Norman Fowler: We must put a cap on welfare, but help with hardship

However, by common consent, we are at a time when public spending needs to be drawn back. The total social security and pensions bill at the moment is £200bn.

The truth is that if the social security budget is to be subject to all kinds of exceptions, we might as well not start the whole process of looking for social security economies.

I say this as a former Secretary of State who spent six years fighting battles on the one hand with the Treasury and on the other with different welfare groups, not always successfully.

Rummaging through my desk at the weekend, I found a badge that was distributed when I was Secretary of State, which says: “Action for benefits-more not less from DHSS. Stop Fowler’s cuts.”

As such, this is not remotely the first Government who have sought to limit the social security bill. Nor is it remotely the first Government who have run into flak.

I would claim, and I think that anyone with responsibility in a department for social security would confirm this, that it is almost impossible to make changes in the social security budget without running into controversy and flak.

One of the most extraordinary things about the proposal which the Government is now putting forward is that, first, the public seem to be overwhelmingly on the side of making this change.

Secondly, on the cap that is being set, £26,000 per annum – the equal of £35,000 a year before tax – is a not ungenerous limit, and most people in this country would regard it in that way.

On the cap itself, we tend to get into figures that rather overegg the number affected. I am not going to downplay this, but we should accept that the number is 67,000 households, or perhaps a little more than that on the latest figures: that is, only one per cent of the total claimant population.

As I say, everything must be done to prevent hardship to such people. However, first and foremost, this change will be introduced in 2013, so we have the time to sort out the problems before that change takes place.

We really cannot have the situation in which beneficiaries living in houses that they cannot afford, or could not afford when in work, will never be able to get back into work because of that situation.

I am rather intrigued by where the Opposition stand on these issues.

Their Lords spokesman started with how much he supported the principle of the changes, but ended with words about human misery being caused by them.

I had rather gathered from their Commons spokesman that the Opposition supported the changes and did not intend to try and vote them down.

I simply point out that they have so far supported amendments that, far from saving money, will cost, I am told, something like £5bn over the next five years.

I do not want to be offensive – or no more than usual – but their policy seems to be one of “Now you see it, now you don’t”, and, frankly, mostly we do not.

Goodness knows how much they would have spent had they not supported the principle of the Government’s policies.

Above all, I put it that there is a very great prize in the Government’s plans: that of universal credit, which both parties have been seeking to achieve for the past half-century.

That prize is something worth fighting for and the benefit cap is a crucial part of it.

• Lord Fowler is a former social services secretary. This is an edited extract of a speech he delivered to Parliament this week.