Friday, November 21, 2008

Different kinds of welfare reform

Good on Sir Richard Tilt, head of the social security advisory committee, for making the point that now might not be the best time to introduce a set of welfare reforms which rely on the assumption that there will be a steady increase in the number of jobs available.

The government's response is that "it would be wrong at a time when it may be harder for people to find work to provide them with less help." But Tilt is not suggesting providing people with less help, merely that parents shouldn't be coerced into looking for work by the threat of having their benefits cut. There's no evidence anyway that threatening to cut people's benefits increases the likelihood that they'll find work.

The debate isn't about welfare reform vs status quo, it's about supporting policies which will help people get jobs and reduce poverty vs policies which are motivated by an ideological belief that people who are out of work are lazy and won't take up support unless they are forced to.

The welfare reform green paper was written back in an age where it was widely believed that there were jobs for anyone who wanted them, and that a multi-billion pound market needed to be created in services which helped people get jobs, because competitive markets enabled greater innovation and delivered better outcomes than state intervention. (It may sound strange, but back then people really did believe that).

Now, obviously, our government has concluded that this approach doesn't work when it comes to the economy. To help the economy, we need state intervention, up front spending which helps our economy grow and workers to become more productive, and to put more money in the pockets of low income earners who will spend it.

So here's a proposal for some genuinely radical welfare reform, which is guaranteed to increase the number of parents who work. The government could make sure that every parent who is working or training is able to get heavily subsidised, good quality childcare, at a price they can afford and at whatever times they need it. And to help recruit the thousands of extra childcare workers that would be needed, it could make sure that every childcare worker earns a living wage.

The upfront cost would be several billion pounds, but it would create lots of new, good quality jobs which are desperately needed, increase productivity for existing workers and dismantle a major barrier which stops people from working. And as well as creating new jobs and stimulating the economy, it would help to reduce child and family poverty dramatically.


At 12:59 pm , Blogger Andreas Paterson said...

It's an excellent proposal, exactly the kind of thing we should be doing.


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