God, poverty and the government

Stephanie Flanders, Economics editor
 

Who has the more Christian reaction to poverty - Iain Duncan Smith or the Archbishop of Canterbury? It wasn't the question I expected to be debating on Newsnight last night.

But Rowan Williams' diatribe in this week's New Statesman sparked an unusually sharp reaction from the government, and when I interviewed Iain Duncan Smith it was clear why.

Like his former chief of staff, Tim Montgomery, the work and pensions secretary is a devout Christian who worked in opposition to strengthen ties between the Conservative party and the church.

Iain Duncan Smith argues fixing the welfare system is a moral imperative. As he sees it, fixing the welfare system is a moral imperative as well as a financial one, and - as my interview rapidly demonstrated - he deeply resents the suggestion that the first is taking a back seat to the second in the government's approach to the benefit system.

Put simply, he doesn't think poverty is the root problem: the root problem is a benefit system that "traps" families into generations of dependency. Long-term, you don't break that cycle by doling out more cash.

By not focusing on that bigger question, the minister had the temerity to suggest, the Archbishop was ignoring the real moral imperative. Quite an accusation.

Child poverty
 
Ben Bradshaw, a former Labour minister and practising Christian who appeared later on the programme, sees it more like the Archbishop.

Even if the likes of Iain Duncan Smith have good intentions, these critics point out that the benefit cuts will have the practical impact of punishing families with children - and putting more of those children into poverty.

Mr Williams is concerned about morals driving benefit reform. The Institute for Fiscal Studies, for example, estimates that child poverty will rise by about 200,000 over the next four years as a direct result of the government's tax and benefit changes. That doesn't sound very Christian.

In our interview, the secretary of state admitted that some of the government's policies - notably the £500 cap on benefits for unemployed families - might end up punishing families who were "playing by the rules". For example, as written, the change could mean a single earner on the average wage with four kids who gets laid off could find his family's benefits are cut by more than £200 a week.

In places like outer London, where rents are more than £300 a week, that family has to find a new job, fast, in a weak economy, or move hundreds of miles away to cheaper accommodation, and an even weaker local jobs market. That or try to live on £3-£4 per person, per day.

Mr Duncan Smith told me he was working to get rid of some of these kind of "unfortunate" side effects, and had previously discussed all of this with the Archbishop. But he did not shy away from the idea that his new system would make families face financial consequences for the choices they make in life.

One choice, he would argue, is whether to actively seek work. Another, almost as consequential in the new system, would be whether to have children.

He denied that this marked a return - in Rowan Williams' words - to notions of the "deserving" and "undeserving" poor. But others will disagree. Certainly, there is a moral compass at work, and it's pointing the minister in a different direction than the leader of the Church of England.

Religious faith
 
I asked Mr Duncan Smith whether he saw an irony here: that the government thinks it's putting morality back into the benefit system, while the Archbishop of Canterbury wants to take it out. Surprise surprise, he didn't think it was that simple.

You might wonder why an economist should engage with all this. But of course, this is all about economics too. When it comes to welfare reform, questions of religious faith, political theory, economics and behavioural psychology all converge on the same basic issue.

That is because when you give help to people in bad circumstances, you are likely to change their behaviour as well as their income, with possibly long-term consequences for society as well as the economy. The debate is over how - and how much - to take those consequences into account in providing that initial support.

Who came out best from yesterday's argument - the Archbishop or the government? I leave that to you to judge. But the interview is well worth watching. bbc news