There has been a lot of talk about welfare reform in the UK since the Conservatives won government. As in this country the changes take time. On Thursday the new bill (175 pages) was introduced. The following is from the Guardian's political live blogging;
Cameron will deliver a speech on welfare speech at about 11.15am. Downing Street released some extracts overnight, and they show that Cameron believes that the welfare state needs to be reformed because people are less responsible than they were 60 years ago.
When the welfare system was born, there was what we might call a collective culture of responsibility. More than today, people's self-image was not just about their personal status or success…it was measured out by what sort of citizen they were; whether they did the decent thing. That meant that a standardised system of sickness and out-of-work benefits – with limited conditions – was effective.
It reached the people who needed that support, and not those who didn't, in part because fiddling the system would have brought not just public outcry but private shame. In other words, personal responsibility acted as a brake on abuse of the system.
And because the ethos of self-betterment was more wide-spread, the system supported aspiration rather than discouraging it. Now let's be honest about where we've travelled to, from there to here. That collective culture of responsibility – taken for granted sixty years ago – has in many ways been lost.
11.40am: Cameron makes the point about people being more responsible 60 years ago. I quoted this extract earlier. (See 8.35am.)
He says the welfare system now operates in such a way as to encourage people to be irresponsible.
But I know this country and therefore refuse to believe that there are five million people who are inherently lazy and have no interest in bettering themselves and their families.
What I want to argue is that the real fault lies with the system itself. The benefit system has created a benefit culture. It doesn't just allow people to act irresponsibly, but often actively encourages them to do so. Sometimes they deliberately follow the signals that are sent out. Other times, they hazily follow them, trapped in a fog of dependency. But either way, whether it's the sheer complexity and the perverse incentives of the benefits
system, whether it's the failure to penalise those who choose to live off the hard work of others, or whether it's the failure to offer the right support for people who are desperate to go back into work, we've created the bizarre situation where time and again the rational thing for people to do is, quite clearly, the wrong thing to do.
11.44am: Cameron is now giving examples of how the system encourages people to be irresponsible.
High marginal deduction rates mean that a single mum has no incentive to work if she is going to lose 96p for every £1 she earns, he says.
And the benefits system makes it sensible for couples to live apart.
You might think, no one would split up because of benefits. But in our country today, there are two million people who 'live apart together' – that is couples who maintain separate homes while being economically interdependent. Can we honestly say the signals in the benefit system have nothing do with this?
11.46am: Cameron says nothing has shocked him more since he has come into government than the situation with housing benefit.
We inherited a system that cost £20 billion a year, with some claimants living in property worth £2,000 a week in rent. That's £104,000 a year. That's the income taxes and national insurance contributions of sixteen working people on median income ...
We've been sending a signal to people that if they're out of work, or on a low wage, and
living in an expensive home in the centre of a city, that the decision to go back to work, or take a better paid job, could mean having to move to a cheaper home, in a different part of the city, in order to escape benefit dependency.
11.49am: Cameron is now talking about how the universal benefit will be. He says it will be much simpler than the current system.
With the universal credit, you would keep 35p of benefit for every extra pound you take home. And because this rate of benefit withdrawal is the same whatever you earn - it's easy to calculate just how much better off you will be.
11.51am: Cameron is now talking about the tougher sanctions that will be imposed.
So if you're unemployed and refuse to take either a reasonable job or to do some work in your community in return for your unemployment benefit, you will lose your benefits for three months. Do it again, you'll lose it for 6 months. Refuse a third time and you'll lose your unemployment benefits for three years.
11.52am: People who can't work and can't be expected to work will be supported, Cameron says. "Full Stop, end of story."
11.53am: Cameron says the government will pay companies to get the unemployed into work.
Don't let anyone tell you this happened before. Under the last government's model, some companies still got a large share of their payment – even if they didn't get someone into work. We're saying: we will withhold the vast majority of these companies' payments until they get someone into work – and they stay in work.
He says that people have been suggesting programmes like this for years. But in the past the Treasury opposed them. Now the Treasury is in favour. Cameron pays tribute to Lord Freud, the welfare minister, for helping to develop this idea. He says he is glad the Tories "poached" Freud from Labour.
11.57am: Cameron says the bill marks the beginning of "a cultural change". It will create "a new culture of responsibility", he says.
The last Labour government took most of its ideas about welfare from the UK. It was always Maharey's big ambition to move to a single benefit. Politically New Zealanders seem more comfortable with following what the UK does as opposed to what the US does. And the Welfare Working Group, which I believe releases is last report next week, have already mooted a single benefit. I have been opposed to such a move in the past. And I am still not persuaded that it isn't just tinkering and political expediency.
One change that is unclear. If people can keep 35 pence of their benefit for every extra pound earned, at what point does that cease? I really hate trying to get to grips with abatement systems. Confounded complicated things. It doesn't appear that any journalist is too keen on it either because I cannot find a simple explanation of the single taper and earnings disregard system being proposed.
2 comments:
". More than today, people's self-image was not just about their personal status or success…it was measured out by what sort of citizen they were; whether they did the decent thing. That meant that a standardised system of sickness and out-of-work benefits – with limited conditions – was effective."
That is a very pertinent observation. Systems which give people help work only if it goes to people in need rather than want and those who receive it take only what they need.
It is a radically different Britain now than 60 years ago.
In that time successive govts have been effectively 'electing a new people', through immigration and the importing of poverty.
Three to four generations of dysgenic welfare breeding means the dwindling middle classes will
under more and more pressure to fund the largesse.
It will get a lot worse, it won't get better.
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