The welfare Perestroika

Marin

Prunell's plans are indeed due to start 2010 or 2011 and this, of course, means that Labour will not have to implement them and be portraited as heartless. Nevertheless they will be able to claim credit for them at election time. Have they just discovered that timing is everything?

Susan Lloyd George

America is hardly a flagship of financial success with its trailer park induced recession, which has crossed the globe. Therefore is it wise for our superior country to ape this inferior nation with its economic welfare reform policies. I'm inclined to think that many people on benefits use their time productively and wisely. For instance, I know of a lone parent who uses a lot of her time coaching her children as the secondary schools are hard pressed and using her children benefit to pay for extra tuition. Two of her children have already made it to university. Is it better for children of lone parents to be without their mothers when they are a positive force for good?

JR

There's something about America Works that winds me up, probably that they're talking rubbish and I suspect they couldn't win contracts over here because they're not very good - certainly compared to the UK and Australian organisations dominating the extremely competative market at the moment.

For the record contracts are already in place with private contractors responsible for 60% of IB claimants on outcome based contracts. and from next year JSA customers after they have been on benefit for a year. So all in all outcome based contracts worth around £1.5bn decided by competative tendering.

Provision of employment support in the United States especially for sick and disabled customers is inefficient and in no way more liberal than the UK's is today. A lot of it isn't outcome based, instead you pay the jokers to deliver Workfare and 'training' at extortionate prices.

In terms of the USA more generally it's a bit of a joke.For those who are counting the US has a higher percentage of people on disablity benefits (the equvilents to IB) than the UK and their numbers are increasing rapidly. If anything there is evidence of a UK style late 80s situation in the USA with long term unemployed people being pushed across to unconditional disability benefits. Because of that US benefit recipent rates stayed roughly stable if you compare federal plus state rolls in 95 and 05. There is no requirements placed on their disability benefit recipients once they're on the benefit and their employment support programmes for those claimants are largely 'supported employment' programmes - yes they have more in common with Remploy than anything else.

So yes you can praise them for keeping unemployment benefit receipt at a similar levels to JSA, substantially reducing benefit dependence of some groups of lone parents - but accept they have largely hidden benefit dependence in disability benefits and make no effort to get them off benefit therefore storing up huge Glasgow style problems in their system. It's only fair.

Fraser Nelson

JR, where have you been? I was hoping for your take on the Green Paper. Whoever you are, you're one of the few people in the country who has heard of America Works. If we were playing Guess Who game and I knew more people in the policy field, I'd have you down to about three people by now. Did Purnell exceed or fall short of your expectations? Are you with Field on considering this a ruse, or do you think this is the real deal? I have taken a charitable view so far but I may have missed a flaw you've spotted. Come on. I only do this for the comments.

Corin Vestey

The problem with the much trumpeted welfare reforms in the US is that while they did drastically reduce the numbers of people claiming the time-limited benefit (I forget the name of it) only around 50% of the people who left the welfare rolls (for that benefit) actually went back to work.

The rest simply decided to live without that particular benefit – and avoid the hassle of ‘work-focused interviews’ etc. They were able to do this because the time limited benefit typically only makes up around 20% of a welfare claimant’s total welfare ‘income’.

So, in exchange for reducing the numbers of people receiving one benefit payment, the US got a major expansion of the Earned Income Tax Credit, a useful but extremely expensive programme now with its own constituency of recipients resistant to reform. The welfare budget increased not decreased.

If we are serious about welfare reform in the UK we will have to tackle not just the JSA and IB but roll back the (virtually) universal welfare payments that people are being trained to accept as their right. Child Benefit, the Child Tax Credit and the Child Trust Fund voucher (not the tax break) should all go. This is, I submit, somewhat politically sensitive.

My preference would be to scrap Child Benefit and the CTF voucher as part of a reform of Income Tax that took the lower threshold to £10,000-£12,000, say. The CTC would have to be reformed as part of an extension of the Working Tax Credit so that together work provides the pot of gold that is currently provided by the out of work benefits. The process of getting people over the hump of withdrawal of tax credits will have to wait for another day.

As for Housing Benefit… I shudder to think.

Rex Burr

Welfare reform is always out of phase with the economy.
When government revenue is buoyant welfare costs are accepted.
When the economy begins to falter there is pressure to get welfare recipients back to work, just when the jobs are disappearing.
It won't happen.

JR

Green Paper?

Some excellent initiatives - disregarding child maintenance payments, requiring far more from new IB claimants (many more interviews and a requirement to do some activities that will help them back to work), making all but sickest existing IB claimants do interviews (about an additional 1.5m people brough into conditionality).

Some interesting expeiments - the workfare pilot for JSA claimants after two years (numbers of people left on JSA after two years are actually tiny but politically a sensible move) and pilots of the AME/DEL funding agreements (although the nationwide changes for IB claimants are more substantial).

Some half thought through stuff - I'll leave you to decide which heavily trailed policy (not those above) will likely have little success in changing this group of people's behaviour and likely have substantial unintended (but well known to Ministers) consequences.

Some things that will be toxic to Labour MPs and others alike (which weren't remarked on yesterday) - the benefit 'alignment' and contribution condition changes in chapter 6, and the arbitary further tightening (by 10%) of the medical test for IB claimants in 2010.

Both of these will hit (in the Conservative media's terms) the 'deserving' poor hard in the coming recession. So Auntie Kath, who's worked througout her life, who gets laid off and is quite depressed is going to be collecting £60 a week for 6 months and then she's going to be running down her savings and selling her house.

So bold, but not as bold as some might think. There's a very well informed lead editorial in the Guardian today well worth reading. I'd guess Tom Clark wrote it (http://www.guardian.co.uk/politics/2008/apr/19/gordonbrown.labour1).

On the last point above (Auntie Kath) - that the £60 per week JSA level, and 6 month time limit before it is means tested. I think given a recession this is going to be a huge wake up call to people. The system developed (mainly solidified by the Tories introducing JSA in 95) is terrible for middle class workers house owners who then fall out of work. There is effectively no National Security (i.e. employment insurance) scheme in this country just a means tested system (welfare dependency anyone). The replacement rates are dire. In the past the middle classes might of sneaked onto contributory IB but with the radically harder test that isn't such an option.

This is almost unique in the western world and could cause a huge political problem in a big recession as everyone is pushed to the bottom. The middle classes might have their preconceptions of welfare sorely tested. I think it might even need to be reformed to support a more generous NI system that payed a % of income for X months. Hell that wouldn't be the worst Keynesian idea if the economy has deflated by that point.

Anyhow I'm off for my holidays for a rest.

Verity

Susan Lloyd George, Corin Vestey and JR - Your venom drips down the screen and runs off the monitor. Hatred and envy of the United States, presented as rational argument, is stomach turning.

And you come from a country that gives "unemployed", aka "never employed and never intend to be" individuals taxpayer money for beer, cigarettes, take-away meals because with all the leisure time in the world, they're too lazy to cook, scratch cards and lottery tickets.

In the United States, the idea is to get those suckers into a job and made independent again. The genuinely disabled are few and far between.

I stopped reading JR's venom-laden contribution when I came across this absurd phrase: "especially for sick and disabled customers".

People who are on the public teat are not customers. Hint: customers pay for goods and services. As long as you use illiterate, would-be manipulative language like this ("would-be" because it only works with morons and other socialists, which are the same thing), you will not get anyone to read all the way through your posts.

We're not the top nation any more. We don't know better than everyone else, especially our usurper. They usurped the "most powerful" spot because they are bigger, richer, smarter, more adventurous. They deserve it. And finally, we would never have made it to the top spot and held our position for 300 years if our country, during those centuries, had been stuffed full of pretenious, "caring" lefties like yourselves. We would have ranked on a par with Romania.

Water

"As for Housing Benefit… I shudder to think" so do I, one can only begin to guess...

gerry

None of the parties have opted for making reproduction not a career option.

David Short

I still have absolutely no idea what gain or 'credit' anyone is going to get out of these absurd proposals.

What possessed the Government to announce them just ahead of Glasgow East?

Are they a secret weapon to promote Scottish nationalism?

Or will these proposals only ever affect England, and Scotland can carry on 'dependency'?

As for having disaffected youth roaming the streets picking up litter, and then being generally very angry in the evening, well.....

Did Purnell ever wonder about the gap between 655,000 vacancies, and 2 or 3 million or more unemployed?

I never thought I'd see a Labour government kick a man (woman, boy or girl) when he is down.

The idea that someone has to 'work' for about £60 a week when that wouldn't buy the average MP lunch, or even a taxi home, is sickening and without any morality.

JR

Verity.

Could you bear to read one paragraph more. Go on, please.

Just the bit about the US having more disabled benefit recipients/claimants/whateveryoulike with the numbers increasing rapidly. And the bit where I criticise them for placing no requirements on sick and disabled claimants at all.

And if you do manage to read that bit can you tell me how the hell the USA system is better in forcing sick and disabled into work. I'd say they're a soft touch, the lilly hearted liberals.

As for "customers" - lovely to have touched a nerve. Actually I'd say that around 1.4m people a year are "customers" of a National Insurance scheme that having worked almost all their lives, paid taxes and then fallen sick or out of work get only around £60-£90 a week tops and half of them will only get that for 6 months.

To be honest if I was a "customer" who got that sort of Equitable Life result out of an insurance company I'd be pretty pissed off. I used to think the "deserving poor" and "undeserving poor" were pretty blunt terms but I'm glad to see one rabid right winger has started a war on the "deserving poor"......

Verity

JR - No. I'm not going back to read the rest of your post, but I'll respond to this one as you had the courtesy to reply.

Here's the problem: word manipulation to elevate everyone: Actually I'd say that around 1.4m people a year are "customers" of a National Insurance scheme ...

No. They're not customers. They are contributors. Customers choose where to spend their money. As long as you use fake words, you will not get my full attention.

... And the bit where I criticise them for placing no requirements on sick and disabled claimants at all.

Are you talking about Social Security or are you talking about unemployment payments? If so, you are talking about 50 different states, some of which are very strict indeed. I believe it's Wisconsin which pays out only if you've been paying in for five years, and even then, your payments only last for three or four months. Then you can't claim again for another three or four years.

For the genuinely disabled, we must, of course, have mercy. But at least half (I'm making this figure up based on what I've read) of people on disability "benefit" are perfectly able to work. They're on "disability" because the government wants them off because the socialist government manipulates the unemployment figures. I recall reading that one of the gypsies that that Martin fellow winged was put on "disability". His neighbours were unsurprised to see him taking holidays with his mountain bike. The whole issue in Britain smells bad.

I cannot see the point of constantly comparing us to the United States, where a completely different mindset and attitude to independence and self-reliance apply.

I'm a right winger. I am no more rabid than you, a far left socialist, is rabid.

Corin Vestey

Umm Verity, easy on the vitriol please. I’m a huge fan of the US and, as I mentioned, I think that the EITC has an important role to play as do time limited benefits, if they are enforced. Welfare reform in the US has shown the beginnings of the way but if we don’t look at why measures have not succeeded as well as they might we learn nothing.

If anything my criticism is in fact that, despite the hype about five year limits (which the states do not in practice enforce, by the way), the range of non-discretionary benefits in the US is wide enough to allow some claimants to ignore the impact of the withdrawal of a given welfare payment. This undermines the real efforts being made to get the unwilling into work.

As you will note from not reading my post, I make a case for addressing – here in the UK - the nearly-universal benefits that are neither work nor main benefit dependent (CTFs being slightly different) and which therefore undercut any compulsion to accept work or training based on the withdrawal of ‘main’ benefits.

That’s it really. I’m delighted to be accused of being insufficiently right-wing though, don’t get that much anymore.

Verity

I don't believe there is a universal blind eye turned to the rules in 50 American states. That is absolutely not possible.

Not every state has the five-year rule, anyway. Not every state limits unemployment payments to 13 weeks. There are huge differences in how unemployment is administered. Plus, if you lose your job and move to another state to look for work, you have to claim your benefits from your home state.

Social Security, being federal, is different again.

Marian C

Verity 1:27; I totally agree with you

JR 3:22; you state "As for "customers" - lovely to have touched a nerve. Actually I'd say that around 1.4m people a year are "customers" of a National Insurance scheme that having worked almost all their lives, paid taxes and then fallen sick or out of work get only around £60-£90 a week tops and half of them will only get that for 6 months."

If you are refering to pensioners, then yes, I would agree with you, pensioners do get a bum deal in this country and that is a disgrace, they deserve and should get a lot more. Or even if they are not pensioners but "have fallen sick or are out of work", then yes, again they should be given help. However, the operative words here are "worked all their lives".

Unfortunately, there are a lot of people claiming benefits etc in this country, who have never worked a day in their lives, and they most certainly know how to play the system, or should I say, bleed the system.

A lot of these people, not all, are quite proud of the fact that they know how to play the system, and to them, playing the system is their career choice!

In some cases, more than one generation are claiming benefits; and again, most of these have never worked a day in their lives either.

You can't tell me that they are all sick, and therefore unable to work, that would be total nonsense!

Those who really cannot work due to ill health or disability should be given increased help, not less, and the same should apply to pensioners.

Personally, I do not feel that pensioners should have to pay tax at all on their pensions; its been taxed once at source so why the double whammy.

However, for those who have NEVER worked, and furthermore, have no intention of working, then they should be made to get up of their lazy backsides and be forced to work; and this is were Verity is absolutely right.

JR

Verity - I'm talking about disability benefits which are federal in the US.

Specifically the Social Security Disability Insurance (contributory) and Supplemental Security Income (means-tested) schemes.

Together these are the equvilent of our incapacity benefits. And they pay these to a higher % of their population than us, the numbers are going up not down, and they put no requirements on the claimants.

So, according to what you've read, they should have less than half of those scroungers on their benefits. And whatever the ills of this Labour government the Conservatives shifted huge amounts of people from unemployment benefits to IB. As I've said before there is superfical evidence Bush has done something similar in the US over the last 7 years.

Frances

Verity, you lost all credibility at the point you called Labour a 'socialist' government. I take it you regarded the Thatcher administration as left-leaning social democratic?

David Short

National Insurance is meant to act as an insurance against unemployment; it's not just a contribution to your meagre pension in the UK.

I agree it's ridiculous to compare the States with the UK. They have never had the 'welfare state' as set up in the Forties.

So it's equally ridiculous for an idiot, public school minister to put forward proposals to change a system and a mindset of 60 years in a nation overnight.

Where do they get these people?

Why do you think people from the poorer parts of the EU and further come here? Because they know they'll get 'free money'. But it's not 'free money' to former taxpayers within the UK.

They would bypass Italy because there is almost nil social security. So Italians know they must work, at whatever job, to get by.

But similarly, you can't change the British into Italians overnight.

And of course, tax evasion/avoidance is a national sport in Italy. If you get nothing from the State, then why not give nothing to the State?

Hence the need for a Financial Police and a receipt for even buying an ice cream on the street.

In the end, I wonder if this is a Baldrick-style 'cunning plan'. Bring in something that will be hugely unpopular and unworkable, to be introduced during a Tory government, and blame them for it, saying they'd cocked it up, lacked compassion etc.

Watch out for much more drug dealing and mugging (better than street-sweeping) if this nonsense ever comes to pass.

Frank Pulley

David Short makes an important point in his last paragraph (5.57pm). The Government has not yet stated what it will do with those whose benefits (of any kind) are stemmed and still refuse to work: I guess that an immediate jump in crime statistics will ensue as Mr Short implies. Moreover, I'm not sure what proportion of claimants both draw benefit and work on the 'black economy' as jobbers or hired hands for cash no questions asked. Obviously the government doesn't know either, but they must know it's rife. Already many career criminals still find time to draw benefit for not being employed in a legal occupation, or malinger and feign disablement while thieving, exploiting prostitutes, peddling drugs, etc. etc., but they are rarely prosecuted for benefit fraud, even when it is reported (I know this from personal experience). Hiring enough operatives to investigate this level of fraud on the taxpayer would perhaps cost as much if not more than the benefits paid, so it is allowed to proliferate because it also keeps the unemployment figures down as a side effect.

Doctors are intimidated or assaulted by thugs, drug addicts and drunks (or a combination of all three) seeking sickness certification or more junk. Many GPs I have met will openly admit they give sick certificates and scripts on demand regardless of whether they are justified or needed, as there is little or no guarantee that the police will arrive promptly if they are called to such incidents and they just want to get the trouble makers out of their surgeries to prevent injury to staff or other patients. Staffs in A & E Departments are submitted to similar threats and often suffer actual violence. And the taxpayers also foot the bill for those whose 'life style' illnesses caused by excess drinking, (see today’s figures 800,000 cases a year), nicotine, drugs or diseases contracted during promiscuous and perverted sexual behaviour, all of which drain NHS resources and combine to make the whole function of the welfare state intractably problematical. Decent people who are in genuine need are easily dissuaded from pressing claims or are ashamed of being a burden on the state, so many muddle through in comparative poverty, having already paid their contributions for a working lifetime. Successive governments have contributed to this state of affairs by failing to address malingering and welfare fraud. Now it is an accepted modus operandi within the victim culture of the underclass.

Think tanks will tittle-tattle and tinker, swap notes with other think tanks; far too much thinking, far too little doing! The damage is already done. We’ve bred a sizeable section of two generations that contributes nothing to society but lives well on welfare scammery and other crime and screams for more daily. There’s a third generation already hatched and ready to follow in the footsteps of the feckless. I haven’t got the answer to it, nor has anyone above as far as I can tell, but Verity’s sanguine suggestions are promising. A government that gets the state off our back and out of our pockets and obligates able–bodied people to work for a living and pay their dues would be a start, particularly if they also stop the world’s spongers from arriving on our doorstep and taking the ‘welcome - this way for housing and sustenance’ sign down. Are we likely to get such a government before the national debt sinks us? I doubt it. Sow with the wind - harvest the whirlwind!

I feel another quote coming on: as Sir Richard Mottram said in 2002 … (you know the one. I don't have to spell it out - it must be the current mantra in the corridors of power in Westminster and Labour Party HQ).

As for Purnell's 'glasnost': I thawt I thaw a pretty prat.

Big Alec

I've been on welfare for the past 5 years due to my health. I wont go into detail but I have weight problems which effects my walking and breathing. I admit I do smoke which probably doesn't help but thats the only luxury I have in life. I also have mental health issues. People who say that I should go out and work for my state benefits (which is only £110 a week by the way) should think about what they're saying. Soon the country will be like nazi germany. people like me have very low self-esteem as it is.