It is extraordinary how trivial news can dominate the headlines while genuinely significant news barely gets mentioned, even in so-called quality newspapers.

One story that came out about nine or ten days ago was mentioned in only a minority of newspapers (including the People, the Daily Telegraph and, from memory, the Daily Express). It was the news that two out of three people claiming Incapacity Benefit (now renamed Employment and Support Allowance) have been deemed fit for work under new, tougher tests.

This is extremely significant news. For the first time since Labour came to power here is concrete evidence that, finally, it is tackling the vast army of people who are wrongly being given Employment and Support Allowance. I have not seen the latest figures but the numbers who were on the old Incapacity Benefit were over two million. That is a vast number. This news suggests that over a million people will be taken off this benefit and required to seek work. Those deemed incapable of work, of course, are not required to seek work.

The consequences could be:

- a dramatic rise in the numbers 'unemployed' as defined by those getting Jobseekers Allowance. This rise may be considered by casual observers to be a rise in unemployment. In fact, to the extent it is due to people being moved off Employment and Support Allowance, it will be a revealing of unemployment that was previously hidden because so many were wrongly on incapacity benefit.

- a great increase in the numbers genuinely seeking work, since the money given to those on Jobseekers Allowance is significantly less than the money people used to get on Incapacity Benefit. Also they have a legal requirement to seek work.

- most important of all - a long term increase in the proportion of people genuinely seeking and doing work. This could make a great - though hard to measure - difference in the morale and culture of Britain.

- a reduction in the cost of the welfare state, as people are moved to a less expensive benefit and more of them seek work.

We are talking about over a million people whose lives are being changed. This is truly important. Yet it is barely written about at all.

Some of the best coverage was by the Taxpayers' Alliance, using the story in the People. Here is the Telegraph coverage. The Guardian, I find, has mentioned it. Naturally it is worried that the test is unfair and appears uninterested in the idea that people have been claiming billions of pounds for being incapable of work when, in fact, they are not. It is, of course, important that a test is fair. But why cannot the Guardian have any sense of injustice to those who pay tax or the importance of work to the creation of decent lives?

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One of the five giants which Beveridge wanted to slay was idleness. What would he say about this particular outcome of benefit dependancy? He would be appalled.

http://winstonsmith33.blogspot.com/2010/01/failing-to-scrounge-from-state.html

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

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Here is part of talk I gave at the Cato Institute in Washington last year.

Posted by James Bartholomew • Indexed in Welfare benefits

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In the great roll call of this government’s failures and blunders, its record on housing benefit deserves to have a prominent place. This was the government that was going to “think the unthinkable” on welfare benefits. Instead it “did the predictable”. Instead of embarking on radical reform like the administration of President Clinton in America, it opted to muddle along. It talked big and acted small.

Housing benefit is arguably the worst of all the benefit failures. Why? For two important reasons. One, it costs an amazing amount of money after nearly doubling since Labour came to power to £20 billion. That – for those who can bear the idea – amounts to £692 for every working person in Britain. Most people imagine that Jobseekers’ Allowance is the big, key welfare benefit. Not at all. Housing benefit costs more than three times as much.

The second and even more important reason why this failure matters is that housing benefit is probably the biggest single discouragement to the low-skilled unemployed to getting a job. Get a job and you lose housing benefit at a rapid rate. So housing benefit is one of the most important reason why more one in four people of working age are not working.

The official cost of £20 billion is just the beginning. Nearly all the people who are discouraged from working are also getting other benefits including Jobseekers’ Allowance and – in many cases - Incapacity Benefit or Income Support. But worse even than that is the effect on the morale and culture of those at the lower end of society who get accustomed to welfare dependency. It causes depression and alienation and contributes to uncivil and even criminal behaviour.

There is a simple rule for creating sound welfare benefits. It was described 175 years ago in the report of a Royal Commission into the operation of the poor laws. The commissioners decided that benefits should not be more advantageous than the income that would be obtained by the individual taking on low-paid work. It is as simple as that. Work must always pay. .

On radio phone-ins I have often heard people exclaim: “Do you realise how little you get on Jobseekers’ Allowance? You can’t live on that!” Unfortunately interviewers – being part of the upper middle class - rarely understand that the Jobseekers’ Allowance and other benefits are normally accompanied by other benefits such as a free school meals and, very likely, the big one: housing benefit. Only when they are all added together do they amount to a meaty discouragement to work for the low-paid.

It will come as a surprise to many people to know that not all countries pay housing benefit – or at least not to as many classes of people as Britain does. In Italy, for example, an unmarried teenage mother does not climb up the council housing queue, get income support and housing benefit. She is expected to live with her parents or other relatives or perhaps the father of the child. The result is that there is far less unmarried parenting in Italy than here. They make their decisions and live with them. That means they make better decisions.

If there were prizes for tinkering with the welfare benefit system, this government would certainly win the gold trophy. I used to get press releases from the old Department of Social Security as it was called. If I had had a strange notion of interior decoration, I could have wall-papered my bedroom with them within a few weeks.

To be fair, some reforms have gone in the right direction. James Purnell, when he was in charge, decided that people should only get benefit to pay for a maximum of five bedrooms. Yet you can see from this example just how cautious the reform has been. For people who struggling to afford accommodation with two bedrooms, it will seem outrageous that others can going on having babies and getting more and more bedrooms at the expense of taxpayers. And people sometimes get benefit at a level based on expensive housing. Hence the scandalous case recently of one family getting £2,875 a week.

America was far more radical in its reforms. President Clinton agreed to a limit to the total number of years in a lifetime during which people could claim unemployment benefit. America was determined to do something about the benefits culture. Britain under Labour has merely strutted on the stage – posing, pontificating and making precious little difference.

What could be done? One idea – from the Centre for Social Justice - is to subsume housing benefit with many benefits into just a couple of major benefits. The benefits could be withdrawn at a slower rate than now when someone gets work, thus reducing the discouragement to getting a job. The trouble is that, other things being equal, this would cost a lot more.

The truly radical idea would be do something like that but significantly reduce the amount paid and leave it to the recipient entirely what accommodation is rented – if any. That would provide a powerful incentive to lodge with relatives or to go to a different area with lower rents.

But has Britain got the guts to do this sort of thing? I would like to think so but there is every reason to doubt it. The upper middle class elite does not get the seriousness of the problem. The BBC, the readers of Guardian and the Independent believe that their support for generous benefits makes them into generous, good people. Unfortunately it does not. It results instead in the continuance of a welfare dependant lower class with tremendously damaging social effects both to the poor themselves and everyone else.

(This is the unedited version of an article that appeared in the Daily Express today.)

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A few statistics from Dynamic Benefits published by the Centre for Social Justice:

- Today there are 10.4 million working-age people not working in the UK. Of these, 5.9 million are claiming out-of-work benefits.

- Throughout the last ten years, prior to the recession, the number claiming out-of-work benefits has been at around 5.4 million.

- Benefits are the main source of income for three in ten households in the UK

- In 2008/09, £74.4 billion was paid directly to working age adults and children, about 40% of the total social security budget.

- The total cost of and number of people claiming Disability Living Allowance are up 50% since 1997.

- 23 European countries have a lower proportion of children living in workless households than the UK. In countries such as Spain, Italy and the Netherlands, the percentage of children living in workless households hovers at around 6%. In the UK, by contrast, it is over 16%.

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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.

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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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Here are ten pretty dramatic assertions about how Labour has affected the welfare of the poor during its twelve years in power. They are extracted from an article by Fraser Nelson in the The Spectator:

1. "Even by Labour’s favourite measure, the Gini index, which measures income gaps across various countries, inequality is at a record high — towering above the levels seen in the Thatcher years."

2. "Scandalously, the poorest 10 per cent now have a disposable income of £87 a week, down from £96 a week eight years ago."

3. "Foreign-born workers account for all net job creation in the private sector since 1997. That is to say, strip out the public sector and there are fewer British-born people in work now than in 1997."

4. "As for youth unemployment, that is now a third higher than when Labour took office."

5. "At no point since Labour came to power has the number on out- of-work benefits fallen below five million."

6. "Of these working-age people, 1.1 million — equivalent to the population of a city the size of Birmingham — have never worked a day in the Labour years."

7. "International surveys show school standards are declining, with the poorest hit worst."

8. "Studies set up in the early Labour years to track progress have in fact tracked decline."

9. "Infant mortality gaps between the rich and poor have — quite extraordinarily — widened under Labour."

10. "Ditto the gulf in life expectancy."

These points are mentioned almost casually in his article. But each is powerful. Assuming they are true, should be far better known. Television and radio interviewers should all be sent a copy to put the points to Labour ministers when they are crowing about their supposed successes. Tory shadows should repeat them frequently.

I would be glad if it were possible to have links to the sources of the data supporting these assertions. Fraser Nelson says in his article: "none of the above figures have [sic] been published by the government - this magazine lodged a request for their release".
It would be good if he would put the sources up online so the assertions could be repeated with confidence.

But the big point, which he makes well, is this: "The Prime Minister's greatest contribution to convervatism... has been to test to destruction the idea that money solves social problems."

And again, "Mr Brown's government spent like no other, and was socially regressive."

Posted by James Bartholomew • Indexed in Education • General • Parenting • Welfare benefits

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Here is a clear account of how our 'welfare state' treats those on low incomes:

Anyone entitled to claim tax credits – and that includes about half of all pensioners – whose annual income exceeds about £7,000 (believe it or not, neither HM Revenue & Customs nor the Department of Work and Pensions could tell me the precise figure when I called to check) has some of their state benefits withdrawn through a means test.

To be precise, claimants lose 39p of tax credit for every £1 of income above that limit. Then, like anyone earning more than £6,475 a year – the current personal allowance – they must pay National Insurance Contributions (NICs) at 11pc.

Plus, to put the tin lid on it, like everybody whose income exceeds their personal allowance, they must now pay 20pc income tax instead of the 10pc they paid on the first £2,230 earned in the last fiscal year before Mr Brown cut off the bottom rung of the tax ladder. So, total deductions from their marginal earnings are 39pc, plus 11pc, plus 20pc – or a total of 70pc.

What it all boils down to is that people earning about £7,000 a year are allowed to keep just 30p in every £1 they earn above that level. The scope of this poverty trap was set out in the Treasury's Red Book last year – funnily enough, the chapter headed 'Fairness and Opportunity For All' – to see the figures, but there they are.

More than 1.87m people paid "high marginal deduction rates" of between 60pc and 90pc last year.

This description is by Ian Cowie, the personal finance editor of the Daily Telegraph. The full article is here.

Two points:

1. Things used to be even worse in discouraging work and employment.

2. What a pity it is that newspapers do not, on the whole, have 'welfare state' correspondents who would point out this kind of thing more frequently and on pages that politicians read more frequently. Of course, as newspapers lose circulation, they have actually been cutting back on specialist correspondents including those who deal with health policy and education.

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Youtube now has an excerpt from the talk I gave at the Cato Institute in Washington.

Posted by James Bartholomew • Indexed in Welfare benefits

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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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The study described below suggests a quick and powerful effect of welfare benefits on behaviour. It is all the more remarkable since the report is connected to the Institute for Fiscal Studies which, in the past, I would have associated with the view that giving money to the poor was an obviously good idea. I would not previously have expected this institute to worry about the perverse incentives this might create. But now this study makes a very dramatic claim: that the effect of benefit changes takes place almost straight away.

Of course I wholly agree that welfare benefits change behaviour. I would argue further than they change people's morality. But I have always taken the cautious view that it takes a long time for benefit changes to do all this. I have found it hard to imagine a woman thinking to herself as she is deciding whether or not to have sex (or whether to have it with contraception) "Yes, I think I will go ahead, unprotected. After all, I calculate that benefits for lone parents have gone up ten per cent."

But who knows? Perhaps I have been overcautious. I hope that I might find the time in the future to read the report in detail.

Here is part of the the Daily Telegraph report:

The study, Does Welfare Reform Affect Fertility?, looks at the impact on the birth rate in the UK caused by reform of child benefits launched by Labour.

It says that the introduction of Working Families Tax Credit and an increase in Income Support between 1999 and 2003 triggered a rise in taxpayer spending on children "unprecedented" in the previous 30 years.

Because the reforms were targeted at the poorest families with children, the value of their state handouts increased by 10 per cent of their total household income.

For couples who both left school at 16, the reforms meant an increase in benefits of 45 per cent, from £39 a week to £56.76. This is a rise almost twice as much as the handouts for which a couple who went on to sixth form college would be eligible, which increased by 25 per cent to £37.27 a week.

The researchers then looked at fertility rates both before the reforms were announced and after, for a sample of 101,330 women aged between 20 and 45.

They found a large increase in the first year after the benefits were made more generous, particularly among women who had left school as soon as possible.

The results show a 15 per cent increase in the probability of having a baby in the "low education group", equivalent to an extra 45,000 births compared with 670,000 across Britain as a whole.

Overall there has been a steady rise in the birth rate since 2001, and although some of this is down to higher fertility among immigrants, even among women born in the UK it has risen from 1.68 births per woman in 2004 to 1.79 last year.

In addition, analysis of household surveys found large numbers of poorly-educated women who said they were not using contraception because they wanted to have children.

The study, led by Sarah Smith of the Centre for Market and Public Organisation at Bristol University, is published in the autumn issue of the journal Research in Public Policy.

Posted by James Bartholomew • Indexed in Parenting • Welfare benefits

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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).

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It will be interesting to see just how radical Purnell is with his white paper later this week. Will he, for example, really take on the problem of housing benefit? Here is an article with him from the Sunday Times.

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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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If you read little else on this website, I hope you will at least read this extract from an article by Iain Duncan Smith in the Saturday Daily Telegraph. It describes the problem well and with some data which I had not seen before.

Britain is witnessing a growth in an underclass whose lifestyles affect everyone. Perhaps the reason why most people haven't been aware of the extent of this is because housing policy has, over 20 to 30 years, ghettoised many of these dysfunctional families.

In the Seventies, only 11 per cent of households on the estates weren't working; today barely a third of working-age tenants have full-time work. Less than 15 per cent are headed by a couple with children. Two-thirds are occupied by lone parents, lone men or lone women.

On such estates, few children see a positive father figure, with young men having children by different mothers, with the state covering the cost.

Small wonder that alcoholism rates are high and drug dealers ply their trade in full view of young families. This social breakdown leads far too many young boys into street gangs.

Although gangs are criminal and bound together by harsh discipline, the leader acts as an authority figure and the gang's strong ties and loyalties perversely replicate the family they never had. As gangs clash, residents suffer from the violence and high levels of crime.

These young boys are on their way to a life of crime. You don't have to take my word for it - look at the background of those who as young offenders end up in custody.

Over three-quarters of them are from broken homes, just under half of them experienced violence in the home and half of them have educational levels below an 11-year-old.

Girls suffer too. Many have grown up in dysfunctional families where their mothers had children as teenagers and they have shared the house with a string of "guesting fathers". Too many will repeat the lives of their mothers.

Families like this are much more at risk of abuse than any other. Recent NSPCC research has shown that a child growing in such a family structure is up to six times more likely to suffer abuse, which is why the social services are under growing pressure.

The cases of Baby P and Shannon Matthews have led to demands that more children be taken into care, yet in the past ten years 20 per cent more children have been taken into care. Furthermore, the outcomes for those youngsters are appalling.

Nearly half of all the under-21s in the criminal justice system have been in care, only 12 per cent gain five A-C GCSEs and a third of all homeless people have been in care.

When social services do take the child, too often the young mother goes off and has another child, which will more than likely end up in care as well.

The full article is here.

Here is a link to the Centre for Social Justice report on "housing poverty".

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

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It is astonishing the way that news and opinion work in Britain. Today, suddenly there is a focus on the idea that the welfare state created Karen Matthews, the woman who arranged for the kidnap of her own daughter.

The key to this seems to be that one of her lovers asserted that she had given birth to more babies to increase her welfare benefits.

In my book, I put the argument that the welfare state had undermined the morality of those most affected by it, namely those at the poorer end of society. I suggested it had damaged our culture and caused misery on a massive scale.

It is fascinating to see the arguments I put very carefully and with as much relevant evidence that I could muster put now in a really pugnacious and blunt way.

I don't want to associate myself with all the views expressed in the Sun today but they certainly overlap with mine. I agree that Karen Matthews is a creation of the welfare state. I certainly agree with the Sun that the need for reform is urgent. Sadly, the beneficial effects of reform would take a generation to come through. When views such as these are expressed in the Guardian and by presenters of the Today programme on Radio 4 or on Newsnight, then there will be a chance of reform actually happening.

From the Sun editorial:

If ever there was a story to make you hold your head in disbelief, this is it.

How could a MOTHER have her own little girl drugged, kidnapped, tethered like an animal and stuffed in a drawer under a bed?

Vile Karen Matthews is a product of the sink-estate underclass of chaotic families that loaf away their days on easy welfare benefits.

She is a one-woman advertisement for urgent welfare reform.

Slumped in front of her big TV, chain-smoking 60 a day and stuffing herself with pizza, Matthews didn’t give a damn for her kids.

By 30 she’d had seven children by five fathers and was raking in £360 a week in handouts.

One of her grubby lovers said: “She used us just to get pregnant so she could grab more child benefit.”

From John Gaunt's column:

The tragedy is that — just as there will be another Baby P case — there are plenty more Shannons being dragged up in a life of grime that leads to a life of crime.

To blame are the feral parents who couldn’t spell the word parenthood, let alone know the meaning of it.

Whole estates are infested by this underclass. They are not working class — the clue is in the title — they don’t and won’t work.

They have no pride in their homes or areas. They have no respect for themselves, let alone their neighbours or children. They have a moral code that would make an alley cat blush.

They have a lawyer’s expert knowledge of their rights but, sadly, no idea of their responsibilities to their kids or society in general. This is an underclass that New Labour have allowed to fester with their lax “non-judgmental, all kinds of family are equal” social engineering attitude.

But these people aren’t equal to you and me, and they need to be told so before they are allowed to breed another generation that will only be more irresponsible and useless.

Welfare

We have a sickening situation where those of us who actually work spend more than £170billion of our taxes on social security. That is in addition to the £16billion spent on incapacity benefit.

It’s ironic that Matthews was convicted one day after Labour promised ANOTHER crackdown on welfare dependency.

Scrape beneath the surface of this new “get tough on benefit fraud” policy and you see it is the same old Labour spin. The depressing reality is that, even if the Government were serious, they have left it too late to crack down on the feral, feckless and long-term useless.

In large parts of the country people like Karen Matthews have won, and TV programmes like Shameless aren’t fiction but documentaries of their lives.

The welfare state was set up to be a safety net, not a lifestyle choice, and it is time to return to those principles.

Only those who have paid into the system through NI or tax contributions should be allowed to claim anything out of the pot. If this were applied, it would soon rule out junkies, new arrivals or people like Karen Matthews.

We should also time-limit benefits, as they have done in the US, to force the shirkers back to work.

We need to break the cycle.

These people have chosen a life of benefit dependency because they have been allowed to do so.

Never before, with the world in economic crisis, has there been such a need for urgent reform.

With hard-working people facing the prospect of losing their homes and their savings, I don’t see why the decent majority of Brits should shoulder the responsibility of the bone idle any longer.

Just as the death of Baby P must signal a complete change in social services, so must the conviction of Karen Matthews lead to a change in our Benefits R Us society.

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A notable extract from today's report by Professor Gregg on welfare reform. The report was commissioned by the government.

...if lone parents had the same employment rate as the overall population some 300,000 children would be lifted out of poverty. Furthermore, the prevalence of psychiatric disorders among children aged 5-15 in families whose parents have never worked is almost double that of children whose parents are in low-skilled jobs.

Here is a link to the report.

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Mr Durkin appears to have read The Welfare State We're In.

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There is nothing new in this letter to the Guardian, quoted in the Samizdata blog. The arguments and the data are treated very fully in The Welfare State We're In. But it is good to hear the argument so pithily put and from someone who has known what it is to be financially poor, rather than culturally impoverished.

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Long after it appeared, here are a few links to coverage of the interview which David Freud gave earlier this year in which he suggested that most people on incapacity benefit should not be there.

Here is a link to the original interview.

Here is the BBC coverage of the story.

Here is the Times coverage.

I would like to add a link to coverage of the story by the Guardian but unfortunately I cannot find any. The BBC and the Times thought it was a big enough story to cover. David Freud is, after all, a government adviser and he was saying something pretty radical (though of course it was in The Welfare State We're In). Did the

Guardian

really avoid covering it because the view was unpalatable to itself and perhaps some of its readers? Or was it because it was a Telegraph exclusive?

Here is a part of the interview:

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I wonder if this is true? A person who commented on the Daily Mail website on the story below, wrote:

In The Netherlands a single mother with a child is not entitled to claim benefits or social housing until aged 22. This makes young women more likely to be careful about teenage pregnancy and get on with their education and lives instead of stuck in a hole of state dependency.

- Adam, UK

If this is indeed true, it casts a different light on the debate on teenage pregnancy in the UK. Usually the argument is all about sex education and I think, if memory serves, it is suggested that the Netherlands has a particularly open form of sex education which, it is suggested, does no harm because the teenage pregnancy rate is lower that Britain's. But if this commenter on the Daily Mail website is correct, it would seem quite possible that in fact any lower teenage pregnancy rate could be due to the benefits system rather than the nature of sex education. It might be that the benefits system is the most influential kind of sex education around.

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For reference, here is part of a story on welfare dependency in the Daily Mail today. The figures are dramatic but they are based on government answers to parliamentary questions put by the Conservative Party, so presumably they are reliable:

One in five British children is growing up in a family dependent on state handouts, shocking figures show.

In some regions almost half of all youngsters are in households claiming out-of-work benefits.

Britain has a higher proportion of children in such households than anywhere in Europe.

The vast majority are living in homes in which nobody is even looking for a job.

Experts say these children risk drifting into a life of joblessness, poverty, ill-health and crime.

Those with parents who do not work are less likely to go on to get a job themselves or take part in education or training.

The Conservatives, who uncovered the figures using Parliamentary questions, said the level of joblessness was unacceptable when an expanding economy has produced record levels of employment.

Four out of five jobs created under Labour have gone to foreigners.

In all, more than 2.2million children are growing up in households dependent on out-of-work benefits - one in five of all youngsters.

The worst area is Manchester Central where an astonishing 49.2 per cent of children have parents claiming handouts.

This is followed by Liverpool Riverside with 47.6 per cent and Poplar and Canning Town in East London with 46.8 per cent.

The full story is here.

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120,000 more people claim incapacity benefit than 10 years ago and 52 per cent more under-24s are claiming than in 1997. Half a million people under 35 are now claiming the benefit. More than half of the people now claiming incapacity benefit have been receiving it for more than five years.

This is from Chris Grayling's article in the Sunday Telegraph. He offers a bold reform. It is more radical that what is proposed by the government. But if the government complains, it will be easy for the Tories to say that the government itself has embarked on the same road. It looks daring and right - politically astute and good policy. Here are his proposals:

The majority of people signed on to this benefit by filling in a form and sending in a note from their doctor. Most claimants are then simply left to their own devices. We will change that. We will contact every single one of those 2.6 million people as quickly as possible. We will carry out face-to-face interviews with all of them, to assess what they can do, and how we can help them back into work. It's a big task, and it won't be done overnight, but it has to be done, and as rapidly as possible.

Our initial aim will be to offer most people a place on a structured programme of support to find them a job. We know that as many as a million people claiming incapacity benefit say that they hope to get back into the workplace. We will offer them the help they need to achieve that.

Those who don't want to accept that offer will be expected to undergo a full medical check to confirm what they can and can't do now, and what they might, with the right support, be able to do in the future. It will be done by someone independent, so the relationship with a family doctor doesn't affect the outcome.

Those found to be perfectly capable of working will lose their entitlement to incapacity benefit immediately. Many have been abusing the system. They will be transferred into the normal process for Jobseekers and will be expected to start looking for work straight away. Based on the experience of other countries, we expect at least 200,000 people to be affected.

Those who have the potential to get back into work - even if it's a different kind of job - but still have mental or physical hurdles to overcome will be required to join a return-to-work programme. Only those whose incapacity makes it impossible or unrealistic for them to work will be able to continue to claim the benefit without conditions.

For Britain such an approach marks a revolution in our welfare state. It marks an end to a situation where the receipt of incapacity benefit is an unconditional entitlement. In the future it will carry with it the responsibility to do everything that you can to get back into work and help lift yourself out of the poverty trap that incapacity benefit represents for so many people. It's already happening in places like New York. It's something we should aspire to in Britain.

A country where a young man and his family regard it as an achievement to get onto the "sick" is one that desperately needs reform. A country that brings in millions of workers but can't help people out of the trap that incapacity benefit has become, is one that desperately needs change.

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The government's announcement on new tests for eligibility for incapacity benefits appear to be be going in the right direction. Unfortunately this government has a long record of talking the talk on benefits but not walking the walk (search 'incapacity benefit' on this website for more details). The first thing one notices about this announcement is that the new tests will initially only apply to new applicants. That leaves in the region of two million people who will not face these tests. Still, I should not complain. I have been arguing for years now that Britain should move towards the system adopted in New York quite a few years ago now: the system whereby a claimant is assessed for what he or she can do rather than what he or she cannot do. It is better to make slow progress towards this than none at all.

This is from the BBC Online coverage of the news:

The new work capability assessment is being introduced alongside the employment support allowance - which will replace incapacity benefits for new claimants from next autumn.

Mr Hain said the true cost of people claiming incapacity benefit in 2006-07 is £12.5 billion.

At the moment more than 60% of the people who apply for incapacity benefits are successful, but only 50% of people who take the new test are likely to pass it.

Those who fail will be expected to seek work.

Mr Hain says the new system will place greater emphasis on what sick and disabled people can do, rather than what they cannot.

Tests such as being able to walk more than 400 metres (437 yards) would be abolished.

"There are lots of jobs that people can do now which don't involve that kind of physical test, so we will be looking at what people could do," Mr Hain said.

"Could they operate a computer properly, use a mouse, operate a keyboard rather than have they got the physical stamina to do the old type of jobs that involve a great deal of physical hard work?"

Mr Hain told BBC News: "We want to help people, not punish people. This is about giving people opportunities because you are better off in work - the evidence shows that."

He said people who remained on benefits for long periods of time were more likely to become ill, as were their children.

"If we can provide the support, the training, the skills, the professional help, we can transform people's lives," he said.

Of course the last part is political spin. What he means is that the welfare state can reduce the extent to which it seduces people into welfare dependency and thus damages their lives.

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I was surprised this weekend to find resistance against the extent of modern welfare states from the late Pope John Paul II of all people.

He apparently wrote in his encyclical Centesimus annus:

By intervening directly and depriving society of its responsibility the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanies by an enormous increase in spending. (CA48)

He was also concerned for the wellbeing of those who work in the bureaucracy:

[Dignity is] extinguished within him in a system of excessive bureaucratic centralisation, which makes the workier feel that he is just a cog in a huge machine moved from above, that he is for more reasons that one a mere productive instrument rather than a true subject of work with an initiative of his own. (LE71)

That was from his first social encyclical, Laborem exercens.

I say Pope John Paul II "of all people" simply because, in England, one is so used to Christian leaders being cheerleaders for big government. It is a surprise to find the most senior Christian leader of all taking a very different view.

The quotations I cite come from a book I was dipping into: "Catholic Social Teaching and the Market Economy" edited by Philip Booth and published by the Institute of Economic Affairs. The quotations were in an essay by Robert A. Sirico called, "Re-thinking welfare, reviving charity: a Catholic alternative."

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The crucial line in an article in the Sunday Telegraph last weekend was this:

"When Labour came to power in May 1997, 1.9 million people received DLA. By last November, the number of claimants had risen to 2.85 million."

Thus does the Disability Living Allowance, a benefit of which many people in the richer half of society have never even heard, become the latest benefit to attract more than an army of new claimants. In the 1970s it was unemployment benefit. In the 1980s it was invalidity benefit and income support for lone parents. Now the DLA is the latest.

As usual, excuses are found. It is said that the population is ageing or that more people are aware of the benefit. This a paper thin covering for the reality that many people who are not well off will, sooner or later, gravitate towards the benefits which are easiest to get and keep.

It does not matter how much of it you call fraud, how much borderline fraud and how much of it welfare dependency or even laziness (not getting off a benefit to which one has ceased to be entitled).
The gatekeeping of this benefit, among others, by the government is weak. The result is that many poor people are taxed today to pay for other poor people who take advantage of them. It is bad for both parties. It corrupts those who take and it makes decent people poorer.

The full story is here.

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The Freud Report, published yesterday, claimed that Labour's welfare-to-work measures have already reduced the inactive total by 900,000. It is a figure ministers keep repeating. It is deeply misleading. This fall is recorded only by using two very separate sets of data that the minister's own statisticians tell them should not be mixed. The true figure may be as low as 160,000.

The above is one of several interesting nuggets in the article by Frank Field in the Daily Telegraph today.

Here is another:

The first move a radical government would make would be to devolve power to local offices. As a minister, I argued for giving the local office their own budget, with the proviso that each office had to administer the law. Local offices would be totally autonomous and have the power and resources to devise local programmes that would be the most effective in helping claimants move from benefit to work.

The idea of localising social security strikes a chord. Beveridge was confident in his views about most things. But one thing he openly hesitated about was having a single benefit rate across the country. Pay rates are different in different places. A benefit rate that would seem modest in London might be enough to discourage someone from working in rural Wales.

The arguments from history in favour of local social security are described in The Welfare State We're In. Look especially at the references to a most remarkable man, Bishop Chalmers.

This is a point by Frank Field that he would totally have agreed with:

the local staff will know many of the claimants personally. They would know which ones have real difficulties, and also which ones were just trying to swing the lead.

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Here is a link to the David Freud report published today that was commissioned by the government.

I was on Radio 5 Live last night debating some of the ideas. One of the other speakers was a woman whose youngest son was 16 and who had been on benefits for the past 16 years.

She objected to the 'demonisation' of lone parents. She said she could not work for various reasons, including ill health. But the crux of the matter seemed to be that, to her, it appeared financially impossible or, at least, disadvantageous for her to work.

She said she could not afford the childcare costs. She had no family to help look after her children. And it later emerged that she feared she would lose her benefits, her house and her housing benefits if she took a low-paid job.

Then on to the radio came several lone parents who said that they had managed to combine lone-parenting with work. One of them revealingly said that her friends did not think of her as a lone parent because she had worked more or less ever since she had children.

Some people get exaggerated ideas of what they would lose in benefits if they took up work. But it is also true that the level of benefits, especially housing benefits, are so high relative to low wages, that they can make it difficult for someone to justify going out to work.

For myself, I do not wish to 'demonise' lone parents. I wish to point out that, over several decades, governments have wrongly reduced the natural incentives to marriage. Men and women both have responded to the change of incentives with the result that we have had a lone parent epidemic with consequent damage to children. The lives of the women and men concerned have also been damaged. To make it worse, we have also brought about one of the lowest rates of work among lone parents. This leads to demoralisation and a culture of complaint rather than one of achievement.

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It is a pity that the people who run this country only read newspapers such as the Times, the Guardian and the Telegraph. They miss seeing stories about what, to them, is the irrelevant underworld of welfare benefits.

Today in the Daily Express is the sort of story which only appears in mid and down-market newspapers. It is about Anna Taylor who has produced five children and lives with her husband. Both are living on welfare benefits.

Anna Taylor has apparently written a letter of complaint to Tony Blair. She is "disgusted" that she has been told by her benefits office to look for work.

Her remarks on the subject reveal harsh truths. They illustrate how the welfare state has made it financially unattractive for some to work and how it has created a culture of complaint.

"I'm better off doing nothing," says Mrs Taylor. "I would be worse off working than at home. I've been told I need to actively seek work, but to be honest, what's the point?"

Her husband Alan is quoted as saying: "How can you expect people to work, when they can get the same money by claiming benefits? It's an infringement of human rights. We're a decent family and should not treated like this."

There is, I suspect, more to the story than was in the article. I find it a bit strange that the mother is on Jobseeker's Allowance rather than Income Support. There may be something slightly unusual about their circumstances. But the fact that we have come to the stage where hale and hearty people of working age think it is outrageous that they are asked to seek work is appalling. The fact that it is financially unattractive for them to work shows how incompetent Britain has been in managing welfare benefits. The creators of the welfare state, such as Beveridge, would be amazed and disgusted.

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Here is a knock-about article by Jeff Randall about Britain's welfare benefits reforms compared to those in the USA.

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I am reluctant to make too much of the story in the Mail and The Telegraph today about youth unemployment being as high today as when Labour came to power. But it is potentially very powerful.

Labour has made a big thing about 'eradicating' youth unemployment. The printed Daily Mail has a series of Tony Blair quotations on this. If today's story is true, it tells us a) that there is still a major problem and b) that Labour boasts on this are absurd.

This is the Telegraph news story:

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I have suggested in the past that Gordon Brown's tax credit system is an unnecessarily complicated way to allow poorer people to keep more of their income. A far simpler way would be to have raised the personal allowance. Gordon Brown opts for the complex way partly, I suspect, because in this way he can make a fuss about himself being 'generous'. He could have been just as generous, but without deceiving the public, by raising the personal allowance - and simultaneously raising the standard rate of income tax, if he wanted to aim all the benefit to poorer people, without passing on any to richer people. (The political advantage of being complex now becomes obvious.)

But when people like me criticise a benefit for being complex, it may seem a pretty weak insult. Who minds a bit of complexity? It does not really matter, if it achieves something worthwhile, does it?

Here is part of a remarkable letter sent to the Your Money section of last Saturday's Daily Telegraph:

Three years ago I began dealing with the tax credit office on behalf of an employee, Matthew, who is dyslexic.

As his appointee, I filled in the forms, and kept the Helpline informed of every change of circumstance. The subsequent deluge of computer print-outs, the unresolved muddles, uncorrected mistakes, payment stoppages, demands for repayment and telephone calls have left Matthew and me in a state of stupefied dejection, as hard to weather as a chronic illness.

He is struggling to live on an income which the Government acknowledges is inadequate, and trying to keep on top of things in the only way he knows, by working long hours. I am angry and exasperated because I have been unable to secure for him the payments to which he is entitled. For me, acting for him on his authority, it has been hours of unproductive work trying to understand a system which is inherently opaque.

Complexity matters. It can make it a miserable experience to try to claim something to which one is entitled. In this case it is partly becuase the bureaucrats attempting to administer such a complex system, just can't maintain a decent service. Here is another extract from the letter:

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It is not only Britain which has many people on sickness and invalidity benefits who should not be there. Here is a press release for a recent OECD report on Norway, Poland and Switzerland:

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Many thanks to Phil Taylor for directing me to this article in the Sunday Times eight days ago.

Here is an extract:

The analysis of figures in 14 European countries found that Britain has by far the highest proportion of single mothers in the European Union.

The report says that in 2001, more than 8% of British households were headed by a single mother aged 18-35, while the UK also has one of the highest rates of benefits for single mothers.

In 1994 a single mother with two children who worked for about 18 hours a week could expect more than £2,000 a year in benefits. By 2001 the figure had increased to more than £3,500.

The researchers do not say outright that high benefits accelerate family break-up. Others, however, believe the study shows that generous benefits for single motherhood provide an incentive for women to have children alone.

Frank Field,

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David Blunkett wrote in the Sun last week (august 30,

All too often girls come to my constituency surgery demanding a house for themselves and their baby.

This just isn't on. If the family - and often their mothers are single parents too - can't or won't look after the offspring then we will simply have to go back to the idea of hostel accomodation.

The "give us a house" mentality has to become a thing of the past and be replaced by "give us respect".

It may sound harsh, but blaming the changes in society won't wash.

So there is a former senior minister calling for hostels for unmarried mothers instead of council flats. It is a sign of the changing times. I remember once suggesting to a Daily Telegraph features editor that offering free flats to unmarried mothers had substantially increased the numbers of children born out of wedlock. Out of concern for children, we should cease to do it. Possibly we should offer hostels instead but it was essential that single parenting was an unattractive route for a girl to take (as it naturally would be if the government did not get involved). Only that way would we reduce the number of children brought up in a way that makes them more likely to be unhappy, more likely to be abused, more likely to under-achieve academically and - indeed - more likely to go wrong and suffer in every possible way.

The features editor of that Conservative Party supporting newspaper was shocked. Now a senior Labour Party figure suggests it. It is progress of a sort - but it is painfully slow.

Further on, David Blunkett refers to a survey of 13 European Union countries "this week" which "tried to link the increase in lone parents with the rise in their benefits." He adds "it is true that lone mothers here are given more financial help than all but one of the other countries surveyed".

It is no surprise if the survey suggests a link between subsidies for lone parenting and increases in the incidence of it. But it would be interesting if it was actually commissioned by the European Union. And, in any case, I would be glad if anyone knows of this survey and could direct me to it.

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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.)

Posted by James Bartholomew • Indexed in Reform • Welfare benefits

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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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I have recently been interviewed on behalf of a magazine called Human Givens. Ivan Tyrrell,who has also co-written a book by the same name, was very interested in The Welfare State We're In from a completely unexpected point of view.

The basis of the Human Givens approach is that all human beings have certain well-recognised needs. These include the need to socialise, to have some status and to be stretched. People cannot readily be content without these needs being met.

Ivan was interested in The Welfare State We're In because in it I argue that the welfare state has made people less happy. He fully agrees and sees this as being because it takes away from people - in many ways - the need to stretch themselves, the context in which to socialise and a sense of status.

It is easy to think of examples of this. People who are discouraged by benefits from seeking work get demoralised staying at home. They would be happier being stretched in a job. They would be happier having the sense of achievement in putting food on the table for their families. They would be happier having the status of a job and soicalising at work. Doctors and teachers would be more satisfied if they were more in control of their work instead of being dictated to so much by commandments from government or managers.

We live now in a society where the government controls more and more of our lives. It robs us of a sense that we are the ones who run our own lives. It takes away a certain dignity and, through that, it takes away some of our contentment.

The psychological impact (not to mention the cultural impact) of the welfare state has been enormous. It deserves far more study than the academic world has yet given it.

Posted by James Bartholomew • Indexed in General • Welfare benefits

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Professor Layard wants pschological therapy for all those people on incapacity benefit who are suffering from depression and other mental conditions. This would help them back to work, he suggests and save a lot of money in benefits.

Of course those familiar with The Welfare State We're In will know that I see this issue from a different angle. To me (and indeed to the government) at least a million people on incapacity benefit are in fact capable of work. Additionally they would be mentally in better shape if they worked. It is no co-incidence, in my view, that depression and back-ache are conditions that cannot be disproved and that these are the most common conditions enabling people to claim incapacity benefit.

Of course there are certainly people who are genuinely chronically depressed or who genuinely have terrible back-ache. But there are many others to whom this does not apply.

Indeed consider if there were genuinely so many deeply depressed people in existence. Britain would be a place suffused with depression. It could be called The Depressed Man of Europe, the Country That Couldn't Cheer Up or Glumovia.

If indeed this is a particularly depressed country by historical and international standards, why should this be? If it is true - and I agree that depression is more common than it used to be, though not as common as the incapacity benefits make it appear - I suggest it is because of the mentally depressing effect of unemployment and other aspects of the welfare state. It is a 'chicken and egg' debate. I suggest that the lack of insistence that people should get a job is one of the major causes of depression. (Another is the subsidy for unmarried, fatherless parenting.) Layard thinks that the depression leads to the unemployment.

The link to Layard and his works is here.

Posted by James Bartholomew • Indexed in Welfare benefits

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I gave a talk last night at the Institute of Chartered Surveyors in which I was 'heckled' by Peter Lilley, the former Social Security Secretary, Professor Pat Thane and Paul Holmes, the Liberal Democrat chairman.

Paul Holmes repeated the well-worn assertion that the Tories shunted people into Invalidity Benefit during the 1980s in order to keep down the official unemployment figures. I said that, in fact, the cause of the huge rise in the numbers claimeing invalidity benefit was the creation of a special premium for the benefit compared to unemployment benefit. This had been created first by the Heath government and then greatly increased by the Wilson government in the 1970s. I had done the numbers (and they are in the book).

I then said I did not believe that there was any cunning plan by the Tories to put people onto Invalidity Benefit but that perhaps Peter Lilley, having been a long-serving Social Security Secretary, would put me right.

Peter Lilley stood up and said that if there had been any intention to do so, it would have been communicated to the civil servants in writing. That is how government departments work. He had seen no evidence of any such instruction or suggestion ever having been made. (Indeed, I will add that if there ever had been such an instruction, it would very probably have been leaked.)

It was possible, however, said Peter Lilley, that individual benefit officers would guide claimants to invalidity benefit since it paid better (and has other advantages, incidentally).

Later he told me that a doctor in the audience had come up to him afterwards and told him that doctors at that time would also guide claimants towards invalidity benefit as the benefit of choice.

This exchange confirms me in my view that there was no cunning plan but the rise in the numbers on Invalidity Benefit was a result of a premium created in the 1970s combined with higher unemployment. Invalidity Benefit became the 'benefit of choice'.

Posted by James Bartholomew • Indexed in Welfare benefits

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Friendly Societies were probably the most important kind of welfare in Britain before they were 'crowded out' by the welfare state. I contend that they provided substantial social security for the vast majority of people prior to the Unemployment Insurance and Health Insurance Acts of 1911.

In bringing to life the importance of friendly societies, I have been hampered by being unable to remember or find any reference to them in well-known 19th century novels. If anyone can recall such a reference, I would be delighted to hear of it. In the meantime, I have come across a paper on the internet which claims that Gladstone, one of the most important political figures of the century, was a member of one: The Loyal Order of Ancient Shepherds (Ashton Unity).

Posted by James Bartholomew • Indexed in Welfare benefits

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In the modern culture it tends to be thought that to be socialist is to be all kind and nice. It therefore amused me to come across a Russian communist plate that is soon to be sold at Sotheby's. These were modernist designs with pro-communist mottoes - terrific art, incidentally. The communists used blanks made in the Imperial Porcelain Factory and celebrated meetings of the Communist Party and suchlike. In this one, dated 1921, a man appears to be eating bread and the motto boldly declares: "He who doesn't work, doesn't eat".

You tell'em comrade.

The link is here but I fear you may need to register with Sotheby's to access it.

Posted by James Bartholomew • Indexed in Welfare benefits

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I am pasting here a comment which has just been contributed to a previous entry about Lone Parents 'On the fiddle'. I should concede that I cannot vouch for whether or not the contributor genuinely does work for the Department of Work and Pensions. But I have no reason to think otherwise.

I think it is an important view 'from the front' and is an antidote to the assumption of many middle class folk that benefits just go to the needy and do not influence behaviour in a damaging way.

I work for the DWP on the Lone Parent section and am confronted with lone parents quite blatently fiddling the system all the time, unfortunately because the government has cut so many jobs within the sector our fraud section only deals with a minute selection of cases. I have come across people who have had sanctions imposed on their benefits for not attending appts and then a further sanction imposed for not responding to the sanction. This in my eyes would say to me that they are either working or got someone helping them out with money as surely they would've noticed 40% of money gone if on such a tight budget? Another common thing we see quite often is that as soon as the child of a lone parent is about to turn 16 the parent gets pregnant again just so as to stay on benefit. I believe that the government should bring in something so that if a lone parent has another child while on benefit they get little or no benefits with it. I'm not trying to to sound harsh but this would save the government millions and also force parents back into work when their child reaches 16 rather than just sitting back and doing nothing while us tax payers pay them for it!

Posted by James Bartholomew • Indexed in Parenting • Welfare benefits

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How interesting and encouraging that the Derek Wanless report on care for the elderly has - on the whole - come out against the current high level of means-testing.

It is good to see resistance to the idea that there can be two people - one of whom spends everything through life while the other saves prudently for old age - who then find themselves in next door rooms in the same care home. The first gets care in old age at the expense of other taxpayers while the second pays for the same care out of savings. It is not fair and the fact of it discourages people from saving - which generally is a sensible and empowering thing to do.

No wonder that this is a King's Fund report and not a government one.

Posted by James Bartholomew • Indexed in Care for the elderly • Welfare benefits

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21% of families who were eligible to claim the children's tax credit did not do so

That is from the Guardian's coverage of speeches by Alan Milburn and Stephen Byers. The statistic is cited by Mr Milburn. Their speeches are interpreted as attacks on the Gordon Brown approach to welfare benefits and his increase in means-testing. The fact that many people do not actually get the tax credits they are entitled to is one of many objections to Gordon Brown's tax credits scheme.

The full Guardian report is here.

Posted by James Bartholomew • Indexed in Welfare benefits

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From the Institute for Fiscal Studies:

The Government thinks it is paying out tax credits or out-of-work benefits to around 200,000 more lone parents than the Office for National Statistics estimate live in the UK, according to an analysis of official statistics by researchers at the IFS.

HM Revenue & Customs and the Department of Work and Pensions together estimate that they are paying income-related support for children to 2.1 million lone parents, even though the best estimate from other evidence is that there are only 1.9 million lone parents living in the UK.

Although there are other possibilities, it is highly likely that fraud or error explain much of this disparity. After analysing
data from the latest Family Resources Survey (FRS), IFS researchers have concluded that a portion of the tax credits or out-of-work benefits which HMRC or DWP think they are paying to lone parents are probably being received by cohabiting couples with children, whether through deliberate fraud or errors made by claimants or the government. If one disregards the threat of fines or penalties, it is often financially worthwhile to pretend to be a lone parent, rather than a couple, when claiming tax credits or out-of-work benefits.
“We already know that the tax credit system is subject to fraud from people using stolen identities. The latest figures provide powerful – albeit circumstantial – evidence that the system is also subject to fraud from families not being honest about their circumstances.

The full press release (released on 12th March) is here.

An insight into the nature of the possible fraud comes from the television programme on benefit fraud commented on here.

Posted by James Bartholomew • Indexed in Parenting • Welfare benefits

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A few other piece of little-known information about modern 'poverty':

"...according to the government's Households Below Average Incomes survey, more than half the people defined as in poverty are homeowners but many of these are pensioners who are asset rich but income poor.

"Can an elderly person living on 60% of average income but with a very valuable property and no mortgage be considered poor?"

(From BBC Online 'The changing face of poverty')

"Between 1996/97 and 2000/01, income inequality rose to its highest level since comparable records begain in 1961 as measured by the Gini coefficient. Since then, income inequality has fallen back to roughly the level Labour inherited."

(From the Institute for Fiscal Studies - IFS - press release 8/3/06. My italics.)

"With the government focusing resources on families with children and pensioners, poverty amongst the working-aged non-parent population has received less attention. Poverty in this group is now about one percentage point higher than it was in 1998/99, on both BHC and AHC measures".

(IFS press release as above. BHC means "Before housing costs" and AHC "After housing costs".)

Perhaps most important of all:

Posted by James Bartholomew • Indexed in Welfare benefits

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An email from 'pommygranate':

You may be interested by recent developments Down Under with regards Aboriginal welfare. After 30 years of unconditional and increased welfare for anyone who could prove they were 1/8th Aboriginal, the Labour Party has declared the experiment an abject failure. Dependancy is now endemic and even the architects of this welfare program have accepted its defeat.

http://www.theaustralian.news.com.au/common/story_page/0,5744,18409415%255E601,00.html

In its place, a new system is soon to be trialed whereby communities will only receive welfare under certain conditions (e.g. ensuring their children attend school).

Interesting that even those on the Left in Australia have now admitted what a catastrophe is unconditional welfare.

Posted by James Bartholomew • Indexed in Welfare benefits

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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.

Posted by James Bartholomew • Indexed in Welfare benefits

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I got round to seeing one of a series of programmes currently running on TV on benefit fraud. It is called 'On the fiddle'. This focussed on lone parents who are actually living with a man but continuing to claim benefits as though they are alone.

Of course every TV programme is not as natural, unrehearsed or objective as it appears. Having made that proviso, I found it fascinating how the lone parents were upset and felt it unfair that they should cease to have their benefits when a man moved in. It was easy to see the logic of their position:

Posted by James Bartholomew • Indexed in Welfare benefits

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BBC Online coverage of the welfare reform Green Paper.

The Department of Work and Pensions press release.

The Green Paper itself.

Posted by James Bartholomew • Indexed in Welfare benefits

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A fascinating assertion by Frank Field MP is reported in the Guardian. It is that many thousands of claimants are not medically examined as they should be. They are therefore given incapacity benefit when doctors think most of them should not receive the benefit.

Why are they not examined? It seems, if I understand correctly, that it is because there is a budget for the examinations and once that budget is used up, the administrators discourage General Practitioners from referring any more claimants for further medical examination. This sounds like monstrous incompetence and maladministration.

This is from the Guardian article:

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I have just returned from a brief appearance on the Today programme where I was up against Polly Toynbee, discussing the welfare reform green paper which is coming out today. During today, you should be able to hear it on the Today website. The time of the discussion was 8.55am.

I argued that one could have little confidence that much would happen. In America, the welfare reform programme had resulted in a 60 per cent reduction in the benefits caseload. In Britain, nothing approaching that result has been achieved or even attempted.

Now, after eight and a half years in power, the Government is producing a mere Green Paper - a discussion document. The performance has been lamentably slow and inadequate.

Polly Toynbee said she understood that the Government intended to take 100,000 people a year off incapacity benefit (from a current figure of 2.5 million). She was utterly confident this would be achieved. She thought that the figures were already going that way.

Her faith in the effectiveness of government action on this is illogical given the government's dithering and lack of effectiveness thus far.

As to the actual proposals in the Green Paper,they are not fully out as I write, but I notice one in particular that seems worrying.

Posted by James Bartholomew • Indexed in NHS • Welfare benefits

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Ahead of the Green Paper on welfare reform, I have been taking a look at a few ministerial speeches on the subject over the past year.

In the process, I was reminded that we had three Secretaries of State for Work and Pensions last year: Alan Johnson, David Blunkett and John Hutton. No wonder this Green Paper has been somewhat delayed. But they have all said rather similar things - much of which I have agreed with. The trouble, I fear, is that they will not be very radical in trying to get people back to work. This is only a Green Paper anyway and it seems unlikely that anything radical would be accepted by Labour backbenchers these days.

But here is a particularly interesting part of the attempt to persuade backbenchers that reform is in the interests of many benefit claimants, as well as of taxpayers (which is quite right). It comes from a speech early last year by Alan Johnson:

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Many people like to believe that welfare benefit fraud is small scale and not a factor even to consider when designing benefits. This is incorrect in both respects. Perhaps The Times's front page story today will begin to change people's minds:

THE identities of thousands of rail workers have been stolen by criminal gangs and used to steal millions of pounds from the Treasury, The Times has learnt. One in seven staff at Network Rail has been caught up in the tax credit fraud that has plunged the tax system into chaos and could turn out to be Britain’s biggest benefit scam.

Last month it emerged that 13,000 Jobcentre workers had had their identities stolen and there are fears that other leading companies have also been targeted by the gangs. Suspicions are mounting that HM Revenue and Customs insiders are involved in the fraud.

Posted by James Bartholomew • Indexed in Welfare benefits

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The government is going to reform incapacity benefit and demand that more of those people on it who are capable of work make real efforts to be get a job. That line could have been written almost any time since Labour has been in power. The fact that the government is announcing this intention yet again should not make us believe it is actually going to happen.

Here is the Guardian coverage of the speech on the subject by John Hutton yesterday. It is the usual thing and perfectly fine so far as it goes. But it does not go very far. And once Labour backbenchers have demanded that it be made less 'tough', it will travel an even shorter distance. The failure to reform incapacity benefit in Britain stands in marked contrast to the vigorous reforms in some states in the USA.

Update:

On dipping into the speech itself, I find a passage in which it almost seems that Mr Hutton might have read The Welfare State We're In:

Our predecessors – Hardie, Atlee, Wilson, Callaghan – would have been horrified to see how the notion of personal responsibility gradually became obscured over the decades as parts of our welfare system trapped people between the twin vices of benefit dependency and poverty. Once inside the benefits system, it was often difficult to get out. People were frequently better off on benefit than in work.

I am not sure he is right about Wilson and Callaghan, who bear much of the responsibility for the way it all went wrong. But he is surely correct about Hardie and Attlee. (He won't have got the mispelling 'Atlee' from my book.)

Mr Hutton can, up to a point, talk the talk. But I doubt he can walk the walk. The full speech is here.

Further update:

Posted by James Bartholomew • Indexed in Pensions • Welfare benefits

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Another step forward: a six-part BBC series on benefits and how they got wrong. The first one, tonight, appears to be about benefit fraud. According the Telegraph,

David Street, the series' producer, said: "These are just a few of the cases that are prosecuted every year. The scale of fraud in disability living allowance claims is just staggering.

"I have made a lot of programmes about fraud and I have to say I was stunned by the size of this problem."

The full article is here.

The programme is on BBC1 at 8.30pm tonight and is called 'On the fiddle'.

Posted by James Bartholomew • Indexed in Behaviour & Crime • Media, including BBC bias • Parenting • Waste in public services • Welfare benefits

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Newspaper articles don't get much more important than the Daily Telegraph one below. It goes to the heart of how and why the character of British people has changed. You see in it incentives not to be married. Through that, you see a major cause of the increasing number of children not brought up within a family with married, committed parents. That, in turn, tends on average - though not always, of course - to lead to alienation and delinquency among more children. That is a pathway to uncivil behaviour and crime. And then there is also the incentive to fraud - making lying and cheating a normal part of the way people lead their lives.

By Sarah Womack, Social Affairs Correspondent
(Filed: 16/12/2005)

Thousands of couples with children may be choosing to live apart because they can cash in on benefits.

An official report by one of the Government's former leading experts on the family shows that as many as one million couples in a committed sexual relationship live most of their time at separate addresses.

Family campaigners seized on the findings, saying women who lived apart from their child's father or a new partner were rewarded with higher levels of state benefits.

The research, contained in a politically sensitive report published yesterday by the Office for National Statistics, has prompted politicians and family campaigners to question Government policy. They say changes to the tax and benefits system could encourage women to wait until they are married before having children.

The ONS report, Living arrangements in contemporary Britain, has been surrounded by controversy for some time.

Last year there were claims - strongly denied by the ONS - that the Government was suppressing a draft version because the findings could be seen as embarrassing.

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

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The inefficiency of state welfare is shocking and mostly unreported. As newspapers cut their staff ever more, they are all the more dependent on Government announcements. But now and again, in place of the propaganda, we get insights into what is really going on. This story tells directly of large-scale incompetence of the state in administering welfare. Such a thing would result in legal action and possibly bankruptcy for a commercial company or a mutual society such as the Equitable. What the story does not describe is the human distress caused to those at the receiving end. One can imagine people in genuine need and already in a bad way being thoroughly depressed by this maladministration:

Posted by James Bartholomew • Indexed in Waste in public services • Welfare benefits

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The audience of parents of children at Tonbridge School last night was one of the most positive and supportive I have come across.

I talked mainly about how the welfare state has damaged the culture and morality of Britain and how it has led to higher levels of crime. One member of the audience responded by saying he had been a fireman who had worked in council estates. There had been youths there who he described as 'untouchables' - that is they were not touched or cowed by anything. They did not care if they were arrested, or got hurt or went to prison. These youths would throw bricks at himself and other firemen as they tried to put out fires.

Posted by James Bartholomew • Indexed in Behaviour & Crime • NHS • Waste in public services • Welfare benefits

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Welfare issues have been around far longer than most people realise. There is a comfortable assumption in Britain that welfare was invented by the Labour government between 1945 and 1950. This is so wrong as to verge on the absurd. It is wrong not just in terms of Britain but internationally.

Welfare provision - by mutual help, by insurance, by charity, by insurance, by investment, by individual arrangement and by government - has been around since before the birth of Christ. The question is not 'should we have welfare provision' but 'what sort of welfare provision is best?' The argument is not between those who want people to suffer and die and those who want people to be assisted. It is between those who think the government is the best provider of assistance and those who do not.

At least it should be. But the less knowledgeable of those who favour government as the provider of first and last resort often imagine that those who are against this are against welfare provision of any sort at all. It suits their purpose. It makes them think they are being kind, good people while those who oppose government welfare are bad, cruel people.

I recently came across an example of welfare provision before Christ. I have been to a few lessons on ancient Greece and was given some sheets about the historian, Thucydides. One of his more celebrated accounts was of that of the funeral oration of Pericles.

In the same winter the Athenians, following their annual custom, gave a public funeral for those who had been the first to die in the war.

In the latter part of the speech Pericles made at this public funeral - in a section most people would not notice - Thucydides quotes Pericles saying,

For the time being our offerings to the dead have been made, and for the future their children will be supported at the public expense by the city, until they come of age.

So in ancient Greece, there was clearly some kind of city government provision for those children whose fathers had been killed fighting for the city. It was the ancient equivalent of the modern 'war widow's pension'.

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Before appearing on Sky News last night to talk about the government statistics on benefit fraud, I took a look at the full press release from the Commons Public Accounts Committee. It included the astonishing fact that while the government claims - as it would - that it is making great progress in tackling fraud and is going to do even better in future, it is simultaneously reducing the number of staff employed fighting fraud.

Confused? There is no need to be. This sort of government line is routine. It goes, as with this issue, "We acknowledge there is a serious problem, although we should not get it out of proportion. We are not complacent. We are tackling it. We have had successes and we are going to make further substantial improvements." This line is trotted out regardless of the actual facts.

The actual facts in this case is that fraud is far more widespread than the government admits (see the section in The Welfare State We're In for more on this) and the government is now cutting the staff involved in combatting it.

The government claims, of course, that this will have no effect whatever on the fight against fraud because of better methods.

Posted by James Bartholomew • Indexed in Welfare benefits

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The system for awarding benefits to the disabled is "crackers", because it is too complicated and wide open to error and fraud, according to David Blunkett, the Works and Pensions Secretary.

The article in the Independent is here.

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The following was submitted as a comment on 'about James Bartholomew'. It was not really suitable for that spot but I think it is interesting and raises a point that is always likely to put up in objection to the arguments in the book, so here it is. The comment was submitted by J. Wallis Martin:

I agree with many of the points you raised in 'The Welfare State We're In', but cannot see an alternative to the Welfare State.

My great-grandmother appealed for help from a church based charity in Warrington. She had been widowed, and had two children, a disabled aunt, and her own mother to care for. They were starving. When she explained her circumstances to Mrs. Broadbent (whose family were prominent in Warrington at that time), she was provided with a recipe for making soup from potato peelings.

My great grandmother was regarded one of the 'deserving' poor. I cannot imagine how she would have been treated had she been regarded one of the 'criminally' poor.

It is a point with power than deserves an answer. I could write at length in reply but I will only mention one point:

Posted by James Bartholomew • Indexed in General • Welfare benefits

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There are some who doubt that the value and conditions of various welfare benefits affect the way people behave. However there is overwhelming evidence that people respond to strongly to these terms, not least from the enormous variation in the proportion of people of working age in different countries who, supposedly, are incapacity by illness.

Note the way that, in the following figures, the rate of incapacity in Sweden is, ostensibly, four times that in Japan. It is surely very unlikely that Swedish people are genuinely four times more incapacitated than the Japanese.

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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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Below is what has been achieved in America. It could have been done here. But instead of radical reform in welfare, Gordon Brown increased means-testing. There has been some reduction in the value of welfare benefits and some increased incentives to work and even some increased conditionality of benefits. But it has been minor and at the edges.

If Blair had done what Clinton (pushed on by the Republicans) had done in the USA, then we might have had this:

What was the result of the 1996 reforms? By 2003, American welfare case loads had declined by about 60 per cent nationally. The number of families receiving cash welfare is now the lowest it has been since 1971. Between 1993 and 2000, the percentage of single mothers in employment grew from 58 per cent to nearly 75 per cent. The sub-group of never-married mothers working grew from 44 per cent to 66 per cent.

Posted by James Bartholomew • Indexed in Behaviour & Crime • Parenting • Politics • 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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An email received today:

I've recently read your book and you raise a lot of good points. I teach in a college that retrains unemployed disabled adults and it is only too apparent that the welfare system has hindered as well as helped a large number of our students in the ways in which you describe. For many the financial incentive to work just isn't there, especially those with families, although often we are sucessful in changing peoples outlook and raising their aspirations.

Posted by James Bartholomew • Indexed in Education • NHS • Waste in public services • Welfare benefits

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David Blunkett is back and talking big. The self-styled bruiser and radical says he intends to take a million people off incapacity benefit.

Is this a sensible thing to try to achieve?

Let's consider a few salient facts: there are currently 2.6 million people on the benefit - 7.2 per cent of the working age population. In Germany, only four per cent are on a similar benefits, only three per cent of the Spanish claim to be incapable of work and a mere two per cent of the French. Is it credible that we in Britain suffer from some ailment - currently not identified by medical science - that makes us more than three times more likely to be incapacitated than the French?

The numbers who claim to be incapable of work have jumped most extraordinarily. They have quadrupled since the mid 1970s. Again, medical science has failed to identify a new disease sweeping the nation and causing four times as many people to be physically or mentally incapable of work.

Here are two clues to what has really been happening. The different afflictions from which this new army of the incapable are suffering have one characteristic in common: they are ones which cannot easily be proved or disproved. The big boom has been in 'mental and behavioural disorders' - which often means 'stress' or 'depression' - and 'muskulo-skeletal' problems which typically means backache. Undoubtedly there are people with serious mental problems and terrible backache. What is beyond belief is that there should have been such a gigantic increase in these conditions and, moreover, that it should disproportionately have affected areas of high unemployment.

In reality, it has been known since the 1980s that a large proportion of those on incapacity benefit could work. Labour used to complain the Conservative Government was using the benefit to hide the true level of unemployment. Now, by saying that a million could be removed from the benefit, Labour is accepting that a million extra people should be classified as unemployed. This is worth remembering next time you hear the Government boast that unemployment in Britain is low. It isn't when you include these hidden unemployed on incapacity benefit.

But how did we get into this mess anyway?

Posted by James Bartholomew • Indexed in Welfare benefits

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Messrs Blair and Brown just don't get it. They think good social policy revolves around a bad definition of 'poverty'. They are puzzled by the 'hoodies'.

This from a good article by Fraser Nelson in the Scotsman:

For all the hype about the New Deal, Brown’s economy has specialised in finding alternatives to work for young people. When Labour came to power, 23% of 18-24 years olds were not working: this has risen to now 25%.

And benefit dependency has risen from 6.01m when Labour came to power to 6.58m now. Family disintegration has continued apace: the proportion of births to lone parents is up from 21% in 1996 to 26% today.

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

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The NHS is the world's third-largest employer with a million people on its books, second only to the Chinese Army and Indian railways. We spend some £80 billion a year on the NHS, equating to £1,400 annually for every man, woman and child. Despite this the number of NHS beds in England has halved in the past 25 years.

The average British woman will have 2.2 healthy pregnancies in her lifetime - almost enough to keep the UK population stable - but will give birth to only 1.7 children. The difference is accounted for by the number of abortions.

The number of people working in the public sector has increased by 10 per cent since 1998, accounting for some half a million of the new jobs created since Labour came to power.

Total public sector employment in 5.29 million, up from 4.71 million in 1997.

In 1981, 600,000 people claimed incapacity benefit. Now it is 2.2 million.

The greatest increases in recorded crime since 1997 have been in drug offences (509 per cent) and violence against the person (281 per cent) and there has been a drop in burglaries by nearly a fifth.

More than half the households in Britain have less than £1,500 in savings, and a quarter have no savings at all.

Teenage birth rates in Britain are twice as high as in Germany, and five times as high as in Holland.

150,000 children are educated at home, and the figure is rising. Bullying, harrassment and religion are the reasons most cited by parents for taking their children out of school.

From Britain in Numbers published by Politico's and serialised in today's Daily Mail.

Posted by James Bartholomew • Indexed in Behaviour & Crime • Education • General • NHS • Parenting • Waste in public services • Welfare benefits

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Email from a friend:

While on holiday I read Irving Stone's biography of Charles Darwin, 'The Origin'. For much of his life he lived in the small Kent village of Down. The local villagers approached him in 1850 and asked him to be the treasurer of the 'Down Friendly Club'. This he duly agreed to, and for at least the following twenty seven years kept the books for this small Friendly society. Then, in 1877 the villagers sent him notice that they wanted to wind up the society and distribute the funds among the members because they feared "that the government intended to unite all the clubs throughout England into a single one, and then divide the funds.'

Posted by James Bartholomew • Indexed in Welfare benefits

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...belief in restoring people to 'self-respect and self-support' has led compassionate conservatives to reject the de-humanising 'feed-and-forget' philosophy that has come to characterises the welfare state's attitude to its dependent clients. Compassionate conservatives want to see 'help-to-change' charities becoming an increasing feature of society's response to poverty.

Compassionate conservatives are then faced with something of a dilemma.

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The 'quality' papers failed to mention the following in their coverage of the Institute for Fiscal Studies report last week. However the Daily Mail and the Daily Express did. This is the relevant passage from the Express's coverage:

LABOUR has penalised parents who work hard to give their children a good start in life while handing huge subsidies to families where nobody bothers to get a job.

The findings shatter Tony Blair's claims that he is on the side of "hard-working families" and blew a hole in his re-election strategy.

Research by the independent Institute for Fiscal Studies found Labour's tax and benefit changes have boosted the income of a typical unemployed couple with children by around £2,500 a year.

But a working couple with children are around £750 a year worse off because soaring national insurance and other stealth taxes have wiped out the benefit they get from the child tax credit.

If this is true, it is important. I can well believe that the working couple with children has been hurt by Labour policies. But I am more surprised by the idea that benefits for the non-working couple have significantly increased. This needs further examination.

(I am grateful to Corin Taylor of the think tank, Reform, for supplying this cutting.)

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The most common medical reason given for people being incapable of work and therefore entitled to incapacity benefit is now depression. It has overtaken musculo-skeletal problems. This is a competition between two conditions that have one thing in common: in neither case is it easy to prove that someone does not have it.

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A key issue for those of us who believe the state is bad at looking after people, is whether or not individuals are any good at it either.

This is Tim Congdon in the Telegraph today on the competence or otherwise of people in saving:

Much of economic theory is concerned to establish that people are rational. But theoreticians and practitioners do not always see eye to eye. When confronted with real-world problems, economists are inclined to forget that they live in a world of rational agents.

Indeed, they are quite unembarrassed about offering recommendations to politicians which make sense only if people are rather silly. A good example is the recent report from the Pensions Commission, under the chairmanship of Adair Turner.

It says flatly: "Most people do not make rational decisions about long-term savings without encouragement and advice.'' The report proceeds from this patronising remark to recommend increased state involvement in pension provision, with a consequent enlargement of the government's role in the economy and a rise in taxation.

Professor Congdon goes on to look at the overall savings people make including saving that is not labelled "pension saving" but which nonetheless can be used for that purpose. He concludes that people are perfectly rational. His analysis may be open to challenge. But I want to mention another area in which the rationality of people in looking after themselves may be in doubt.

In America, people have to pay for their own healthcare. But in the same country, the incidence of obesity is very high. Why, when they must know that being fat increases their chances of premature death and early use of expensive healthcare, do so many Americans allow themselves to become fat? It does not seem sensible or rational.

Posted by James Bartholomew • Indexed in General • NHS • Pensions • Welfare benefits

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The Conservatives have 'matched' the Labour promises on financial support and leave for new parents. They have added some elements of choice but essentially the Conservatives are accepting the Labour idea that the government should dish out other people's cash and impose extra obligations on employers when a couple have a baby. In their desperate attempts to morph a Labour plan which would subsidise care by people outside a family but not care from inside the family, the Conservatives have come up with the idea that grandparents should be able to take a course in caring for children so that they could then qualify for subsidy too. The idea of the government - which has shown itself incapable even of teaching children in its care how to read - telling grandparents how to look after children is grotesque.

The Conservatives have also implicitly accepted tax credits. But tax credits are an appallingly bad way of delivering benefits. A large minority - often those most in most need - do not go through the difficulties of applying and so do not get them.

The Conservatives should not have accepted these flawed, complex, anti-employment, high-tax, bureaucracy-heavy ideas.

The BBC coverage of the Tory proposals is here.

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Walter Williams on proposals to raise the minimum wage in the USA:

The crucial question for any policy is not what are its intentions but what are its effects? One of its effects is readily seen by putting yourself in the place of an employer and asking: If I must pay $6.25 or $7.25 an hour to whomever I hire, does it make sense for me to hire a worker whose skills enable him to produce only $4.00 worth of value per hour? Most employers would view doing so as a losing economic proposition. Thus, one effect of minimum wages is that of discriminating against the employment of low-skilled workers.

For the most part, teenagers dominate the low-skilled worker category. They lack the maturity, skills and experience of adults. Black teenagers not only share those characteristics, but they are additionally burdened by grossly fraudulent education, making them even lower skilled.

Bureau of Labor Statistics unemployment data confirms the economic prediction about minimum wage effects. Currently, the teen unemployment rate is 16 percent for whites and 32 percent for blacks. In 1948, the unemployment rate for black teens (16-17) was lower (9.4 percent) than white teens (10.2 percent). Plus, black teens were more active in the labor force.

Posted by James Bartholomew • Indexed in Welfare benefits

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Why did crime rates fall so dramatically during Victoria's reign? Why is the fact that crime fell so little known? And why do some very clever and well-educated people decline to believe it?

The fall in crime in the second half of the 19th century is an astonishing, little-known story throws light on how government welfare policy may influence crime levels ('the causes of crime'). Crime levels, in turn, probably reflect more general standards of behaviour.

Here is an excerpt from Dr Jose Harris's excellent Public Lives, Public Spirit: Britain 1870-1914 which gives us some of the facts from which to start:

One of the most striking features of British society betweeen the 1860s and the First World War was its continually diminishing rate of recorded crime - a phenomenon that was historically quite unusual by comparison with both earlier and later periods in British society and with the experience of other industrialising societies in the latter half of the nineteenth century. In spite of increasing concentration on imprisonment as the sole form of punishment for serious crime, the prison population in all parts of the United Kingdom was proportionally much smaller in 1914 than it had been in the 1860s, while sentences for penal servitude were one-fifth of the level of fifty years before. Recorded crime and conviction rates are clearly a somewhat elastic measure of actual criminal behaviour, and public definitions of what constituted 'crime' were no less fluid in this epoch than in any other. But as legislators thoughout the period were constantly extending the boundaries of crime and as police were increasingly active in its apprehension, it seems scarcely credible that falling crime rates can be ascribed to mere transient social perceptions.

This point could be demonstrated much more forcefully than I have space for here; but the point should be made that a very high proportion of Edwardian convicts were in prison for offences that would have been much more lightly treated or wholly disregarded by law enforcers in the late twentieth century. In 1912-13, for example, one quarter of males aged 16 to 21 who were imprisoned in the metropolitan area of London were serving seven-day sentences for offences which included drunkenness, 'playing games in the street; riding a bicycle without lights, gaming, obscene language, and sleeping rough. If late twentieth century standards of policing and sentencing had been applied in Edwardian Britain, then prisons would have been virtually empty; conversely, if Edwardian standards were applied in the 1990s then most of the youth of Britain would be in gaol.

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Lunch with a senior official of the Hong Kong government. Hong Kong still has a relatively low burden of government, but the weight has got a lot heavier since John Cowperthwaite's day. (Cowperthwaite is the hero of the chapter on tax and growth in The Welfare State We're In). Whereas government activity used to account for 14 per cent of gross national product. It is now up to 22 per cent. Of course, that is still miles better than our 40 per cent and rising.

The official admitted that the big rises in spending happened in 1993-1996, when Chris Patten, the Conservative politician, was there. Mr Patten played a strong political game in Hong Kong. But he was, of course, a British centrist. Under him, Hong Kong welfare state spending rose. It comes as no surprise that unemployment after Patten has been higher than it was before he arrived.

Posted by James Bartholomew • Indexed in NHS • Tax and growth • Welfare benefits • Welfare benefits

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Lunch with a senior official of the Hong Kong government. Hong Kong still has a relatively low burden of government, but the weight has got a lot heavier since John Cowperthwaite's day. (Cowperthwaite is the hero of the chapter on tax and growth in The Welfare State We're In). Whereas government activity used to account for 14 per cent of gross national product. It is now up to 22 per cent. Of course, that is still miles better than our 40 per cent and rising.

The official admitted that the big rises in spending happened in 1993-1996, when Chris Patten, the Conservative politician, was there. Mr Patten played a strong political game in Hong Kong. But he was, of course, a British centrist. Under him, Hong Kong welfare state spending rose. It comes as no surprise that unemployment after Patten has been higher than it was before he arrived.

Posted by James Bartholomew • Indexed in NHS • Tax and growth • Welfare benefits • Welfare benefits

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