So, Iain Duncan Smith has set out proposals to comprehensively reform of the welfare
system. The goal is to replace 51 benefits with a single and flexible allowance. It has been claimed that this reform would allow people with jobs to retain more of their benefits and ensure that
people who work will always be better off than people on benefits.
There are problems with Iain Duncan Smith’s proposals. Fiscal cost is one, and the Work and Pensions Secretary has already clashed with George Osborne over the price of these proposals.
Lowering taper rates to make work more rewarding could mean that more people receive more generous assistance – meaning costs go up. While fiscal cost could be reduced if the government is
willing to reduce the generosity of assistance to some families there are questions over whether the coalition will have the political will to ‘create losers’ in this way.
Patrick Nolan
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