Opportunities and threats presented by the Budget U-turn

By Virginia Moffatt
March 22, 2016

It's official. In the wake of Iain Duncan Smith's resignation and the likely rebellion from backbenchers the government has made a very welcome U-turn on the proposed cuts to Personal Independence Payments (PIP). I'm sure that sick and disabled people and their families will be breathing a sigh of relief today.

It is pleasing to see MPs on both sides of the house strongly asserting that the 2016 Budget is unfair. Last summer when the Welfare Bill was first mooted, Labour was reluctant to be seen to oppose it, and the majority abstained. So it was good to see Yvette Cooper and Rachel Reeves, politicians not usually keen to condemn welfare cuts, do so in no uncertain terms yesterday (21 March 2016). It has also been good in the last few days to hear backbench Conservative MPs condemn cuts, with one, Charlotte Leslie, threatening to resign over the issue.

It's also very pleasing to see the BBC finally acknowledge what many of us have been saying for years – the main assumption behind the welfare cuts (that there are too many people 'parked' on sickness benefits) is actually false, and that the savings projected could never be realised. 

All of this is good news for anyone concerned with the impact of welfare cuts over the last few years. We do appear to have reached a tipping point where people on all sides of the political spectrum are realising that continuing to cut working age benefits is harmful. And with it comes the opportunity to push the case further.

Because it’s not just about stopping this one cut to PIP. It’s about reversing the recent cut of £30 per week to new claimants for Employment Support Allowance (ESA), which will arguably be more damaging to sick and disabled people. It’s about reversing the harmful regime of constant assessments and poor decisions for PIP and Employment Support Allowance that continue to inflict misery. Only this morning, I read the story of Mark Roberts, seriously ill with a heart condition, whose PIP assessment gave him zero points, with one reason being that he was considered to be fit because he was able to cuddle his daughter. Whilst every day, my social media timelines continue to be filled with posts from people experiencing the anxiety and fear of attending ESA and PIP assessments.

With the economic arguments failing and concern for the suffering of disabled people rising, we must point out that the whole premise of welfare reform is based on a fallacious argument. The idea that people on benefits don't need them, or will abuse them unless incentivised to work, isn't just wrong because it causes harm: it is actually untrue – more generous welfare systems help people find work. Now is the time to be  making these points loudly and clearly.

But whilst we have a good opportunity to make the case against welfare cuts, some threats are emerging that will make the task more difficult. It is true that the proponents of such cuts have suffered a serious blow in the last week. However, they are down, not out. A wounded opponent is often more deadly than a strong one and may fight harder, and more harshly to maintain their long term goals. It looks like this might be happening now.

There is some sense in the last 24 hours that the Conservative Party is regrouping after the chaos caused by Mr Duncan Smith’s surprising resignation. Mr Cameron made a robust speech in the House of Commons yesterday, praising both his Chancellor and his former minister and defending the government’s welfare record. This appears to have united his party for the time being. Meanwhile, there were three commentators on Newsnight last night confidently asserting the government’s case and no-one with an alternative view to rebut them, suggesting a concerted effort was being made to present their arguments in the best possible light. And although the new Secretary of State for Work and Pensions told the House of Commons that PIP cuts were being abandoned, a later comment from the Treasury suggested perhaps this was only for the time being. Meanwhile, the minister has made it clear that welfare reform and universal credit will continue.

Furthermore, we have a forthcoming White Paper on welfare which is likely to include changes to the Work Capability Assessment. And though many of us would like to see this produce some real change, indications from the thinking of Reform (whose recommendation for the £30 per week ESA cut was picked up by the government) suggest we are  more likely to see a narrowing of the definition of disability then a reversal of policy.

A further threat is also emerging for pensioners. To date, pensions have been ring fenced from the cuts, as the political judgement has been that it is too politically risky to do otherwise. But with a £4.4 billion black hole in the budget, unless the Chancellor retracts his corporation tax breaks, he will have to find the money from somewhere. Now Iain Duncan Smith has aired the unthinkable, it may be tempting to make the cuts from the pensions budget. Experience tells us that if this happens, it will be the poorest pensioners who will suffer most.

Despite these potential threats, I do believe things are changing, and that as the damage caused by cuts continues to be exposed, the old consensus on welfare is breaking down. Those of us committed to a world where all 'fare well' need to redouble our efforts to reach across all shades of the political spectrum. It is up to us to demonstrate the ethical and economic necessity of rebuilding a welfare system based on compassion and justice.

Now, more than ever, is the time to do it.

* You can access all Ekklesia's commentary and analysis on the 2016 Budget here: http://www.ekklesia.co.uk/budget2016

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© Virginia Moffatt is Chief Operating Officer for Ekklesia.

Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.