Welfare reform

Either the Government should put the money into universal credit necessary to make it work or else stop the roll-out. Its principles are solid: simplify the smorgasboard of benefits and make sure no one loses out when they move from unemployment to a job. The problem is that for any welfare reform to work inevitably costs money, and universal credit has been constantly undermined by the Treasury. Esther Mcvey, the Work and Pensions Secretary, has been forced to admit that some of those switching to universal credit could in fact lose cash; pressure is on the Government to put more investment into the system.

Sir John Major has warned that universal credit might damage Theresa May the same way the poll tax hurt Margaret Thatcher, although defenders of it would counter that a U-turn would in fact harm the poor. The Tories have been struggling with the legacy of Gordon Brown, whose tax credit revolution created a cohort whose employment is essentially subsidised by the state, typically at low pay and part-time. This limits productivity and the ability of the individual to move up, and while Labour’s policy was about expanding dependence, Iain Duncan Smith, Ms Mcvey’s predecessor, sensibly tried to refashion the welfare system to encourage independence through employment.

Failure, again, lies with the Treasury, which not only kept Mr Brown’s tax credits system in place but also neglected Mr Duncan Smith’s project. In the long-run, the Conservatives are now faced with a choice between pouring money into further, wholesale reform, or accepting failure and going back to lower spending, lower taxes and raising opportunity through business growth. Many Conservative voters probably favour the latter.