A shopping list of cuts

Iain Duncan Smith has been represented this week as defending social security from the Chancellor, but he is also  reported in the Sunday Times  as arguing for four cuts in benefits.  They are:

  • refusing benefits to immigrants for two years.  The argument here seems to be that European countries should remain responsible for their own citizens for two years.  I’m not in a position to say how much this might save, if anything, but it’s important to recognise that Britain exports a staggering number of migrants to other countries, currently standing at 5.6 million citizens: this rule, applied generally, could end up costing money.
  • stopping Housing Benefits for young people under 25.  Duncan Smith is quoted as saying that this would give young people an incentive to work.  Politicians don’t seem to understand that Housing Benefit is available to people in work as well as those out of work.  A cut in HB would mean that a young person could not afford to set up accommodation independently in many locations.  If young people can only afford to live with their parents, it will restrict their ability to move for work.
  • limiting Child Benefit to two children.  Duncan Smith is quoted as saying this is a ‘brilliant idea’ that would save £4 billion.    If the £4bn figure is not cumulated over several years, it’s wrong.     It’s right to say that families with three or more children account for a fifth of Child Benefit – but they would still be receiving benefit for the first two children.
  • increasing low wages.  This, by contrast, is a good idea; it would save benefits, increase tax take and improve incentives.

What’s striking about the first three items in the shopping list is not so much the meanness, which we’ve come to expect; it’s how limited is the Minister’s grasp of the way that the benefit system works.


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