Peter Hoskin

Iain Duncan Smith’s overlooked “affordable policy solutions”

Iain Duncan Smith's overlooked "affordable policy solutions"
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After his superb work with the Centre for Social Justice, it's encouraging that Iain Duncan Smith is being tasked by the Tory leadership to come up with "affordable policy solutions" to spring the traps which keep people stuck in worklessness.  It's thought that David Cameron rated the proposals of the CSJ's recent report on this issue – as, too, did Coffee House – but was put off by the £3 billion upfront cost of the reforms.

But there's an important aspect of that report which hardly got any attention at the time: it already includes more affordable options.  The £3 billion was for a universal benefits system which would see claimants losing*, at worst, only 55p of every extra £1 they earn from taking extra employment.  That's a stark improvement on the 70p, 80p, 90p rates that some claimants face now.  But the report's appendix outlines how the Exchequer can save money by slightly raising that 55p rate, or by changing some allowances.

There's even a "break even scenario," which would operate at "effectively no additional static cost to the Exchequer".  It wouldn't be as effective as the report's primary proposal, but it's still better than what we've got now.  If anyone's interested, then I suggest you read pages 352-357 here.

* via withdrawn benefits.