Some things just don't add up. The government propaganda machine tells us one thing but our own experience tells us another. And it seems to be getting worse.
Living in Britain is becoming rather like living in the old Soviet Union. People there were regularly told how agricultural production was increasing wonderfully but, on the other hand, they noticed there was no fresh fruit in the shops. It did not make sense.
In the same way we have been repeatedly told how unemployment is in Britain is low. Gordon Brown boasts about it at every opportunity. In one of his recent bouts of this, he announced, "while unemployment in America is higher than ours — and in France and Germany, it is much higher, at nearly 10 per cent —in Britain, unemployment is lower than 5 per cent."
That sounds marvellous.
But hang on a minute. Though our unemployment is apparently so low, the bill we pay for the Department of Work and Pensions - which dishes out welfare benefits - does not seem low at all. It is expected to amount to £136 billion this financial year, accounting for over a quarter of all government spending. It costs far more than health or education. And that is without even including the cost of tax credits - which are benefits by another name - and various other benefits paid for by other departments.
So how come the cost of benefits is astronomical if we have low unemployment?
Half of the cost consists of payments to those past retirement age. But after taking them out of the equation, we are still left with a bill of some £65 billion. Why do people of working age cost so much if virtually all of them are working?
The answer is, they aren't.
A total of nearly 5.2 million people of working age are not working and are in receipt of state hand-outs. That is 14 per cent of those of working age. It is equivalent to 52 British armies.
Of course some of these people cannot work because they are genuinely incapacitated. But many of those who claim incapacity benefit are capable of work. That is the view of the Government itself which has said it wants to get a million people off this benefit and into work. The government is probably being modest in its estimate of the proportion of those on incapacity benefit who are, in reality, unemployed.
The numbers claiming the benefit tripled between 1979 and the late 1990s. This was without any medically recognised increase in real levels of disease or incapacity. If we add, say, one and a quarter million of those claiming incapacity or other sickness benefits on to the 870,000 claiming Jobseeker's Allowance (what used to be called 'unemployment benefit'), we leap in one bound to a figure of 2.1 million unemployed.
But there are many others in our non-working army who could arguably be included, too. There are those on New Deal training schemes, for example. They have not got jobs but they are not counted as unemployed. There are those who are unemployed but do not claim Jobseeker's Allowance.
Then there is the vexed question of lone parents.
The government intends to put more pressure on lone parents to seek work. But there remains no legal requirement on lone parents actively to seek work until the youngest child reaches the age of 16. That is in contrast to many other countries. In America, for example, a lone parent is expected to work as soon as the youngest child is three months old. There are 790,000 lone parents on benefits in Britain. If they were added to the 'unemployed', the total would amount to 2.9 million and the percentage of the workforce out of work would climb to 7.8 per cent.
But even this does not fully tell the story of why welfare benefits cost so much. There are 'passport benefits' - the further benefits people often get once they are established as being in need. For example, someone on Jobseeker's Allowance might also be able to claim housing benefit and/or council tax benefit. The average value of these benefits are £64 and £14 per week respectively.
I asked a Department of Work and Pensions official what were all the possible extra benefits a lone parent might get in addition to basic income support. She immediately reeled off: housing benefit, council tax benefit, child benefit, family premium on the income support, disability premium (if the parent has some disability) and disability living allowance (similar). Then there are the benefits from other deparments: child tax credit, from the Treasury, above all. It is a big item, worth £40 or £50 for each child. Then there are free school meals and other free services such as after-school clubs and training which those on benefits can get. This is all without mentioning free education and healthcare. The cost of those who do not work goes far beyond the value of whichever initial benefit they are entitled to.
The suggestion that we have low unemployment is simply a lie. It does not matter how often it is repeated, it is still false. We have mass unemployment and it has become a permanent feature of British society regardless of all the talk of 'New Deals' and 'pilot schemes'. This mass unemployment is extremely expensive - pushing taxes up to a level which damages economic growth and the prosperity of each of us. It also changes the psychology of those who suffer the unemployment, causing depression and alienation. There is nothing here for Mr Brown to be proud about at all.
How many people of working age are not in full time jobs and receive welfare benefits?
Jobseeker's Allowance 870,000
Incapacity Benefit 2,710,000
Lone Parents 790,000
Carers 360,000
Other income benefit 150,000
Disability living allowance* 305,000
---------
Total 5,185,000
*Some of those receiving DLA may be in work.
(The above is the unedited version of an article which appeared in the Daily Express on Wednesday.)
Posted by James Bartholomew • Indexed in Welfare benefits
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James,
Your 'totting up' at the end is wrong. It doesn't include, for example, those out of work for over six months (after which contribution-based JSA stops) who do not qualify for means-tested benefits because they have a working spouse. Miraculously, these people disappear from the unemployment figures because they are no longer in receipt of benefits.
There has also been a big push in recent years to encourage people to become self employed if they've been unemployed for any period. In the absence of work, many people register as such, but struggle to generate any real income. To all intents and purposes they're unemployed, but, of course, they don't appear on the official figures.
Posted by: HJHJ at March 4, 2006 03:59 PM
In Australia the official unemployment rate is calculated by surveying random households rather than using the data the government has on unemployment payments.
Surprise, surprise, the official unemployment rate is far lower than the percentage of people who are receiving unemployment benefits.
Posted by: Bill McGrath at March 20, 2006 09:39 AM
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I think this is one of the worst effects of the perpetual unemployment benefit. It really does seem to trap people in the system, isolates them and kills pride and hope. I'm glad to see it mentioned.
Posted by: Ronnie Horesh at March 4, 2006 10:22 AM