Universal Credit: is it the theory or the practice that is bothering Rachel Reeves?

According to the Daily Telegraph, Iain Duncan-Smith is intending to accelerate the rollout of Universal Credit to thwart Rachel Reeves and her intention to pause its implementation.

This is odd, because Ms Reeves said that in June, after the Major Projects Authority and the Public Accounts Committee has noted their concerns with the project. They were probably right to, if the concern was simply over the cost of the project and the likelihood of the IT infrastructure working. However, it isn't clear to me whether or not a pause would lead to scrapping the project or not.

Universal Credit, not necessarily coming to a town near you soon...

Universal Credit, in conceptual terms, seems like a bit of a no-brainer. Bringing together the application processes of a number of benefits and rolling them into one would reduce the cost of bureaucracy and, perhaps ironically, making it more likely that some vulnerable people would receive benefits to which they were entitled but had not actually claimed, put off by the hassle of form filling and assessment. And, in theory, there is nothing that should prevent the creation of an IT system that would support it.

In practice, however, government is bad at big IT projects, poor on procurement, prone to mid-project interference and weak on deciding what it actually wants in the first place.

And so it has come to pass with Universal Credit. Ironically, one of the underpinning changes, the introduction by HM Revenue & Customs of Real Time Information for PAYE, seems to have gone quite smoothly, exposing the uncomfortable fact that any system requiring the analysis and processing of data is only as good as the data fed in. And some employers, it turns out, aren't very good at that.

Nonetheless, the Universal Credit programme has been delayed significantly, leading to a perceived loss of confidence that it will work.

But what is one to do? Scrapping the project takes you back to the drawing board, whereby you still need to find ways of cutting the cost of social security. And, if cutting the cost of administration is made more difficult, that means an increased likelihood that benefits themselves will need to be cut - not an attractive option for politicians who claim to want to protect the poor and the vulnerable.

So, Ms Reeves faces a dilemma. Does she continue to harbour public doubts about the viability of Universal Credit, does she openly support the concept, or does she oppose both process and concept? And time is ticking...

If you were holding out the hope that an incoming Labour Government would end austerity...

Party members have endorsed the tough fiscal position Ed Miliband and I have set out. We will balance the books, deliver a surplus on the current budget and get the national debt falling as soon as possible in the next parliament.

You can't get plainer than that. With those comments from Ed Balls, the course of the next five years is set. An incoming Labour administration will eliminate the government deficit - £105.8 billion in 2013/14, lest we forget - and run a surplus by the end of the next Parliament, possibly sooner.

Given the optimism priced into the prediction by the Office for Budget Responsibility (OBR) that the deficit will be eliminated by 2018/19, based on current plans, it is clear that Labour are going to have to either raise more income, or cut spending further.

Ed Balls has, perhaps, given a clue as to which of those options he prefers when he goes on to say;

But we will get the deficit down more fairly.

Well... yes. But Rachel Reeves has been laying down some of what she means by this as Labour's Shadow Secretary of State for Work and Pensions...

A Labour government will introduce a Basic Skills Test to assess all new claimants for Job Seekers Allowance within six weeks of claiming benefits.

Those who don’t have the skills they need for a job will have to take up training alongside their jobsearch or lose their benefits.

Labour’s Basic Skills Test will give the long-term unemployed a better chance of finding a job and will help us to earn our way out of the cost-of-living crisis.

She had already said;

If you increase what you give to some people then presumably you have to reduce it for others. We are not in an environment where there is more money around. It is a difficult thing to achieve.

and;

Nobody should be under any illusions that they are going to be able to live a life on benefits under a Labour government. If you can work you should be working, and under our compulsory jobs guarantee if you refuse that job you forgo your benefits, and that is really important.

It is not an either/or question. We would be tougher [than the Conservatives]. If they don't take it [the offer of a job] they will forfeit their benefit.

So, fairer might not be what you hoped for. There will be compulsion, and there will be those who are worse off after reform of the welfare system, if Ms Reeves is to be believed.

There will also be additional costs to the public sector arising from the insistence that those bidding for government contracts pay the living wage to their employees - although, in fairness, that may well be mitigated by a fall in the amount of benefits paid out to bolster low wages and an increase in tax revenues.

And, of course, the OBR forecasts include the expectation that departmental budgets will be cut further - the expectations for local government and the NHS are already looking gloomy at best - so an incoming Labour Chancellor will need to wave an axe with more enthusiasm than his supporters might think seemly.

So, not much to look forward to for the next five years, is my prediction. And yes, the books may be balanced, but we're all going to have to accept that we'll experience more austerity, and have to take rather more responsibility for what goes on around us. And that goes for politicians and voters alike...

Labour: is messaging enough to re-establish credibility, and how much does it actually matter?

Recent pronouncements on benefits from Rachel Reeves, and on taxation from Ed Balls, have come in for much criticism from their political opponents, and I myself have not been particularly convinced. But, I am reminded, I'm not the target of their messages, as I'll be voting Liberal Democrat anyway. And it makes me wonder, are we in danger of rather missing the point, which is that Labour don't necessarily need to persuade that many people, if current polling is to be believed.

There is a lot of talk amongst the political 'chatterati' that, despite the current numbers, Labour might not be able to form a majority administration. No opposition party with such a narrow lead at this point in the political cycle has won, etc. etc. And yet we know that Labour held 250 seats despite polling less than 30%, the electoral geography operates in their favour and a whole bunch of left-leaning voters who voted Liberal Democrat last time currently feel betrayed by the Party and are minded to vote Labour instead.

And if the evidence of polling by Lord Ashcroft is to be believed, Labour are doing rather better in the seats that really matter, i.e. Labour/Conservative marginals. So, if you think that you're probably doing enough, the priority is to make sure that you keep your supporters motivated. Which brings us back to cutting benefits and reintroducing the 50% rate band.

Forget the argument about whether or not raising the highest rate of tax brings in more revenue, because to most voters, it either doesn't matter - it doesn't affect them - or it involves rich people who can apparently well afford it anyway. And how many people earning £160,000 plus per annum do most people know anyway? And as for benefits, it is still the case that the majority believe that the welfare system is too generous, and goes to too many of the wrong people - the undeserving poor, if you will.

Now I do hear you say that this is massively oversimplistic, and that it's all so much more complex than that, and you'd be right. The catch is, you and I are politically engaged and take an interest in the details. We can discuss the Laffer curve without assuming that it's part of a Grand Prix circuit, even if we don't know too much about the detail, and we have an idea about the actual amounts paid out in various benefits. The general public? Many go along with whatever they've heard which fits sufficiently with their personal biases and experiences - that's why political campaigners write leaflets and stick them through letter boxes.

So, the important question is not, could Labour deliver on such promises if elected, it is whether enough voters believe that they could, and the bar is set rather lower on that one...