Chris Mason: Trade-offs for ministers over towering benefits bill

There are a trinity of trade-offs for the government as it prepares to shake up the benefits system.

How does it save money?

How does it increase the incentives for people to find a job?

And how does it protect those it has concluded are unquestionably reliant on the state, once it has defined who they are?

If ministers tack too far in any of these directions, they will probably undermine at least one of the other two, so you can see how fraught this is.

I am very aware at moments like this that we have an imperfect picture of what is to come.

It is incumbent on reporters to be responsible, and clear about what we dont know, so as not to cause unnecessary alarm.

There is a danger in under or over emphasising particular elements which may or may not happen or may, perhaps more likely, contain mitigations or nuances that we are not currently aware of.

There are two big picture issues the government is wrestling with.

Firstly, there is a towering benefits bill which is projected to continue skywards.

We have seen ministers in recent weeks, from the prime minister down, try to make what they see as the moral case for cutting that bill.

Secondly, the economic backdrop is even worse than it was: the economy is smaller, inflation is higher and interest rate expectations are higher than at the time of the last Budget in the autumn.

The Resolution Foundation, a think tank with a focus on those on low-to-middle income families, also says the number of people in work is falling at a pace consistent with a recession and the chancellors room for manoeuvre, which was already limited, has vanished.

Both the benefits bill and the economic backdrop point in the same direction, then: a conclusion from ministers the benefits bill has to come down.

The question, then, is how to do it.

In broad terms, it looks like it will become harder to get the personal independence payment, or PIP, which is designed to help those who need extra financial support because of long term physical or mental health concerns.

But it no longer looks like PIP will be frozen for a year, which, after accounting for rising prices, would amount to a cut.

It is also expected that there will be changes to universal credit, with a narrowing of the gap between what is paid to those who are looking for work and those who, due to health issues, are not.

The current system, ministers believe, creates perverse incentives: it is currently rational to try to make the case that you are unable to work as this way you get more money.

The cuts will amount to £5-6bn and around £1bn will be allocated to helping get people back into work.

The Conservatives dont oppose the governments plan to drive down the benefits bill, but question whether its approach is adequately thought through and can work.

There are concerns among some Labour MPs who ask how fair this will be, who will miss out and whether the most in need of support will be adequately supported.

There is also, too, among Labour MPs an awareness that plenty of their constituents passionately believe the benefits bill has to shrink.

It is, of course, possible to hold both these views at the same time.

It is the job of ministers to try to address both these concerns.

It wont be easy.

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