d have had to reach agreement on exactly what those are”.The minister added that as soon as the Conservatives had properlymodelled their proposals, they would spell out their plans in public: “Thekey area is that everybody is very clear that if you get a Conservativegovernment, we have already said we will save £12bn from working age

benefits. The work that we will do on this will be announced in thespending review,” he said. “Without that saving, being able to put the extramoney into things like the health service becomes very difficult. I don’t saythis is easy. But we are making that commitment.”The Labour work and pensions spokeswoman, Rachel Reeves, said: “Theonly way the Tories can fund their extreme plan to cut £12bn from social

security is by cutting child benefit and tax credits, abolishing maternity payand increasing the cruel bedroom tax.”

“Labour has a better plan to control the costs of social security. We’ll save£1bn by cutting housing benefit fraud and overpayments and controlhousing benefit spending by tackling rip-off rents, getting 200,000 homes ayear built, increasing the minimum wage to £8 an hour and giving taxrebates to firms who pay a living wage.”Recent Tory claims that they have a strong track record on cutting socialsecurity over the past five years are undermined by the documents, whichpoint out that coalition changes failed to meet promises to limit spendingon three of the costliest cap items: incapacity benefit, disability benefit and

housing benefit.The leaked proposals say the DWP is at high risk of continuing tooverspend on sickness and disability benefits in future years because thehigh-profile programme of welfare reform introduced by Duncan Smith in2010 “has not realised its goals” of saving money.