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| David Cameron is throwing ideas around for a new British welfare state, but could his aims be achieved with less stick, and more strategic thinking? (Pic: Wikipedia) |
In the
last week or so, the UK Prime Minister launched (what can only be
described as a "policy octopus" – putting ideas out like
tentacles and hoping one sticks) a debate on the issue of welfare,
including suggestions of regional rates of benefits and that housing
benefit for the under-25s could be withdrawn.
This has probably been done with May 2015 in mind, not 2012. Like the issue of immigration, any mooted changes to the welfare system are pounced upon, with debate polarised between the people on the extremes – those who want more "personal responsibility" (and lower tax bills) and those who probably see welfare as a way to "redistribute wealth", no questions asked.
The shifting definition of “vulnerable”
In the eyes of the UK Government, you stop being "the vulnerable" on your 18th birthday, and you don't become "the vulnerable" again until you are 65 (or for people my age, likely to be 68+). Unless you're pregnant, seriously ill or disabled, the period in between is when you are expected to contribute - supporting the state, yourselves and in turn "the vulnerable".
During the good times, "the vulnerable" widened in definition when it looked like those times would never end : single parent families, the low paid, sixth formers from poor backgrounds, carers, people with any illness, women pensioners with too few NI payments. All welcome – a society should be judged on the way it treats the least privileged.
That changed. The national credit card has been overused, and now the UK Government is faced with making some tough decisions on which of these vulnerable groups is “more vulnerable than thou”.
If there's a toss up, there'll be one group placed at the top of the list, and they also happen to be the most resource-needy – pensioners. That means every other group is going to find themselves, suddenly, significantly less vulnerable in the government's eyes.
We're already seeing what the decision of the previous UK Government to introduce work capability assessments in 2008 is having on the disabled – a gift from the Gods for any blue-blooded Conservative. But that isn't enough. The welfare budget is creaking and more fat needs to be trimmed. Next in line are "the young".
Maybe there's legitimacy in the argument that younger generations can adapt much more easily, and fluidity in the job market is now a fact of life. But young people have been hit disproportionately hard by the economic crisis - something out of their control - as well as policy decisions of previous and current UK governments.
Welfare should meet individual needs
There is one fundamental, overriding fact that makes any change to the welfare system potentially explosive – no two families, or two people, are the same. Each has their own needs, and their own sense of "vulnerability".
It's also much easier to rail against something in opposition than do something in government. Like it or not, there's a fundamental unfairness about the current situation.
An unemployed 20 year old from a stable background doesn't need to prioritise their own home – they need a job to prove they can sustain themselves in their own home. Doing the opposite is a bit “arse about face”. Now, an unemployed 20 year old from an unstable background, or leaving care, is a different story. As I've said, no two people are the same.
I think David Cameron and Iain Duncan Smith understand this, but are looking at it from a pure balance sheet perspective, deciding that entire groups are different to one another rather than individuals. They think they just need a bigger stick instead of using the existing money better.
"Withdrawal of entitlements" is a fantastic right-wing populist sound bite, but in the end it won't actually save that much money, and getting young people to move back with parents is unlikely to provide enough of an incentive. If anything, it might make the problem worse and infantilise a generation.
While there's something to be said for universal benefits, or ensuring all people within a group get similar help, that's also the wrong approach (in my opinion).
For example, no two disabled people have the same needs. However, it's wrong to assume one is "fit for work" simply because they haven't been exposed to enough delta radiation. Maybe there's a case for a tiered benefits system that matches relative needs, instead of single payments as there are now. Telling people who have been registered disabled - perhaps for many years - that they're suddenly fit for work is an insult to them, and the medical professionals who've assessed them.
Categorising whole groups of people – whether it's "single mothers", "the disabled", "the young" – as one great lump, when their needs are multi-layered, is wrong.
It panders only to the stankovites amongst us who see wealth creation as the be all and end all of your miserable existence on this dump of a planet.
However there's another uncomfortable truth – work pays.
It's the only way out of poverty in the long-term. Help should be aimed at getting people into some form of sustained employment, activity or training – not thrashing them with a stick to get them through the nearest factory door, nor wrapping them in the big state's cotton wool, ensuring that someone else will always take care of their every need.
We need that "middle way". I'm sure most people would support that, but try as they might, no UK Government has come close to a solution that dissatisfies everyone equally.
Playing fair : What do we want the welfare system to do?
There are two "strands" associated with UK welfare as I see it.
This has probably been done with May 2015 in mind, not 2012. Like the issue of immigration, any mooted changes to the welfare system are pounced upon, with debate polarised between the people on the extremes – those who want more "personal responsibility" (and lower tax bills) and those who probably see welfare as a way to "redistribute wealth", no questions asked.
The shifting definition of “vulnerable”
In the eyes of the UK Government, you stop being "the vulnerable" on your 18th birthday, and you don't become "the vulnerable" again until you are 65 (or for people my age, likely to be 68+). Unless you're pregnant, seriously ill or disabled, the period in between is when you are expected to contribute - supporting the state, yourselves and in turn "the vulnerable".
During the good times, "the vulnerable" widened in definition when it looked like those times would never end : single parent families, the low paid, sixth formers from poor backgrounds, carers, people with any illness, women pensioners with too few NI payments. All welcome – a society should be judged on the way it treats the least privileged.
That changed. The national credit card has been overused, and now the UK Government is faced with making some tough decisions on which of these vulnerable groups is “more vulnerable than thou”.
If there's a toss up, there'll be one group placed at the top of the list, and they also happen to be the most resource-needy – pensioners. That means every other group is going to find themselves, suddenly, significantly less vulnerable in the government's eyes.
We're already seeing what the decision of the previous UK Government to introduce work capability assessments in 2008 is having on the disabled – a gift from the Gods for any blue-blooded Conservative. But that isn't enough. The welfare budget is creaking and more fat needs to be trimmed. Next in line are "the young".
Maybe there's legitimacy in the argument that younger generations can adapt much more easily, and fluidity in the job market is now a fact of life. But young people have been hit disproportionately hard by the economic crisis - something out of their control - as well as policy decisions of previous and current UK governments.
Welfare should meet individual needs
There is one fundamental, overriding fact that makes any change to the welfare system potentially explosive – no two families, or two people, are the same. Each has their own needs, and their own sense of "vulnerability".
It's also much easier to rail against something in opposition than do something in government. Like it or not, there's a fundamental unfairness about the current situation.
An unemployed 20 year old from a stable background doesn't need to prioritise their own home – they need a job to prove they can sustain themselves in their own home. Doing the opposite is a bit “arse about face”. Now, an unemployed 20 year old from an unstable background, or leaving care, is a different story. As I've said, no two people are the same.
I think David Cameron and Iain Duncan Smith understand this, but are looking at it from a pure balance sheet perspective, deciding that entire groups are different to one another rather than individuals. They think they just need a bigger stick instead of using the existing money better.
"Withdrawal of entitlements" is a fantastic right-wing populist sound bite, but in the end it won't actually save that much money, and getting young people to move back with parents is unlikely to provide enough of an incentive. If anything, it might make the problem worse and infantilise a generation.
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| "Fit for work?" Should disability-related welfare match needs without stigmatising people as scroungers or malingerers? (Pic : UGO) |
While there's something to be said for universal benefits, or ensuring all people within a group get similar help, that's also the wrong approach (in my opinion).
For example, no two disabled people have the same needs. However, it's wrong to assume one is "fit for work" simply because they haven't been exposed to enough delta radiation. Maybe there's a case for a tiered benefits system that matches relative needs, instead of single payments as there are now. Telling people who have been registered disabled - perhaps for many years - that they're suddenly fit for work is an insult to them, and the medical professionals who've assessed them.
Categorising whole groups of people – whether it's "single mothers", "the disabled", "the young" – as one great lump, when their needs are multi-layered, is wrong.
It panders only to the stankovites amongst us who see wealth creation as the be all and end all of your miserable existence on this dump of a planet.
However there's another uncomfortable truth – work pays.
It's the only way out of poverty in the long-term. Help should be aimed at getting people into some form of sustained employment, activity or training – not thrashing them with a stick to get them through the nearest factory door, nor wrapping them in the big state's cotton wool, ensuring that someone else will always take care of their every need.
We need that "middle way". I'm sure most people would support that, but try as they might, no UK Government has come close to a solution that dissatisfies everyone equally.
Playing fair : What do we want the welfare system to do?
There are two "strands" associated with UK welfare as I see it.
- The pragmatic safety net – to prevent absolute destitution.
- The job substitute – providing a steady income for those who can't/are no longer able to be in full or part time employment (the disabled, pensioners etc.)
You could argue the "safety net" element acts as a "stick". It's supposed to nudge you back into employment as quickly as possible - unless you like living as a Zen monk. £70 per week JSA isn't the most extravagant sum of money in the world, though it's enough to get by on if you cut back on practically everything except the essentials.
The way the welfare system operates also leads to it becoming a "job substitute". Alongside that £70 per week JSA, due to your low income, you'll become eligible for various benefits covering things like : housing costs, council tax bills, and other unofficial benefits such as free or subsidised childcare, free bus passes, winter fuel allowance etc. These are usually things you to pay for from wages. Subsequently, welfare becomes more expensive - and expansive - than a simple safety net.
This "one size fits all" approach means that help is spread thinly amongst too many people claiming their share of the pie. Instead of targeted help, what previous UK governments have done is create new benefits, with more loopholes, and more ways to exploit the system.
The system has become so unduly complex, that people feel they are entitled to some kind of state help whether they actually need it or not. That's inefficient, and leads to the situation we are in now, with benefits being withdrawn because the money's running out.
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| Our dirty little secret - despite the growth of welfare and tax credits, many of our poorest are actually in full or part-time employment. (Pic : Walesonline) |
Take tax credits for example. These effectively subsidise low wages in the private and public sector - that's a scandal in itself. It hasn't worked either. A good proportion of people classed as in relative poverty in Wales are from working families. They, frustratingly, probably aren't eligible for many of the welfare entitlements listed above because they're in some sort of employment – or household earnings are above a threshold, but with too many mouths to feed.
That isn't fair, is it?
What if, for example, you ring-fenced money that can only be used on practical help to get people out of poverty permanently - though they would still have choices : further and higher education courses, energy retrofitting to combat fuel poverty, driving lessons, free transport to/from job interviews, private drug/alcohol rehab, business start-up grants, part-subsidise fully-paid work placements etc. This would be alongside "income" to cover any unemployment – nominally JSA and income support.
Who knows, something like that might be significantly cheaper to run too and have better outcomes.
As it's one of the most difficult topics to approach re. independence, it'll probably be some time before I cover the subject in detail as part of the "Independence Index" in the same way I did for defence. I gave a few hints in my Cambria article a few weeks ago.
In shorthand I envision it as something like this:
- Being treated as an individual, not a “customer”, nor a number.
- Targeted, practical assistance with some choice (as above)
- Greater professionalism, national standards and regulation of the recruitment industry
- The system should be designed to prioritise the skilled unemployed, “working poor”, carers, older pensioners (75+) and the severely disabled.
- Paid-in, independent, co-operative welfare schemes to top up a “safety net” welfare state and also cover other things (i.e. glasses, dentists, serious illness, bereavement, sudden expenses). The money can be invested by the co-ops a like a pension fund – for example infrastructure bonds - with the returns/interest used to pay out to members. I'd like to see every major employer/industrial sector have one. For example, one for teachers, medical staff, electricians etc. – perhaps in cooperation with trade unions . It could become a major player in a Welsh financial services sector.
Welfare needs to empower us all
People who survive on welfare have written themselves off, because the situations they're in seem so hopeless that there's no escape.
Politicians in Wales have written them off by merely stabilising a decline, or offering tiny schemes that don't really empower people or communities. These act like a crèche to keep people occupied, instead of the concrete, long-term action required on the economy.
Most of our devolved politicians simultaneously shy away from responsibility for the big decisions. They simple lack imagination and probably ambition too, hiding behind devolution and a set way of thinking and doing things - saying they can stand up for us, and resist changes thrust on them by Westminster, when they know they can't.
That false hope - and false promise - is as scandalous and damaging to Wales as no hope at all.
People in the higher echelons of power, like Westminster, pandering to a frenzy against scroungers from a geographically-advantaged southern England that's alien to most people in Wales, have written them all off too - without taking into account their talents, skills or potential.
Welfare shouldn't be something you live off. Neither should it be a cheque without any conditions attached. It should be positive and pro-active - taking individual needs into account, but aiming to get some kind of contribution back, because they're treated with respect, not as a drain on resources.
We all have hard times in our lives, and sometimes the state isn't the thing you turn to, but we shouldn't target whole generations simply because of when they happened to be born. Nor should we allow the state to take basic personal responsibilities away from people.
That isn't a safety net, it's a cot. And there are an awful lot of people out there - grown adults - with nappy rash.
A really difficult bullet to bite. I am attracted by the concept of a citizens' Wage, with the unification of the tax and benefits system. Also the principle that work should always pay. But that those that are genuinely unable to work should not be condemned to a life of destitution. I also regard the subsidising of low paid work by the state, a huge hidden subsidy to employers, morally wrong.
ReplyDeletePart of the problem is the high cost of housing, created by a massive, and unjustified, rise in the cost of purchasing a home. If we could find a way of lowering rent we would be in a more healthy position.
A mutual tier of help with items like dentistry and crisis loans etc would go someway to remedy the deficiencies of the current welfare system. We could of course begin by dispensing with the concept of national insurance and just subsume it into income tax - after all there is no real ring fenced national insurance fund.
Thanks for the comment, Cibwr.
ReplyDeleteWe are "sort of" moving towards a citizens wage in the form of Universal Credit, but UC isn't based on any sort of "negative income tax" principle in the same way tax credits might be.
You're absolutely spot on re. the cost of housing. Cost of energy is also perhaps a primary factor in poverty, which is ridiculous in a country that exports energy as much as Wales does. I think we'll probably need to come up with ways of reducing building costs while maintaining some sort of standard - modular/pre-fab homes etc.
You make a good point on NI too, but I don't think it's been done for sake of headlines. A 33% basic rate of income tax wouldn't look good value for the services we receive - even if it's more honest.