The Labour government’s first budget fires a salvo of measures in the general direction of social security, some large, some small. They include:
Pensions. The headline figure claims that the government is increasing the state pension by 4.1%, reflecting the increase in wages. This is being presented as an amount consistent with the triple lock, but that is not true. The level of the state pension will increase by the triple lock minus the value of the Winter Fuel Payment, typically equivalent to some £4 to £6 per week.
The Budget alse presents a cost for increased takeup of Pension Credit. This is listed at a desultory £15m over four financial years. There may be more of an increase in takeup than the government is anticipating, because of another factor: the intention to bring Housing Benefit for pensioners into the PC system. Takeup rates – the propotion of eligible pensioners claiming – will be low, but the absolute numbers of claimants will increase.
Benefits for disability and incapacity. Migrating claims for Employment and Support Allowance to Universal Credit is claimed to be very costly over the next 3-4 years but then to save money in years 5 and 6, apparently through the magical process of persuading sick people to take up work. The government seems to believe they’re in the court of miracles, where the lame will walk and the blind will see.
The threshold that carers might earn before losing their benefit, is being updated. A small measure, that will not resolve the problem but will put off some problems for a little time.
Fraud and error. The government aims to save £4.3bn with a crackdown on fraud (pp 40-41 of the budget red book). This has been reported as somehow linked with benefits for disability and ill health, a misleading juxtaposition on page 2 of the red book; in fact the main focus of the budget saving is Universal Credit, a consistently ill-thought out set of reforms which have greatly increased the likelihood of error and serious fraud. There will be an extra 3180 civil servants charged with curbing fraud and administering verification procedures. The biggest saving, however, is supposed to come from targeted case reviews within the UC system, facilitated by new powers to investigate people’s bank accounts and assets.
Other lesser changes include extending the Help to Save scheeme, extending the surplus earnings threshold in UC, a modest but welcome ‘Fair Repayment Rate’ for people in debt to the DWP, the extension of Household Support Fund and Discretionary Housing Payments, and pilots of new schemes for kinship and fostering.