From ConservativeHome:
A new report (1) by the think-tank [Policy Exchange] puts the actual number of Britons out of work and living on benefits at 5.96 million - somewhat different from the official tally of 2.44 million, according to the latest figures. Policy Exchange calculates the figure based on the number of those of working age living off the following benefits:
1.58 million on Jobseeker's Allowance
2.6 million on incapacity benefit and the new Employment and Support Allowance
736,000 on lone parents' benefits
400,000 on carers' benefits
363,000 on disability benefits
182,000 on other income-related benefits
95,000 on bereavement benefits
It also reminds us that the cost of the benefits system has risen from £93 billion in 1997 to £193 billion today (2), all of which will present a considerable challenge for an incoming Conservative Government if elected next year...
Shadow Work and Pensions Secretary, Theresa May, said the report demonstrated the urgent need for radical welfare reform:
"These figures plainly show Labour's complete failure to get to grips with our welfare system. Too many people have been abandoned on out-of-work benefits and now sadly the recession has made their situation even more desperate. The Government should adopt Conservative proposals for bold, radical welfare reform (3) to help these people and their families before it's too late."
Mrs May gave a speech identifying the principles underpinning the Conservative approach to welfare reform ... (4)
(1) "New report"? Jesus wept! These statistics have been freely available from the DWP for years!
(2) This tricks you into thinking that the six million people they speak of cost £193 billion, which would equate to about £32,000 each, which is patent bollocks. The £193 billion figure includes old age pensions (twelve million recipients) and Child Benefit/Child Tax Credits (ten million recipients) and various other bits and pieces, of course.
(3) Hey, here's a truly bold, radical idea:
Lets scrap all the tax breaks that are supposed to 'alleviate poverty' like the personal allowance and tax breaks for pensions savings, which 'cost' well in excess of £100 billion, chuck it in the pot with the £193 billion and replace the entire welfare/pensions system with a Citizen's Income scheme (kids £35 per week; adults £70 and pensioners £140, for example) which would 'cost' £233 billion or so.
This would completely end absolute poverty; the poverty trap; the couple penalty; opportunities for fraud; the massive bureaucracy (in both public and private sectors) and so on, and we could then use the handsome 'saving' of £60 billion a year to scrap higher rate tax and Employer's NIC so we end up with a flat tax income tax of 30%-ish, for example, heck knows what the corresponding boost to the economy and employment would be...
(4) Feel free to follow the link to her speech, it's badly thought out paternalist/authoritarian drivel at best ...
Forbidden Bible Verses — Exodus 1:8-21
3 hours ago
21 comments:
I tell you what MW it absolutely terrifies me that the Tories have no intention of being any better with their numbers (aka spin and lies) than NL.
They just don't yet get it. Or perhaps they do and they couldn't give a load of dingos kidneys. Why don't they try, really try to make some coherent and sensible arguments? My personal bet is that their poll ratings would go through the roof.
I like the Citizens Income idea, it solves a lot of the problems around the benefit trap, benefit fraud etc etc.
But I have one area of concern. There are people in society who need more help from the State than £140/week. The severely disabled need someone to care for them, and that has to be paid for. There is no way a really disabled person (not the work shy 'bad back' brigade') could finance their existence on £140/week. Pay for carers, food, housing, special requirements etc etc. They could not earn any more either. So what would happen to them?
The beauty of the CI idea is its simplicity. Everyone gets the same. If you then start to create categories of people who get more, slowly you will end up back where you started with a bloated bureaucracy paying out more and more cash to an ever expanding clientele.
"I tell you what MW it absolutely terrifies me that the Tories have no intention of being any better with their numbers (aka spin and lies) than NL."
Me too.
But it doesn't surprise me....
Sobers, true disability benefits cost around £15 billion a year (i.e. for blind people, wheelchair bound etc), that would go on top of the CI. Anything else is up to their relatives or charities.
chuck it in the pot with the £193 billion and replace the entire welfare/pensions system with a Citizen's Income scheme (kids £35 per week; adults £70 and pensioners £140, for example) which would 'cost' £233 billion or so.
Eh, what's this? Did I read right?
A refinement to the CI would be to have it only available across the counter at Post Offices, like child benefit used to be, thus ensuring those who didn't really need it wouldn't be arsed to collect it. Of course the Gov't campaign to take all official business away from the Post Office has resulted in child benefit now being paid directly into your bank account, which means everyone who is entitled to it now claims it, 'cos it's no hassle to do so.
@ JH, a couple of years ago I did working for the Citizen's Income Trust that showed a CI of £30/£60/£120 would cost £200 billion, so I pro-rated that up by 7/6.
@ Bayard, that's an interesting point. The upside of personal collection is the shag of physically doing it (so those that don't need it won't bother); but the killer question is, is it more likely that fraudsters will create multiple bank accounts or just rock up at various different post offices in neighbouring wards and collect several times over? I'll have to think about that.
MW .. .. .. you've written about CI a few times so to clarify .. .. .. every citizen is eligible or only those who currently qualify for state benefits?
As for the rest of the post .. .. the Torys being a devious with numbers as Labour? Who'd have thunk it?
Bayard, having to physically collect it from the Post Office would favour the unemployed over the person in work. Thus our shiny new CI would in effect become a benefit trap just like the current system.
Plus you have the higher cost overheads of paying it out via the Post Office, presumably with something similar to the old pension books.
However, my main objection is that it seems dishonest for the government to offer something and not want people to take it.
CFF, the idea is that every legally resident citizen gets it, and it's non-taxable, non-means tested, non-contributory - exactly like Child Benefit.
Mark's figures make perfect sense - if you assume 11.5m children @ 35/week, 11.5m pensioners 140/week and 38m adults you get £242bn/year.
If - as it is - GDP/head is something like £23,000, then this benefit as a weighted average of just under £4,000/year, is about 17% of GDP. Obviously there would be a rather large (if nowhere near as much as at present) administration charge given the potential for fraud, but £10bn max, surely?
The problems I foreseee are two. First is that people's needs just aren't very similar, and some people will just need more, and as Sobers says that immediately brings back form filling, inspectors, admin, etc. Also regional differences will present problems with no housing benefit - of course people can move away from London, and aggregate housing costs will decline a bit, and it will encourage them to get jobs etc, but these things will either be slow or limited in their effect. I'd probably keep a type of housing benefit.
The major problem though is political acceptability. The headlines about people getting something for nothing, families with 10 children spending it all on fags, blah, blah. And of course anyone who earns more than about £17,500 will get (net) nothing after taxes, and it that will be extremely transparent, won't help. "Assualt on middle classes"
Of course this will mostly be nonsense, but that doesn't stop anything. Which means the only real chance it ever has of being implemented is the first term of a landslide government. Nothing in 1997, I fear 2010 is the last chance then until about 2023.
Mark, as you say, CI is just an extension of Child Benefit. How much Child Benefit fraud is there? That would give some idea as to the likelihood of CI fraud.
@Ed Post Offices are open on Saturdays, well, at least round here they are. I can't see anything dishonest about wanting a universal benefit to be more attractive to those who need it most, so long as everyone's entitled to it.
@Matthew I don't think Housing Benefit was included in the list of benefits to be abolished. I agree it would have to stay, though sadly that increases the opportunities for fraud. You're dead right about the problem of acceptability. Envy is the curse of British politics.
Matthew: I agree that some people will need more than this and be unable to work to earn it. However, why should we assume that it is the responsibility of the state to provide for that need? What happened to family, friends, neighbours, communities and charities?
On Political acceptability: would the transparency of this system not be an advantage in selling the idea to the middle classes? Plus the fact that they will benefit most if the current income tax+NI is replaced by a flat rate 30% income tax.
At least Mark's CBI is fiscally affordable unlike some of the proposals, indeed I think it would allow room for some tax cuts. In terms of % of GDP, we've got 17% for the CBI, presumably 7% for the health vouchers (ie costing much the same as Germany), 5% for the education vouchers, 4% on defence (not vouchers?), 4% on law and order and unavoidable other welfare, and 3% on interest. So about 40% in total. I think this overestimates it as I'm not sure you should really count transfer payments such as CBI the same as direct spending. But anyway its considerably lower than now.
"Matthew: I agree that some people will need more than this and be unable to work to earn it. However, why should we assume that it is the responsibility of the state to provide for that need?"
Well you could scrap all government spending and say the same thing. Unfortunately the state is the only body we can compel to do things (admittedly the extent of our power in these blog comment boxes is relatively small).
bayard: The queue in the Post Office here is long enough on Saturdays! If everyone is entitled then we should make it as easy and efficient as possible for everyone to collect. There is the issue of those who do not have access to bank accounts, so the option of Post Office collection may be good. However, I would have thought that the presence of a steady, regular income would help people in this position get access to a basic bank account, which would help them in other pays (e.g. save money on bill payments).
Matthew: (BTW: I was under the impression that the state existed to compel us to do things. That's certainly what they believe.) The problem here is that the state is not very good as dealing with the specific needs of individuals, and the very act of the state trying to do so only encourages dependency and fraud. Better it provides a broad foundation (CI, health+education vouchers, defence, law and order, etc), and leave the people who know the needy person best to handle the details.
""Better it provides a broad foundation (CI, health+education vouchers, defence, law and order, etc),"
Sure Ed, I am a supporter of a CBI, and possibly education vouchers on a Swedish style model. But as I note above that still means 40% or so of GDP goes through the state, albeit perhaps not consumed by it.
Matthew, seeing as am a bit meaner/more optimistic than you, I make it about thirty per cent.
I really really like your "truly bold radical idea", including the Citizen's Income scheme and a flat-rate income tax for all. This would at one stroke deliver all the benefits that you list, along with suddenly getting rid of all the bloatware in the Public Sector.
Simple sensible system enables the highest productivity from everyone. Or else, you end up with genius' trying to work out how to 'play' the system, giving rise to the false economy that we currently have.
Just take one example of our Tax/benefits system, which you have appropriately picked. People have to work, so the Government can get enough taxes to run the bloated Public Services, who create enough complexity and additional work for all those people at the front of the initial chain. The government constantly thinks up schemes to collect more taxes out of people, while citizens have to employ financial advisers so as to pay less taxes.
I wonder who is funding whom...???
Joseph, Surrey
Right
@Ed - the queue at your local post office wouldn't be so long if so many small post offices hadn't already been closed down in the name of "efficiency", but I agree, it's a bit chicken-and-egg. Personally, I think that the extra public money that the "inefficient" over-the-Post-Office-counter system costs compared to paying directly into bank accounts is money well spent.
@Matthew - What are these vouchers of which you speak?
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