James Chapman reports in the Daily Mail – Iain Duncan Smith will today say Britain’s benefit system is growing at the slowest rate since the inception of the welfare state.
The work and Pensions Secretary will point to almost £50billion of savings for the taxpayer thanks to government reforms.
He will hail a ‘momentous reversal of Labour’s reckless spending’ and claim that the lives of hundred of thousands of people have been ‘transformed’ by pushing them into work.
Despite Labour’s claim that austerity measures would cost a million jobs, there are 1.75million more people in work, and 700,000 fewer people in workless households, he will say.
Mr Duncan Smith will attack the ‘accepted wisdom of the Left: that poverty is solely about money, and more state money solves it’.
Rachel Reeves will claim stagnation of wages over much of this parliament has meant more people in work reliant on the state.
She will say that by 2020, the number of working people depending on housing benefit to meet the costs of their home will have more than doubled, at cost of over £14billion.
Former Labour work and pensions secretary David Blunkett is expected to unveil his own proposals for welfare reform, including curbs on benefits paid to better-off pensioners.
But Mr Duncan Smith, speaking at the free market think-tank Reform, will attack Labour for opposing every one of the Government’s measures to cut the welfare bill.
Labour allowed welfare bills to ‘spiral out of control’ having rocketed by 60 per cent in real terms he will say.
‘Now, welfare spending is under control, seeing the first real terms fall for 16 years. The Independent Institute for Fiscal Studies estimates the cost of welfare next year will be nearly £17bilion lower thanks to our reforms.’
Controversial measures introduced by the Coalition include freezes on uprating of benefits, tax credits and public sector pensions to the less generous CPI measure of inflation, the removal of child benefit from better-off families and a £26,000 household benefit cap.
Mr Duncan Smith’s analysis suggests £50billion will have been saved cumulatively over the course of this parliament from 2010 to 2015.
‘We had to get spending under control – for under the last Government, welfare expenditure had increased on a trajectory that was entirely unsustainable by 2010, costing every household in Britain a an extra £3,000 a year,’ Mr Duncan Smith will say.
‘Yet it was not enough simply to top-slice the budget. To do so would be equally unsustainable in the long-term, for problems would simply accumulate further down the line or emerge elsewhere – with consequences for the health system, the justice system and more.
‘Rather in its true sense, welfare reform is about transforming the life chances and outcomes of those on benefits – bringing down the cost of social failure in the process.’
The Governments reforms have been designed so the state is ‘no longer just putting money in, maintaining people in dependency’, but tying spending to improved outcomes.
Back-to-work providers are paid by results, depending on how long someone moving from benefits into a job keeps it.
And the new Universal Credit, which is gradually replacing all the major out-of-work benefits and tax credits, is designed to bring about ‘a complete shift in welfare culture’.
It ensures it always pays for people to move into a job and take more hours, while allowing the state to place new requirements on claimants.
‘Gone are the days when it makes more sense to sit on benefits than enter work,’ Mr Duncan Smith will say. A welfare system that ‘can catch you when you fall, lift you when you can rise’ is the ‘strongest statement yet of this Government’s commitment to helping people get on’, he will argue.
Despite the progress, Mr Duncan Smith will warn that the ‘disparity between the top and bottom of society is in many cases larger than it has ever been’.
‘We have a group of skilled professionals and wealth creators at the top of society who have little or no connection to those at the bottom,’ he will say.
‘Yet in so many cases what divides the two is little more than a different start in life. I believe social investment gives us an opportunity to lock not just wealth back into our most disadvantaged areas – but something else as well.’
Mr Duncan Smith will urge the wealthy and big firms to put money into ‘social enterprises’ in deprived neighbourhoods.
Miss Reeves is expected to say: ‘The Government’s failure to make work pay has meant they are struggling to keep social security spending under control.
‘Last week the IFS confirmed that, for all David Cameron and George Osborne’s rhetoric, social security spending will be no lower next year than it was when David Cameron took office.’