6 September 2009

The Conservatives are looking at plans to localise benefits: local councils would be given the power to set the benefit levels in their areas and the present uniform payments throughout Britain would be abandoned. The story is in today’s Observer, Tories plan to let benefit levels be set by local councils.

Many people in Cornwall gain from national standards in wages and benefits. The levels of wages for people in the public services here, like nurses and teachers, are set by national standards and comparisons not local ones. For example, Cornwall local wages are not used as comparators to decide what to pay a teacher here. Benefit levels are also set nationally and do not, with exceptions for rent for example, refer to local living costs. The Tory localising ideas would have a marked effect on the rates of benefits paid to people in Cornwall where average wages and the general cost of living are lower than in, for example, London and the south of England. Benefit levels in Cornwall would be stifled — fall or be frozen or increase at a lower rate than elsewhere, the last probably being the more likely — to align them with the different living costs here.

Would it just be benefits a Conservative government would localise? I pointed out in this post that the national minimum wage might be a target for Tory cuts: localisation would be a way for a Conservative government to stifle it, to freeze it or hold back its present progressive increases, in places like Cornwall. Once the localisation of benefits is established, the Tories might indeed come to see localism as a rational way of reducing costs and acknowledging varying local circumstances in other spheres, especially in public service pay: for example, localising nurses’ pay — in Cornwall lower levels than in London and the south of England because comparator pay and living costs are lower — is a way of tackling the costs of the NHS.

Local variations in benefits and public sector pay (and the minimum wage) might seem reasonable. After all, local living costs do vary and market pay varies. However, the Tory ideas appear not to be about topping up mandatory national payments in areas of high living costs. In practice councils of all parties would most likely seize the localising of payments as an opportunity to cut back costs and perhaps reduce or stabilise council tax. David Cameron has said a Conservative government would wish to give councils a general power of competence: it will thus be difficult to prevent the essentially arbitrary stifling of benefits or pay, a stifling with only a tenuous link to local living costs. We shall also have a contentious post code lottery, especially noticeable outside Cornwall in large urban areas where neighbours will have different levels of benefit payment and, although doing the same job, different pay. Indeed, we might have differences within Cornwall as local living costs, especially housing costs, vary within the county. I discussed these issues two years ago in this post.

Cornishing benefits, public sector pay, and the minimum wage carries large disadvantages for many people in Cornwall. There are questions to ask the Conservative parliamentary candidates and unitary councillors. Localisers in other parties have some difficult questions too.