This morning George Osborne has promised to slash spending after the next election by £25 billion, with the bulk of the savings to come from the social security budget. The news comes the day after the Prime Minister promised to protect the state pension ‘triple lock’ in the next parliament.
Fabian Society research shows that these two promises could only be introduced simultaneously through savage cuts to the rest of the welfare budget, which would make changes in this parliament seem mild by comparison. Such cuts, while technically feasible, would bring suffering to millions of low and middle income households, especially children and disabled people. It is hard to see how any party could win an election afterwards: £25 billion of welfare cuts is political suicide.
The chancellor suggested that he would first look at scrapping housing benefit for under 25s before considering means testing universal entitlements. Yet neither of these proposals would save anything like the money he would need to find – both policies would realise around £2 billion pounds a year.
To save anything like £25 billion it would be necessary to make sweeping cuts to entitlements for children and disabled people, as the table illustrates.
[table caption=”Benefit cuts required to save £25 billion while keeping the state pension ‘triple lock’” width=”500″ colwidth=”350|150|” colalign=”left|left|center|left|right”]
Cuts, Pounds (billion)
Scrap housing benefit for under 25s,2
Means test winter fuel payment and free TV licence,2
Extend current 1 per cent cap on most benefits to 2017/18,1
Full means testing of child benefit and stop it at 16,5
Scrap benefit entitlements for more than 2 children,3
Reverse all means tested benefit increases for children in the last decade,4
Tax disability benefits,1
Give attendance allowance to fewer pensioners,2
Means test all disability benefits,6
Source: 2030 Vision: the final report of the Fabian Commission on Future Spending Choices, Fabian Society, 2013