Welcome to the Department for Work and Pensions. Your new department spends more public money than we spend on the police, schools, hospitals, railways and international development combined. Nearly 20 per cent of government expenditure is spent on benefits, excluding pensions. If Ed Miliband’s new government is serious about predistributing wealth, not redistributing it via benefits and tax credits, then the DWP is the key strategic department.
After five years of the coalition, the department is in a mess: spending on benefits a fifth higher than predicted and relationships at the top strained to breaking. You should start by a series of sessions with the permanent secretary and DWP directors to settle nerves and win back their trust. They’ve had a bruising few years under IDS.
Our manifesto pledge to ‘repeal the bedroom tax’ is easily met. We’ll just stop enforcing it. universal credit is a good idea, badly implemented – it needs rescuing. Having gone through the pain, it would be crazy to scrap it and start again. Let’s institute a swift review, and make it work.
But this won’t solve anything in the medium term. We need a serious programme of reform, and quick. Your first big speech, to the Resolution Foundation, should set out the big areas for reform. The theme should be getting Britain back to work. That’s the best way to cut benefit bills.
The work programme is a shambles. It’s missed all of its own targets. If it had hit them, we’d have saved over £100m. I propose you convene an immediate summit of business, ministers, officials, local authorities and the third sector to thrash out how to make it work. We need a new concordat between business, government and charities to get people back to work.
You should launch an all-out assault on youth unemployment. The failure of the government’s youth contract cost £457m in 2014-15. You need to sit down with the chief secretary to the Treasury and the chief whip this week to get space in the Queen’s speech for a bill to tax bankers’ bonuses and create the jobs guarantee for young people out of work for more than a year. That was one of our most popular manifesto pledges: you should be judged on its success.
On disability benefit, you need to end the current regime. Anyone taking the work capability assessment is now eight times more likely to end up in a tribunal than a job. Appeals cost £47m in 2011, and £66m in 2012. There’s a copy of the ATOS contract on your desk. I suggest you rip it up, preferably on live TV.
One for the medium term is the reform of housing benefit. We spend five times as much on housing benefit as we do on unemployment benefit. The taxpayer is subsidising thousands of private landlords, and not always the most scrupulous ones. Why not look into paying housing benefit direct to tenants, not landlords? Empower people to shop around, and drive rents down.
What about the cap on benefits? You’ve inherited a cap of £500 per week for single parents and couples with children, and £350 per week for single people. In opposition, we talked about removing the cap, but there’s no rush now you’re in charge. I’d wait to see what the impact of the cap is, before turning on the money tap.
Finally, you need to be ready to make enemies. The campaigning groups will be as vociferously opposed to Labour’s ministers as coalition ones. They’ll never be your friends, so don’t even try. Remember – your audience is the British public, with our innate sense of decency and fair play, and the protestant work ethic running through us like life-blood. Our social security system depends completely on the goodwill of those who pay for it.
Progressive centre-ground Labour politics does not come for free.
Our work depends on you.