For reference, here is an assessment in July 2006 of how US welfare reform had done up to that point. The figures at the end of the article are impressive but obviously the figures would not look so good today.

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A former teacher who was falsely accused by a pupil suggested that one of the reasons for classroom disruption now is the Children's Act. Speaking on Radio 5 Live this morning, he said that the Children's Act meant that any teacher who was accused by a child of doing something wrong was immediately suspended. Teachers were terrified of being accused. He suggested that this was linked with the high rate at which teachers leave the profession.

The solicitor who spoke on the same programme who clearly was involved with children's rights had no sympathy for him and clearly thought that children's rights are a black and white matter on which there is no room for compromise. She might like to consider what damage is done to children by

a) the loss of good teachers.
b) the disruption of classes that would not take place if the teachers were more often able to maintain good discipline.

Good policy in education is surely better decided upon by considering what is in the best interest of children rather than inventing 'rights' and then adhering blindly to them regardless of the consequences.

See also here.

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I have just returned from the launch of proposals by the think-tank Reform for changing welfare benefits. The report is called the The End of Entitlement and is surprisingly disappointing. Its main thrust is that lots of money is 'wasted' because it goes to middle-class people. Instead, the money should be concentrated on those who need it.

This is an idea which has been knocking around for centuries. Among the various times, I remember it being proposed by Conservatives in the 1970s. On the face of it, the idea is attractive. Let's save money by only giving money to those who really need it.

Quite absurdly, the name of Beveridge was mentioned in this context and anyone who has a cursory knowledge of the system Beveridge proposed would know that he was against such a thing. His proposal was for a flat rate contribution rate for everyone and a flat rate benefit for everyone, too. Means-testing was intended to play a tiny part.

It is disappointing, to put it kindly, that the people who wrote this report seemed to have little awareness of why the idea has been discredited and why, indeed, Beveridge would have none of it.

What is wrong with 'concentrating benefits on those who really need it'?

Let us say that you decide to remove Child Benefit in order not to 'waste' it on the middle classes and, indeed, the rich. In doing so, you will be under great pressure to make up the loss of this benefit to the poor.

So the pay-out that goes specifically to the poor - who will probably also be unemployed - will go up. But if that poor person thinks of taking a job, that child benefit element of his or her benefits will be lost. Whereas if you keep the child benefit, he or she will not lose it on taking a job. Therefore the incentive to take a job will be reduced. The poor person's reasons to stay on benefits will increase. This will, other things being equal, lead to even more unemployment with all the damage it creates in terms of the poor person's well-being and self-respect and the tax burden on those who work.

This failure to think through the effect of welfare legislation on the incentives affecting the poor has caused the unemployment and unmarried parenting explosions that have afflicted this country over the past half century. It is dismaying to hear them touted as a new proposal.

The trouble always comes from those who think it would be a good idea to save money but have no background in how welfare can go wrong. The Treasury has often been at fault in this way, I suspect. It comes as no suprise that the Reform presentation started with the size of the government deficit as a reason to reform welfare.

If benefits, such as Child Benefit, that often go to the middle classes were removed as part of a thoroughgoing reform of benefits in which the incentives facing the poor were centre stage, there need be no harm. But removing such benefits and replacing them with even more means-testing would be a terrible mistake.

I should say that I have previously and otherwise had great respect for Reform which has done some terrific work. However in this area, I fear they are aiming at the wrong target and could end up doing more harm than good.

Posted by James Bartholomew • Indexed in Reform • Welfare benefits

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There has been an interestingly muted response to Gordon Brown's proposal of hostels for teenage mothers aged 16 and 17. Simon Hoggart in the Guardian referred to

a weird Victorian notion of an institution for fallen women – a barracks for single teenage mothers

and his colleague Polly Toybee said,

Sheltered housing with support is a good idea for the youngest teenage mums without families. But why make good schemes sound like sending them to a Victorian nunnery for punishment?

If a Tory government had suggested such a thing it is sure that there would have been shriek of outrage that unfortunate women were being 'victimised'.

If the Tories run with the idea or anything like it when/if they form the next government, the Left and people on Question Time and the BBC will be sure to turn on it with fury.

Here, then, is a reminder of why action of some sort has become desirable. It comes from Dynamic Benefit: towards welfare that works recently published by the Centre for Social Justice. It includes a graph showing that Britain is the unmarried parenting capital of Europe. The only country that is anywhere close to us is Ireland. The rest have a far lower incidence of unmarried mothers.

These are the proportions of households headed by an unmarried mother (figures from Eurostat, read off as best I can from the graph on page 117 of the report):

UK 11%
Ireland 9.7%
France 5.6%
Netherlands 5%
Germany 4.9%
Slovenia 4.7%
Norway 4.3%
Poland 3.3%
Portugal 2.8%
Bulgaria 1.8%
Italy 1.3%
Spain 1.2%

The reason we are the European capital for unmarried parenting is that we give higher benefits - in cash and housing - compared to money available from low-paid jobs than the other countries. Italy gives virtually nothing and unmarried parenting there is rare. It is not that the cash encourages young women to have children out of wedlock. It is rather that government, by giving - relatively speaking - so much money has ended the situation that has previously existed in Britain and still exists elsewhere: that it is a disaster for a young woman to have a child outside wedlock so she does all she can to avoid it.

To those who say that giving less money is harsh and that this is a humanitarian issue I will agree on this: it is indeed a humanitarian issue. A government which changes the natural order of things so that more children are produced by unmarried mothers without any means of support other than the state is creating a deluge of misery for the children that are created.

There are many kinds of evidence that the children are likely to do less well at school and turn to delinquency causing unhappiness to themselves and others, too. Here are just two figures from the same report (p120):

- 70% of young offenders are from lone parent families

- children from lone parent families are than 70% more likely to fail at school.

It is indeed a humanitarian issue and we should think of and speak for the children who are created by the policies that remove the natural disincentive to have children out of wedlock.

Posted by James Bartholomew • Indexed in Parenting • Reform • Welfare benefits

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In my previous entry I suggested we should take a closer look at those healthcare systems which came out best in an international survey. How do they work? Should we move in their direction?

Nick Cowen has suggested the Civitas report Quite like heaven? Options for the NHS in a consumer age for information on the Dutch system of healthcare which came out well. There is also information of the Swiss system which also come out well.

I went to the Civitas web site and found this highly relevant part of the summary:

Evidence from abroad, particularly countries such as Switzerland and the Netherlands, indicates that it is possible to deliver universal and comprehensive healthcare, equitably and to higher standards than in the NHS.

The Dutch, in particular have succeeded in setting up a system that has the potential to harness the benefits of real competition and real choice, through insurance arrangements, while maintaining health care for public benefit through tax credits and a Health Insurance Fund.

In both systems the government is neither the provider, nor main funder, of health care, but regulator. Political interference is at a premium compared to the NHS.

The ability of the patient to choose between insurers, insurance packages and hospitals ensures the system is patient-focused. Patients are a lot more cost-conscious and, if they don't like the health care they receive, they can vote with their feet and go elsewhere.

The power of exit for providers is real and acts as a powerful incentive for them to drive up standards. (ch.5)

So two of the top-ranking systems appear to include two layers of choice for the consumer: among insurers and among providers of healthcare.

[I am afraid the 'comment' facility on the website does not appear to working reliably at present. I have asked the website host if this can be fixed.]

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Here are six good things about the Centre for Social Justice's report on reforming welfare benefits - and one worry. (This is based only, so far, on the summary):

1. The idea that no person on benefits should face a tax and benefit withdrawal rate of more than 55 per cent by working.

2. The idea of 'dynamic analysis' of welfare benefits. It is absurdly the case that people in government for decades have liked to think that benefit rates do not affect behaviour. (Thus it was that Edward Heath's government was the first to make invalidity benefit higher than unemployment benefit. It did not occur to them that the result would be hundreds of thousands more people claiming the benefit.)

3. The report aims to remove the existing discouragement that the benefits system gives to couples living together.

4. The report aims to remove the discouragement which the benefits system gives to poorer people to save.

5. It suggest simplification of benefits so there are two instead of over 50. This could be more important than it sounds. Imagine you are thinking of taking a job but it would be insecure. The idea of trying to make sure you get all your benefits back if you lose your job might be daunting. Or perhaps it is just too complicated to try to work out how much better off you would be working. I would suggest that every year ten or so employees at the ministry apply for benefits as if they were unemployed and experience all the hassle it involves.

6. The report also deserves praise for trying to make sense of housing benefit. This has been one of the most intractable problems in welfare reform. It is the elephant in the room that usually people don't want to talk about, it is so difficult to put right. I don't know how well the proposals manage the task, but the CSJ deserves marks for trying at least.

One worry: from the four page summary I have seen, there appears to be no mention of substantially raising the personal tax allowance. This seems to me to be a much simpler and less bureaucratic way of making work pay for the low paid than tax credits. People will object that the benefit of larger tax allowances would be enjoyed by the rich. It need not be if you re-jig tax bands and rates.

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http://www.latimes.com:80/features/health/medicine/la-oe-tanner5-2009jul05,0,915371.story

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Obama is moving on towards his reforms of American healthcare. The Cato Institute is mounting a carefully argued opposition to his reforms.

The existing US healthcare is, of course, bad in a number of respects. It is just less bad that British healthcare. One of the agreed faults of American healthcare is its ridiculous cost.

Here are a few ways in which the cost could, perhaps, be reduced:

1. All people could be allowed to buy the insurance they want instead of coverage dictated by their state. (See excerpt from Cato paper below.)

2. Break up the cartels that I suspect may exist in US healthcare such as accredition only by a very limited number of associations for doctors and nurses. This kind of cartel leads to many, expensive years of training which are an unnecessary expense if a practitioner is going to work exclusively, say, in in obstetrics. The customer pays for massive over-qualification. Competition in accreditation would bring down costs and allow innovative, lower-cost solutions.

3. Reduce the awards given by courts for medical malpractice. These big awards increase the cost of a doctor's insurance which, I gather, can be amazingly high. If the awards were lower, the doctor's insurance bill would be lower and the customer's bill would be lower. The laws on what constitute malpractice may well be worth revising, too.

I expect there are plenty more, major savings to be had. American healthcare could perhaps be half the price without sacrificing any quality at all.

Here is an excerpt from the Cato paper in which the policy proposals of Obama and also McCain were discussed. Here is the section on McCain's liberalising ideas:

Deregulation (mostly)

Whereas Senator Obama’s plan relies
heavily on new regulation, Senator McCain
generally calls for deregulation, particularly
in the area of insurance.
Most notably,McCain would allow people
to purchase health insurance across state lines,
a practice that is currently prohibited by state
laws. Since health insurance is largely regulated
at the state level, one of the major reasons
that costs differ so from state to state is
because of the varying regulations and mandates
that states have chosen to impose.

For example, New Jersey has imposed more than
40 mandated benefits, including in vitro fertilization,
contraceptives, chiropodists, and coverage
of children until they reach age 25.
The state has also adopted community rating
and guaranteed issue. In part as a result of this,
the cost of a standard health insurance policy
for a healthy 25-year-old man would average
$5,580 in the state. A similar policy in
Kentucky, which has far fewer mandates and
no community rating or guaranteed issue,
would cost the same man only $960 per
year. Unfortunately, consumers are more or
less held prisoner by their state’s regulatory
regime. It is illegal for that hypothetical New
Jersey resident to buy the cheaper health insurance
in Kentucky.

In contrast, if consumers were free to purchase
insurance in other states, they could in
effect “purchase” the regulations of that other
state. A consumer in New Jersey could avoid
the state’s regulatory costs and choose, say,
Kentucky, if that state’s regulations aligned
more closely with his or her preferences. Many
consumers would undoubtedly choose less
regulation. For example, young and healthy
individuals with low incomes may choose not
to buy coverage that forces them to subsidize
older, sicker (and generally wealthier) individuals.
For those risk-adverse individuals who
prefer greater regulatory protection, the cost
of those protections would be reflected in
higher premiums.

Senator McCain’s proposal would permit
this type of interstate competition. With millions
of American consumers balancing costs
and risks, states would be forced to evaluate
whether their regulations offered true value or
simply reflect the influence of special interests.
As McCain says, “nationwide insurance markets
that ensure broad and vigorous competition
will wring out excessive costs.”

McCain would also allow people to purchase
insurance through nontraditional groups. Today,
three types of organizations can offer group
insurance: employers,unions, and trade associations.
McCain would open this to other groups,
notably churches and professional organizations.

More problematically, he would also allow
small businesses to band together in “association
health plans” (AHPs) to gain benefits
from pooling their risks. That makes sense if
the AHPs can choose among competing state
regulations, but there are reasons to be concerned
over creating federally regulated
AHPs. Doing so would be a step toward
greater federalization of insurance regulation.
As costly and damaging as much insurance
regulation is today, it is at least somewhat
restrained by the fact that special
interests are forced to lobby in 50 state capitals.

Fundamental to McCain’s vision
of health care reform is
changing not just who pays for
health care, but how that health
care is paid for.Moving the locus of insurance regulation
to Washington would simply create a
“one-stop shopping” center for lobbyists.

On the supply side, McCain supports
“innovative delivery systems, such as clinics in
retail outlets and other ways that provide
greater market flexibility in permitting appropriate
roles for nurse practitioners, nurses, and
doctors.” His campaign speaks of healthcare
being offered through a variety of venues such
as “Minute Clinic, COSTCO, banks, investment
companies,hospital orhealthcompanies
such as Wellpoint, Humana or online services
such as Revolution Health, Google Health,
etc.,” with the government’s role limited to
establishing “some standards of transparency,
solvency, etc.”

He has also called for “different licensing
schemes for medical providers.” In particular,
McCain has suggested that some types of
care could be shifted to nurse practitioners
and other allied health personnel. “We need to
have flexibility in the delivery of care so physicians
can spend more time on the tasks they’re
suited for,” a McCain advisor explained.
Although most medical licensing and scope of
practice laws are a state, not a federal,
purview, there are some actions McCain could
take in this area, particularly in terms of federal
reimbursement policies.

Unfortunately, not all of Sen. McCain’s
proposals are free-market oriented.

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How do you go about reforming welfare benefits?

It is not often that the story is told but the process which took place in Wisconsin was carefully examined in Government Matters by Lawrence Mead (Princeton University Press, 2004).

Here are few observations extracted from the first two chapters:

“The states with good-government traditions like Wisconsin were the most able to fuse generous benefits with strong work requirement. That is the combination that seems to work best and that the public supports.” (p12)

“Administrative work tests – where work effort is demanded as an eligibility condition for aid – avoided the fairness problem of incentives. They turned out to be more effective as well.” (p20)

“Work enforcement emerged as a middle ground between the old policy of entitlement and the more extreme conservative proposal of simply eliminating welfare.” (p20)

“While fraud and abuse were indeed rampant when welfare expanded in the 1960s and 1970s, states moved speedily under federal pressure to clean up, and the rolls remained largely unchanged.” (p20)

“However, deciding and enforcing the required work standards makes serious demands on government. The potential for political conflict or administrative breakdown is great. The dilemmas of traditional welfare are traded for institutional challenges that may prove just as difficult.” (p20)

Between 1994 and 2000, the real value of welfare benefits in Wisconsin rose a little. So the dramatic fall in caseload between those two dates clearly had nothing to do with the level of benefits. It appears to have been entirely due to the amount of conditionality. (Statistics on p22)

Prior to 1994, “Normally when applicants approached local welfare agencies, they were immediately processed to determine their eligibility. Under Work First, they were first counselled against unnecessary dependency and invited to pursue other options, including immediate participation in JOBS.” [JOBS = Job Opportunities and Basic Skills Training Programme.]….Self Sufficiency First (SSF) was a tougher version of the same thing…they had to attend work orientation sessions and put in 60 hours looking for work for 30 days prior to going on aid – or their applications would be denied.”(p30)

“SSF’s companion was Pay for Performance. PFP toughened the sanction for noncooperation with work requirements….hours of assigned activities that a client missed without good cause were docked from the grant at a rate of $4.25 an hour…” (p31)

“SSF and PFP were implemented in March 1996 for the entire state. They were thus the first reform programs to impact Milwaukee seriously. They produced little short of a revolution….huge numbers simply left the rolls, with the majority apparently taking jobs…”(p31)

“There is no point in considering options to solve a problem that will be rejected by the legislature or the voters.” (p35)

“Tommy Thompson [the Governor of Wisconsin] realized it was more important to begin a process of change than to know precisely where it was headed. By proposing one initiative after another, he got people thinking about change, and he kept his opponents off balance. He legitimised the idea that welfare, which had been sacrosanct, could be changed without the roof falling in.” (p35)

Early ‘inconsequential’ legislation “…changed the discourse surrounding welfare and thus prepared the way for the later and more radical programs…Policymaking is a process as much as a decision.” (p36)

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There have been 20 occasions since 2004 on which gang members have fired guns in the Croxteth and Norris Green areas where Rhys Jones was killed. The gang members start as early as 12. They come from broken, workless homes and start out as couriers or look-outs for the older members. Then they progress up the pecking order, their rising status measured by the viciousness of the crimes they have committed.

Sean Mercer, the youth who killed Rhys Jones, has been stopped by police on an astonishing 80 occasions by the police. He scorned them and their lack of ability to arrest him and other gang members.
It is surely impossible to deny the association between the social breakdown – the unmarried parenting and the worklessness in Norris Green and Croxteth – and the development of these gangs.

In Norris Green, more than half the people are in social housing and the workless rate is 35 per cent – far above the national average. A worrying number of council house and housing association estates have turned into ghettoes of hopelessness, vandalism, crime and fear. A poll by YouGov on behalf of the Centre for Social Justice found that a third of social tenants nationwide feel that where they live is not ‘reasonably safe’. Nearly half won’t say that they trust their neighbours and 40 per cent don’t believe that the local schools provide a good education.

The underclass has grown and become concentrated in many council estates. What are we going to do about it?

Yes, of course we can start by tightening up the weaknesses in the policing, prosecuting and sentencing. These communities have a crisis on their hands and it is offensive that police time is taken up with so much paperwork. It is absurd that the police should have had such knowledge or the wrongdoings of Sean Mercer yet been somehow unable to send him to a corrective institution. The weakness of our justice system – and those who made it so weak – bears a responsibility for the death of Rhys Jones.

So, yes, it would help if Labour finally fulfilled its long-ago promise to be ‘tough on crime’. But we need to go much deeper. One of the major causes of crime is the way many estates have become centres of unemployment and unmarried parenting. There is plenty of evidence that unmarried parenting leads to a greater likelihood of children becoming delinquents. Add that to a concentration of unemployment on a council estate and the result can be extremely toxic.

Council housing has been around for well over a century. Originally it was allocated to the respectable and even prosperous working class. It was a reward and a privilege for people considered worthy of it. It was also for those who had been compulsorily or otherwise moved out of housing areas designated as slums.

But then in 1949, the allocation of council housing began to change. It began to be granted to people on the basis of need rather than worth. In 1977, this way of doing things became compulsory. And so began the downward spiral of Britain’s council estates. Sir Robin Wales, the Mayor of Newham described it like this last year: “If you walk in and say ‘I’m homeless’ you get a greater priority than if you walk in and say ‘I’ve managed to do something for myself but I’m still looking for a council property’”. I could add that if you walk in and say, “I’m homeless and I’ve got a baby” then you jump ahead as if you were playing snakes and ladders.

So the system now makes the life-choice of being unmarried and workless easier to fall into. Not actually attractive, but less obviously awful. Worse still, it makes it almost impossible to get out the trap. Once you have council or social housing and are in receipt of housing benefit and council tax benefit you will find it difficult to discover a job which would bring in much more money after you are obliged to give up these benefits.

Housing benefit is the dark secret of the whole benefits system. People often say the Jobseekers’ Allowance and Income Support are tiny. They say no one would be discouraged from working because they get one of these benefits. Perhaps. But once you add on housing benefit and council tax relief and other so-called ‘passport’ benefits, the maths change substantially. The council estates have become quagmires from which few escape. Would you like to guess how many people move out of council estates each year? It is mere four per cent. Once you are in, it is practically for life. A large minority of people are living in these estates, subsidized by everyone else and living low-quality lives.

Reform is desperately needed. But even after 11 years in power, Labour is still in the position where it is only promising a green paper next year. In other words, it has not thought the unthinkable. It has buried its head in the sand.

What should be done? First, one must surely allow those of retirement age to live out their lives in peace in the council homes they have known for years. But after that, we should no longer be content to let this disastrous social experiment continue as it is. Those of working age should be required to seek work if they get subsidised rents or housing benefit. The tenancies should not be for life but for limited periods – an idea that is being taken on in the Netherlands. Tenants should be given every encouragement to become the owners or partial owners of their properties. Unmarried parents should no longer jump up the housing lists compared to those who have worked and planned for their futures.

Such a programme – allied with a more purposeful justice system - could make a dramatic difference. Some may say the government would need a lot of political courage to do such things. But many of us – especially those in council estates – will need a lot of courage to face the future of increased unemployment, crime and fear that will result if we do nothing.

The above is the original draft of an article which appears in today's Daily Express.

Thwe full report on housing by the Centre for Social Justice is here.

Posted by James Bartholomew • Indexed in Behaviour & Crime • Housing • Parenting • Reform

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NOTES AHEAD OF THE WHITE PAPER ON WELFARE REFORM

Britain has more than four million people who are of working age but who are claiming benefit on the basis that they are not working. This is the case after more than a decade of economic growth. The figure is likely to rise substantially now that we have entered a recession.

The numbers who are claiming benefits in this way are about four times the equivalent figure in the 1960s. This has been a massive increase and it shows particularly in the number claiming benefit on the basis that they are sick or incapable and then number claiming benefit as lone parents.

This enormous change in our society has been and remains extremely damaging.

1. Living on benefits and not on earned income is demoralising and disaffecting for many people. It has a tendency (though of course this does not always happen) to change the values of those affected. People are sorely tempted to go on claiming benefits when they know, in fact, they are no longer genuinely entitled to them. Karen Matthews, allegedly, was tempted to have more children for the bad reason that she would get more benefits and perhaps larger accomodation. Women are tempted not to care so much whether a man who fathers a child with her actually stays around. Men consequently feel they no longer have a duty to take responsibility for children they father. Unintended consequences such as these reverberate through a benefits culture.

2. The unemployed are depressed as is evidenced by the increased likelihood of them becoming ill, committing suicide, drinking and smoking more than others and dying.

3. Children brought up in families in which no one has worked are twice as likely to have psychiatric disorders (this telling statistic comes from the government-commissioned report by Professor Gregg published a week or so ago).

4. The benefits system has led to enormous growth in lone parenting and absent fathers. It is well established that children of lone parents and absent fathers tend to less well in life, tend to be less happy and have a greater likelihood of becoming delinquent. (Of course this is a tendency, not true in every or indeed many cases. I should also add that the evidence for this holds true even after allowance is made for class, wealth and other factors which might be thought to be a cause of children's good or bad outcomes.)

5. The welfare benefits have to be paid for out of taxing those who are working. This is, in many cases, simply unfair. It is also distressing to think of able-bodied people claiming benefits and the cost being paid for in part by taxing, for example, elderly people with very low incomes.

6. The fact that millions of able-bodied people are not working means that Britain's economic output and growth is lower than it would otherwise be.

What the present administration has done:

Unemployment benefits

- it has reduced the value of benefits in comparison to earnings (continuing the policy instituted by Lady Thatcher)
- It has created various schemes of encouragement and training to try to get people to work.
- Incapacity benefit has continued to be paid on more attractive terms than unemployment benefit

RESULT There has been a big reduction in the number claiming unemployment benefit/jobseekers' allowance since 1997. (Personally I suspect the reduction in the value of the benefits is the more important cause of this change.)

Sickness and incapacity benefits

- There has been some mild tightening up on the checks on people and some encouragement to take up work.

RESULT The numbers of such benefits are a little higher now than in 1997. These benefits are now the benefit of choice for those who are unemployed. (As well, of course, as being the benefit which is paid to those who have genuine incapacity to work.)

Benefits to lone parents

- Little change except the general reduction of benefits in comparison with earnings.
- Some extra pressure on mothers with older children to take up work. This pressure is now due to increase especially on those with an oldest child of 12 or more.

RESULT A small reduction in the numbers of lone parents claiming benefits.

OVERALL VIEW OF THIS ADMINISTRATION'S PERFORMANCE

The Labour government basically funked it. President Clinton had signed into law a radical change in the USA which resulted a 60 per cent reduction in the numbers claiming welfare benefits. Other countries, according to Professor Gregg, also sharply increased the conditionality of their welfare benefits. Britain has made only marginal progress. The welfare culture with the damaging effects it has on national culture has been allowed to continue.

THE CURRENT PROPOSALS IN THE WHITE PAPER

At the time of writing, these have not been published. If the leaks are accurate, the proposals will tighten up the conditions more and offer more assistance to people in getting work. This is welcome. But it will still be modest compared to what has happened in America. It sounds as though there will be little in the way of workfare or in requiring people to turn up every week either to work or to try to get work (important elements of the reform in New York State, for example).

Posted by James Bartholomew • Indexed in Parenting • Reform • Welfare benefits

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In one or more interviews, Alan Purnell, the Secretary of State for Work and Pensions, has referred back to the report by David Freud published in 2007. I thought it might be useful to have link to his report since it seems to have had an influence on the current minister in framing his reforms.

Here is an extract:

...the UK is some way behind international best practice. The lone parent employment rate in Great Britain stands at 56.5%, compared to 80% in Denmark, one of the best-performing comparators. Practices round the world vary. What is increasingly common, however, is an expectation that once children reach school age then receipt of benefits should be conditional on looking for a job.

I should declare that I used to work alongside David when we were at the Financial Times many years ago.

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A Daily Telegraph leader on Saturday puts the case for tough welfare reform. Of course it is a case with which I agree and it is satisfying, well over 15 years since I conceived the idea of writing The Welfare State We're In to see one of the main contentions of the book supported in a major national newspaper. But, as I have said before, our best chance of a major advance will be when the Guardian and even presenters of the Today progamme or Newsnight take the same view.

The conclusion of the Telegraph leader:

Ten years ago, Labour identified a moral case for welfare reform, but, like so much with this Government, it was mere rhetoric.

Another attempt is to be made in the current parliament, but it offers no greater prospect of success than the last.

Unless a far tougher approach is adopted, another generation of children will be born into this cycle of state-sponsored hopelessness.

Sadly, Polly Toynbee in the Guardian appears unwilling to accept that things are getting worse or that welfare and housing benefits are the root cause. She wrote on Saturday:

But this is not a story of broken Britain going to hell in a hand cart; it is a picture of small but deep and persistent dysfunction passed from generation to generation. Social historians looking at Charles Booth's maps of poverty in Victorian Britain find the same areas still in deep poverty, often the descendants of those he studied. The seven Matthews children or Baby P's siblings have a slender chance of growing up to be good parents, as abuse, neglect and lack of love are passed on indelibly.

I would urge her to read the Duncan Smith article below which offers at least some evidence that this constant level of people in great difficulties that she suggests does not actually exist. The levels of dependency, worklessness and crime have all risen dramatically. Moreover the evidence from Charles Booth is not all as most people suppose as this earlier post reveals.

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I have just been to a talk given by Charles Murray, the American intellectual who has been so influential in the matter of state welfare and the damage it has done. He spoke about his idea for reform - an idea described fully in his book In Our Hands.

His idea, briefly, is this: that the government should give every person US$10,000 a year in place of all welfare benefits, retirement payments and healthcare. Of this, US$3,000 would have to be used to buy health insurance.

I hope he will forgive me if I misreport some of his remarks. I do not have shorthand.

He said he was not primarily concerned that the welfare state costs too much "though it does", nor that it tends to make things worse "though it does" but that it "drains" the life out of people - particularly the spiritual life and sense of meaning.

He believed that people derive a sense of meaning in their lives in one or more of the following four ways: vocation, community, family and faith. For these things to retain their meaning, it was vital that government should leave them alone.

He offered his sense of how Europeans defined the purpose of life these days. He felt they think that the idea is to have a pleasant time until you die. He felt that they no longer believe that life has a special or transcendental meaning. Their priorities seem to be holidays and shorter working hours. The idea that work can have meaning in their lives has faded. Their belief in marriage, too, has dwindled. They even are no longer so ready to put their children's interests above their own. There has been a secularisation of society. People now think they are a combination of chemicals which, after a while, would "de-activate".

This may be a caricature of how Europeans think but it is not so very far from how a lot of Britons think. His view is influenced, I think by the fact that he is a believer - and believers in God are probably more widespread and fervent in America than in Britain. It is his religion that perhaps makes him more shocked by some of the behaviour in Britain than non-religious people are.

In fact, I would suggest that America's continuing belief in God helped to get through the welfare reform of 1997. Many simply thought that it was wrong, for instance, that there should be special government payments for those having children outside marriage. It was against God's law. (American religion is, perhaps, different from what remains of British religion in that, here in Britain, the church has given up on morality and tends to take a socialist approach, calling for more big government).

He said that if his plan were introduced, behaviour would be affected. There would be 'feedback loops'. I think he implied that a girl would be less inclined to get pregnant out of wedlock if she knew she would get no extra money from the government. She would also be able to get money from the father because his regular money from the government would be paid to a known bank account and money could be taken from it. This would, Murray suggested, affect his behaviour, too. He would be more cautious about making women pregnant.

The idea of 'feedback loops', such as described above, is crucial to understanding how the welfare state has undermined behaviour. The welfare state has, in many ways, taken away the feedbacks which a society without state welfare used to supply.

Among these, Murray emphasised, is stigma. He said "stigma is wonderful" and "it is extremely powerful" and he suggested it was rarely a bad thing except in novels.

My take on Charles Murray's proposal is this:

I am struck first of all by how he admitted that this was a compromise. He said he was making an offer to the Left. They would be allowed to keep big spending - since his plan would continue big state spending. But it would be in a different form that would curtail many of the bad effects of state welfare.

Many times I have been asked, when giving talks about my book, "so what is the answer?" I have always felt it is impossible to give a satisfactory answer. The ideal solution - minimal state welfare - would probably not be politically acceptable in a democracy. But reforms that would be politically acceptable would probably not be radical enough to make a 'good society'.

What Murray has done is come up with an admitted compromise. But I wonder whether even this compromise would hold. I can imagine some hard luck stories that would be played out at length on TV and radio and would cry out for action by the government. Gradually, the whole thing might fall apart. I fear that in a democracy there is a tendency for people to look to government to sort out every problem. I fear that even in America, the will to say: "let the chips fall where they may - the net good to society will still overwhelmingly come from a low welfare state society" is not likely to be strong enough in the face of such stories.

I have come to fear that all advanced societies are becoming more and more welfare state dependent and that people in these countries are gradually being changed more and more by these welfare states. The welfare state gives you money if you have children out of wedlock, it gives you money if you don't work, if gives you money if you are well but you pretend to be ill and it declines money it would have given you if you have saved. I agree with Charles Murray that the worst effect of the welfare state is on the character of the people it affects (mostly the less well off). I would love to see major reform but I fear that over the long term, reform will not last and that the damage done to society will continue.

If this happens around the advanced world, we are really talking about a whole civilisation in decline. Is this too gloomy? I hope so.

Posted by James Bartholomew • Indexed in Behaviour & Crime • Parenting • Reform

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Rather belatedly I want to mention last week's speech by John Hutton, the Secretary for Work and Pensions. He flagged up the idea of requiring more lone parents to seek work in order to be entitled to welfare benefits. At present, they are not required to seek work until their youngest child reaches the age of 16. He suggested this age might be reduced to 12.

If this sounds radical, it is nothing compared to the situation in other countries. He mentioned that in Sweden, widely regarded in Britain as the place where welfare benefits are enormous and handed out without question, lone parents are expected to seek work. In America, I believe, lone parents are expected to seek when their youngest children reach the age of three months.

Britain has been amazingly lax about this with the result that we have an enormous lone parent population with millions of children disadvantaged as a result.

The fact that John Hutton is prepared to suggest this reform is a sign that common sense can break through from time to time. He must have been encouraged by the modest objections from the Left. The Guardian clearly did not like it much but did not make a great deal of it.

But the Telegraph points out that David Blunkett suggested something similar two years ago.

Let's see if Hutton goes ahead and puts this through. It would be one of the more significant welfare reforms of this government. It might also pave the way to reducing the age requirement much further.

This is part of the Guardian's coverage:

The work and pensions secretary, John Hutton, signalled his willingness to consider more stringent requirements for lone parents to look for work as part of a package of measures to encourage them back into employment and alleviate child poverty.

"Very little" is currently asked of lone parents on benefit with a requirement to look for work that begins only when the youngest child reaches the age of 16, Mr Hutton said in a speech in central London today.

Mr Hutton cited evidence which showed that when the youngest child reached 16, as many as a third of lone parents moved almost "seamlessly" on to incapacity benefit or made a further claim for income support within the following 12 months, he said.
The UK was at the bottom of the league of major European countries for lone parent employment rates, he said.

Countries such as Sweden and Denmark make "little distinction" between lone parents and other benefit recipients in terms of their obligation to look for work.

Here is some of the text of Hutton's speech with a few useful statistics:

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Ten years ago, President Bill Clinton was faced with a difficult decision. For the third time, Congress, dominated by the Republican Party, had sent him a welfare reform bill to approve. He had vetoed the previous two.

The Democrats - his own party - were overwhelmingly against this reform. Left-wing commentators warned that the poor would become destitute. But Clinton, for all his faults, knew a lot about the welfare system and the damage it was doing to America. After some indecision, he signed the bill. It was probably the best act of his presidency.

A decade later, the terrific success of America's welfare reform is there for all to see. The number of people receiving welfare benefits has fallen by 60 per cent. That is a staggering figure - a major change in the nature of the lives of millions of people. There has been a 70 per cent rise in the employment of single mothers. Welfare grants from the central government to the states have been cut by 30 per cent in real terms.

As for the poor, far from becoming penniless, as some said they would, their condition has considerably improved. The rate of officially-defined poverty among blacks has fallen from 31% to 24%. Among Hispanics, it has has fallen from 31% to 23%. The toughening up of welfare has made poor people better off. It is a paradox which many on the Left struggle to understand or accept. But it is not hard to explain: work is the best route out of poverty.

The benefits of the major changes have reverberated through the country. Since the amount of benefits paid by government have been reduced, taxes are lower than they would otherwise have been. As a result of lower taxes and more employment, economic growth has been faster.

Most Americans recognise the success of the reforms and are glad of them. Last week I was riding in America. A retired man who had administered food stamps - one of the major welfare benefits - remarked that the rules had been tightened up considerably and it was better. He used to do home visits to people on welfare and had seen how those who claimed they were not working often had a job on the side. Men who supposedly were not part of a single mother's household turned up when the welfare cheque arrived. There was a ripple of agreement.

Why can't we have the same sort of reform here? Why can't we have a similar transformation? The answer is that we could.

True, at present it seems impossible that a politician of any political party could manage it. Tony Blair talked a lot about welfare reform on coming to office, but funked it. Gordon Brown was effectively in charge of welfare but did not understand it. He bodged the entire thing, creating tax credits and numerous employment plans which have added greatly to the bureaucracy and left the underlying problems little changed. The discouragement to saving is actually worse. And we still have, by the government's own admission, over a million people on incapacity benefit who could be working.

Meanwhile the new Tory leadership, in awe of the way Tony Blair achieved power by being a centrist, has adopted a similar stance. It does not appear to have the guts to reform welfare.

Yet in the 1970s, it seemed equally impossible that overwheening trade union power would ever been contained. No one predicted the events which then took place. As with the trade unions, a powerful force is pushing for reform: the problem itself is causing major damage to our country. More than that, an increasing proportion of the population is aware of the fact.

We all know that there are millions of people 'working the system'. We know that single parenting is unpleasant for the mother, fails to socialise the father and often damages the children. It contributes, in the long term, to crime. We all know that incapacity benefit is often a cover for unemployment. We know, too, that lives spent in dependency are miserable. As Lord Beveridge, the man who wrote the report that led to the modern welfare state, said, "Complete idleness even on an income demoralises".

Eventually welfare reform will have to take place. The only question is when and how. The way things are going, welfare reform is happening so slowly that our society will continue to deteriorate. Crime will continue to rise. Our economy will lag further behind that of America and the rising countries of the Far East. More people will be so poor they are means-tested in their old age.

But if we took radical steps, like the Americans, we could change our nation's future. True, It would take political bravery and skill. Some of the measures would be angrily criticised as harsh. In America, for example, a single parent on benefits is required to seek work once her child is three months old. In Britain, she can continue on benefits until the child is 16.

In America, the bill that Clinton signed introduced a requirement that no one should live on welfare benefits for more than five years. That would be strong medicine by British standards.

But anyone who cares about this country must support radical reform such as America has had. Welfare is probably more influential on the nature of Britain than the church or the media. We must get our poor off benefits and into work. In doing so, we can make the poor richer. We could then reduce taxes. And in all this we would be doing major work to arrest the decline of civility and decency that has been the bane of our country in recent decades.

We need to fight for welfare reform not in order to be mean or hard but to give people back their dignity and to make Britain a better society.

(The above is the unedited draft for an article which appears in today's Daily Express.)

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Here is an article on the success of America's welfare reform in the Daily Mail today.

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In France, children are taught that the Battle of Trafalgar was inconclusive and that the British admiral was killed. In Britain, of course, we are told something rather different, that it was one of our greatest naval triumphs.

History is not just a series of facts but an interpretation of them. Quite often there is considerable disagreement. [A new book called ] Margaret Thatcher's Revolution is a cavalry charge by loyalists in the battle over how her time in office should be seen. It is a bold assertion that the Iron Lady made Britain a better place than it was before.

Yes, she had her flops.

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I attended a talk by Professor Larry Mead at the Institute of Economic Affairs the night before last. He gave his talk in a scholarly, methodical way - quite different from the more openly partisan talk given by Ron Haskins last week. But the message was mostly the same. The big fact is that welfare rolls fell by 60 per cent in America following the 1996 reform package. It was an awesome result. Of course, people like Professor Mead knew very well that such a thing would be attacked as cruel and bad. But one of the impressive things about the American Right is that it arms itself with plenty of facts to counter such assertions:

He gave Federal Poverty Rates for whites, blacks and Hispanics in 1994, 2000 and 2003 respectively:

Posted by James Bartholomew • Indexed in Parenting • Recommended reading • Reform • Welfare benefits

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Gordon Brown's poor record as chancellor is gradually becoming more obvious.

This week, more light fell on his bad policy of tax credits. But first a quick summary of the bad policies he has pursued:

1. He has raised tax heavily to pay for investment in a monopolistic healthcare system (adding to the problem by fighting any attempt to make it less monopolistic). The result: the country will be poorer than it would have been and people less well cared for when ill.

2. He took a pension system which was amongst the most successful and well provided for in Europe and has put it in crisis. Result: more people will be poor in old age.

3. He has increased the prevalence of means testing - with all its disadvantages (see The Welfare State We're In and previous postings. One of the results: reduced savings (which will, again, cause more people to be poor in old age).

4. He has dramatically increased red tape, waste and errors through complicated systems - such as tax credits - instead of using much simpler methods (such as higher thresholds for tax-free income). By wasting public money, he has made us poorer. Through red tape he has cost us money again and wasted our time.

Here is some of the coverage of the problems Mr Brown created through tax credits:

Hundreds of thousands of families have suffered because of flaws in Gordon Brown's £13 billion system of tax credits, a watchdog says today.

Ann Abraham, the Parliamentary and Health Service Ombudsman, says poor families are particularly vulnerable because of the way they have been forced to pay back money given to them in error.

Posted by James Bartholomew • Indexed in Reform • Tax and growth • Waste in public services • Welfare benefits

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Ron Haskins, a senior adviser to President Bush on welfare reform, addressed the Centre for Policy Studies yesterday. It was an exceptionally good presentation - powerful about the way in which the 1996 welfare reform programme has succeeded and honest about admitting ways in which it has disappointed.

He brought home that the welfare reform was not, as it is usually described in Britain, a genuinely bi-partisan affair. It was, above all, a Republican reform that was fought bitterly by most Democrats (with one particularly notable exception). Based on the American experience, we should not get hung up on the idea that only the Left can reform welfare on the same basis that 'only Nixon could make peace with Commmunist China'. In America, passionate Republicans aimed to save their country though welfare reform and they have, to a remarkable degree, succeeded.

The notable exception on the Democrat side was,

Posted by James Bartholomew • Indexed in Behaviour & Crime • Parenting • Politics • Reform • Welfare benefits

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The blog Once More Unto the Breach has an interesting posting and comments on the options and difficulties in welfare reform.

Posted by James Bartholomew • Indexed in NHS • Politics • Reform • Welfare benefits

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