Tories ‘may not detail benefit cut’

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Published: Sunday 29th March 2015 by The News Editor

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Conservatives may not reveal details of how they plan to cut £12 billion from benefits before voters go to the polls on May 7, Work and Pensions Secretary Iain Duncan Smith has said.

Mr Duncan Smith said that the planned changes will have a “life-changing, dramatic” impact on claimants, arguing that they will improve lives by allowing people to get off welfare and back to work.

His comments came as the independent Institute for Fiscal Studies (IFS) warned that the planned cuts will be “really tough” to achieve, involving “pretty dramatic” reductions in areas such as housing and disability benefits over the next three years.

IFS director Paul Johnson said that cuts under Labour would be “quite a lot less” but could involve “big cuts” in the first couple of years after the election and would leave the country with a deficit of up to £30 billion – while Tories would eliminate it altogether.

Mr Duncan Smith dismissed a leaked document which appeared to suggest his Department for Work and Pensions was considering changes to industrial injuries compensation, child benefit, the carer’s allowance and disability benefits. The paper, obtained by the BBC, was merely one of a number drawn up for consideration by civil servants and did not represent Government or Conservative Party policy, he said.

The Work and Pensions Secretary told BBC1’s Andrew Marr Show that the Conservatives had already announced around a quarter of the £12 billion cuts they have pencilled in for working-age welfare benefits, by extending a freeze for a further two years and reducing from £26,000 to £23,000 the cap on household claims.

But he said the party may not think it “relevant” to explain where the rest of the cuts will fall before the election.

He added: “When we are right and we are ready, we will talk about what we plan to do …

“(Voters) know for certain that we are going to save that £12 billion. We may, we may not, decide that it’s relevant to put something out there about some of those changes.

“As and when the time is right, we will make it very clear what our position is. A quarter of what we need to save is already out there. That’s a good indication that we know where we are going to go to be able to make those savings.”

Insisting that he was not intending to carry out “cheese-paring cuts”, Mr Duncan Smith added: “I cannot and will not on this programme try to write the next spending review. What I will say to you is that there are some things that we will do, and want to do, that are of life-changing, dramatic effects. That is about getting people back to work and improving their life chances.”

Mr Duncan Smith said the planned cuts amounted to less than 10% of the welfare budget and pointed out that the Government had already saved £21 billion over the past five years

He added: “I believe that in all of that we have actually improved people’s lives. People have gone back to work, more disabled people are in work than ever before, more women are in work than ever before.”

Mr Johnson said it was not yet clear how Conservatives would deliver the planned welfare savings, while preserving the “triple lock” protection for pensions.

“They’ve said £12 billion of cuts and they’ve said they want to achieve that within the first three years of the Parliament and they’ve said they want to protect pensions,” the IFS director told the Marr Show.

“That is really tough to achieve from the rest of the budget. That’s a more than 10% cut for the rest of the social security budget.

“That would require pretty dramatic changes to things like housing benefit and disability benefits. You can’t do this in the way they’ve done most of their cuts over this Parliament, which is just to reduce the rate at which things get increased.”

Mr Johnson said Tory plans would involve a “sharp cut over the first two or three years, and then the potential for a bit of increased spending towards the end”, but it was “a little bit less clear” how welfare cuts would be introduced under Labour.

“In terms of its totals, it’s clear that Labour want to do quite a lot less, because they don’t want to get rid of the deficit altogether, they are happy to borrow to invest,” he said. “They would be happy with a deficit of £25-30 billion, whereas the Conservatives don’t want a deficit at all

“If you take the period to the end of the Parliament, that means that Labour doesn’t necessarily have to cut at all. But what we don’t know about is the speed at which they want to get to their fiscal aim, which is current budget balance.

“If they want to do that by 2017/18 – which is sort of implied by the fiscal mandate they’ve signed up to – then they would have to do big cuts in the first couple of years. But they have been careful to say it’s ‘as quick as we can’ and not when.

“We may be unclear about what the Conservatives would do in terms of their cuts. We’re very unclear about when Labour would do it.”

Published: Sunday 29th March 2015 by The News Editor

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