Benefits

Peter Hain is wizened counsellor to young king Ed, or gives that impression at least. The two are close, which makes Hain’s recent comments on tax noteworthy. Hain describes universal benefit as ‘non-negotiable’, adding: "If you start driving a coach and horses through universality you're effectively saying to middle Britain, 'you've got no stake in the welfare state.' I think the Tories and Liberals are making a very big mistake on child benefit. There's an answer to people on higher incomes and that's they pay higher taxes. And that is the answer to squaring that circle.

Next week’s spending review will involve hard decisions. Hundreds of thousands of jobs will go. People in work will find employment conditions less generous with, for example, greater contributions required for their pensions. People out of work will find benefits provide less assistance and be under greater pressure to return to work. Goods in shops will be more expensive, with the basic VAT rate going up, some new schools will no longer be built, more hospitals will be under pressure to close and students will face higher tuition fees.   These changes are necessary but are just the start. To get the deficit under control in this Parliament, much more will be needed than this. A good place for further attention would be middle class welfare.

Yesterday was a day of weighty reports. At 700 pages, the Equality and Human Rights Commission’s ‘How Fair is Britain?’ won the thoroughness stakes. Aside from the usual findings that a disproportionate number of young black men are imprisoned and that the white working class is outperformed at school by Indian and Chinese migrants, it made some telling discoveries. The report found that a staggering 50 percent of Muslim men and nearly 75 percent of Muslim women are unemployed in certain regions. No clues as to where, though the reasons as to why should now be familiar: the figures correspond with the Centre for Policy Studies’ view that Britain has the highest rate of household worklessness in Europe.

Ed Howker's weekend post about life in Rochdale – and The Spectator's study of welfare ghettos – has made the news today. There's a powerful spread in The Sun, with full and due attribution to the source. But the Daily Mail also ran the figures, incorrectly attributing them to the DWP. (We expressed DWP dole figures as a share of ONS population estimates. The resulting ratio only we produced.) We at The Spectator have no doubt that the Daily Mail reporter did actually visit Rochdale. It's just that her material looks as if it could have been copied from Ed's Coffee House post. Here are some coincidental overlaps: Coffee House source: "Everyone wants 'the sickness' [incapacity benefit]. Then you've really made it. You don't have to turn up for work or sign on.

Today we are releasing a brand new picture of the nation’s welfare ghettos. Our research gives a disheartening insight into the extent of dependency in England and Wales. The top line: things are getting worse. This is much more detailed and useful information that the statistics often bandied about by politicians. It is well known, for example, that nearly 2 million people have been claiming out-of-work benefits for more than five years. But what does that look like?

Daniel Finkelstein and Philip Collins’ email exchanges are always enlightening. This week, they discussed child benefit. Both think it has altered the markings on the playing field of politics. Ed Miliband is yet to respond: how should he? ‘From: Daniel Finkelstein To: Philip Collins If you were Ed Miliband, where would you go now on child benefit? First option: total opposition to the Government’s plan. You get to hoover up discontent but you don’t look much like a governing force, do you? And it seems hypocritical. Plus, you said you were going to support the Government on many cuts. If not this, then what? Second: you go with it. You look big, you look grown up, but lots won’t like it.

One of the most intriguing questions about the decision to take child benefit away from households with a higher rate taxpayer in them is whether it marks the beginning of the end for universal benefits. The quotes today from Michael Fallon, the Tory vice-chairman, certainly suggest that it does. Fallon ridicules Ed Miliband with the line: “He wants to tax the poor to give benefits to the better off.” Now, if you accept that the poor are currently being taxed to provide child benefits for the rich (a slight exaggeration given that higher rate taxpayers contribute far more than they take out in services) then this argument applies with equal force to all other universal benefits.

We have a new facts and figures column in the magazine, Barometer, and I thought CoffeeHousers might like a preview of one of the data series we have dug up for tomorrow’s edition. George Osborne has this week pledged that, from 2013, no family on benefits should receive more than the average family does through work. But how many will it affect? Those living in expensive areas, for example, but also those with large families. CoffeeHousers may remember Karen Matthews, who lived on benefits with seven children. She was demonised, understandably, but I was left thinking: we paid her to do that. The more kids she has, the more money she received – so shouldn’t the system take some of the blame?

There was a quiet momentousness about Iain Duncan Smith's speech in Birmingham today – even before he started speaking. When IDS resigned the Tory leadership in 2003, he could barely have imagined that he would one day address his party as a leading member of the government. Even a few weeks ago, he couldn't have been sure that the coalition would implement the policy agenda that he developed during his time at the Centre for Social Justice. Yet here IDS was, receiving a standing ovation for his efforts. What a difference seven years make. And then to the speech itself. Much of it reverberated to the same reforming drumbeat that we've heard throughout this Tory conference.

In the last few weeks, there has been much speculation that child benefit would be stopped when a child reaches 16. Today’s announcement suggests that this is not going to happen, although the Tories are refusing to rule it out. If there are to be changes to child benefit — and given the financial situation there need to be — then removing it from households with a higher rate taxpayer is a better move than stopping it at 16. Child benefit ending at 16 would send out a message that at 16 a child should start earning its way in the world. This would, for obvious reasons, have a negative impact on social mobility as it would likely lead to fewer children staying on at school post 16.