Benefits

Amid the many failures of public policy during the Covid crisis, one success has gone largely unnoticed. The Universal Credit system coped with a huge uplift in applications without breaking down. In February last year 2.6 million households were signed up; six months later that had swelled to 4.6 million. Some 554,000 people made new claims in the first week of lockdown, ten times the normal levels. For a benefit which not so long ago was being damned for the poor execution of its rollout, it is remarkable that the system coped. Its unexpected success offers plenty of lessons for the future of the welfare state. The digitisation of the system, controversial at the time, enabled the service to be delivered to those in urgent need of help.

If you haven’t heard of Thérèse Coffey, then this will be — to her — a sign that she has been doing something right.  As Work and Pensions Secretary she has had to sign people on to benefits faster than anyone who has held the position before. If this had gone wrong during lockdown, she would be as infamous as Gavin Williamson. But the system, Universal Credit, managed 1.5 million claims in four weeks. Many things have gone wrong for the government over the past few months, but the welfare system has (so far) held up. Coffey has kept her anonymity.  ‘My main task has been making sure that DWP runs effectively. Being in the news would probably be a sign that it wasn’t,’ she says over lunch in The Spectator’s boardroom.

Amber Rudd left the Home Office over the Windrush scandal and has joined the Work and Pensions department just as its flagship benefits reform is under fire from all angles. The new Secretary of State spent most of her first session at the dispatch box this afternoon answering questions on Universal Credit - and she had arrived determined to strike a rather different tone from her predecessor. Esther McVey, who resigned from the role last week, had garnered a reputation for being rather hardline when dealing with criticisms of the benefit roll-out, while also managing to give far more away about some of its problems than Number 10 would have liked.

It's rare that a government pauses the implementation of a flagship policy. There's so much ego involved in these matters that to do so is to admit a failing, rather than merely being sensible. But the government has had little choice but to further delay the roll-out of Universal Credit while it sorts out some of the problems with it. The plan had originally been that a further roll-out to four million people would start in January, with more claimants moving in July. But today the Work and Pensions department confirmed that the July deadline has moved to November as a result of fears across Parliament that those who are already receiving the benefit are severely struggling.

I was born in north London, at the Whittington Hospital in Archway, and at the age of 62, after many years of trouble and wandering, I have come to rest in the streets where I was born. And in my usual cunning way I have become one of the roughly 300 or 400 people living in inner London you perhaps think of as ‘homeless’, making the rounds from drop-in centres to churches, from morning till night, in the hunt for free food. For this is what my life has come down to as I stand on the threshold of old age, the endless movement from one soup kitchen to the next, which at least gets me to the end of the day by a pleasant route. Or it might be not so pleasant, because of course a lot of conflict erupts at places where a large number of people benefit from organised kindness.

If you're not familiar with the term, then 'salary sacrifice' is a bit of a puzzler. Just what is your boss expecting you to sacrifice? A chunk of your wages? A goat in the car park at lunchtime? Put simply, salary sacrifice arrangements enable employees to give up salary in return for benefits-in-kind that are often subject to more favourable tax treatment than their wage packet. They're a nice little earner for staff and employers as they essentially permit a bypassing of National Insurance (NI) payments. So, employers allow their workers to take a so-called 'pay cut' and that money is funnelled into a pension or another benefit such as childcare or a mobile phone. The end result: both parties pay less NI, as well as paying tax on a smaller income.

MPs are voting on the Welfare Reform and Work Bill this afternoon, with the big story being about Labour turmoil over the second reading. Harriet Harman’s amendment looks rather forlorn on the order paper this morning, with just five frontbenchers signed up to support it. Helen Goodman, who was explaining why she was pressing ahead with her own rebel amendment on this morning’s Today programme, has 57 MPs — not all of them Labour — supporting her motion.

In his Budget, the Chancellor claimed that ‘those currently on the minimum wage will see their pay rise by over a third this Parliament, a cash increase for a full time worker of over £5,000.’ But this wasn’t quite the whole story. What he didn’t say is that a full-time worker could see just 7pc of this pay rise in their pockets due to the withdrawal of benefits and tax credits. Osborne’s Treasury will accrue the remaining 93pc in reduced welfare payments and increased tax revenue. The simple truth is that the Living Wage helps government more than it does workers. In Britain, tax credits and other benefits conspire to make low-paid work a fiendishly complex network of allowances and taper rates.

Each year Anjem Choudary earns more in benefits than a soldier does starting off in our armed forces. This is a fact I never tire of pointing out – especially to Anjem’s face whenever we have the misfortune to meet. The follow-on point, which I think also worth continuing to make, is that there is something suicidal about a society that rewards its enemies better than it does its defenders. Choudary and his family rake in around £25,000 each year  and - as you can see from this newly-released video above  – we taxpayers now get even more for our money than we had previously thought.