By David Williams
29 April 2010
Campaigners have called for the universal entitlement to benefits to be protected after figures revealed the full extent of spending cuts required over the next Parliament.
The calls followed a pre-election briefing from the Institute for Fiscal Studies, which included detailed analysis of the three major parties’ tax and spending proposals.
The IFS concluded that the Conservatives were yet to announce 82.3% of the cuts they would need to make to meet their pledges on reducing the fiscal deficit. For Labour, that figure was 87.3%, while the Liberal Democrats are yet to outline 74.1% of their total planned cuts.
All the parties have pledged to preserve pensions benefits and entitlements, but IFS director Robert Chote said they were being overambitious in how much they thought they could reduce departmental spending. ‘If so, the next government may rely more on tax increases and welfare cuts than any of the parties are willing to admit at the moment.’
Chote added that welfare was the ‘dog that hasn’t barked’ in the campaign, with little disagreement between parties on how much social security spending will grow.
Professor Howard Glennerster, professor of social administration at the London School of Economics, said it was ‘remarkable’ that no welfare cuts had been suggested. ‘It’s the largest single budget,’ he said.
But he warned that big cuts to social security would be ‘very brutal’ and unpopular.
Andrew Harrop, policy director of Age UK, told Public Finance: ‘There are no pain-free cuts’. He said: ‘The problem is that if you start means-testing allowances, you often have cliff-edge cases where people are only just too well-off to qualify. And you get a huge stigma, such as in pension credit, and council tax benefit, [where] only two-thirds of people claim.’
Gabrielle Preston, policy and research officer at the Child Poverty Action Group, argued against the introduction of means-testing for child benefit and child tax credit.
‘The idea you’re taking money away from families and children to redress an economic crisis that’s hardly of their own making in the first place does seem unjust.
‘It’s going to create more poverty, which is not cost-effective to tolerate.’
She added that universal benefits were cheaper and more efficient to administer, and called for progressive taxation.
Colin Talbot, professor of public policy and management at Manchester Business School, said the best way to reduce public spending was to spread the pain as much as possible.
He suggested the next government introduce some temporary cuts to reduce spending over a period of two or three years, and said means-testing areas such as child benefit and winter fuel allowances could make ‘substantial savings’.
But Talbot questioned whether tens of billions of pounds needed to be saved over the next few years to reduce government debt as a proportion of gross domestic product. He suggested the extraordinary events of 2007/08 could be paid for over a period of decades.
‘We are treating this like a credit card – some of it should be treated like a mortgage.’
29 April 2010
Campaigners have called for the universal entitlement to benefits to be protected after figures revealed the full extent of spending cuts required over the next Parliament.
The calls followed a pre-election briefing from the Institute for Fiscal Studies, which included detailed analysis of the three major parties’ tax and spending proposals.
The IFS concluded that the Conservatives were yet to announce 82.3% of the cuts they would need to make to meet their pledges on reducing the fiscal deficit. For Labour, that figure was 87.3%, while the Liberal Democrats are yet to outline 74.1% of their total planned cuts.
All the parties have pledged to preserve pensions benefits and entitlements, but IFS director Robert Chote said they were being overambitious in how much they thought they could reduce departmental spending. ‘If so, the next government may rely more on tax increases and welfare cuts than any of the parties are willing to admit at the moment.’
Chote added that welfare was the ‘dog that hasn’t barked’ in the campaign, with little disagreement between parties on how much social security spending will grow.
Professor Howard Glennerster, professor of social administration at the London School of Economics, said it was ‘remarkable’ that no welfare cuts had been suggested. ‘It’s the largest single budget,’ he said.
But he warned that big cuts to social security would be ‘very brutal’ and unpopular.
Andrew Harrop, policy director of Age UK, told Public Finance: ‘There are no pain-free cuts’. He said: ‘The problem is that if you start means-testing allowances, you often have cliff-edge cases where people are only just too well-off to qualify. And you get a huge stigma, such as in pension credit, and council tax benefit, [where] only two-thirds of people claim.’
Gabrielle Preston, policy and research officer at the Child Poverty Action Group, argued against the introduction of means-testing for child benefit and child tax credit.
‘The idea you’re taking money away from families and children to redress an economic crisis that’s hardly of their own making in the first place does seem unjust.
‘It’s going to create more poverty, which is not cost-effective to tolerate.’
She added that universal benefits were cheaper and more efficient to administer, and called for progressive taxation.
Colin Talbot, professor of public policy and management at Manchester Business School, said the best way to reduce public spending was to spread the pain as much as possible.
He suggested the next government introduce some temporary cuts to reduce spending over a period of two or three years, and said means-testing areas such as child benefit and winter fuel allowances could make ‘substantial savings’.
But Talbot questioned whether tens of billions of pounds needed to be saved over the next few years to reduce government debt as a proportion of gross domestic product. He suggested the extraordinary events of 2007/08 could be paid for over a period of decades.
‘We are treating this like a credit card – some of it should be treated like a mortgage.’
