Exposing the 'devil in the detail' of benefits review

IMAGINE if you would a clos of 10 bungalows.

Each household has an income of between £22,000 and £33,000.

Then the tax, pensions and benefits review changes come in.

One of the stated goals of this has been fairness.

So why are four of those lower income households worse off – maybe because there is a pensioner couple living there who do not benefit from changes to income tax thresholds, or there is someone who is a carer on a low income but they still have a mortgage to pay?

And why was that type of scenario spelled out in the first place?

This is the devil in the detail argument that the authors of the review do not want people to get bogged down in but the Guernsey Community Foundation has exposed.

Now Treasury and Social Security come back all knowingly with the argument that the foundation's figures do not include the benefits that will be redirected to help these low-income families.

There is a simple reason why they do not – because the review makes no such proposal.

It in fact has left a giant £12m. question mark over this element – a £12m. trust us, the new, as yet unknown, benefits system will pick up the pieces of what we have created.

After all the work, after all the sales pitch, after all the backslapping over a job well done, that is not good enough.

This is the same review that has a £50m. shortfall should a GST not be introduced with no answers as to what happens if that is the case – perhaps the income tax threshold promise, also so fundamental to the review, falls apart too.

The same review that has U-turned over the one piece of decisive action that it had proposed over universal benefits because it had not recognised the impact that would have.

The same review that has gone from being a carefully crafted package to one where success is now apparently going to be measured in its ability to raise awareness of the impending issues.

Feeling confident?

The States is absolutely right to have exposed the demographic issues that lie ahead and the need to put in place a plan to cope with them.

It's just that this plan seems to be lacking in the depth that was promised.

It is no good to argue that this is about agreeing broad principles before more detailed proposals come back, because there is a very real direction being set by this review and those broader principles.

Failure to understand the impacts of what is being proposed could lead to some very nasty surprises when different elements of the 'package' come back and the difficulties are revealed.

Better to get the foundations right than have to knock things down once you realise one part simply won't work.

Those uneasy with any of the measures may well take comfort from the fact it is all likely to change when the next States comes in anyway. There are too many unanswered questions and different philosophies for this to remain in place as is.

But they should ask themselves, is that really good government? Or is it simply destabilising, bringing uncertainty into a stagnant economy?

This week's debate will be exhausting – redesigning a tax, pensions and benefits system in a four-day window, which is essentially what will happen with all the amendments in play, is a frightening prospect.

All the time, members should be kicking themselves and remember the phrase 'evidence-based decision making'.

Because at times much of what is on the table – both in the review and the amendments – has a whiff of people working off gut instinct. The classic 'it just feels right' argument.

Evidence is not simply acres and acres of figures which look good because there are lots of them. Those figures have to be both relevant and have meaningful analysis too.

States members must not get dazzled, swept away in 'the need to be seen to be doing something' argument without really knowing what they are doing.

When the States set off on this journey, one of the review objectives was fairness.

That is outlined in the early literature.

It acknowledged that fairness was subjective and people's views would differ.

Perhaps that is why the fairness concept has been sidelined to date, at least until the foundation's intervention.

There are winners and losers.

Treasury and Social Security were perhaps brave but foolhardy to take on some of the titbits around the edges that made little ground in terms of savings, such as free TV licences and prescriptions, but created plenty of ill-feeling.

The noise from that, though, unhelpfully disguised some much more fundamental and perverse wider impacts, such as making 3,000 lower-income households worse off.

Who will argue that is fair?

That is not an anomaly, those types of numbers are too fundamental to ignore.

Should you expect a review like this to have all the answers at this stage?

Probably not given the size of the topic.

Does it come up with enough answers, though, to create a balanced package that everyone can have confidence in?

At this stage, no.

As this week unfolds, we will discover whether there is enough there for deputies to take a giant leap into the unknown.