Wednesday, 25 January 2012

Welfare Reform 2.0 - where will the Coalition go next?

As the Welfare Reform Bill goes through the Lords (with difficulty), it might seem premature to consider where the Coalition goes next on welfare.  The Bill contains so many deep reforms and has encountered so many problems that many people probably aren't considering what comes next.

But it is highly likely that stronger and deeper reform will come.  The Coalition know they're on to a vote winner with welfare; for many complex reasons, the public have turned on the welfare state and, in particular, the benefits system.  Welfare reform will be a key area - if not the key area - fought over during the run-up to 2015 and the Coalition will be desperate to prove they've been radical.

This means that after the Welfare Reform Bill is finally passed, the Coalition will start to think how they go about a second phase of welfare reform.  After all, the clue is the name; 'welfare reform' suggests a narrative of ongoing, relentless change and this is precisely what the government will be keen to show.

So what might we expect during this second phase of policy, or Welfare Reform 2.0?  This is just guesswork, but we can get some clues from the direction of travel in the US, who are about 15 years ahead (or behind, if you think - like I do - that these are neanderthal reforms) of us on welfare reform.  Here are some predictions (and definitely not recommendations) about what might happen next:
  • Intensified workfare.  Workfare (or work-for-your benefit schemes) are already increasing in use, as stories such as Cait Reilly's demonstrate.  But I think we'll see them rolled out even more over the next few years, to increasing jumpers of JSA claimants and at an earlier stage of the claim.  Why?  For the two reasons most welfare reforms are introduced: to cut expenditure (by discouraging people from claiming benefits) and to shame the unemployed (because the public like this kind of thing).
  • Time-limited benefits.  Time-limiting is already a feature of the welfare state, but this is mostly applied to the contributory components of benefits like ESA and JSA.  I think we might see time-limits introduced to means-tested benefits, such as - for example - a 12 month limit to any claim to JSA.
  • The abolition of contributions-based benefits.  It also wouldn't surprise me to see the abolition of the contributory element to JSA and ESA considered, thereby placing all claimants within a system of means-testing.  The contributory principle is already very weak in the UK relative to other countries and has been chipped away at for decades.  
  • Regionalising benefits.  This idea has been brought up by James Kirkup in the Telegraph and has apparently been referred to by Iain Duncan Smith.  This would involve giving people lower benefits if they live in 'low-cost' parts of the country (presumably old industrial areas in south Wales, Scotland, the north-east and the north-west).
  • Limited child benefits and tax credits. The Coalition are already proposing removing Child Benefit from higher earners, but there has been much debate over the past year about large families and whether it is right for the state to support such families.  It's an increasingly populist view that the state should not and it would undoubtedly please many if benefits were limited to a first or second child.
These are just some of the reforms which the Coalition might be considering: in reality they might not pursue any.  But those who want to defend the welfare state must not be complacent in the thought that the government will stop with the Welfare Reform Bill.  They will seek to go further, and they must be challenged.


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  2. I suspect these predictions will turn out to be accurate, if not in specifics, then at least in the general direction. The electorate has indeed turned on the welfare state and it seems will vote for its abolition or for its reduction to the barest minimum (as we had under National Assistance, post war).

    The electorate had better be careful what it wishes for. Its wishes may well be granted. Short, nasty and brutish are words that spring to mind to describe nightmare Britain once the welfare state has been abolished. Fortunately, the State's obligation to provide education is enshrined in the European human rights convention, otherwise this provision too would be withdrawn.