The UK is embarking on a long overdue revamp of its welfare provision, this includes unemployment benefits, incapacity benefits, pensions, housing benefits and a whole range of tax credits too numerous to name. The aim of Mr Duncan Smiths reforms are to simplify the system, put the emphasis on work rather than paid-for idleness and to reduce the amount of expenditure. These changes have been greeted with howls of anger from the Left, although Labour have made no firm commitment to reinstate these cuts if re-elected in 2015.
The main problem with these changes is the uneven spread of the benefits spend, is some northern cities reliance on social security is so endemic that, when fully implemented, these changes will eliminate 6.5 years of real household disposable income growth. In prosperous inner London, Surrey and Buckinghamshire just a few months' worth of income growth will be lost. Prof Fothergill of Sheffield University tells us "A key effect of the welfare reforms will be to widen the gaps in prosperity between the best and worst local economies across Britain. Our figures also show that the Coalition government is presiding over national welfare reforms that will impact principally on individuals and communities outside its own political heartlands."
The regional effects of these necessary changes have not be thought through properly by the coalition who have been at pains to be fair as they dish out austerity. What this initiative is lacking is a counterbalance. Many of us agree that these changes will promote the desire to work rather than to be on benefits, and this has been at the heart of Mr Duncan Smith’s crusade, but where is the work. The great failing of this coalition has been the complete lack of a compensating industrial policy that needs to bridge the gap between a thriving private sector in the South and a predominantly dying public sector in the North. Where are the tax incentives for businesses, where are the infra-structure projects to improve the attractiveness of corporate relocation, where are the research grants for Northern Universities and most importantly where is the sense of urgency that we need more that a “sink or swim” attitude to our great northern cities.