[Indian Bicycle Marketing] That was then, this is now

Thanks to Bob E for the links:

1. Wikipedia:

Atos HealthcareAtos Healthcare, a division of Atos providing consulting in the UK health sector, employs over 3,000 people.... Its most prominent business process outsourcing contract is with the Department for Work and Pensions, under which it "conduct[s] disability assessments for people claiming a range of disability benefits including Employment Support Allowance, Incapacity Benefit, Disability Living Allowance and Industrial Injuries Disablement Benefit."

Initially awarded to Schlumberger's Sema Group (subsequently purchased by Atos) in 1998, the contract was renewed for a further five years in March 2005. The contract with the DWP was believed to be worth £400 million to Atos.

NB. The Labour Party was in government from 1997 to 2010.

2. National Audit Office report The Medical Assessment of Incapacity and Disability Benefits of 9 March 2001:

Recommendation (gg): The Committee has not been convinced that there has been an improvement in the quality of examinations and reports since contractorisation. Some efficiency improvements have been made: the challenge now must be to improve the quality of reports and the treatment of claimants. Given that there is pressure on doctors to see more patients more quickly it is difficult to see how this can be achieved.

Ministers should ask themselves whether one of the goals of contractorisation - improved service to the public - has really been achieved. If they conclude, as we do, that it has not, they should take steps to renegotiate the contract, or otherwise influence performance to ensure that this goal is met.

3. Hansard, 13 March 2008:

James Purnell [Labour MP, then in government]: I said that this was a contract, and so it is. As my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) quite rightly said, for those who can work, there is no option not to do so. We have already announced—much to the Opposition’s chagrin—that there will be work for the dole for young people who are not working or learning and for the long-term unemployed: a much wider programme than the one that they had previously announced...

Last month, we announced payment by results. Now, we can announce that everyone on incapacity benefit will be put through the work capability assessment to find out whether they are capable of work.

4. PM's welfare speech, 25 June 2012:

[David Cameron, now Conservative Prime Minister] The [welfare] system we inherited was not only unaffordable. It also trapped people in poverty and encouraged irresponsibility. So we set to work.

In two years, Iain Duncan Smith has driven forward welfare reform... And he is delivering remarkable results:

Over 400,000 more people in work than in 2010. Tens of thousands of claimants of incapacity benefits re-assessed, and found ready for work. We’ve established the biggest-ever Work Programme – and we’re well on our way to getting 100,000 people into jobs. We’ve helped tens of thousands of young people find real work experience.

5. Guardian, 7 February 2013:

Margaret Hodge [Labour Party MP, now in opposition], chair of the public accounts committee, said the Department for Work and Pensions was getting far too many decisions wrong on claimants' ability to work.

The government should accept much of the blame for distressing and expensive fitness-to-work tests that have caused "misery and hardship" to thousands of benefit claimants, according to a report by MPs released on Friday.

The public accounts committee said there had been much criticism of Atos, the firm contracted to conduct so-called work capability assessments (WCA), but it warned that most of the problems lay with the Department for Work and Pensions.

The tests on claimants were introduced in 2008 to assess entitlement to employment and support allowance. Atos was paid £112.4m to carry out 738,000 assessments in 2011-12.

Really bad cut and paste job

Here's Cigar Guy attending the opening of a new hospital, right next to James Purnell, who funnily enough wasn't there either.

PS, I spent two hours downloading freebie Adobe Photoshop to do the cut'n'paste electronically but that particular package didn't seem to have the right tools. Twats. So I did it the old fashioned way instead.

Yes, but how are they going to enforce it?

From the BBC:

Alcoholics face having their benefits docked if they do not get treatment, under government plans. Minister James [Photoshop] Purnell has announced a review into the idea to be carried out jointly by the Department of Health and Department for Work and Pensions.

That's a clever bit of Indian Bicycle Marketing, actually, what can the authoritarian Tory party do to out-bid the authoritarian Labour party? Hmm. As ever, I wonder, how are they going to enforce this? Will dole claimants be breathalysed at random intervals? Nope - this is actually all just an excuse to hand over more cash to a fakecharity:

A spokesman for drug and alcohol treatment charity Addaction said that, historically, help for people with alcohol problems was under-funded. "We support measures to get treatment to the people who need it, but that treatment needs proper funding to be effective," he said.

The Tories, wary of being outflanked in the authoritarian stakes, show that they can really get to grips with tricky abstract concepts like 'big numbers':

Theresa May said this latest review was "another smokescreen" to "deflect from Labour's failure to get to grips with our welfare system ... Under James Purnell the system has gone into meltdown with more than 100,000 people claiming benefits because they are drug addicts or alcoholics. That's more than doubled from 48,700 since 1997."

Right. Let's assume that one hundred thousand is correct, and that half of those are alcoholics, so there are fifty thousand people getting £3,000 dole a year plus a free council flat, a total cost to 'society' of £300 million. Part of the reason for having alcohol duties (and VAT on top of the duty!) is to cover the external costs, which I suppose includes alcoholics on benefits.

My magic fag packet says total alcohol duties plus VAT is in the order of £12 billion, i.e. if you have a pint in the pub, out of the 80 pence duty plus VAT, 2 pence is needed to fully cover the costs of the people we're talking about. That seems perfectly fair to me, plus if it comes to it, I'd rather give somebody £60 a week cash to drink himself to death (half of which goes straight back to the government as alcohol duties plus VAT, of course!) than pay some meddling busybody quangista £500 plus index linked final salary pension to shove his or her nose in.

UPDATE: in a rather bizarre twist to the tale, the BBC had Antonia Bance on the telly just now, speaking on behalf of Oxfam and not on behalf of the Labour party, saying that this was all a bit harsh.

View from Middle England has a slightly different take on this, also worth a read (via LFAT).

More Indian bicycle marketing...

This week's episode of the two main parties trying to differentiate themselves by creating a phoney argument over something completely irrelevant was in yesterday's Times:

A NEW political battle over tax breaks for marriage has broken out with a Labour cabinet minister accusing the Conservatives of wanting to penalise children whose parents “have not walked down the aisle”. James Purnell, the work and pensions secretary, has criticised Tory plans to give tax incentives to married couples and those in civil partnerships and pledged to help struggling single parents instead. He claims that Conservative policy would result in children from broken families being “abandoned to poverty”.

This is hardly a "new political battle", I think that most people have made up their minds that that the way that the welfare state favours single mothers is an outrage, to the extent that they take any interest in it at all, the point here is that neither side is actually suggesting changing anything fundamental, because the Tories are talking about the tax system and Labour are talking about the welfare system.

In isolation, the joint taxation of spouses seems a good idea*, but let's not forget that it was the Tories who scrapped this and what they are proposing is a bit of a gimmick really. Let's say seventy per cent of thirty million taxpayers are married and the tax incentive is worth £1,000 per couple. That means the Tories have to raise £10.5 billion from thirty million taxpayers, or £350 each, which they then give back to married couples. Single people end up £350 worse off (which seems a bit spiteful), married couples with two earners end up £300 better off and a married couple with one earner ends up £650 better off. This will not make the slightest difference to the stereotypical single-Mum-on-benefits (the villain of the piece), as she doesn't pay income tax anyway.

Well, whoopie-doo, is all I can say to that. As to the welfare system...

1. The welfare system has looked much the same under the Tories as it did under Labour, even the biggest disaster of all, Tax Credits, is just Family Credit repackaged and made worse. There's no reason to assume that the welfare system will change much when the Tories get back in.

2. The welfare system does not actually discriminate against marriage as such, it discriminates against both marriage and cohabitation, whether a child's parents have "walked down the aisle" or not is irrelevant, the way to get all the extra goodies is for the mother to claim to be living alone.

3. It's difficult fisking the last sentence in the quote as it is pure gibberish. First James 'Photoshop' Purnell talks about children whose parents "have not walked down the aisle" and in the next breath he talks about "children from broken homes being abandoned to poverty". There are plenty of us who think that the welfare system is the main cause of child poverty, as it happens, i.e. ending these lunatic bribes for single mothers would not just save taxpayers' money, it would actually reduce child poverty in the long run.

* Under the MW flat tax/Citizen's Income scheme, it does not make any difference whether you are single, co-habiting or married, so married couples would be free to opt for joint taxation but it wouldn't actually make them better or worse off.

Twats of the day (6)

At the bottom of the same article covered in my previous rant we find this:

Mr Purnell said: ... "There's a danger of saying, as David Cameron did in the Sunday papers, that all five million people on benefit are potential Karen Matthews. I think that's offensive to people looking for work."

He said the Government was spending an extra £1 billion over the next two years on more Jobcentre advisers and other help. Mr Purnell said that the lone parent changes were aimed at giving young people more "aspiration". But he admitted that "if there isn't childcare, that would be a good reason for not going to work". Today's White Paper features moves to increase sanctions on those who avoid work, with a range of penalties from losing one week's £60 jobseeker's allowance to being forced to work for the benefit.

However, Right-wing think tank Civitas hit out at the proposals for being "too soft". It claimed that allowing single parents to simply "monkey about with their CV" was a "waste of time".

As ever, clowns to the Left of me, jokers to the Right.

1. I've bolded the important bit; "an extra £1 billion over the next two years on more Jobcentre advisers and other help". I make that about 20,000 extra tied Nulab voters come the next election (20,000 x typical salary £25,000 x 2 = £1 billion).

2. As to 'childcare', it's not my decision if single women choose to have children. They ought to think about 'childcare' before they have 'em. Yes, I am perfectly happy to scrap Child Tax Credits (which are a straight bung for single parents actually) and roll them into a higher Child Benefit of (say) £30 a week (or whatever is fiscally neutral), but of course I'd restrict it to the first three children per mother to prevent baby-farming à la Karen Matthews).

3. The real point is that welfare claimants have no strong motivation to find a job because they lose more in benefits than they can earn in net wages. Until the Powers That Be grasp this simple fact, all this tinkering achieves nothing.

4. Civitas make superficially fair points actually, but I've read plenty of their pamplets and while they are good at diagnosing the reason why the welfare system is so corrosive (the perverse incentives and poverty trap), to my knowledge they haven't twigged that the key to all this is simply reducing the savage withdrawal rates. Such a measure would probably more than pay for itself (total withdrawal rates of seventy per cent-plus are quite clearly on the downward slope of the Laffer Curve).

Another day, another reckless throw of the dice (2)

As John Pickworth pointed out, in reply to my question "What will they do next to prop up house prices?", our benighted gummint has thought up another wheeze to prop up house prices at taxpayer's expense:

Mr Purnell pledged that ... Those who are made redundant will get help to pay their mortgage after 13 weeks on the dole up to the value of the average house - £175,000.

The underlying message is: "If you are worried about losing your job, rush out and buy a property for £175,000 or less and you can live there rent- and mortgage-free"

FFS! Subsidies for land and property ownership are the very worst kind of subsidies* as these are in fixed supply, so subsidies just feed through into artificially high prices. Being repossessed is stressful, I agree, but that house doesn;t get demolished - the new owner either lives in it or rents it out - ultimately to the very people who were repossessed in the first place.

* The equal and opposite argument is that taxes on land values are the least bad taxes! This sort of scheme is yet another transfer of wealth from workers/businesses/tenants to the unemployed/homeowners. How about having a tax system that does the reverse?

"The End for Sicknote UK"

Promises The Sun.

A couple of good ideas here, but it's only scratching at the problem. Bearing in mind that Nulab are going to be out for good in two years' time, we can ignore the idea about the present gummint "ending Incapacity Benefit by 2013". When the Tories get in, the economy will, as like as not, be in a real mess. IB was abused by the self-same Tories to mask true unemployment back in the 1980s (the number of claimants increased from 600,000 in 1979 to about 2.6 million in 1997, it hasn't changed much since then), what's there to say they won't continue with this fraud?

Secondly, anything James 'Photoshop' Purnell says is to be taken with a pinch of salt. Or preferably not at all.

What's the MW policy on this?

1. Double the personal allowance.

2. Reduce income-means testing to no more than the basic rate of tax*. For millions of employees, actual and potential, who currently face marginal deduction rates of 70%** to 100%, this would on average treble their effective hourly pay - which ought to get half (?) of the five million benefit claimants willing to work again.

But is it enough to make work worthwhile? There still have to be jobs for them, so let's continue with MW's business tax policies ...

3. Scrap VAT, first on services and ultimately replace VAT on new goods with a lower rate to cover refuse collection costs. Assuming that the price-elasticity of everything is roughly unity (I don't know what else to assume), this would increase output by about 15% by volume - there'd be at least the same amount of money to spend on goods and services that are 15% cheaper. The private sector employs about 22 million people, that's potentially 3 million more vacancies.

4. Scrap Employer's NI (which would be more or less fiscally neutral, and if not, who cares? There is plenty of corporate welfare we can scrap). This would increase the number of people that businesses otherwise want to employ by at least 10%.

Steps 3 and 4 will reinforce each other, heck knows what the overall increase in employment will be, but surely we'd have something approaching 'full employment' (whatever that is). Assuming that a service business has to make a 20% mark up on salaries to cover overheads and make a profit, the break-even price it would have to charge for £1's worth of gross wages would drop from £1.66 to £1.20!

Finally, if we are to have a welfare system at all, the least-bad system must be a universal, unconditional, non-taxable, non-means tested flat rate cash benefits for all low- and non-earners, regardless of household composition and wealth.

Council Housing & Housing Benefit stick out like a sore thumb here; they will never be universal. Housing Benefit is the benefit that should be replaced with Workfare jobs - surely it is better for the State to give people £90 a week for doing something however marginal the benefit to society than to pay people to sit at home? Once this has sorted itself out for private tenants, then this could be extended to Council Tenants as well, the State would just be a landlord like any other.

* The purists say that there should be no personal allowance at all - everybody should get the CBI and pay the same rate of tax. Details, details.

** Basic rate tax, plus Employee's NI plus Tax Credit withdrawal.

Rising star? Rising star?

I've got a one word reply to that sort of nonsense*:

Photoshop.

* I am afraid I couldn't find a link to today's articles that still refer to him as a 'rising star'.