Welfare Reform

Here's a thoughtful article on welfare reform by Andrew McKie - which appeared in The Herald newspaper the other day.

I have to say that I agree wholeheartedly with the central point made in the piece.

Because if you divide the new £26,000 benefit cap by 52 weeks and divide that answer by 35 hours - then the hourly 'benefit' rate of pay is equivalent to £14.29 an hour.

Which is paid tax free of course - since people on benefits don't get clobbered by either tax or national insurance.

Now the vast majority of lower paid workers in Scotland are paid a lot less than £14.29 per hour - and most of these low paid jobs are done by women.

Take local councils in Scotland as an example - carers, cooks, cleaners, catering workers, clerical workers and classroom assistants - are all predominantly female jobs and are paid typically around £7, £8 or £9 an hour.

In other words these female dominated jobs don't earn anywhere near £26,000 a year or £14.29 an hour.

'Well what about levelling people up instead of levelling their pay down?' - I hear  a voice say.

Yes, indeed.

Because I'm all in favour of levelling up and that is precisely what was supposed to happen with the 1999 Single Status (Equal Pay) Agreement - which was intended to sweep away the widespread pay discrimination and low pay affecting so many female jobs.

But the big changes envisaged by Single Status never happened - and that's why so many low paid women workers in Scottish councils are now pursuing equal pay claims - and have been doing so in such large numbers since 2005. 

So when I hear certain politicians and trade unions making a big noise about welfare benefits, the obvious question to ask is - why did they fail to make the same kind of fuss over such low levels of pay for all these female dominated jobs?

Which in 2013 are still stuck firmly at the bottom of the pay ladder - of course. 

To my mind, the answer is that they lacked the political will and chose all the wrong priorities  over the 10 year period from 1997 to 2007 - when council budgets across Scotland doubled in size. 

And, by the way, that was a long time before the UK economy became overwhelmed - by a debt-fuelled, banking-led recession. 

Seems to me that the latest benefits row has more to do with party politicis - than a real determination to tackle low pay and reform the welfare budget - so that, in future, it directs more resources on those who need most help.

Without reform, welfare state steals money from neediest

By Andrew McKie

One of the definitions of welfare – indeed, the primary one – is good health, progress and prosperity.

The architects of the welfare state may not, however, have anticipated quite what wonders could be done for the health of some benefit recipients by the simple expedient of checking whether there was actually anything wrong with them.

It emerged yesterday that one-third of those claiming incapacity benefit – an astonishing 878,000 people – have withdrawn their claims rather than face a medical assessment. What's more, 55% of the 1.4 million who have been assessed were ruled perfectly fit to return to work, and almost one-quarter of them found capable of doing some work.

The obvious lesson to be drawn from these figures is that the Conservative Party is a uniquely wicked, malicious and cruel organisation which delights in the suffering of those who are not merely poor but sick as well. Oh, hang on a minute. No it isn't, unless you happen to be an ideologue prejudiced to the point of intellectual impairment. The obvious lesson is that there is something terribly, profoundly wrong with the provision of welfare.

I don't deny there will be some cases where people in genuine need, and whom most of us would think should receive financial assistance, will suffer as a result of these changes. I'm sure, too, there are a few individuals who could make a real case for why the taxpayer should subsidise their spare room. I'm not persuaded by the libertarian argument that all welfare spending is wrong; indeed, caring for the poorest and most vulnerable seems to me to be one of the few worthwhile things the state can actually do, and the hallmark of a civilised society.

But these numbers speak for themselves. No matter how easily one can find particular cases of real need, there is no way the size of our current welfare state can be morally justified, let alone afforded.

The villains of the piece, one need hardly say, are not for the most part those in receipt of benefits, many of whom have effectively been trapped in their current circumstances by state provision. That includes not only the jobless who would be worse off in work, but the large numbers of working people who are paying tax in order to support a bureaucracy which then returns a small proportion of their own money to them in the form of benefits. It is the successive governments of both parties which have allowed a system intended for the needy to expand to the point of lunacy, if not criminality.

Since the modern welfare state began in 1948, there have been only six years in which household income has not risen in real terms. Even in the current financial climate, the citizens of the United Kingdom are staggeringly more prosperous than they were six decades ago – about four times as rich, in fact.

Yet the benefits system has ballooned. This year, Government spending on benefits is up more than 5%, while average household earnings have risen by only 1.5%. The vicious cost-cutting of Iain Duncan Smith's reforms – such as capping the rise of most working-age benefits at 1% – is, you'll notice (the clue is my use of the word "rise"), not actually cutting any costs. The Government's current spending plans mean that in 2016, public spending on welfare will be 10% more than it was last year.

And, despite the rhetoric of those on the right who would like to characterise all of this astounding spending (it will be about £220 billion) as lining the pockets of the workshy, or immigrants, or fraudsters, or Abu Qatada, it is actually a fairly small proportion of the welfare budget – though still, admittedly, too much – which ends up in such quarters.

The underlying problem is that governments of all colours have expanded the reach of the welfare state far beyond those who genuinely need help. Under Gordon Brown's demented ambitions to draw every citizen of these islands into the maw of the state, this resulted in some families with a household income of £60,000 being entitled to benefits.

That meant, as anyone with basic arithmetic could have told you, an insupportable burden on the public purse. But its fundamental wickedness is that it removes money not just from the taxpayer, but from the very poorest and most vulnerable people. It also constructed a trap which made it unprofitable for those who might have been able to work to take on jobs.

One little noticed aspect of the immigration debate is how very few recent immigrants claim unemployment benefit (social housing is the big public cost). But if these arrivals, particularly from eastern Europe, are "taking British people's jobs", as Nigel Farage would have you believe, the obvious question to be asked is why they are able to. And a large component of the answer is that many unemployed Britons do not believe these jobs are worth taking.

That may be a hard-headed and rational response, especially if, for example, you would lose your housing benefit by doing so. Or it may be a justification for indolence or a disinclination to take on menial or unpleasant work. But whichever it is, it is a circumstance which has been created by the very system designed to prevent it. It is difficult to think of anything which is a more damaging and dangerous assault on the poor.

Compare that for wickedness with the ruthless plan of the Work and Pensions Secretary to cap the total amount of benefits received by a household at £26,000. That figure has been selected on the basis that it is the average gross salary. At the risk of stating the stunningly obvious, quite a lot of people earn quite a lot less than the average salary, which is why it's the average. And just as obviously, since that is the average salary before tax, even the people who earn that level have quite a lot less money which they're allowed to spend on themselves.

It might seem just as obvious that if the state has, until now, been paying some people more money than that not to work, it's hardly surprising that they don't. And the most obvious point of all is that we simply cannot afford to do it, and to persist in the attempt is to steal money from the neediest in society. The really ruthless and cruel attacks on the poorest and most vulnerable, who need and deserve help, are not the Government's attempts to reform the welfare system. They are the inevitable result of the welfare system itself.