Cameron's moral obligation

JR

I'll be really interested to see whether the Tories really do propose new policies to deal with a huge increase in unemployment. Looking at the speech it can be read two ways: (1) we will somehow prevent unemployment rising, and (2) we will help you more if you are made unemployed.

Obviously unless you're going to consider public works programmes (1) is dependent on international conditions, fiscal and monetary policy. I can't see any profitable ground here or any real options. Brown is pursing employment maximisation policies by promising to borrow more to maintain spending whilst cutting taxes - that may have some very awkward long term effects but you can't say he's not making a bold effort to try and reinflate the economy.

So to (2). This is a looming issue and I wonder if the Tories have caught sight of it before Labour. The benefits system is pretty much the least generous in the western world (apart from America) for people who have worked in previous years and have some savings. In particular the Tory reforms of the 90s (in particular the introduction of jobseekers allowance in 95) mean the UK basically doesn't have a proper national insurance (or unemployment insurance) scheme. For a lot of people with any meanful savings this will be £60 per week for a maximum of 6 months.

I personally believe this isn't sustainable. If I were the Tories I'd find some middle class and working class voters (from sympathetic professions) that have recently lost their jobs - I'd then push the case studies like mad across the media(i.e. "I was working all the hours I could to earn £300 per week, I went down the Jobcentre - there isn't any work and all I get is £120 per fortnight....I'm having to spend all my savings just to pay the Bills).

Then I'd build a narative that those who have worked hard deserve more - for the Tories I'd imagine they'd want to compare and contrast to the so called undeserving poor who are on means tested benefits (i.e. haven't got good work records).

The background to this is that what the public have always been concerned about is people getting benefits they "don't deserve" (i.e. "her down the road gets her rent paid for her while I have to scrimp and save to get by"). But according to opinion polling I've seen this unfortunatly (and this is reflected in the Tory reforms in the 90s) turned into a general anti-benefits agenda because in the comparative boom times working people didn't feel any pain from the rates of unemployment benefits for all being reduced. Now there isn't any sort of proper protection.

This is an opportunity to show that the Tories will 'look after' those who have worked hard, steal a march on Labour - and in effect they can split welfare/benefit system politics in two to their long term advantage.

Of course the risk is that Labour can rightly suggest the Tories created this system in the 90s - but I think in the same way Brown has stolen the tax cutting agenda Cameron can steal the 'friend of the working man' agenda.

We shall see. Given current form I probably expect some reannounced rubbish about providing the right back to work services.

Christian Spence

"If I were the Tories I'd find some middle class and working class voters (from sympathetic professions) that have recently lost their jobs - I'd then push the case studies like mad across the media(i.e. "I was working all the hours I could to earn £300 per week, I went down the Jobcentre - there isn't any work and all I get is £120 per fortnight....I'm having to spend all my savings just to pay the Bills)."

I might suggest that if you were a Tory, you might see some irony the sense that people who save also get money paid out by the state as well. I'm afraid I don't think it should be possible to have it both ways. At the end of the day, what is saving for if it isn't for a rainy day.

I would be extremely unhappy if the Tories were to support a policy where my taxes were contributing to the unemployment benefit of a recently sacked person who has spent the past years saving up a nice nest-egg, but doesn't want to touch it.

TrevorsDen

Brown may borrow more to maximise spending but how will that seriously help unemployment? Unemployment has been steadily rising for some time, despite a massive govt spending deficit ... there is a major disincentive to employ people and a crumbling market for products.

'Look after the unemployed'? How? Make them so comfortable they don't bother about a job? The current govt moves are in the opposite direction.

Fairminded Fred

If I were the Tories I'd find some middle class and working class voters (from sympathetic professions) that have recently lost their jobs....

Top tip, JR. But why stick at the working and middle classes?

Let's look at this case study: George, in his 30s, until recently he was a respected upper class statesman who worked every hour God sends staying on yachts in Corfu. Now he's facing the chop and is completely unemployable faster than you can say tarmasalta, er, taramarmalata, or perhaps taramasalata.

Henry Rogers

Christian Spence,

I hope I am not misrepresenting your post but to me it reads very much as if you think those who could have saved but actually spent every penny should receive benefits whereas those who could save and did so should not? Do you really mean that? The logic of would be that fewer people would bother to save, which would have economic as well as social consequences.

The case of those who had no opportunity to save and simply must be looked after is quite separate.

David Bouvier

This discussion illustrates the perverse incentives involved:

If you offer benefits I have less incentive to save; if I have saved them become unemployed I should dispose of the savings as fast as possible - ideally in a way I can recover.

e.g. part-pay-off the mortgage, dump it into a pension, or buy some expensive salable 'personal possessions'.

JR

I agree with Henry for the record.

Christian - the issue is fairness and rewarding people who work. In this country we provide (and this was a Tory policy as well) means tested benefits so that no-one starves to death or can't get help with putting a roof of some sort over their head (housing benefit). But to get those benefits you have to have practically no savings.

The Tories (and indeed Labour) have completely undermined the National Insurance principle. i.e. that I pay money in NI to provide insurance if I'm unemployed.

Now if you work, pay your taxes, and save some money for a rainy day you barely get any benefit if you're made unemployed until you've spent all your savings - you're effectively punished for being sensible.

If you save nothing, or don't work the state will pay much more (because it can't rely on you spending your savings to keep yourself out of the gutter).

Yours is in fact the view the Tories and Labour came to - you can't have people homeless or destitute in the street but where possible the state should save money by forcing people to spend their savings before the state will help. Exactly the same principle was used on care homes as it was on unemployment benefit.

To me what Thatcher and Major did was the exact opposite of what a 'good Tory' should do. We now have a system that doesn't provide properly for its population and doesn't reward people who have worked hard.

Sue Denim

If you pay people to be poor, you never have a shortage of poor people. Whatever you do to this system, there are people who will find a way to get money for nothing, and others who will work. Personal experience of the jobcentre is that nobody in the system wants to get you back to work. They wait until you're about to go on the +6months list, then send you on 'training' to reset the clock. They also hint you might be able to become incapacitated with 'stress' if you haven't found a job.

The best thing any pol could do is take away the disincentives to employ people. Nobody will be hiring otherwise. This one will not be fixed by benefits or subsidising industry who say they are going broke.

A neightbour was am employer, up til last week. His biggest client went bust owing him money, and now he must close the doors on his factory, and a few people are going to be jobless. Who will rescue him and his perfectly viable factory? Fix that, and you just might be on to something.

Travis Bickle

Christian Spence

Good grief man, I'd suggest that someone in that scenario would have paid more than enough in tax and NI contributions to help him out whilst he is no doubt making every effort to find a new job. Certainly much more deserving than those who never have, and never intend to, do an honest days work in their lives.

Christian Spence

Some comments above have given me pause for thought: thank you for that. Heaven forfend that I should ever be too proud to be guided in a different direction.

Of course, if one assumes that one pays NI as an insurance policy, then we surely need to ensure that a balance is struck between those who have paid in and are entitled to their fair share of drawings, and those who haven't, and therefore aren't (or at least it should be limited, to ensure some level of fairness. The "all paying into the common pot" is, of course, essential in a civilised society, but there must be limit on how much people can draw if they never pay anything in.)

Perhaps this is where individual NI/health accounts have the potential to help in this matter. One has one's own account from birth, and one pays in and spends the "pot" where and how one wishes. The question is, at what point the state should say that your pot is now empty?