Who benefits?

The cries of unfairness which have gone up in reaction to George Osborne’s assault on the £12.5 billion annual bill for disability benefits are a sign of just how ingrained the welfare culture has become among Britain’s workshy millions.

The cries of unfairness which have gone up in reaction to George Osborne’s assault on the £12.5 billion annual bill for disability benefits are a sign of just how ingrained the welfare culture has become among Britain’s workshy millions. They are also an indication of how hard the Chancellor will have to battle against the assortment of quangos and charities which stick up for their rights to taxpayer-funded lives of leisure.

It is a mark of just how absurd the incapacity benefit had become that even the Labour government at the height of its Keynesian spending splurge decided enough was enough. In October 2008 it replaced Incapacity Benefit with Employment Support Allowance (ESA) and subjected claimants to a tougher eligibility test called the Work Capability Assessment (WCA). For example, an inability to bend down on to your knees was no longer accepted as a reason why you can’t sit in an office chair.

The results were astounding. Out of 352,500 assessments carried out between October 2008 and May 2009, only 18,100 claimants, or 5 per cent, were judged to be incapable of working at all. Twelve per cent were judged to be capable of doing some work, and were put on a programme to help them find it. Thirty-eight per cent were judged to be fully fit for work, and were moved on to jobseeker’s allowance, and a further 38 per cent of claimants ceased claiming while being assessed — no doubt realising that their days of malingering were over.

Yet even more astounding was the fact that in spite of the new tests, the number of claimants for disability benefits kept rising. In the year to April the number of people claiming either the old incapacity benefit or ESA rose by 12,880 to 2.62 million. It is hard to escape the conclusion that most of these people should really be added to the roll of the unemployed — the current figure for which, 1.48 million, flatters the state of the economy.

Disability benefits have become a scam perpetrated by governments of both colours since the 1980s. Stung by unemployment figures, Mrs Thatcher’s administration was only too happy to see people moved off unemployment benefit and on to incapacity benefit. The claimants were happy too, given that disability benefits paid them more: ESA is worth between £89.50 and £108.55 a week, compared with £65 a week for jobseeker’s allowance.

Over the next three years all current claimants of Incapacity Benefit will be reassessed using the WCA. This should exert downward pressure on claims, but it is not enough. Two reforms are needed to put an end to the dis-ability benefits scam for good. First, ESA should be lowered to the same level as jobseeker’s allowance, ending the incentive to get ‘put on the sick’. If genuinely ill people need money to help them overcome specific conditions, this should be granted according to need; not through an indiscriminate extra allowance.

Second, the government should stop publishing increasingly meaningless unemployment figures and instead publish a figure for economic inactivity, which includes all people of working age who are out of work for whatever reason. At present this figure stands at a shocking 8.19 million — one in five of the working population — and has increased by 298,000 over the past year.

There is no magic solution to Britain’s welfare culture, but one announcement from Work and Pensions Secretary Iain Duncan Smith this week shows promise: he wants social housing tenants to have greater rights to exchange their tenancies. Too many people, he observes, are trapped by their council house tenancies in areas of high unemployment. We are not going to get the unemployed into work unless it becomes easier for them to move around the country to make the most of the opportunities on offer. The sooner the ghettos of the hereditary unemployed and chronically ‘incapacitated’ are broken up, the better.