Clashing Agendas: Inside the Welfare Trap

"I really did enjoy reading this book. David Freud was an investment banker by career but was plucked into the Tory government in 2010. He was stuck in the House of Lords so he could be a minister, and was Iain Duncan Smith’s wingman, if you like. He tells the story of the Universal Credit program, and it’s the only one of these books that gives the voice from the inside, from the ministerial point of view. It must be terribly hard to write a really frank and honest book from the inside of something that went so badly, at least for many years, but he’s done a really good job. You have to care about the subject, which is a bit technical, but it’s readable. He talks about some of the blind alleys that they went down, and the difficult political fights, particularly with the Treasury (George Osborne and Iain Duncan Smith were not particularly good friends, if I can put it like that). It also went through some near-death experiences from the technology point of view, of just not being able to get it to work. Universal Credit was dancing on the edge of being canceled many times. And if that had happened, we’d have lost five years. It’s been a dreadful project in terms of its schedule. It’s been a dreadful project anyway. But we’d have had to go back to square one, and a new government would have had to start again. So that’s the story that David Freud tells quite frankly. That’s a really good question, and one that I end the chapter on because plainly it hasn’t. If one is to believe what one reads in the newspaper, we are now in a situation which is exactly the one that Universal Credit was intended to solve. Being in work should always be better than not being in work, and there should be a heavy incentive for everybody who can to work. The way David Freud describes it, the Treasury (i.e. the Chancellor, George Osborne) wanted to take the benefits of Universal Credit—lower costs because everybody would be in work and paying tax—in welfare cuts before the upfront work of getting Universal Credit in and generating its magic came to fruition. Whether that’s true or not is too difficult a question for me. It’s not really my specialist subject. It ultimately led to the resignation of Iain Duncan Smith—although the Brexit referendum, where he was on the wrong side of the government, might have had something to do with it as well. There was a critical need to simplify and rationalize the benefit structure. It was a thicket of historical allowances and benefits and so on. It was a mess. Everyone knew it was a mess, and the idea of trying to sort that out was not a bad idea. But the ideological politics behind it were, ‘We’ll get rid of all of those benefits, and we’ll structure benefits so that they always incentivize work.’ It’s not evident that that’s been a success. There is a longstanding concern that the civil service is staffed with highly intellectual generalists. Harold Wilson’s government was concerned about this, and he had people advising him on it. You get on in the civil service through your intellect and your ability to devise and sell policy, rather than to deliver solutions. It’s often described as a lack of parity of esteem. It’s not a criticism of policy professionals. But if you join the civil service as a fast-stream, generalist policy person, you might expect to be sitting in front of a minister within three or four years, talking to them about something—welfare policy, or whatever it might be. If you join the civil service from university in their project management stream, you might never meet a minister in the whole of your career. So the power rests with policy and announcing policy is very, very cheap. Delivering huge projects takes a very, very long time and costs a great deal of money. The immediate payoff is the announcement. I hope I don’t come over in this book as saying ‘I’ve got these simple three things, if only we do these, everything will be okay’ because it isn’t that kind of a world. But one thing I felt increasingly stronger about as I wrote the book is that we have to find a way of separating announcements from actual investment decisions. As I said before, ministers will always make announcements. That’s the nature of the beast. So when a minister makes an announcement about a project to assembled journalists, rather than them rushing to tomorrow’s paper and writing ‘Government to Build High Speed 3’, the question I’d like them to ask is, ‘Has the business case been approved? Has the formal governmental decision to spend this money been taken yet?’ And the honest answer, at that stage, will be no. And then their question could be, ‘When will that be and can we talk about it again then?’ We need to shift the focus from political announcements and statements of policy direction to formal investment decisions. Then we can hold people to account for them. You can’t hold somebody accountable for what a minister might have said in 2014. We have to build more candour into this world."