Osborne demands welfare cuts to pay for national security

[dutchman]

George Osborne is demanding further cuts to welfare spending — including disability benefits — as he seeks to protect key aspects of national security in next month’s spending review.



With some Conservative MPs already expressing concern at the chancellor’s plans to cut tax credits by over £4bn from next year, his search for steeper welfare cuts will be controversial.

But the chancellor wants new savings to help fund the fight against organised crime and illegal migration and to boost international diplomacy, as he seeks to ensure that cuts do not undermine national security.

The chancellor is seeking £20bn of further savings in real terms by 2019-20 and has run into opposition from Theresa May, home secretary, and Philip Hammond, foreign secretary, who claim the cuts will hit security.

Those close to the spending review say that Mr Osborne has some sympathy with their position and is anxious to protect policing, border security and counter-terrorism work.

To help maintain that work, Mr Osborne wants to reduce spending on disability benefits and jobcentres. But such cuts will be tricky, with some Conservative MPs already urging Mr Osborne to tweak his tax credit changes before they come into force next April.

At the Summer Budget in July, Mr Osborne announced £12bn cuts to working-age benefits, none of which included the main payments made to people with disabilities to help them with living and transport costs.

Ministers are not seeking to reduce the levels paid in disability benefits but the Treasury is keen to explore whether the assessments for the benefits can be applied more quickly and rigorously.

In 2013, new claimants began receiving the personal independence payment (PIP), rather than disability living allowance (DLA), the older benefit that is being phased out.

From this year, those already on DLA have begun to undergo assessments to be switched over to PIP. The Department for Work and Pensions wants all claimants to be receiving the new benefit by May 2018.

But the Treasury is keen to find more savings, urging the Department for Work and Pensions to consider whether the switchover could be accelerated and whether the tests could further reduce the caseload.

“Disability benefits is a big area of spending so it’s to be expected that [the Treasury] would look at that,” said a Department for Work and Pensions official, adding that negotiations were still at “an early stage”.

The two disability benefits are currently received by about 3.2m people and are forecast to cost £15.6bn in 2015/16. The government estimates that the cost of benefits will decline to £13.8bn by 2020, since it believes about 600,000 fewer people will receive the new benefit.

The Treasury is also seeking cuts in the numbers of Jobcentre Plus staff, according to two officials. About 80,000 people — one in every five civil servants — worked for the Department for Work and Pensions as of last year, and the Treasury wants to reduce that number further.

[rebbonk]

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