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By Tim Montgomerie
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Patrick Wintour has already predicted that Polly Toynbee won't like tonight's speech from Iain Duncan Smith. The Welfare Secretary launches a direct attack on the idea that the battle against poverty is all about welfare and benefits. This is an extract from his speech at the LSE:

"Increased income and increased wellbeing do not always follow the same track. Take a family headed by a drug addict or someone with a gambling addiction – increase the parent’s income and the chances are they will spend the money on furthering their habit, not on their children. According to the relative income poverty figures they might be above the line, but by any reasonable measure of long-term life chances they would be stuck firmly below.

Or take a family where no one has ever worked. Increase their benefit income – while taking no other proactive action – and you push the family further into dependency, only increasing the chance that their child will follow that same path as an adult. So while income is important we should be clear that the source of that income can have very different effects. Income through benefits maintains people on a low income, whereas income gained through work can transform lives. Of course for some people, such as those with severe disabilities, income from the welfare system will always play a vital role, and rightly so. But money can never be the whole story, as it ignores so many other indicators of well-being."


This is one of the Coalition's strongest arguments and to the vast majority of the British people it's uncontroversial. Common sense. Obvious. The routes out of poverty are work, education, family. The most impressive work of the Coalition is Michael Gove's school reforms. The most popular work is Iain Duncan Smith's welfare reforms. Protecting pensioners while introducing strong checks on whether those claiming out-of-work benefits are genuinely needy. Reforming housing benefit. Introducing the benefit cap. Making work pay. Reducing the gap between public and private sector remuneration.

In Tuesday's Autumn Statement the Coalition made a big decision. Largely under Lib Dem pressure (but with IDS' support) George Osborne reluctantly uprated benefits by 5.2% at a time when the pay of those in work is falling, flat or barely increasing. As we revealed this morning, 69% of Tory members think this was the WRONG thing to do. Only 23% supported it. The Sun and Mail stand with the 69%.

I'm glad I didn't have to make the decision but on balance I think the right call was made. A narrower gap between what you can receive on benefits and what you can receive in work is undesirable but rising food and energy prices are hurting poorer families most. Although a YouGov poll found that 40% of people think it was the right thing to do and 44% think it was wrong I fear the media would have a field day with hard luck stories. The uprating which protected the poor has also got to be seen in the context of tough new 'looking-for-work' requirements on those who are on benefits. There is also the decision to introduce independent verification of incapacity. IDS and Chris Grayling are ending the easy-to-claim benefits of the Labour era.

Looking forward, the Government would be wise to introduce a more sophisticated mechanism for deciding benefits uprating. One month's inflation numbers should not be the trigger. It can easily produce unnecessarily generous or harsh uprating. An average of six months' price data would be better.

24 comments for: Was Osborne right to increase benefits by 5.2%?

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