One of the most important takeaways from last week’s high court ruling declaring the government consultation on reform of incapacity benefits to be unlawful was the clarity with which it highlighted the failure of Conservative ministers to be honest about why they wanted the changes, and who will lose out as a result.
The ruling effectively pointed out that the previous administration’s presentation of cuts to incapacity benefit as a positive development for low-income claimants was misleading because it unaccountably neglected to mention 420,000 of them would also be £416 a month out of pocket, and many of them thrust into abject poverty.
While the consultation had emphasised the transformative job opportunities that would potentially become available to sick and disabled claimants once freed from the grip of benefit dependency, it failed to explain that the “primary rationale” of the whole exercise was Treasury spending cuts.
Labour is to rerun that consultation in the form of a green paper expected in the next few weeks, and there is likely to be intense scrutiny of the clarity – and honesty – with which it presents tough policy choices made even tougher by what some would say are the unnecessarily rigid economic rules it has imposed on public spending.
Few object to the need to reform the notoriously poorly designed incapacity benefit system, or to help disabled and chronically ill people get a job if they are able. Things get trickier because Labour has embraced Tory plans to cut £3bn from the incapacity benefits bill by 2028, while also promising to reduce child poverty.
Handling these trade-offs – it says its approach will be both “fair” and “fiscally sustainable” – is a massive challenge. Is reform a binary choice between a better system (which takes time and money) or a quick £3bn savings raid secured by bluntly reducing benefits eligibility? Can you “get tough” on benefit spending while also retaining your credibility as social justice warriors?
Unusually in recent times, there’s a fair amount of goodwill towards the Department for Work and Pensions (DWP) among campaigners, who feel listened to in Whitehall after years of being frozen out, as well as respect for the DWP ministerial team, credited with both understanding the complexity of the benefit system and genuinely caring about tackling poverty and worklessness.
Brutal benefit cuts could dissolve much of that goodwill. The issue has the potential to trigger a backbench MP and party activist revolt, reigniting the outrage over Labour’s refusal 18 months ago to promise to scrap the two-child limit. Handled badly, it could undermine the government’s child poverty strategy, due in early summer.
Labour will be also under intense pressure from the rightwing media, already fighting a culture war on “job-shy shirkers”, “fake” mental illness and benefit “influencers”, while issuing dire warnings about an out-of-control health-related benefits bill (it’s rising fast, although as a share of GDP it has changed little since 2007).
“We need to be patient, and we need to accept Labour’s tough economic inheritance. We know you can’t just wave a magic wand,” one poverty charity head told the Guardian. “But they need to come up with some properly thought-out proposals.”
They added: “Campaigners won’t like everything but if it’s done responsibly, not just ‘slash and burn’, it will be a lot easier. Ministers not doing things you’d hoped for is tolerable. Just making cuts isn’t – and that’s when people will lose faith.”
