Fraser Nelson

Society 3, The State 0

Society 3, The State 0
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Cameron and Osborne may just be about to pull off something incredible. This time last year, The Spectator ran a cover story about a new proposal which we could revolutionise welfare: the Universal Credit. It was an IDS idea: he’d sweep away all 50-odd benefits, and replace it with a system that ran on a simple principle – if someone did extra work, they’d get to keep most of the money they earned. It meant a bureaucratic overhaul, of a system that controls the lives of 5.9 million people. The resistance from HM Treasury, the architect of the tax credit system, was as fierce as it was predictable. But Clegg came to the aid of IDS, and Osborne has approved what could be – if properly followed-through – the single greatest single blow against poverty in a generation.

Tomorrow, it will be confirmed that the Universal Credit is to be adopted in Britain, replacing the matrix of benefits that so entraps the poor now. Osborne looked at the IDS proposals thoroughly in the summer, and they reached a deal a few weeks ago. The media haven’t quite picked up the fact that the change will take most of this decade. Universal credit needs things like monthly PAYE data, something which is at least two years away. That's why IDS will not see this as a triumph (which it is, for him, in many ways), but the end of the beginning. Many genuinely bold Labour reformers (Hutton, Purnell) have tried and failed. What we see now is serious intent. Ed Miliband indictaed in his speech last week that he may even support it. Bipartisan approval would be a goal well worth pursuing.

I heard Yvette Cooper on ITV yesterday (she interrupted Hot Fuzz) saying “We haven’t seen the detail yet.” I would respectfully direct her to a 369-page report on the Universal Credit by the Centre for Social Justice, whose brainchild this is. One thing IDS is not short of is detail. As I pointed out in The News of the World a few weeks ago, some workers keep just 4.5p of every extra pound they earn. It’s madness. And its about to end.

I argued in August that “Cameron must take this chance to end the giant evil of welfare dependency.” It looks like he is taking this chance – and backed all the way by Nick Clegg. It has been made possible by Osborne, who managed to stand up to the Treasury's instinct of crushing any Whitehall idea that it didn't originate. Indeed, Osborne's role should not be understated. British welfare is such an outrage – incubating the very poverty it was designed to eradicate – that it does radicalise ministers who propose reform. Even Peter Hain wanted change. But the block has always been the Treasury, protective of its own power and deeply resistant to ideas that it didn't think up itself. In Osborne, we have a Chancellor dedicated to reform. The Chancellor, at last, says that he will no longer tolerate a system that makes poverty permanent.

As Tim Montgomerie argues, Oliver Letwin also played a major role bridge-building here. Tim calls it a Conservative victory, but I'd say that Clegg's support was crucial – so it's more of a coalition victory. And to think I believed the old Tory warnings that coalition would mean "party political wrangling would dominate". My remaining reservations I had about this coalition are melting away. All we need now is a sane defence settlement, and the remaining legal obstacles to Gove's free schools swept away, and we will have a proper counter-revolution on our hands. Society 3, State 0. And that’s a pretty good score for a team that is the equivalent of seven minutes into the match.