The department has moved quickly since the formation of the coalition, finds Joshua Chambers, publishing far-reaching proposals to get people into work and reform benefits.
An incoming work and pensions secretary seldom declares themself absolutely content with the status quo; DWP’s job is one of constant reform. This has certainly been the case with the coalition government – secretary of state Iain Duncan Smith has ambitious plans to tackle welfare dependency and help five million long-term unemployed back into work.
The emergency Budget has already signalled some significant changes affecting the DWP. On pensions, the government declared that it will restore the link between earnings and basic state pensions from April 2011: pensions will rise in line with either earnings, prices, or by 2.5 per cent, depending on which is the highest. The government also plans to move towards raising the state pension age to 66.
The Budget also brought changes to the benefits system: the chancellor dropped the threshold for tax credit eligibility by £10,000, while freezing child benefits and capping housing benefit.
Much bigger changes to the benefits system are planned. Duncan Smith recently published a command paper, 21st Century Welfare, which set out a number of options for reforming and simplifying the benefits system. Notably, the specific costs of each proposal were left out.
The most radical option is a universal credit system, which would combine welfare benefits such as Jobseeker’s Allowance, tax credits, and also benefits for those with special circumstances, such as young children or in need of housing benefit. This credit would taper quite slowly as earnings rise, encouraging people to work rather than claim unemployment benefit; there is currently a disincentive in the benefits system, because benefits taper so sharply that people gain little in real terms as they move from benefits into work.
Other proposals include providing a single, flat-rate benefit for all working-age claimants, regardless of whether they are jobseekers, lone parents, sick or disabled. The command paper is open for consultation until 1st October, and the department intends to introduce legislation early next year.
DWP also plans to medically assess all claimants of incapacity benefit next year, with the aim of moving those who require it onto the new Employment Support Allowance – which aims to find claimants some form of work according to their ability – and shifting the more able-bodied onto Jobseeker’s Allowance and ultimately into full-time employment.
The ministerial team
The great welfare reforming prime minister Clement Attlee once said: “Often the experts make the worst possible ministers in their own fields. In this country we prefer rule by amateurs.” Iain Duncan Smith has wholeheartedly rejected this mantra.
After stepping down as Conservative leader, he set up the Centre for Social Justice (CSJ): a think-tank dedicated to looking at issues in the welfare system and examining how to tackle poverty. Although he’d been concerned about these issues during his time as Tory leader, the CSJ has enabled him to promote his agenda far more effectively; as his former parliamentary private secretary and current cabinet colleague Owen Paterson tells
CSW, he has now thoroughly demonstrated his “complete determination to stick to things”.
Duncan Smith has four ministers serving him. The minister for employment, Chris Grayling, was at one point destined for the cabinet but committed a number of gaffes on the campaign trail and was demoted.
Minister for pensions Steve Webb is the sole Liberal Democrat in the department. A contender for his party’s leadership in 2007, he withdrew and backed Nick Clegg. In opposition he was the work and pensions spokesman.
Maria Miller is the minister for disabled people, a role which she shadowed in opposition; and parliamentary secretary Lord Freud was a Labour Party adviser on welfare reform but defected in a talismanic move to the Conservatives in 2009.