Clause 93 provides for a crude benefit cap to be imposed irrespective of circumstances
The venue was carefully chosen, and the prime minister struck his most progressive note. In Toynbee Hall, east London's temple of the big society, David Cameron yesterday explained that his welfare reforms were not merely driven by money but by the same moral convictions that inspired Beveridge. He will be happy with the immediate results. The gist of the news reports was that Mr Cameron's tough decisions would promote responsibility, autonomy and work.
This reporting was far too kind. Eyes were grabbed by Iain Duncan Smith's plan to replace a host of benefits with a universal credit. No matter that the work and pensions secretary's squeezing of the welfare balloon into a new shape will cause old problems to pop up in new places, as Resolution Foundation research has underlined this week. Social security is at its knottiest where one piece of the safety net gets entangled with another, so there is real logic in weaving overlapping elements into a seamless whole. It must be hoped that the parallel move to let every town hall write its own rules for rebating council tax does not undermine the whole enterprise, by ensnaring national rationalisation in local variation.
In the end, however, the changing shape of welfare is less important than its adequacy. Step back from the blueprint for a universal credit, and cuts dominate the big picture. The annual £2bn earmarked for ironing out glitches in the new architecture is scant compensation for the £18bn set to be squeezed from existing benefits. The howls of anguish heard thus far concern particular payments to care home residents or to poor families in flashy postcodes. These cries are a mere foretaste of the horrors ahead, as a close reading of the bill confirms.
Part 1 of the legislation covers the universal credit, but push on through its 136 clauses and bigger stories emerge. Clause 51, for example, contains proposals, as yet scarcely noticed, that seriously jeopardise the income of many disabled people. Consider a stroke victim, who may have paid national insurance for decades before incurring a severe impairment from which there is no prospect of recovery. If they have even a low-paid working spouse, the bill will cut their money off cold the moment that 12 months have passed. Prompting incapacity benefit claimants to consider their options is eminently justifiable, since some could indeed work. But this is hardly an argument for punishing other recipients who either cannot work at all or else cannot find suitable jobs.
Spooling slightly further forward, clause 93 provides for a crude benefit cap to be imposed irrespective of circumstances. The wheeze won red-top plaudits, with the headline "the cap fits". But according to forensic analysis by Tim Leunig, an LSE economist who has recently been appointed to the leading liberal thinktank CentreForum, it could leave large families even in deeply unfashionable corners of the capital trying to scrape by on £3 per person each day. And the entire bill is underpinned by a recasting of the rules on indexation, which will steadily make the poor poorer. Instead of being pegged to the total cost of living, benefits will in future be pegged to the cost of shopping, thereby stripping the rising price of keeping a roof over one's head out of the general calculation – and at just the same moment that housing benefit is being cut back.
Mr Cameron may sense he will not get away without some compromise. Already, impractical plans to force the long-term unemployed to pay more of their own rent have been ditched, and in a curious coda to yesterday's speech he signalled that the bill covered "lots of difficult issues and many things that we will have to examine all over again". He has this week performed one about-turn over the forests. Cast your eyes up from the individual trees and survey the whole welfare wood, and it looks like he might soon need to make several more.