The Daily Mail says ‘No’

By DeusExMacintosh

The welfare system is also there to help people of a working age when they lose their job, have a disability, start a family and need help with low pay. But the truth – as everyone knows – is that the welfare system is failing many millions of our fellow citizens.

People find themselves trapped in an incomprehensible out-of-work benefit system for their entire lifetimes, because it simply does not pay to work. This robs them of their aspirations and opportunities. And it costs the rest of the country a fortune.

Welfare spending now accounts for one third of all public spending. Benefit bills have soared by 45% under the previous government. In some cases, the benefit bill of a single out-of-work family have amounted to the tax bills of 16 working families put together.

This is totally unsustainable and unfair.

The last government promised reform and flunked it. We will deliver.

My RHF the Work and Pensions Secretary is setting out proposals, with my support, to replace all working age benefits and tax credits with a single, simple Universal Credit.

The guiding rule will be this: it will always pay to work. Those who get work will be better off than those who don’t. It represents the greatest reform to our welfare state for a generation. It will be introduced over the next two Parliaments, at a pace that ensures we get this right.

I have set aside more than £2 billion over this spending review of resources to make this happen. And it will go alongside our new Work Programme, which we are also funding today.

Drawing on the skills of the voluntary sector and private providers, the Work Programme will provide intensive help to those looking for work – and support for those who could look for work but currently lack the confidence or skills to try.

The Department for Work and Pensions will make savings to help deliver these schemes, by increasing the use of digital applications and reducing overheads. We will also be seeking substantial savings from the rest of the £200 billion benefit bill, on top of those already identified in the Budget.

As I said in June, the more we could save on welfare costs – the more we can continue other, more productive areas of government spending. And in the massive public consultation we conducted over the summer, the overwhelming message we received was that the British people think it is fair to reform welfare bills in order to protect important public services.

So today I announce these further welfare savings.

The Chancellor George Osborne, Spending Review

Other messages received in that public consultation included the forcible sterilization of single mothers, return of public executions and the employment of crocodiles in Jobcentres to discourage unemployed people from claiming support.

40 Comments

  1. Posted October 21, 2010 at 10:32 am | Permalink

    Do they have any concept of how much it is going to cost to help people with a disability and a desire to work to actually get jobs that they can do, enjoy, get to, work at safely and within their limits? I’m guessing that this falls into the ‘they can suck it up’ category and will no doubt also catch a lot of people who are genuinely unable to work.

  2. Posted October 21, 2010 at 11:27 am | Permalink

    the benefit bill of a single out-of-work family have amounted to the tax bills of 16 working families put together.

    … Yeah, if you choose carefully.

    No mention of tax scams and government corporate welfare going into executive pockets, where there is patently no need. I bet you could find a lot of execs where the dodgy tax avoidance, or large bonus-for-faiure (think banks and financial crises), of ONE of those execs could cover the costs of providing welfare to 16 families.

  3. kvd
    Posted October 21, 2010 at 12:47 pm | Permalink

    DEM I see the word “fair” was used. That would be things like “it’s only fair the crocodiles get first whack” and “we plan to employ a fair number of crocodiles” I suppose. I am sorry to read this, and I hope somewhere buried in there is some sort of humanity. Or has that been mortgaged as well?

  4. PAUL WALTER
    Posted October 21, 2010 at 4:46 pm | Permalink

    Gary Sauer Thompson, at “Public Opinion”, has included another of those gorgeous Martin Rowson Grauniad cartoons; this one even less easy to interpret than some previously, unless youre a pom.
    But one gets the idea quickly, particularly after you read Sauer Thompson’s take on their horror budget.
    Rowson’s series has Cameron and co as ferocious sado economists drawn from Puritanism and the Jacobite Reformation with its superstitions and bloodletting. A fierce zietgeist indeed, and all this “discipline” to characterise it.

  5. Posted October 21, 2010 at 5:05 pm | Permalink

    It all seems a bit strange: but I am looking from the perspective of an country whose welfare state is eminently sustainable — demographically, fiscally, in terms of popular support.

    Britain seems to be in a fiscal mess, with a migration and integration policy that seems to have long since lost popular confidence–and feeds badly into attitudes to welfare–rather too many failing schools, a health service that lurches from crisis to crisis and an increasing crime problem. If you lose confidence in the state to deliver even basic services, I guess simply cutting it has a certain brutally simple appeal.

  6. Posted October 21, 2010 at 5:32 pm | Permalink

    [email protected] said

    If you lose confidence in the state to deliver even basic services, I guess simply cutting it has a certain brutally simple appeal.

    Hmmm. If I was to suggest that sort of feedback loop of self-fulfilling prophecies of the right wing in power (deride as dysfunctional, sell cuts to MAKE it dysfunctional, deride, more cuts, deride more…) then I’d be accused of mouthing mindless lefty propaganda.
    😉

    Seriously, that statement of yours has great explanatory power.

  7. kvd
    Posted October 21, 2010 at 5:35 pm | Permalink

    B.43 includes

    introducing objective medical assessments for all DLA claimants;

    and then

    B.44 These measures were excluded from the distribution analysis in the previous section because it is not possible to formulate robust assumptions about how policy impacts would be felt at an individual level. For example, the introduction of objective medical assessments for DLA claimants is excluded because it is not possible to model deterministically how individual claimants might fare against medical assessment.

    So… I can now robustly determine that this means?

  8. Posted October 21, 2010 at 5:39 pm | Permalink

    [email protected] Thanks 🙂 Though I would note that the Centre-Left was in power in the UK for over a decade, while the Centre-Right in power in Oz for over a decade and our welfare state is bouncing along quite functionally 😉

  9. Posted October 21, 2010 at 6:16 pm | Permalink

    So… I can now robustly determine that this means?

    That they’re *ss-pulling, kvd. Disability Living Allowance has had “objective medical assessments” by actual doctors no less, for over a decade now. I had one when I was first disabled back in ’98, they just weren’t compulsory before.

    In addition, it is entirely possible to formulate a robust assumption by extending the Department of Work and Pensions own estimates of fraud rates for DLA onto the numbers to be re-tested. That fraud rate currently stands at less than 0.5%, so applying it to the 2.9 million caseload (round to an even three for new applicants between now and the implementation in 2013) and you have 150,000 claims reasonably expected to bite the dust. Unfortunately this is well short of the 20% budget reduction the coalition UNREASONABLY expects to achieve which is why you’re not reading about it in the Spending Review.

  10. Posted October 21, 2010 at 8:03 pm | Permalink

    DEM:

    So:

    (1) did you vote for the Tories?
    [PS: your vote is secret, I accept entirely you may decline to answer.]

    (2) Otherwise, suggest you take this up with SL who surely either did or would have if she could have.

  11. Posted October 21, 2010 at 8:54 pm | Permalink

    It’s easy and cheap to blame Labour and the Tories separately for borking the UK’s welfare state (in ways, as Lorenzo points out, that have never happened in Australia). Both, however, are equally guilty of making a mess of the system. Some examples?

    1. The left has an addiction to progressive rather than flat rate taxation. The effect of this under successive Labour governments (including Blair) was to create effective marginal tax rates that Sergei Bubka couldn’t pole vault over. This means that work of any sort never pays for a benefits recipient. Weaning the left off progressive taxation (the last bit of Karl Marx that still persists in modern Western economies — he advocated it) is an important part of lifting benefits recipients and the low paid out of poverty.

    2. The right has an addiction to personal responsibility and the savings that can be had by combining households. This means (under Thatcher) that people on benefits who moved in together lost a considerable sum. The effect of this is that people on benefits (or who are low paid) routinely move in together but ‘maintain’ a second address so that they can keep their benefits payments at the pre-cohabitation level. The net effect, however, is that the UK’s housing benefit bill (paid on all those second addresses) is actually higher than all benefits paid to disabled people bundled together.

    I could go on and provide many other case studies, from both sides of politics. You get the idea, however.

    I was able to convince (as a policy wonk) the Tories to abandon what is called the ‘couples penalty’ (point 2) before May 10, using research I completed as part of my MPhil. By contrast, Labour thought that facilitating cohabitation ‘privileged’ one lifestyle over others and showed me the door. The Tories abandoned their pre-election policy to end the ‘couples penalty’ as a result of forming a coalition with the Lib Dems. Like Labour, the Lib Dems thought the policy ‘privileged one lifestyle over others’.

    You may think Labour and the Lib Dems completely barking over this. I couldn’t possibly comment 😉

    It is perfectly possible to criticize right-leaning parties over welfare reform from the right, as I have done. Always remember that the right (call it ‘Conservative’ or ‘Republican’) has two main strands — conservative and libertarian. Sometimes the libertarians are in the ascendant (Thatcher, Goldwater). Sometimes the conservatives are in the ascendant (Bush II). It is my belief that libertarians provide superior government, for the simple reason that conservatives have the same instinct as many lefties — a desire to use law, planning and regulation to interfere with the private lives and choices of free citizens.

    Conservatives are often shocked when their pet anti-abortion law, or faith-based initiative, or anti-drug law is an expensive and socially destructive failure. It is then up to libertarians to explain that all the standard criticisms of the Great Society, or the Beveridge Report, or rent control laws apply with equal force to conservative attempts to police morality.

    So Marcellous, I’d appreciate it if you desisted from attempting to impugn my motives.

  12. desipis
    Posted October 21, 2010 at 9:32 pm | Permalink

    SL,

    Weaning the left off progressive taxation (the last bit of Karl Marx that still persists in modern Western economies — he advocated it) is an important part of lifting benefits recipients and the low paid out of poverty.

    Progressive tax systems only cause marginal tax rate issues when, due to inflation and reformReaganomic degradation, they shift from ramping up between the middle and upper class to just ramping up between the lower and middle class causing significant overlap with welfare tapering.

  13. Posted October 21, 2010 at 9:43 pm | Permalink

    Desipis, I believe the phrase you’re looking for is ‘bracket creep’. It’s endemic in all progressive taxation systems, and even if one doesn’t abandon progressive taxation altogether, the solution is to make the system much flatter, with many fewer ‘steps’.

    Given my way, I’d get rid of progressive taxation altogether (it has perverse incentives at the top end, too, like encouraging the wealthy to adopt non-dom status), but as an interim measure I’d accept moving the ‘steps’ a long way up the income scale and having far fewer of them. This needs to be coupled with a large tax free threshold. It is simply ridiculous having the poor pay tax.

  14. Posted October 21, 2010 at 9:55 pm | Permalink

    [email protected]: Well, FU… if you are ever back in Melb and want to borrow all 3 series on dvd… (ditto LE)

    Wow! That benefits for 2 houses a couple thing is pretty bonkers and probably pushes up rents in the “budget” end of the market. Admittedly, it might make sense for a limited time, and I can see the incentive or necessity given costs of moving all your stuff – in which case a moving benefit (again not too often without a good reason, and means tested) would probably save money within a year or so.

    It’s worth noting that the Tony Tories here cracked it when KRudd wanted to start phasing out child benefits for those earning $100000 pa approx.

    It’s too often the case of bugger the policy outcomes… Pander to the voting segment you most need to keep/win. I reckon DEM’s quick figures show that being seen as hairy chested and taking action is the most important outcome for the UK government, not fiscal and human responsibility.

  15. Posted October 21, 2010 at 10:28 pm | Permalink

    [email protected] : The impact of bracket creep and sudden disincentive might also be minimized by having an infinite number of infinitely small steps… Rate=((Earnings-TaxFreeThreshold)*FudgeFactor) where fudge factor is not necessarily linear (something vaguely sigmoidal is probably the best… Logistic, Hill etc equations would be ideal for everyone but the politicians trying to sell them, and regular John H will probably giggle at the metaphor of dissociation of money rather than oxygen at the most useful places, with taxman and earner both trying to bind it).

  16. kvd
    Posted October 22, 2010 at 2:16 am | Permalink

    [email protected] Only on first coffee for the day but there is a zero or a decimal place out of alignment? 150,000 is 5%. Whatever. But that would probably qualify for the 50 pound penalty attached to errors in form filling, so I think I’ll just have another coffee.

  17. John Turner
    Posted October 22, 2010 at 6:03 am | Permalink

    I do charity work for a youngish mother of three with a life limiting recessive gene problem which affects about one person in about 750,000. The gene fault, which both parents must contribute, causes optical atrophy, diabetes and several other problems. Should she and her children who have no apparent health problems but who may carry the recessive gene be denied a reasonably comfortable life? I think not.

  18. Posted October 22, 2010 at 9:38 am | Permalink

    @SL:

    Not impugning your motives, save as to their consequences.

    @LE

    You’ll note I didn’t suggest DEM take the matter up with you. It is of course possible and indeed likely that UK Labour would have done something similar in the circumstances if it were in office, but my rule of thumb, derived from experience and observation, is that in almost all cases to do with social welfare, the right is predisposed to be harsher (and especially to the poor) and generally is.

  19. desipis
    Posted October 22, 2010 at 9:58 am | Permalink

    SL,

    As far as incentives go, I’d prefer a wealth tax rather than taxes that discourage economic activity (eg income tax), for general revenue raising. Although regulatory government bodies could be funded by taxation on the relevant economic activity.

  20. Posted October 22, 2010 at 10:27 am | Permalink

    ER majesty, who I suspect disliked Maggie Thatcher, might again put pretty stern words critical of the government between the lines of this year’s xmas message.

    I always try and catch those well-constructed addresses, and wonder how useful excerpts might be in letters to the politicians.

    Is Dave Cameron’s hero FU? You might well say the policies are identical, but I couldn’t possibly comment.

  21. Patrick
    Posted October 22, 2010 at 1:47 pm | Permalink

    I dunno marcellous, what is really crueller, cutting benefits, or letting you live your whole life believing in a free lunch that simply doesn’t eventuate (see eg Greek public sector workers, see soon French public and protected sector workers, etc)?

  22. kvd
    Posted October 22, 2010 at 2:01 pm | Permalink

    Patrick “letting you live your whole life” has its attractions. Personal preference as to free or expensive lunches is ancillary to that. And for some, it is a luxury to have such a choice. Or lunch.

  23. Posted October 22, 2010 at 4:26 pm | Permalink

    Being a terminal policy wonk, I am wondering why both sides of British politics made such a balls-up of their welfare system when the performance of both sides of Oz politics is, well, SO much better.

    So, the first point is — it is not ideology (at least, not in a conventional left-right sense).

    What are differences? Oz is smaller and effectively on it own (CER with Kiwiland hardly is up to the weight of the EU: it is more like having a sort-of-extra State). That concentrates minds somewhat.

    We are seriously federal and have an elected upper house. Governments have to put a lot more effort into persuasion, which leads to relatively sophisticated policy debates.

    So, more focus on persuasion, more realisation of vulnerability, more concern for consequences leads to better public policy.

    I suspect UK governments are just more inclined to believe that They Can Make It So since the centralised “Elective Dictatorship” means they can and size and EU membership gives a greater sense of invulnerability.

    Just a thought.

  24. Posted October 22, 2010 at 7:37 pm | Permalink

    Lorenzo, had I not been living in Scotand I would have happily voted Conservative but I went for the LibDems having been convinced by Vince Cable’s £10,000 tax-free threshold. I’m not convinced that the Conservatives are totally at the mercy of some pernicious Tory philosophy, they make choices like anyone else (just as the LibDems have done in order to participate in government) and as SL points out, there is more than one kind of conservative.

    Hate the policy, not the person?

    My problem is that the choice of policy is inefficient and ill-conceived – (AND threatens me, declaring a personal interest) – when there is a much simpler alternative in that £10,000 tax allowance which will do fare more to “make work pay” than any welfare cut, means-testing or compulsion they care to mention.

  25. Peter Patton
    Posted October 22, 2010 at 7:56 pm | Permalink

    DEM

    I think I read you post you’re a Brissy gal.?Have you thought of returning to our seemingly more secure approach to disability?

  26. Posted October 22, 2010 at 8:27 pm | Permalink

    Too bloody hot, Pete. Though I do miss the Jacarandas.

    [email protected]: You’re entirely correct even uncaffeinated, I had a wandering decimal. A whole 15,000 claims for DLA could be expected to bite the dust. Now they just have to find a good excuse to drop the other 585,000 claims.

  27. Peter Patton
    Posted October 22, 2010 at 8:29 pm | Permalink

    DEM

    I came back, intending to return to London 6 months later. I live in Sydney, and I agree it IS too bloody hot! 🙂

  28. Posted October 22, 2010 at 9:23 pm | Permalink

    Links may not work, need to be registered.

    http://jech.bmj.com/content/56/10/722.extract

    Editorial
    Is there a causal association between suicide rates and the political leanings of government?

    http://jech.bmj.com/content/56/10/766.abstract?ijkey=4cbca2175f9af973bde61bcca8324d13a897014c&keytype2=tf_ipsecsha
    Research report
    Suicide and political regime in New South Wales and Australia during the 20th century

    Conclusion: Significantly higher suicide risk was associated with conservative government tenures compared with social democratic incumbents. Results are discussed in terms of the differences underpinning conservative and social democratic government programme ideology, and their relevance to Durkheim’s theories of suicide, social regulation, and integration.

  29. Posted October 22, 2010 at 10:20 pm | Permalink

    Really what one has to do is recognise that personal responsibility is not possible in all circumstances, but one does not wish to totally stifle personal responsibility for one’s circumstances either.<

    The challenge there is that all the personal responsibility in the world won’t overcome prejudice. I’ve cited previous research indicating how the disabled are marginalised because of innate predisposition and the BMJ has even written editorials addressing the need for wider public education about the stigma disability. Personal responsibility has its place not only for the disabled but as a challenge to all of us. We think of improved ways to allow room in society for the disabled to find fulfilling roles and that allow them to exercise their personal responsibility.

  30. desipis
    Posted October 23, 2010 at 9:49 am | Permalink

    Really what one has to do is recognise that personal responsibility is not possible in all circumstances, but one does not wish to totally stifle personal responsibility for one’s circumstances either.

    Indeed. A reasonable discussion of “personal responsibility” cannot take place absent of how we define personal responsibility as a function of both outcome and ability such that any incentives society offers for personal responsibility are practically applicable.

  31. Posted October 23, 2010 at 12:09 pm | Permalink

    [email protected] I not sure we are disagreeing. After all, my points apply to both sides of the political aisle, so no, I would not take the Tories to be slaves of some ideology: more a matter of lazy thinking.

    [email protected] I seem to remember suicide rates go down in wartime as well.

    The first paper’s claim that that conservative governments are associated with “retrenchment” of the state is dubious without careful assessment of actual expenditure performances.

  32. Posted October 23, 2010 at 12:49 pm | Permalink

    I seem to remember suicide rates go down in wartime as well.

    Thanks Lorenzo.

    That is an important point, showing how when people gather around a common cause many more find a reason to participate, to have a meaning in their lives. So what is it about conservative govts that increases the suicide rate?

  33. Posted October 24, 2010 at 5:46 pm | Permalink

    [email protected] Of course, the wartime effect may be a bit of statistical artifact (it is easier to have someone else do the deed for you in wartime).

    The editorial in the first link makes the relevant points: the relationship was not statistically significant in the time-series analysis, it did not seem to be connected to actual policies (there was no “fuzzy lag” since it takes time to change policies) and it could be a result of some other common factor.

    People of left persuasion are also notoriously less likely be happy than folk of a right political persuasion. Maybe, to the extent there is a causal factor, it is as simple as the right winning encourages a sense of depressed hopelessness among enough left-partisans to drive up the suicide rate.

  34. Posted October 25, 2010 at 4:28 am | Permalink

    I see the UK Coalition government is increasing foreign aid expenditure. Why? Foreign aid has such a dreadful record of failure.

  35. Posted October 25, 2010 at 5:30 pm | Permalink

    People of left persuasion are also notoriously less likely be happy than folk of a right political persuasion.

    That paper asserts that conservatives are happier because they have less concern about inequality. At least that explains the homelessnes problem that emerged under Reagan.

  36. Peter Patton
    Posted November 5, 2010 at 4:52 pm | Permalink

    DEM

    How significant do you think these types of expenses are to the overall spend on disability services?

    http://www.guardian.co.uk/society/2010/nov/04/council-social-care-services-cuts

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