Welfare: I double-dare you

Oops. Work and Pensions Secretary Iain Duncan Smith really set himself up on Radio 4’s Today programme yesterday.

John Humphrys (interviewer): Could you survive on £53 a week?

IDC: Well….if I had to I would.

I repeat: oops. Judging by the public reaction to IDC’s comment, one might have thought he yelled “bring it on!” while pumping the air in defiance. A petition on change.org for IDC to prove he could live on that amount had received 184,554 digital signatures when I started writing this and 208,988 by the time I finished (about an hour). All this is particularly poignant when your party says stuff like “we’re all in this together

Some clarification:

  • The guy who challenged IDC, David Bennett, 51, is a divorced father of two who claims he only gets £53 from the state to live on each week. He is a gambler, but lets not tarnish his reputation unduly – he was made redundant three years ago, according to his interview, and is now a self-employed market trader. His £53 does not include the money he gets in housing benefit, and he has only worked 21 hours this year.
  • Iain Duncan Smith earns £134,565 as a cabinet minister – roughly £1,500 per week after tax. He lives in a £2m home in Buckinghamshire (which actually belongs to his father-in-law) and drives a Morgan convertible, if you can believe The Mirror.

So what is actually going to happen to Mr Bennett’s benefits (and yours, potentially)? There are three main changes, besides a cap on the amount benefits can reach – £26,000 (national average income).

  1. UNIVERSAL CREDIT will be the most common benefit dished out. It will replace Jobseeker’s Allowance, Employment Support Allowance, Income Support, Housing Benefit, Working Tax Credit and Child Tax Credit.
  2. PERSONAL INDEPENDENCE PAYMENTS (when they think about the acronym more than the title, you know we have a problem) will replace Disability Living Allowance.
  3. COUNCIL TAX BENEFIT will be worked out on a national basis rather than local. It won’t be cut for old people (I’m glad to see that the transfer of wealth from young to old is still healthy as ever).

The media has gone mental since the changes were all proposed. The Daily Mail (which hates immigrants and lazy people) says: “Thousands taking jobs because of Iain Duncan Smith’s benefits cap.” The Mirror (king of sarcastic hyperbole) begs to differ, yelling: “Stuff the workers: Osborne mugs 1.7m breadwinners with Tory welfare reforms.

Apparently 400,000 families will be worse off under the universal credit, according to some experts. Other experts say that 3m families will be better off. The Chancellor George Osborne says “9 out of 10 working households will be better off.

Huh!? Come again? Someone can’t add.

The short answer is: nobody really knows whether you’ll be better off or not because each case is different and generalising across the population is just not helpful. If you want some idea about your personal situation (or someone you know), you could try the universal credit benefits calculator.

So is this all going to save the government some dosh?

The UK spends 23 per cent of the government budget on benefits – that’s £159bn. About half of that goes on the state pension – people living longer than expected costs an awful lot of money. The Guardian datablog does some great coverage of this. Here’s the infographic:

Public spending on Benefits in the UK

How much will the cuts save?

ANSWER: Around £18bn a year by the time we get to 2015 – about 11 per cent of the welfare budget.

Bottom line: Don thy future-specs or brush the dust off that crystal ball, because no-one really knows who is going to win and who isn’t. 

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