George Osborne denies Iain Duncan Smith dispute

[fedsron2us]

http://www.guardian.co.uk/politics/2010/aug/17/george-osborne-iain-duncan-smith-dispute

George Osborne today played down suggestions he is embroiled in a tense dispute with cabinet colleague Iain Duncan Smith, amid reports that the Treasury is demanding big savings from the work and pensions department to fund welfare reforms.

Duncan Smith wants to simplify the benefits system and create incentives to work. But while his reforms are expected to save money in the medium to long term, the Treasury is worried about the billions it will cost to implement them in the short-term.

The Financial Times reported today that the Treasury has told Duncan Smith to find about £5 of savings for every £1 he spends on his plans. This approach is said to have prompted angry exchanges between Duncan Smith and Osborne, with one source describing it to the FT as a "blazing, shouting, grade-A row".

Interesting story and perhaps as important as those rumours about Lib Dem splits.

We are already seeing the Treasury trying to take the position in this government that they held under Blair and Brown (the government within the government). They have already neutered Vince Cables Business department as soon as it looked as though it might actually take an interest in how the UK financial sector operated. It is now trying to brow beat the DWP into submission over any Benefit reforms (The Treasury likes cuts not reform which might actually cost money).

It is all a bit of a hoot to see how quickly ministers go native in their various departments. But there is a serious core to these rows which of course goes unmentioned. The harsh truth is that what has got the UK economy into such a weak state was not excessive benefit spending but a crack up credit boom and bust engineered by the financial sector with the complicit approval of HM Treasury. It is the Treasury and the City whose feet really need to be held to the fire for these failures not single Mums on housing estates in Stoke or the poor old civil servants at the DWP.

[Jeneral2885]

1. but of course

what else would he have said?

[Hopeless Romantic]

2. I have to confess that I quite like IDS's approach to this problem

and it is a problem imo.

There are many people and families trapped in poverty simply because it is not affordable in the short term for them to move off benefits and into work.

John Bird (Big Issue founder) sums up the issues very well for me here

http://www.yorkshirepost.co.uk/opinion/John-Bird-You-have-to.6383492.jp

[LeftishBrit]

3. While there is some truth in this...

all the 'easing people from welfare into jobs' in the world will not work, if there simply are *no jobs* to ease them into. The problem of long-term 'welfare dependency' is not due to the existence of welfare; it is mainly due to the destruction of our industrial base under Thatcher, and the acceptance of policies that create significant unemployment. So far as I am aware, there wasn't a big problem of 'welfare dependency' in the 1960s and 70s; people might have good jobs or lousy jobs, but they generally had jobs.

Job creation is what is vital - and not just in the short term; we need to get back to being a country that manufactures and produces and provides *real* services, in diverse ways: not just a country that is a centre for the banking industry. And this is clearly not something we can expect under this government.

[Hopeless Romantic]

4. Agreed, although I have to add

during the boom years we had around a million eastern Europeans come to the UK and find work, during that time we also had a fairly static number of British folks remaining in the welfare poverty trap.

Also, at least the current government have paid lip service to developing a more diverse economy

http://www.newbusiness.co.uk/articles/banking-finance/david-cameron-i-will-transform-economy

It remains to be seen if it happens (I am doubtful) but what we do know is that 13 years of the last government achieved nothing in that direction.

[LeftishBrit]

5. The last 13 years (especially the first 10 of them) were modified Thatcherism..

but the view of Cameron et al is unadulterated Thatcherism: indeed, enhanced Thatcherism. The only hope is that the government's minority status, the divisions in both the Tory party (as shown here) and the LibDem party, and hopefully a stronger Labour opposition once the leadership contest ends, will prevent them from doing all they want to do.

[Hopeless Romantic]

6. What do they want to do?

[LeftishBrit]

7. Cut funding to public services permanently - even when the deficit has been addressed.

http://www.guardian.co.uk/politics/2010/aug/03/david-cameron-public-sector-cuts-permanent