Osborne turns his attention to welfare

George Osborne suggested as much in his Today interview last week, but now we know for sure: the government will look to cut the welfare bill even further in October’s spending review, and incapacity benefit will come in for special attention from the axemen. It was, you sense, ever going to be thus. With unprotected departments facing cuts of over 25 percent unless more action is taken elsewhere, the £12bn IB budget was always going to be a tempting target for extra cuts. Particularly as so much of it goes to claimants who could be in work.

The questions now are how? and how fast?  The first answer seems clear enough: the government is keen to move a significant number of the country’s 2.6 million IB claimants off the benefit and into work, rather than cutting the benefit payout itself.  But there’s more confusion around the second.  Before the election, there were indications that the Tories would take 1.5 million people off IB in one year.  But now that may have been limited to 1 million people by 2014.  And where Chris Grayling’s reforms fit in, I’m not sure.  Expect more details this week.

In the meantime, the Labour leadership hopefuls are going to love this, if only because it gives them something other than VAT to campaign on against the nasty Tories.  But the truth is that the government has a considerable amount of cover when it comes to welfare.  As the Lib Dem MP Lynne Featherstone says on her blog, “everyone wants those who can work but who claim incapacity benefit falsely not to receive that support.” And Labour’s James Purnell used to talk of getting 1 million claimants off IB during his time at work and pensions.  Now let’s see whether the coalition can put that kind of thinking into practice.