By Matt.Ross

10 Mar 2010

The government has been moving in the right direction on welfare and benefits reform, shadow work and pensions secretary Theresa May tells Matt Ross; it just hasn’t been doing so very cleverly, or very quickly


Recent weeks have seen the very public – and rather bitter – collapse of attempts to build cross-party consensus on high-speed rail and care for the elderly. And certainly, few cross-party initiatives can survive the political jostling of a pre-election period. But in the key arena of unemployment and benefits reform, there is a remarkable level of agreement over welfare policy. While both parties are reluctant to admit just how much ground they share, the real debate is over pace, ambition and methodology, not direction. “We’d be going faster and further,” says shadow work and pensions secretary Theresa May (pictured above).

Cheekily, May even claims some credit for Labour’s own welfare policies. “In our 2001 manifesto, when I was handling employment and education, we had a very similar idea called ‘Britain Works’: bringing in welfare providers, paying them by results to get people into jobs,” she says, arguing that Labour has dragged its feet on the agenda.

“The government asked David [Lord] Freud – who’s now in my team – to write a [2007 welfare reform] report, then quietly sidelined it. We produced our own green paper, and the government has reacted to those ideas and begun to put a degree of welfare reform in place.” May is exhibiting a substantial wedge of chutzpah in planting a Tory flag on Labour’s welfare policies – but the reassuring implication for officials is that she’d want to see reform and progress inside the Department for Work & Pensions (DWP), “not a revolution”.

Indeed, while May is well known for her stylish and colourful taste in clothing (leopard-print boots when we meet, since you ask), her political style is a lot less flashy: apparently moderate and pragmatic, she is eager to quash rumours that the Tories have a secret radical agenda. “I’ve received a few emails from people saying that they’ve heard a Conservative government would ‘privatise the DWP’. This is not true,” she says with confidence. And asked whether the DWP has the right structures and agencies for the job in hand, May takes a cautious line. “A politician’s job is not to decide the entire management structure of their department,” she says. “I don’t think it’s right for a politician to micromanage.”

Asked what does make a good minister, May says they need both “a clear sense of direction in terms of the agenda and policies that they want to put in place, and a willingness to be open to debate and to listen to arguments that are put to them”. She values greatly the DWP’s “enormous experience of delivering real policies”, she adds.

JobCentre Plus too has many “committed staff who know their local area and their clients”, May says, adding that: “If they had a bit more flexibility, they might be able to match what they’re doing more to the needs of the local area.” Cooperatives could play a role in managing local offices, she says, and there’s a role for local authorities: “That might be Jobcentre Plus services being operated on local authority premises, or it might be the other way around.”

At a national level, May’s agenda – as set out in the Tories’ recent policy document Get Britain Working – envisages folding all Labour’s various New Deal programmes into a single ‘Work Programme’, delivered by welfare-to-work providers and backed by programmes offering jobsearch and small business support, volunteering opportunities, training and apprenticeships. Young people would go into the programme after six months on Jobseekers’ Allowance (it’s currently a year), while those with the greatest ‘barriers to work’ would be given immediate support by providers offered cash incentives to tackle the most difficult cases.

Meanwhile, the payment-by-results system would be strengthened, with providers paid only when former clients have been in work for a year (rather than six months, as now). Reminded that Labour had to soften the Flexible New Deal’s payment-by-results system when the recession deterred providers from bidding for contracts, May gives no ground: “I question whether that was the right thing to do,” she says, insisting that “we see a developing market” in which “the number of providers who are interested has increased”. The Work Programme will not see such retreats, she says: “We’ve made it absolutely clear that the system will be payment-by-results.”

May also wants to extend welfare-to-work provision to former Incapacity Benefit (IB) claimants deemed able to work. The government has begun to apply work readiness tests to the 2.6 million people receiving IB – but, says May, “it’s very important that we ensure that those people [coming off] IB are not put to one side, but included within welfare-to-work.” And how about those – both former IB claimants, and Jobseekers’ Allowance (JSA) recipients – who just don’t want to work? “There has to be a sanctions regime within welfare-to-work provision,” she replies.

The exact nature of that regime, May concedes, has not yet been decided. As an example, she suggests that a claimant who’s been on JSA for two out of the last three years might be put straight into a community work programme, “and also that somebody who was offered two reasonable jobs but refused them would have a sanction in terms of losing some benefit payment”. Surely, though, a reluctant interviewee could always deter even the keenest and most flexible employer from offering them a job? “We have to look at the details of how it would operate,” May replies.

On benefits reform, too, May is still thinking. “At the moment we’re concentrating on back-to-work programmes,” she says. “The other work has started, but it’s not work that will be completed before the election.” The benefits system is too complex, she suggests, and needs to respond more rapidly when people move quickly in and out of work. It seems, though, that the Conservatives will go into the election without a fully-formed view of how the benefits system needs to change.

On one front, at least, May says the Tories have made the decision to be radical. Labour has been piloting the so-called ‘DEL:AME switch’, which would enable the DWP to fund welfare-to-work programmes out of the benefits savings created, rather than solely from the department’s discretionary budget – and May says that implementing the switch is a “crucial part” of Conservative welfare policy. She accepts that the Treasury has traditionally opposed the move: “That’s why it’s an important change,” she says. And won’t the state of the public finances make the decision still more difficult? “The decision is there,” she replies. “Part of Get Britain Working is to put in place the DEL:AME switch.”

Armed with a sturdy policy document, Labour’s former welfare adviser, and an agenda that builds on the government’s own experience, May looks well-prepared for the coming election. Whether she would retain the job in government is, of course, another matter. And May herself sounds a little unsure: asked whether this is the cabinet role she most wants, she doesn’t quite answer. It is not, she concedes, one of the flashiest jobs in government; but then, despite her sartorial elegance, May is not a flashy politician. She is, she says, enjoying the opportunity to examine benefits and unemployment on the one side, and pensions on the other – after all, “in terms of the number of people’s lives [this job] touches and the difference it can make to their lives, it’s very, very important indeed.”

CV highlights
1977 Awarded a BA in geography at Oxford University; joins Bank of England
1985 Joins Association for Payment Clearing Services (APACS) as financial consultant
1986 Elected a Conservative councillor in Merton, London
1989 Made head of the European Affairs Unit at APACS
1992 Becomes deputy group leader, Merton council
1997 Elected MP for Maidenhead
1999 Made shadow Secretary of State for Education and Employment 
2002 Chosen by Iain Duncan Smith as party chairman
2007 Selected as shadow minister for women
2009 Becomes shadow Secretary of State for Work and Pensions, retaining the women’s brief

Read the most recent articles written by Matt.Ross - Kerslake sets out ‘unfinished business’ in civil service reform

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