1. Tax on bankers’ bonuses to fund compulsory workfare for long term unemployed for whom 10 out of the 25 hours of work would be training. If the work is not accepted, the workless person would lose benefits.
2. Require parents whose youngest child is three or four to attend Job Centre, have training and learn about job opportunities. But these parents would not be required to seek work. (It sounds as though he is mostly thinking about lone parents.)
3. He would ‘look at’ requiring contractors for central government to pay a ‘living wage’.
4. Give local authorities power to negotiate lower rents paid to ‘social landlords’. The money saved would be used to build more housing.
5. The age at which people retire ‘will have to increase’.
6. “It doesn’t make sense to continue sending a cheque every year for Winter Fuel Allowance to the richest pensioners in the country.” So presumably he proposes to cut this.
7. Workers should be employed for five years instead of two to qualify for contributory benefits which should be higher.
8. “Extra” help for older workers who lose their jobs to get back into work.
9. “Examine” ways to recognise the work of mothers looking after young children or people looking after elderly relatives.
10. Three year spending reviews of social security spending and a cap. He referred to long term rises in structural unemployment and housing benefit. No indication of how the cap would work.
11. If in government now, would raise top rate of tax to 50% and use money to improve tax credits for those in work.
This Labour Party package clearly does not represent a serious re-think of welfare and in some cases it would make matters worse. Effectively enforcing a ‘living wage’ for government contractors would be a partial creation of a new, higher minimum wage. This would cause unemployment and increase government costs, making the deficit worse.
The idea of allowing local authorities to negotiate rents with social landlords to reduce rents would seem to have several problems attached to it. By taking the individual out of negotiating for the accommodation, the local authority would surely reduce the choice of the individual. Effectively, the local authority would do a deal with big landlords and the individual would be told, ‘if you don’t like it, bad luck’. He or she would have no direct recourse to the landlord. Presumably there would also be a new layer of local authority bureaucracy which would have to both negotiate with landlords and then allocate tenants to them. Has the cost of this extra bureaucracy been taken into account?
Mr Miliband put this in the context of making housing more affordable. He said that the savings made would be put into building more housing – presumably more social housing. The idea that this money would make any significant difference to housing affordability in Britain is patently absurd. Yes, housing affordability is a major problem. This proposal shows he is not taking it seriously.
The ‘workfare’ idea for those who are long-term unemployed is not completely without merit. But the idea that 10 hours out of 25 should be training betrays a failure to have looked in detail at this area. The company that can offer work may not be in the best place to offer training. In any case, in many basic jobs, not much training is really needed. The real need for long term unemployed is often more to do with things like illiteracy, drug habits, lack of confidence and so on.
The reference to a spending cap on welfare benefits is the most bizarre aspect of his speech. How would he ‘cap’ the spending? Would there be cuts? If not cuts, then what? He seems to want to get the credit for controlling spending on social security without doing the hard part of telling us how he would do it.
Some of his ideas would actually increase spending – the living wage, higher contributory benefits and workfare.
It just does not add up.
The full speech is here: http://labourlist.org/2013/06/full-text-ed-miliband-speech-a-one-nation-plan-for-social-security-reform/
10 Responses to Baroness Thatcher gives me my instructions
Congratulations!
As for the proposal, don’t let yourself influenced by contemporary political concerns and particulars. Try to write a book about the best welfare system you can think of… if it’s really good, sooner or later it will be pheasable.
I’d rather read something great but not suitable for a particular administration than something too specific about particular circumstances.
Well, what about considering Charles Murray’s new book from a UK perspective? He offers a way out of welfare (though not big governemnt) for America by payments to every citizen without considering need. That might be a place to start, even if you want to reject his ‘Plan’.
I think your caution wiser than Mrs Thatcher’s enthusiasm. The story TWSWI tells so well is that of unintended consequences from good intentions. That would apply in full force to any blueprint drawn from the book just as much as it does to the 45-51 government. In most respects I think the closing chapters of your book say all that can be said – that the mistake of the left was to nationalise welfare, not to mismanage it afterwards, and that form of pre-’45 welfare wasn’t really given its chance in the favourable economic conditions of the post-war boom. What the modern equivalents are is hard to say – because they will be made by individuals in their own modern contexts – and blueprints aren’t necessarily going to have any influence on that, beneficial or otherwise.
If Mrs T enjoys the book, why not put a proposal to her, setting out the funding, timescale, research facilities, etc. you imagine will be needed to bring your paper to fruition.
Surely she has contacts with some pretty rich backers who might be interested in sponsoring you, if all else fails..?
I am with Lady T on this.
If you consider the fact that a welfare replacement may not NEED a detailed blueprint, then we has a chance. Why not detailed? Because it would be formed and created to a large extent from individual and voluntary energy and thus self-renewing and evolving.
To me the biggest challenge is not deciding where we will end up, but migrating from where we are now, to wean people off the State teat. Now THAT needs a detailed blueprint.
When you decide what we MUST do, then there is no option but to go ahead and do it.
I am tempted to augment my Roger’s Manifesto (linked) to incorporate migration plans.
It must have been a great moment meeting Lady T. I share your pessimism concerning your chances of chaging things, but I’m sure that her advisors were equally pessimistic when she grabbed the UK by the scruff of its neck and put it back on its feet again.
Go for it.
Write a sequel outlining the way forwards. You may not succeed in changing the world, but the royalties might go some way to easing your disappointment.
Author meets Thatcher
The author of The Welfare State We’re In confessed to nervousness when being introduced recently to Margaret Thatcher. Says James Batholemew of the meeting:
I greatly enjoyed your book and was pleased to Lady Thatcher also appreciated it. However I was surprised by your comment regarding an alternative that “it would be a big job, requiring a lot of research.” In the book you often describe how services were as well or even better provided by the market and private enterprise before the introduction of state control. Isn’t the idea then that we don’t replace the Welfare State with an alternative but instead simply reduce state involvemnet and leave these services to be provided by the market?
If people like yourself, do not set out some kind of alternative, then the politicians have noone from whom to take a lead.
I found your book very convincing and I’m sure another would take the argument much further.
There is a genuine problem in that the welfare state has crowded out alternatives, and created dependants who will resist any changes. However, you might be interested in my Social Policy Bond idea. Essentially it would mean that government defines the broad welfare goals it wants to achieve: these would probably be safety-net type measures of education, health, and poverty. Then it would issue on the open market non-interest bearing bonds redeemable for a fixed sum once the objectives had been achieved. Bondholders would have incentives to achieve social (and environmental) goals efficiently, and to explore diverse, adaptive approaches. Human ingenity and self-interest would be channelled into public benefit. I would happily collaborate with you on this if you are interested.