Thursday, May 15, 2008

Going the wrong way on welfare

One of the forthcoming pieces of legislation which we have to look forward to is a new Welfare Reform Bill. The government apparently wants to hear from the public about what they want from the welfare and benefits system. There should be a big opportunity here for the government, because the opposition has decided that the way to tackle poverty is to bring out new policies to improve the parenting skills of a family which appears in a telly programme and aren't actually real.

The outline of this bill is pretty vague, but the government has published a list of the things which it hopes the Bill will accomplish:

• Giving disabled people greater choice and control;
• Strengthening parental responsibility;
• Reduce welfare dependency;
• Greater requirements to undertake work, training or other activity in preparation for work.
• Increase personal responsibility within the welfare system;
• Deliver value for money for the taxpayer.

Or, in other words, ask not what your government can do for you, but what you can do for your government. In the world of the people writing this sort of stuff, the government has made considerable help available (that's the exact phrase used), and it is now up to people to fulfil their part of the deal and stop being dependent and irresponsible and a burden on the taxpayer. (A helpful tip, 'giving disabled people greater choice and control', an admirable objective, could start with a u-turn on upcoming plans to cut the benefits of many disabled people).

The basic principles underlying any and every welfare reform should be twofold. It should be about making sure that more people are able to live their lives with dignity, with enough money to live on and high quality services when they need them. And across our society it should be about reducing the number of people living in poverty and the gap between rich and poor.

This bill starts instead from the perspective that the reforms needed are ones which punish bad or irrational behaviour amongst welfare recipients. This is the same old politics which we already know ends up with policies which reduce dignity and increase poverty. We had eighteen years of a government which signed up to this analysis whole-heartedly, started from the belief that if people were poor it was their own fault (not that they were really poor anyway) and made policy accordingly. The result was far higher levels of worklessness, dependency and irresponsibility, at a far higher cost to the taxpayer.

The last eleven years of Labour government have been very mixed when it comes to welfare reform. But something which is absolutely clear is that focusing on reducing poverty and on helping people to live with dignity works on its own terms, and also helps to reduce dependency and worklessness. The extra spending on child tax credits and child benefit to try to reduce child poverty, and policies like Sure Start, New Deal for Lone Parents, extended schools and the minimum wage have all involved giving lone parents more cash and better services. And between 1997 and 2007, the percentage of lone parents in work went up from 49% to 60%, with a further 20% not working but wanting to.

In any area or any walk of life, there will always be some people who play the system, and in some ways it is worst of all when people like that take benefits which are meant for those who really need them (though the amounts of money involved pale in comparison to the amount of tax that some rich people are legally obliged to pay but don't). But the basic problem with the welfare debate at the moment is that the assumption is that everyone is either on the fiddle or too stupid to know what's good for them, that it's all about either dependency or irresponsibility. In fact, what's needed is a bit more help from the government, which would make sure that more people are happy and able to help themselves.


At 10:35 am , Anonymous Anonymous said...

Money week, a fairly widely read publication, has a wonderful feature each issue 'Tax dodge of the Week'.

This week it advises top rate tax payers to pay their wife a salary of £4,800 - immediately saving £1,920.

Even better she can then pay that into a pension and claim tax relief. In all you end up with £6,000 for a real just of 'just £2,832'.

They have one every week. Great read. Or maybe not.

Search 'tax dodge of the week' on their website for other great ruses such as 'how to avoid paying tax on rental income', 'cut your tax bill like a private equity boss' or ' a neat way to avoid inheritance tax'.


At 2:32 am , Anonymous Anonymous said...

There are essentially two kinds of welfare recipients (no, I'm not getting into deserving and undeserving here).

The first kind are normal functional people who need welfare because they haven't got a job but have a child, or because they're disabled but can't find suitable work, or just don't have a job, or whatever. These people are best served by giving them money, and letting them choose how to spend it.

The second kind have no money (and probably no job) because either due to mental illness or just general crapness, they have the organizational and management skills of a blancmange. Giving them money and expecting them to take responsibility is the worst thing you can do for them, because they'll just spend the money, not really have any idea of how or anything to show for it, and still not be able to pay the gas bill.

The second group is smaller than the first. You can't serve bot groups with a one-size-fits-all benefit system.

At 9:35 am , Anonymous Anonymous said...

Following on from what anonymous said, I think the big question for those who don't want to see money going to the 'undeserving' poor is are we prepared to have them starve? Because if you want to cut payments to these people, that's what they are facing.

Except they probably won't all starve. Some might scratch a living. Some will survive as homeless. Some will thieve and steal. Some will find themselves in hoc to people considerably less benevolent than the state. Dickensian poverty, minus the smoking chimneys.

And this will be fine because the rest of us can explain away the fate of the poor as being completely down to a lack of personal responsibility, absolving us entirely and soothing our consciences of any collective responsibility as a society. Now there's something to stir the heart with pride for one'e country.


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