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Welfare reform is clearly necessary, but let's not over-egg the pudding Welfare reform is clearly necessary, but let's not over-egg the pudding
(about 1 hour later)
As all sorts of people have rushed to point out, the political advantages of David Cameron's latest bout of welfare-baiting are obvious - a distraction from more immediate problems such as muddled Lords reform, Europe and tax avoidance by top Tories, and red meat to the restless party faithful, so desperate that some are even touting Michael Gove as a leader-in-waiting for a post-coalition age when they can upset the Lib Dems every day.As all sorts of people have rushed to point out, the political advantages of David Cameron's latest bout of welfare-baiting are obvious - a distraction from more immediate problems such as muddled Lords reform, Europe and tax avoidance by top Tories, and red meat to the restless party faithful, so desperate that some are even touting Michael Gove as a leader-in-waiting for a post-coalition age when they can upset the Lib Dems every day.
But the political perils are pretty obvious too. It's one thing to try and shake up a doddery welfare system when the mood is optimistic, and economic opportunity and growth are plentiful; it's quite another when there are 2.6 million people looking for work and many more either working part-time or resigned to unemployment.But the political perils are pretty obvious too. It's one thing to try and shake up a doddery welfare system when the mood is optimistic, and economic opportunity and growth are plentiful; it's quite another when there are 2.6 million people looking for work and many more either working part-time or resigned to unemployment.
Oh, and another thing, lots of voters suspect the Tories are talking this way because they want to use the recession as an excuse to cut back the welfare state and wider public expenditure. Oh, and another thing: lots of voters suspect the Tories are talking this way because they want to use the recession as an excuse to cut back the welfare state and wider public expenditure.
Labour's welfare spokesman, Liam Byrne (another citizen over whom joblessness hovers), was quick to issue a statement: "It's now very clear that a welfare revolution was all talk. Out-of-work benefits are going through the roof. Each week we hear of another new initiative, another crackdown, another test.Labour's welfare spokesman, Liam Byrne (another citizen over whom joblessness hovers), was quick to issue a statement: "It's now very clear that a welfare revolution was all talk. Out-of-work benefits are going through the roof. Each week we hear of another new initiative, another crackdown, another test.
"Meanwhile in the real world, the cost out-of-work benefit is up nearly £5bn, housing benefit over £4bn, the Work Programme is failing and the multibillion pound Universal Credit scheme is running late and over budget," he protested. "Meanwhile in the real world, the cost out-of-work benefit is up nearly £5bn, housing benefit over £4bn, the work programme is failing and the multibillion pound universal credit scheme is running late and over budget," he protested.
All true, as far as it goes. The danger in a recession – so evident in stricken Greece – is that the economic slowdown, combined with official austerity that reinforces rather than counters private austerity, means that more people lose their jobs, stop paying taxes and start claiming benefit. Austerity-minded governments, our own included, find themselves borrowing more, not less, to pay for the consequences. An extra £9bn has been spent on jobseeker's allowance and housing benefit since 2010, according to Byrne's figures.All true, as far as it goes. The danger in a recession – so evident in stricken Greece – is that the economic slowdown, combined with official austerity that reinforces rather than counters private austerity, means that more people lose their jobs, stop paying taxes and start claiming benefit. Austerity-minded governments, our own included, find themselves borrowing more, not less, to pay for the consequences. An extra £9bn has been spent on jobseeker's allowance and housing benefit since 2010, according to Byrne's figures.
Meanwhile the economy flatlines at best, and ministers' hopes of getting the long-term unemployed back into work via the Work Programme are proving unfounded. No surprise there really. Labour in office had all sorts of ideas to tackle hardcore unemployment which were made much harder by the rise in jobless figures in its third term between 2005 and 2010. Meanwhile the economy flat-lines at best, and ministers' hopes of getting the long-term unemployed back into work via the work programme are proving unfounded. No surprise there really. Labour in office had all sorts of ideas to tackle hardcore unemployment, which were made much harder by the rise in jobless figures in its third term between 2005 and 2010.
The left's response is to say: "Go easy on austerity. Borrow more to generate worthwhile investment and jobs and tackle tax avoidance by the rich before welfare benefits. Don't hammer the poor, they suffer enough and spend what they get, which helps the economy more than rich folk piling the stuff into offshore accounts." Ed Balls even advocates cutting VAT.The left's response is to say: "Go easy on austerity. Borrow more to generate worthwhile investment and jobs and tackle tax avoidance by the rich before welfare benefits. Don't hammer the poor, they suffer enough and spend what they get, which helps the economy more than rich folk piling the stuff into offshore accounts." Ed Balls even advocates cutting VAT.
All more or less true, but no one should think that such policy shifts would do more than marginally ease our collective plight and would probably create other problems – higher borrowing costs, for instance, if markets panic. We are suffering from a much bigger readjustment to our way of life than either Cameron, Nick Clegg or Ed Miilband's policy initiatives or political manoeuvres can easily accommodate.All more or less true, but no one should think that such policy shifts would do more than marginally ease our collective plight and would probably create other problems – higher borrowing costs, for instance, if markets panic. We are suffering from a much bigger readjustment to our way of life than either Cameron, Nick Clegg or Ed Miilband's policy initiatives or political manoeuvres can easily accommodate.
Some are our own fault - the collapse of skills in many sectors, the sell-off of key British manufacturing and service companies to the highest foreign bidder (who may then asset strip jobs and research capacity), decades of under-investment and too much focus on the City.Some are our own fault - the collapse of skills in many sectors, the sell-off of key British manufacturing and service companies to the highest foreign bidder (who may then asset strip jobs and research capacity), decades of under-investment and too much focus on the City.
It's as if a football team, full of potential talent, was hopelessly ill-prepared to win a major competition (obviously I'm just making this up) and is left outclassed and defeated again.It's as if a football team, full of potential talent, was hopelessly ill-prepared to win a major competition (obviously I'm just making this up) and is left outclassed and defeated again.
But it's not all because Wayne Rooney (obviously I've made the name up) is ill-disciplined, overpaid and out of condition to manage 90 minutes, let alone 120. Other fundamental changes to our relative status are way beyond our control. Rivals teams are doing better: notably in Asia – from the Gulf state oil economies whose sovereign wealth funds are now buying prime chunks of UK Plc through south Asia – India, Singapore, Thailand — and on to China. The 20th century rise of Japan turned out simply to be a foretaste of things to come. But it's not all because Wayne Rooney (obviously I've made the name up) is ill-disciplined, overpaid and out of condition to manage 90 minutes, let alone 120. Other fundamental changes to our relative status are way beyond our control. Rivals teams are doing better: notably in Asia – from the Gulf state oil economies whose sovereign wealth funds are now buying prime chunks of UK Plc through south Asia – India, Singapore, Thailand – and on to China. The 20th century rise of Japan turned out simply to be a foretaste of things to come.
In that context, we can forget about dodgy Lords reform or the determination of Eurosceptic Tories to make a bad situation worse. Cameron – Clegg, Miliband and Co. too – have a duty to consider the long-term imperative that ensures we have an affordable welfare system, a better-educated and motivated workforce (I mean you too, Rooney, as well as those offshore City spivs and welfare professionals) and much else needed to keep us afloat and relatively solvent. "You Europeans have become lazy," say all sorts of Asian analysts. In that context, we can forget about dodgy Lords reform or the determination of Eurosceptic Tories to make a bad situation worse. Cameron – Clegg, Miliband and Co too – have a duty to consider the long-term imperative that ensures we have an affordable welfare system, a better-educated and motivated workforce (I mean you too, Rooney, as well as those offshore City spivs and welfare professionals) and much else needed to keep us afloat and relatively solvent. "You Europeans have become lazy," say all sorts of Asian analysts.
So I don't think Cameron is necessarily out of order to say some of the things Patrick Wintour's report this morning suggests are in today's big speech, challenging entrenched assumptions about payment levels to single parents with large families, or the way in which the average age at which young people now get social housing (if they're lucky) funded with housing benefit has dropped to 21.So I don't think Cameron is necessarily out of order to say some of the things Patrick Wintour's report this morning suggests are in today's big speech, challenging entrenched assumptions about payment levels to single parents with large families, or the way in which the average age at which young people now get social housing (if they're lucky) funded with housing benefit has dropped to 21.
It's automaticity he's challenging. He's not putting everyone under 25 on the street, though I wish he'd wait for one set of interesting-but-unproven IDS reforms to bed down before he muddies the pond by launching another set, even if they're for the 2015 Tory manifesto. It makes it all sound more omni-shambles, not blue sky thinking. It's automaticity he's challenging. He's not putting everyone under 25 on the street, though I wish he'd wait for one set of interesting-but-unproven IDS reforms to bed down before he muddies the pond by launching another set, even if they're for the 2015 Tory manifesto. It makes it all sound more omnishambles, not blue sky thinking.
Family fragmentation at all levels of society is a cause of grief, but when bad habits were confined to the upper classes it was usually kept quiet and they paid for their own vices. It's much more complicated now, a highway to middle class impoverishment. As for the bottom of society where the underclass lives, society is expected by many to pick up their bill. I got some stick when I wrote about it recently , though the way things turned out make me think I called that one right.Family fragmentation at all levels of society is a cause of grief, but when bad habits were confined to the upper classes it was usually kept quiet and they paid for their own vices. It's much more complicated now, a highway to middle class impoverishment. As for the bottom of society where the underclass lives, society is expected by many to pick up their bill. I got some stick when I wrote about it recently , though the way things turned out make me think I called that one right.
It may not be a huge problem, but the cost of problem families to the taxpayer is huge, and collecting the tax-avoiders fair share of tax – footballers as well as bankers are in K2-style rackets of the kind that Jimmy Carr has just abandoned – will only offset the costs. In any case, they are not simply about money. There is a social and economic cost too, mostly borne by the problem families, their neighbours and (in some cases) their victims. It may not be a huge problem, but the cost of problem families to the taxpayer is huge, and collecting the tax-avoiders' fair share of tax – footballers as well as bankers are in K2-style rackets of the kind that Jimmy Carr has just abandoned – will only offset the costs. In any case, they are not simply about money. There is a social and economic cost too, mostly borne by the problem families, their neighbours and (in some cases) their victims.
We should do better, as many of our European neighbours do. And before you tell me it's class warfare, I draw your attention to a Prospect magazine poll, which the BBC's Nick Robinson mentioned today. Some 74% of voters, including 59% of Labour voters, think we spend too much on welfare, and 51% of those in the lowest income groups think the same.We should do better, as many of our European neighbours do. And before you tell me it's class warfare, I draw your attention to a Prospect magazine poll, which the BBC's Nick Robinson mentioned today. Some 74% of voters, including 59% of Labour voters, think we spend too much on welfare, and 51% of those in the lowest income groups think the same.
Two-thirds of voters believe "a substantial minority" of claimants are scroungers. That's probably too high and reflects the diet of welfare stories in the rightwing tabloids, most of which Guardian reading, BBC-watching folk never get to hear about. The unemployed and never-married single parents are the chief targets of their disdain, not pensioners.Two-thirds of voters believe "a substantial minority" of claimants are scroungers. That's probably too high and reflects the diet of welfare stories in the rightwing tabloids, most of which Guardian reading, BBC-watching folk never get to hear about. The unemployed and never-married single parents are the chief targets of their disdain, not pensioners.
Fair or not, I expect you would probably have got that sort of polling result at any time in the past 500 years, and anywhere too. It's not going to get any easier in the next 500, so we'd better try and rebalance the equation.Fair or not, I expect you would probably have got that sort of polling result at any time in the past 500 years, and anywhere too. It's not going to get any easier in the next 500, so we'd better try and rebalance the equation.