Tuesday

Reform of incapacity benefit – again

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:


One of the more interesting passages in his speech, arguing that there is a demographic need to get more people into work:

Maximising employment is equally essential for Britain to cope with the demographic challenge of a nation where people are living longer and healthier lives. By the late 2020s, nearly half of the adult population will be over 50. Over the next forty years or so, the numbers of pensioners will increase by 50%. Originally there were ten people of working age for every pensioner. Now there are four for every one pensioner; By 2050, two of working age for every one in retirement. Unemployment levels for people over 50 are relatively low, but economic inactivity rates are high and many people leave work early because of ill health. The economic consequences of these trends could be serious unless we take action now.
It is for those reasons that we have set ourselves the aspiration of working towards an 80% employment rate – reducing the numbers on sickness benefit by one million, and getting one million more older people and 300,000 extra lone parents into work.
To do that we must extend the principles of active, tailored welfare across the entire welfare state – providing help and support to the key groups that remain left behind.
Incapacity benefit remains one of the greatest barriers to social justice in Britain today. While 80-90 per cent of people coming onto the benefit expect to get back to work – many never do. After two years on the benefit, someone is more likely to die or retire than to find a new job. This is just not good enough.

Further update:
And here is a clear indictment of incapacity benefit as it has been:

For all claimants, it is the passive system itself that traps people in poverty.
- Nothing expected of claimants, and little support is offered.
- The gateway to the benefit poorly managed, with some claimants receiving IB before even passing the medical test;
- There are perverse incentives to stay on the benefit – you get paid more the longer you claim;
- And those who try to plan their return to work through volunteering and training run the risk of proving themselves capable of work and losing their entitlement;
Even the name of the benefit sends a signal that a person is incapable – that there is nothing that can be done

The following is also interesting, especially the reference to housing benefit, which probably is far more important in causing benefit dependency than is widely realised.

Radically changing incapacity benefit is critical to giving more opportunity to those trapped by the current system, but the green paper will also seek to do more for other key groups who still face barriers to accessing the benefits that work can bring.
- We will set out proposals to do more to help lone parents balance their need to care for their children with the huge benefit to their family that a job can bring.
- We will bring forward measures to do more to help older people overcome the barriers to work which make their employment rates significantly lower than the population as a whole.
- And we will reform housing benefit so it better promotes personal responsibility and does not hold people back from working.

  1. If we had had welfare reform like America, we could have had this:
  2. American welfare reform was bitterly opposed and not bi-partisan
  3. Swedish people are supposedly four times more likely to be incapacitated than the Japanese
  4. Welfare reform reduced poverty in America. When will the Tories endorse it?
  5. Benefit fraud – they are going to sack some of the staff who fight it but it won’t affect performance
This entry was posted in Pensions, Welfare benefits. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>