Benefits

The government’s welfare reforms seem to be staggering on, despite the concern from the Lords that they’ll harm those who need help most: children and the disabled. But before the Bill goes back to the Commons, and everyone becomes more agitated, let me put the case for the Bill from the perspective of someone it might affect.  I have a vested interest in the impending changes to disability benefits, because both my brothers are autistic – one severely so. My family depends on the Disability Living Allowance; caring for my brothers is a full time occupation for both my parents, and without support they simply wouldn’t be able to cope.

In the Cameroon effort to redefine the politics of fairness, the benefit cap of £26,000 a year is key. When George Osborne announced it in his 2010 conference speech, he explained it – rightly – as a matter of fairness that ‘no family on out-of-work benefits will get more than the average family gets by going out to work’.   The Tories were also aware of just how potent a wedge issue it would be. If Labour opposed the cap, they would be in favour of some households in which no one is working receiving more from the state than the average salary people achieve by working. This is, to put it mildly, not a position that would go down well on the doorsteps.   But the cap has hit a snag: Simon Hughes.

Welfare wars are erupting again, with Iain Duncan Smith’s bill amended in the Lords and more showdowns ahead. Number 10 has been completely robust, threatening to use rarely-invoked powers to overrule the Lords. In my Telegraph column today, I say why it’s so important that David Cameron does not go wobbly – as his predecessors did.   Tony Blair understood the need for radical welfare reform, especially when his idol Bill Clinton introduced it in America. Listening to his speeches in the mid-90s is heartbreaking: he had precisely the right idea, but lacked the determination to implement it.

What's this? Seems like Liam Byrne has emerged from his policy review with an idea. He calls it, in an article for the Guardian today, ‘something for something’: ‘…“something for something” means reward for those who are desperately trying to do the right thing, saving for the future and trying to build a stable, secure home. Right now, these families are offered too little reward and incentive — in social housing and long-term savings — for the kind of behaviour that is the bedrock of a decent society.’ In truth, it's not a new or surprising idea at all.

The Prime Minister has backed the proposal for a new independent service to sign workers' long-term sicknotes, instead of GPs. The plan, which Pete wrote about at the weekend, is aimed at ensuring that people on sick pay or sickness-related benefits really are too ill to work. Cameron describes how it would work in today's Mail: 'The independent service would be free to all employers from four weeks of sickness absence, with the option for employers to pay for it earlier. It would provide an in-depth assessment of an individual's physical and mental function. So if they're unable to work, they’ll be helped – but if they are fit, they'll be identified and supported back into the workplace.

Should GPs determine whether people on long-term sick leave are too ill to work? Perhaps not, according to the draft copy of a government-commissioned review into sickness absence. It proposes setting up a new, separate and independent body to assess those on long-term sick leave, on the grounds that doctors have no incentive — nor, perhaps, the specific knowledge — to prod and coax them back towards employment. The new service, it is said, would advise sick leavers, and their employers, about just what they can and can't manage. If the government does introduce this, it will be another sign of their intent to untangle the problems with sickness benefits.

Jill Sherman, the Whitehall editor of The Times, reports tomorrow that the government will not raise benefits in line with September’s inflation figures as normally happens. However, there’ll be no freeze in benefits. Instead, they’ll rise in line with a six month inflation average which stands at 4.5 percent rather than September’s 5.2 percent figure. This move will save the government a little less than a billion pounds as pensions will be exempt from the move. I suspect that there’ll be objections to this shift from various quarters. But it is worth remembering that 4.5 percent is far larger than the pay rises most private sector workers will see while there’s a wage freeze in the public sector.

"7m caught in tax blunder," trumpets the cover of this morning's Daily Mail. "After a series of errors, six million will get an average £400 rebate, while a million face demand to pay £600." It's a good story — but it's also sadly, wearily familiar. Rewind the tape to last November, and the Telegraph was running with the headline, "New HMRC tax blunder means thousands face demands to repay". Last September, the Guardian had an article about the 10 million people who might be owed rebates. Last August … oh, you get the point. Nary a month has passed without some tale of how HMRC has screwed up once again.

If George Osborne is serious about growth, a relatively easy decision awaits him: to stimulate the economy by spending more on housebuilding. David Cameron knows there's a problem, and during Tory conference announced a "Tory Housing Revolution" to tackle the failing housing market, and plans to boost Right to Buy and release more land for house building that will deliver 200,000 new homes and create 400,000 jobs. All welcome, suggesting the government has recognised the role that housing can play in creating growth. But if the Treasury is looking to stimulate demand in the short term, there's still much more that could be done. Investment in housing can happen fast.

‘400,000 children will fall into relative poverty by 2015, says IFS’ we read on The Guardian’s front page today — yes, one of the most pernicious ideas of recent years is back. It’s the definition of ‘poverty’ as being figures on a spreadsheet, households deemed to fall beneath an arbitrary threshold. It’s almost entirely meaningless, and diverts energy and resources away from a real fight against poverty. I really do believe that, as ideas go, this one has damaged Britain more than almost any other over the last two decades — and it’s high time it was confronted.