How Osborne and IDS reached agreement

I have found out a little more about the Universal Credit – and how the arguments over the summer were resolved. First, the backdrop. Money was always going to be a problem. This policy is about saving lives, not money. Right now, we pave the road to welfare dependency, creating a vacuum in the labour market that sucks in workers from overseas. Under Brown, the Treasury accepted this: cheap workers pay tax too, and as do companies who profit from them. Result: tax receipts up, but never fewer than 5 million on out-of-work benefits throught the boom years.

The IDS plan was not sprung on Osborne. As I blogged a while ago, it was Osborne who suggested bringing him back – to implement this very policy. So the idea of some fundamental tension between them was misplaned: IDS was, in effect, Osborne’s hire. Both wish to restore the link between economic growth and reduction of unemployment – so it was time to abolish the perverse incentives that pay so many millions not to work.