Saving the welfare state from misguided opinion

The folowing is a quick response to an article by Max Wind-Cowie entitled “Iain Duncan Smith: Saving the Welfare State From Misguided ‘Kindness.'” I wrote this very quickly, am now very tired and my hands hurt from typing.  So apologies for any inappropriate statements, I generally try to stay evidence-based but sometimes my emotion gets away with me, especially when I’m too tired to regulate it.  And apologies for any typing mistakes.

 

“Anyone who genuinely, seriously wants to protect our welfare state should be full-square behind Iain Duncan Smith’s latest ideas for reform.”

That’s a huge conclusion to reach.  No arguments are made to support this conclusion.  Off the top of my head, I can think of several against it:

  • Universal credit is not simplifying the benefits system; monthly payments will make life harder for many; online management will  be difficult for many
  • DLA is being replaced with a harsher benefit that is planned to cut 20% from working-age recipients.
  • ESA has a heavily criticised assessment process
  • More and harsher sanctions are being introduced, with no evidence to their effectiveness
  • Out-of-work benefits are amongst the lowest in the developed world and do not meet subsistence levels of income

 

“A Daily Mail article has trailed the idea of using smart-cards to restrict what certain individuals spend their benefits on.”

It was Iain Duncan Smith who trailed the idea, and he has asked his department to come up in one month with a solution to the impacts of drug addiction and poverty on children.

 

“Apparently there’s some moral principle that demands taxpayers fork out money to help addicts fuel their alcoholism.”

Taxpayers are required to provide a form of social insurance because it would be hugely costly and inefficient for individuals to take out private insurance against all possible dangers.  Because it is a form of insurance, welfare payments are not a form of charity.  For this reason there is no more dictation on how the money is spent than a private insurer would place restrictions on the money it pays out.

Dividing people into ‘taxpayers’ and ‘non-taxpayers’ is rarely possible, except for those who are still in or have only just left full-time education.  The majority of adults have paid tax; whether this covers what they receive in benefits at a later date is a separate issue.  Most adults receiving out-of-work benefits have paid tax in the past.  They are therefore, for at least some period of time, buying alcohol and tobacco out of their own taxes.

Mothers who stay at home whilst the father works yet still claim child benefit may not have ‘paid’ their ‘tax’ to ‘deserve’ this benefit.  Pensioners who have worked little (particularly current pensioners, for whom it was more common that the mother/wife did not work) or only on minimum wage but then live for several decades may get more in pension, and other benefits such as housing benefit, winter fuel allowance, TV licence, free bus pass, Disability Living Allowance/Attendance Allowance, Carer’s Allowance, than they paid in tax/National Insurance.  Given all the benefits we all receive from the government – education, health, transport networks, defence – it becomes very difficult to say who has the right to what.

The risks that National Insurance provide against include the possibility of addiction to nicotine and alcohol.  Such addictions may start in childhood through peer pressure and difficult home lives; when carried on into adulthood these people need extensive support not enforcement into further poverty, stress and chaos.  Or the addictions may have started as a response to stress in the adult life; 3-5% of professionals are alcoholic, with another 25% at risk of becoming alcohol dependent.[1]

As a slight aside, taxpayers currently subsidise the MP’s bar.

 

“I want there to be a safety-net for folk who fall on hard times. The good news is – as the British Social Attitudes survey and a flurry of recent polling shows – so, in principle does almost everyone else. But, in common with my compatriots, my support for a welfare system does not equal support for this welfare system. We need social security in this country – not social dependency.”

I think most people agree that we want a safety net and social security.  The difference is, Wind-Cowie implies that the current system promotes dependency (and presumably also a safety net and security, otherwise there would be nothing to become dependent on), whilst the new system will provide safety and security only.  Wind-Cowie provides no evidence for dependence; indeed there is very little.  There is, however, a large body of evidence published by reputable organistations such as the Citizen’s Advice Bureau and Joseph Rowntree Foundation that the current system is not a safety net and does not provide social security.  Unfortunately the changes that the government is bringing, and Wind-Cowie is advocating, are changes that work to make the system harsher.  The aim is to stop welfare dependency; but if there is little dependency then the result will be an even hole-ier net.

 

“Last week, Demos released the findings of a poll, conducted on our behalf by Populus, looking at attitudes to how people spend their benefits. Coming on the back of the BSAS (which, while showing in-principle support for welfare also found high and growing levels of concern about how our benefits system works – or fails to work) this polling highlights the need for further and more radical reform.”

Unfortunately, the public aren’t necessarily making informed decisions.  With a wealth  of media and government output using pejorative language and discussing fraud, dependency and ‘problem families’ as though these are widespread issues, it is unsurprising that many believe there is a culture of welfare dependency that needs to be addressed.  But important decisions need to be based on fact, not on opinion that has been formed from biased and all-too-often sensationalised media reports.

 

“The fact that government currently exercises little to no control over how benefits are spent – while the vast majority of us wish that it would – should bring home the growing gulf between our expectations of what is reasonable in relation to welfare and the policy responses on offer.”

It also brings home the growing gulf between the reality of welfare and poverty, and what many of the rest of the public thinks is the case.

 

“In my view, there are two possible justifications for limiting what benefits can be spent on. The first is in the case of alcohol and drug dependent claimants – whose addictions are ruining their lives and often the lives of those around them. These are people whose illness is all-too-often being enabled by the payment of cash-benefits, which allow them to fuel a destructive habit and makes recovery all the more difficult. By giving this group smart-cards, that could only be used to buy groceries and essentials, and by targeting treatment, we could do a lot of good with minimal harm. This is not about punishing the sick – it’s about enabling their recovery.”

There are many reasons to argue why smart-cards is not going to get addicted people off drugs and aid recovery with minimal harm.  The biggest one is that lack of money has rarely, if ever, been a reason why someone ended a long-term addiction.  On the other hand, it will restrict choice as market-stalls and small shops may be unable to take the cards; it may encourage a black market as people trade items to get desired drugs; it provides no help or support to people who are already suffering the effects of poverty and addiction; it may serve only to force these people into greater poverty and more chaotic lives.

 

“The second group we should look at are the non-disabled, non-contributors. People who’ve never had meaningful work and have never made a meaningful contribution – through NI – to the safety-net the rest of us pay for. There are too many in our society who walked out of the school-gates and onto the dole queue without so much as a glance at the workplace.”

This is a very small group of people.  Or at least it was, until a recession hit and many graduates were unable to get a job – over-qualified and under-experienced being the story of many graduates attempts to find work – whilst many school-leavers struggle to find training or apprenticeships that pay a livable wage, or even one that adequately reimburses the cost of commuting and time spent in training.

 

“We’re a civilised country, we don’t let people starve to death in the streets. But the lack of recognition for contributors – who, on the whole, will get pretty much the same out of the state as those who’ve put nothing in – is a damaging and corrosive theme of our welfarism. We can’t afford to give contributors substantially more. But we could give them more freedom and flexibility over how to spend their benefits than those who’ve added little to the pot. After all, for those who have worked and paid-in their welfare is a right and an insurance policy they should expect to enjoy when times are hard. For those who have failed to pay-in, welfare is the privilege of being born to our generous and caring society. It’s right, proper and – if the attitudinal evidence is to be believed – necessary to start making that distinction. Smart-cards for those who could have contributed but have not done so would be a step in the right direction.”

Somewhat sadly, the first link I found when I searched ‘people starve on streets UK’ was this one: http://mikesivier.wordpress.com/2012/10/05/uk-policy-on-refugees-let-them-starve/

Another story explained the existence of starvation and malnourishment in our capital city:

http://www.standard.co.uk/news/dispossessed/in-2012-thousands-of-children-are-starving-on-the-streets-of-london-7621114.html

Other pages explained the role of food banks, a charitable provision and not a government policy of aid.  I’m delighted to live in a country where the citizen’s care, but the government should care too.

Wind-Covie’s lack of data on who pays what in and gets what out undermines his argument about what freedom people should have in spending benefits.  The government, as I have said, pays for many things for the citizens of this country.  A rough calculation I made some time ago suggests that anyone who does not earn an average salary of £41 500 a year for fifty years will receive more from the government than is paid in tax.  Separating into National Insurance contributions vs any other form of tax becomes nonsensical when the welfare bill is well above NI receipts.  Unless the government is going to make other restrictions, it is inconsistent to restrict alcohol and tobacco purchases by people on certain benefits.

It is not right, proper or necessary to make the distinction between those who ‘have’ and ‘haven’t’ paid in. The very concept of ‘paying in’ is rife with problems.  Age is one big factor in what has been paid in.  Caring duties are another.  ‘Paying in’ can also occur through voluntary work, or simply the presence of a friend or relative helping a healthy adult to stay on top of things in an often stressful world.

Then there’s the question of what the government has paid out.  State schools vary in quality.  Healthcare varies in quality.  Public transport varies in quality.  Maybe these ‘problem families’ or people with addictions have these problems at least in part because of inadequate or improper provision on the part of the state in the first place.  So maybe what should actually be happening is that the state should invest more in helping these people, not simply restrict their freedom in the hope that this will somehow sort out all the struggles they are having in their life.  And the state should do this because it failed to help these people in the first place, before the use of alcohol and tobacco became an addiction.

 

“What’s more, it would add more nuance to the ‘conditionality’ framework. At the moment, the only real penalty we have for folk who refuse to play by the rules is to remove their benefits for a short time. So if you refuse to apply for a job we can stop payments – but only for a little while because, as I say, we’re a civilised country. Under a smart-card regime we could use flexibility as a reward and greater control as a punishment. That gives us a better range of tools to use in the battle to get people back to work.”

By short time, Wind-Covie means complete cessation of benefits for a minimum of four weeks (only for the first failure at a low or intermediate level) up to 156 weeks, that is 3 years.[2]  Not a short time for anyone trying to live on nothing.  By better range of tools, Wind-Covie appears to mean an increase in punishments.  Flexibility isn’t a reward when it’s what most people have, it’s simply the status quo with loss of freedom as a punishment.   It shouldn’t be a battle to get people back into work, and if it is then it may be more helpful to look at the state of the job market and what can be done to improve that.

 

“I want a welfare state that accords with the moral intuitions of British people. To continue with what we’ve got would be to dangerously derange benefits from the beliefs, attitudes and opinions of those who pay for them. We need to listen to those who pay the bills, not denounce them. Exercising more control over how benefits are spent – to differentiate between contributors and non-contributors and to enable the recovery of addicts – would be a kindness both to individuals and to our welfare system itself.”

I want a welfare system that works and is based on evidence: evidence of what the problems are; evidence of what is needed; evidence of what is successful.  I’m not interested in intuition when people’s lives are affected.  To separate between contributors and non-contributors, those who pay and those who don’t, is complex to the point of impossibility.  In some ways we all contribute and pay; in many ways we all take.  The ones with the money aren’t necessarily the ones who know what is best to do with it.  And the recovery of addicts has never yet occurred on a large and permanent scale by forcibly removing access to cash.


[2] http://www.dwp.gov.uk/adviser/updates/jsa-sanction-changes/ These are the sanctions for Jobseeker’s Allowance.  As many other benefits such as Housing Benefit are passported from JSA, a loss of JSA frequently means a loss of all benefits and therefore may be loss of all income.

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