Making the country work again

Even Margaret Thatcher didn’t manage to dismantle Britain’s disastrous welfare system. Judging by the policy plans of the Lib-Con coalition, there is little reason to be optimistic that today’s leaders will be any more successful. The timid proposals on welfare are little more than an expansion of existing failed programmes.

It is unsurprising that welfare reform has presented such a problem for successive governments. The six million working-age adults who now receive out-of-work benefits – plus millions more over-60s receiving generous pension credits – comprise a large voting bloc. Labour would have risked losing its core support had it attacked benefit dependency.

Within the new administration, the rebranded, centrist Conservative Party will be wary of implementing policies perceived (wrongly) as an attack on the poor, while any major changes could face strong opposition from the Liberal Democrats’ hard-socialist Left.

Nevertheless, the dire state of the public finances means the Government will have little choice but to make substantial cuts in welfare expenditure…

Read the full article in The Daily Telegraph.

Richard, I’m not sure that I agree with you on this. I think that the combination of ministers at the DWP (Duncan-Smith, Grayling, Freud) is perhaps the most impressive team in the new government. If Ian Duncan-Smith is able to implement the dynamic benefits model devised by his think tank, the Centre for Social Justice, last year then we will get many of the changes which you call for. I agree that one area that needs further work is Housing Benefit, but again I am genuinely optimistic that something might get done. If this lot won’t do it no one will.

@Peter – I hope you are right. My fear is that the emphasis will be on training-type schemes (building on New Labour’s policies) rather than solving the problem of high marginal withdrawal rates. Having said this, the budget deficit may force them to look at more radical measures.

Given the likely political opposition even to tinkering with the system, it may well be that it would make sense to consider much more radical measures. People like Ian Duncan Smith and Frank Field don’t need to ‘prove’ that they are aiming to help ‘the poor’. The cost of the present system (and I don’t mean just the financial cost to taxpayers) is unsustainable — and nearly everybody who has thought about it for more than five seconds is well aware of that fact.I wonder if the IEA should try to assemble a working party which could look at this over the next twelve months or so? (I expect we could raise funds especially to pay for it.)

Well Richard I’m not shocked, though very appalled at your: what can only be described as contempt and resentment of those fellow citizens who are less fortunate, as a result of the kind of ethos you are willing to give credit to. I must ask and please don’t be offended, are you: an elitist with a desire for an elitist utopia for yourself and similar, while the rest of us rot in the gutter, as your economic blueprint suggests? Is that what you call economics? I would call it an elitist and outrageous view…an extreme reaction to circumstances caused by the free market economics you so willingly adhere to. What gives you the right to play God? a nasty one at that, deciding people’s fate.

A difficult subject!How to address our deficit, without worsening the fragile communities where state benefits provide an important safety net…a life line! Benefits may be a burden on public expenses. For a majority of claimants: it’s not a “life style” choice, but a requirement! claimants don’t make policies, they are forced upon them. Often they have to jump through many hurdles to qualify, and stringent rules may disqualify the most needy. Crime will increase and cause other costs not just financial, if benefits are removed or reduced. Our benefit culture has grown and is a burden…can free market economics policy address such moral issues, create adequate and sustainable employment?

The largest single bill for benefits is old age pensions.Jobseeker’s Allowance comprises only 2 per cent of the total.

@Michael Petek – You are correct. State pensions account for over a third of the total benefits bill. Other big items include tax credits and housing benefit. JSA is only a tiny fraction of the total and it is also one of the least generous payments.

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