Cameron avoids the benefits trap

1530 UPDATE : According to the Spectator editor Fraser Nelson the reason David Cameron said there would be no losers is because when people migrate to the universal benefit there will be a “no lose” guarantee, which means people will not lose money even though they do not qualify for the same amount. It will be interesting to see how that proposal pans out : it will be hard to explain why people are being paid amounts they would not get if they were starting a new claim from scratch. Of course there will also still be losers if child benefit and/or winter fuel payments are withdrawn from anyone, and if people currently regarded as too incapacitated to work are deemed able.

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The Prime Minister’s media skills ensured he didn’t fall into any benefits traps this morning in the traditional sunday morning conference opener interview. But he did drop some big hints about changes to universal benefits (such as child benefit). We have to look, he said, at whether universal benefits are affordable – although he strongly believes there should be some universal benefits, even if others are stopped. And he isn’t against the principle of means testing. The government is aware that there is considerable support for the notion of stopping “rich” people from being paid things like child benefit and winter fuel payments.

When Channel 4 mounted “How to Save a Hundred Billion Pounds” the studio audience was enthusiastic about attacking such things. But the trouble always comes when you ask where the definition of “rich” kicks in, and when you try to invent a means testing system that doesn’t cost more to administer than it saves. There are easier alternatives : you could for example make benefits taxable for higher rate earners, or you could do something more arbitrary such as stopping child benefit at 16, instead of the current system that allows it to be paid until children are 20 (as long as they are in qualifying educational courses). Or even both.

Mr Cameron also claimed there would not be ‘losers’. I suppose he means that in general people will not just find their benefits cut, but instead will be helped back into the world of work with transitional payments that mean “work pays”. But that of course depends on whether there are any jobs for them to go into, and obviously if nobody is going to lose anything it is going to be impossible to reduce the welfare bill by anything very significant. So that might have been a bit of a howler. Fortunately we have just two and half weeks before we start to find out the details in the Spending Review.  Anyway…off to Conservative Party Conference now. Have been agonising over whether to get to Euston station, train to New Street and taxi to the ICC (journey time about 2 hours 45 mins) or just drive from home (journey time 2 hours 15 mins)….in this weather I’m afraid my car is looking appealing.