The cost of the welfare state - challenges posed and solutions

[Krokodil]

We could do better with preventative healthcare though which would bring it down a bit.

Not forgetting that issues with adult social care cause backlogs in hospitals. Patients who are fit enough to leave hospital but not fit enough to go home end up blocking beds.

 

[Bletchleyite]

Not forgetting that issues with adult social care cause backlogs in hospitals. Patients who are fit enough to leave hospital but not fit enough to go home end up blocking beds.

Similarly inadequate GP services put pressure on A&E.

 

[Tetchytyke]

The Pension auto-enrollment is the longer term enabler to get rid of the State Pension

I wouldn't agree with that at all, given the extremely poor performance of most defined contribution pensions.

Anyone solely relying on a defined contribution pension for their retirement is going to have a very miserable existence.

 

[Krokodil]

Similarly inadequate GP services put pressure on A&E.

Sorting out the 60p tax trap would help there. Lots of GPs have gone part time to avoid tax.

 

[Bletchleyite]

Sorting out the 60p tax trap would help there. Lots of GPs have gone part time to avoid tax.

Totally agree, that's a huge piece of folly that was done to avoid increasing higher rate tax/adding an upper band, either of which is a better solution.

 

[styles]

I wouldn't agree with that at all, given the extremely poor performance of most defined contribution pensions.

I got enrolled with NEST at one point. They had a choice of maybe 5 funds.

Given my age, I was enrolled on one of their Retirement funds, and what that meant was it operated in 3 phases:

1. Year 1 - 10% equity, 90% other stuff (mainly bonds and property, year 2 - 20% equities, year 3 - 30% equities, etc; until it got to something like 70% equities
2. Most of working life - this fund remained at around 70% equities, 30% other asset classes
3. 10 years before target retirement age, it would start to drop the equities again

I had two issues with this - the first is that I might not want to taper off my equities towards retirement, certainly not all the way down to nothing, because they could continue to grow, but this decision is at least fairly common practice. The second was a major issue for me - when I'm in my mid-20s, I shouldn't have my pension invested only around 10% in equities. In fact the opposite - it's so far away from retirement that this is the best time to go all in on an asset class which has some short-medium term volatility but is incredibly likely to deliver greater gains long term than bonds or property (and if the stock market crashed so bad that it didn't do this long term, a pension would be the least of your worries!) NEST did this because they didn't want young investors being spooked by short-term market volatility, e.g. COVID hits, they login to their pension, see it's lost a chunk in value, and then opt out of future contributions. I thought this was madness, especially given NEST is an arms-length public sector provider set up to support auto-enrollment. Surely the solution is educating younger investors on what investing means and why they shouldn't be spooked by such drops (and in fact, COVID was a great time to add to your pension!)

NEST's other funds included a higher risk fund, a lower growth fund, an ethical fund, and a Sharia fund. The Sharia fund was the only 100% equities fund, because of religious rules on charging interest, so I moved all my money there. Then two years ago NEST managed to find a Sharia-compliant form of bond called sukuk, and changed the Sharia fund to be 70% equities, 30% sukuk. Bonkers. Glad I had moved all my money out to a SIPP by then.

There was government plan for the FCA to operate a traffic lights system for pension providers or funds based on the performance of their investments. It was reiterated in January this year so I hope they follow through with it, though the devil will be in the detail in terms of what a 'green' or 'red' performance is defined as.

Anyone solely relying on a defined contribution pension for their retirement is going to have a very miserable existence.

I think people who take an active interest in their pension - they maximise employer matching, don't opt out when they're young (assuming they're able to afford it today), they make sure they're invested in reasonable funds - can rely on their private pension in retirement. The issue is that very very few people do this, and those who do I would guess are more likely to be higher earners who will retire with a mortgage fully paid off, and some outside-pension investments, etc.

 

[Tester]

The quote from Jean-Claude Juncker comes to mind.....

We all know what to do, but we don’t know how to get re-elected once we have done it.

 

[Broucek]

I got enrolled with NEST at one point. They had a choice of maybe 5 funds.

Given my age, I was enrolled on one of their Retirement funds, and what that meant was it operated in 3 phases:

1. Year 1 - 10% equity, 90% other stuff (mainly bonds and property, year 2 - 20% equities, year 3 - 30% equities, etc; until it got to something like 70% equities
2. Most of working life - this fund remained at around 70% equities, 30% other asset classes
3. 10 years before target retirement age, it would start to drop the equities again

Many auto strategies suck. But that's truly shocking! (I'm a pensions actuary.)

I'm actually a bit down on bonds even near retirement as they fall if interest rates go up which they do if there's inflation and inflation is bad for non-growth assets...

They do make a kind of sense if you are looking to match annuity prices.

 

[styles]

Many auto strategies suck. But that's truly shocking! (I'm a pensions actuary.)

Yeah they've actually stopped doing the first graduated ramping up phase, presumably after a lot of criticism.

They still go a graduated ramp up but it's not as bad: https://app.powerbi.com/view?r=eyJr...mMDMyLTFkMDktNDU3ZS1iYTAyLWU1NjU2OTU0ODZjZiJ9

I'm actually a bit down on bonds even near retirement as they fall if interest rates go up which they do if there's inflation and inflation is bad for non-growth assets...

They do make a kind of sense if you are looking to match annuity prices.

Yeah that's fair. And I do actually invest in non-equitiy assets for obvious reasons, but NEST's options aren't great.

 

[Broucek]

And I do actually invest in non-equitiy assets for obvious reasons, but NEST's options aren't great.

I have mostly DC pensions and I've been reducing my exposure to US equities. They may continue to go up, of course, but taking some profits seemed wise given the downside risks.

 

[GusB]

This is true - there needs to be wholesale cuts to benefits across the board - but clearly the State Pension and WFA are seemingly untouchable.

*yawn*

Same old story. You keep saying that benefits should be cut, but offer no solutions as to how revenue could actually be raised. State pension and winter fuel allowance are untouchable because doing so is likely to lose votes and it's quite understandable that no political party wants to go there. Why do we have to cut, though? There's more we can do to raise revenue before we start making cuts, such as actually collecting tax that is owed but unpaid. We could also impose some sort of tax on the very wealthiest in society, but the Wealth Hoarders "Creators" are the most untouchable of all.

Personally, I’m happy to pay more tax. What are you prepared to sacrifice?

I noticed that you didn't receive an answer to that question. @JamieL hasn't responded to any of my questions, either. The silence is deafening.

There are now proposals for parents to lose child benefit as part of a sentence for crimes committed by their children. Putting aside why this isn't already the case, this is where I think some forms of welfare should actually remain, so some form of leverage could be made out of it, and is why I thinking lifting the child benefit cap has upsides beyond more money for 3+ child families - if successive children misbehave but are not in receipt of child benefit, there's no financial incentive to discipline them:

Parents could face prison for child's crimes under justice reforms, minister says

The reforms to Parenting Orders could also see parents losing benefits, Jake Richards MP told the Times.

www.bbc.co.uk

^ Politicians are obsessed with criminalising everything and fixing nothing

We're getting into the realms of collective punishment again. If an errant child commits a crime and child benefit is cut as a result, other children in that family will also be affected. Is that really fair? I'm happy to acknowledge that there are some parents who really couldn't give a stuff about what their offspring get up to, but there are many parents who have the best of intentions and still struggle. We need to find out why some kids are going off the rails; is there an underlying cause?

Of course, any early intervention scheme will be seen by some as state overreach and not really any of our business.

No doubt the more sanctimonious types will be pleased by this, but given the clear link between poverty and crime, I struggle to imagine that it will actually solve the problem or save any money in the longer-term.

No problems will be solved and the money will still be spent; the responsibility simply passes from central government to local councils.

The issue is not the existence of these schemes per se but rather the number of people receiving disability benefits in the first place. When people used it to buy BMWs it obviously raised eyebrows; now that's been stopped but it hasn't saved any money since those same people still have a mobility allowance (or other package of disability benefits) that is presumably more than they truly need.

Would you mind explaining "presumably more than they truly need"? How do you know what people actually need?

Any government, left or right wing, will have to control the welfare bill at source. In respect of disability benefits, the bill for which is rising at an alarming rate, they can either do it by restricting eligibility, or by broad cuts (or lack of increases) to the overall benefit levels. Starmer's government was set to do the latter (and in fact did to an extent).

There is no third way where the benefits bill can continue to rise at its current rate, it's about choosing the method of reducing it that does the least harm. The default will undoubtedly be widescale cuts and fiscal drag because it's easier and less controversial, so that's what you'll get (from this government or the next one) if you don't support an alternative; that's less progressive than working to tighten eligibility so those who most need support still get it at the current (or even higher) levels.

How do you tighten eligibility? In your mind, what criteria need to be met before someone is considered to be disabled?

 

[JamieL]

*yawn*

Same old story. You keep saying that benefits should be cut, but offer no solutions as to how revenue could actually be raised. State pension and winter fuel allowance are untouchable because doing so is likely to lose votes and it's quite understandable that no political party wants to go there. Why do we have to cut, though? There's more we can do to raise revenue before we start making cuts, such as actually collecting tax that is owed but unpaid. We could also impose some sort of tax on the very wealthiest in society, but the Wealth Hoarders "Creators" are the most untouchable of all.

We have already taxed the economy into a stall. We needs overall cuts to public expenditure whilst also increasing defence spending. The reality is those cuts need to come from welfare. Spending an ever greater of money on those who cannot or will not make a net contribution to the economy is unsustainable. Hard decisions are needed.

 

[GusB]

We have already taxed the economy into a stall. We needs overall cuts to public expenditure whilst also increasing defence spending. The reality is those cuts need to come from welfare. Spending an ever greater of money on those who cannot or will not make a net contribution to the economy is unsustainable. Hard decisions are needed.

What do you propose to do with those who cannot work? Let them starve?

I would also be interested to hear your proposals for those who you deem to be unwilling to work. Instead of bleating that something must be done, provide us with some ideas as to how you would solve these issues. What are those hard decisions?

 

[JamieL]

What do you propose to do with those who cannot work? Let them starve?

I would also be interested to hear your proposals for those who you deem to be unwilling to work. Instead of bleating that something must be done, provide us with some ideas as to how you would solve these issues. What are those hard decisions?

Multiple ideas have already been provided in this thread - why don't you thread back through the posts to see the suggestions and discussion? Equally, I would also say your proposals for ever more taxation and are far removed from reality - we need to grow the economy to increase taxation, not beat it to death with taxation on the small percentage of net contributers.

As for whether there should be gaps in the safety net. Well, there already are and inevitably they will have to be enlarged. There are too many people on welfare to make it sustainable and affordable longer term - and it is trending the wrong way.

 

[Snow1964]

What do you propose to do with those who cannot work? Let them starve?

Firstly there needs to be better distinction between those that cannot work (due to severe medical condition), and those that are more choosing not to.

The whole system of overlapping welfare credits, taper withdrawals, and lumpy marginal tax thresholds is having effect of limiting work hours for too many.

There have already been multiple suggestions in this thread about work. Even the famous economist John Maynard Keynes said it was better to pay someone to dig a hole in a road and fill it in again than give them welfare. That's what led to new works schemes of 1930s, manual work doing something that would be needed by the country.

But another big problem is the current housing policy where Councils and Home Office are swallowing up hotels and bedsits, so it is hard to get people to move to work because even if there is jobs, there is lack of rental accommodation. Nobody in Government seems to grasp the concept of jobs need workers who can easily get accommodation within reasonable distance.

 

[AlterEgo]

But another big problem is the current housing policy where Councils and Home Office are swallowing up hotels and bedsits, so it is hard to get people to move to work because even if there is jobs, there is lack of rental accommodation. Nobody in Government seems to grasp the concept of jobs need workers who can easily get accommodation within reasonable distance.

Again, housing is an enormous drag on the country, and no more so than in welfare, where the costs of housing keep having to be met or contributed to. This is a political choice because Britain is addicted to the idea that houses are some sort of investment where line must go up rather than a place to live, which is not necessarily something common among all our peer countries.

Transforming how housing works would provide the single largest cut to the welfare bill before you start getting into the ideas of performative cruelty and Darwinism perpetrated by some in this thread, who like everyone else are one car crash or one stroke or one virus away from permanent disability.

 

[Harpo]

Again, housing is an enormous drag on the country, and no more so than in welfare, where the costs of housing keep having to be met or contributed to. This is a political choice because Britain is addicted to the idea that houses are some sort of investment where line must go up rather than a place to live, which is not necessarily something common among all our peer countries.

The inevitable consequences of the ‘something for nothing’ years that gave away our social housing stock at discounted prices along with our infrastructure.

Transforming how housing works would provide the single largest cut to the welfare bill before you start getting into the ideas of performative cruelty and Darwinism perpetrated by some in this thread, who like everyone else are one car crash or one stroke or one virus away from permanent disability.

I often wonder how much the absence of major conflicts has shaped our current generations. Previous generations that experienced mass and massive loss and deprivation saw enormous value in standing together.

Today we seem to have an insular Spiv culture where any support for the have-nots is bitterly resented and an awful historical echo in the resurgence of far right politics using that for its own ends.

If you fail to learn the lessons of history……

 

[Cdd89]

Would you mind explaining "presumably more than they truly need"? How do you know what people actually need?

I am not making a judgment, rather it is simply a statement of fact that:
- Nobody needs a BMW
- If someone can afford a BMW through their combined benefits and other income then they are receiving more than they need

The government seems to agree given that use of Mobility Allowance to lease luxury cars has now been ended. But it remains the case that these people are receiving more in mobility allowance than they need; it's just going on other luxuries or being saved up instead.

How do you tighten eligibility? In your mind, what criteria need to be met before someone is considered to be disabled?

Again, this is not really a matter of judgment. There are four ways to deal with the welfare/benefits bill, they are:

1. Collect more tax
2. Reduce the payment amounts
3. Tighten the eligiblity
4. Invest in treatment to reduce demand

Given that (1) is politically very difficult, and (4) is slow and temporarily makes the issue worse, that leaves (2) and (3) as pragmatic options. Starmer already tried (2), wanted to go further, and I suspect the next government will try (2) again.

In a binary choice between (2) and (3), tasked to reduce the bill by (say) 5%, it is clear that (3) does the least harm to severely disabled people. I get the arguments against means testing, in a perfect world I wouldn't do it either but it seems like the quickest win out of the available options.

 

[WelshBluebird]

Firstly there needs to be better distinction between those that cannot work (due to severe medical condition), and those that are more choosing not to.

What about the probably larger group who could work if given the support they need but are stopped from working because employers wont give them the flexibility needed and continue to have unreasonable illness policies?

WFH following covid could have been a huge benefit for this group but backwards thinking employers and the sheer amount of money invested in office space has largely stopped this from being helpful to most people.

 

[brad465]

Again, housing is an enormous drag on the country, and no more so than in welfare, where the costs of housing keep having to be met or contributed to. This is a political choice because Britain is addicted to the idea that houses are some sort of investment where line must go up rather than a place to live, which is not necessarily something common among all our peer countries.

Transforming how housing works would provide the single largest cut to the welfare bill before you start getting into the ideas of performative cruelty and Darwinism perpetrated by some in this thread, who like everyone else are one car crash or one stroke or one virus away from permanent disability.

This is a very good point. The two biggest problem areas I think are housing and energy costs. Any moves to significantly reduce these (but they won't be simple), would solve a whole host of problems, not just welfare.

 

[Bletchleyite]

Job creation schemes to do stuff like improve the public realm (e.g. bring back park keepers and lavatory attendants) aren't such a terrible idea. At least the Government gets something for the money, and the individual gets the satisfaction of being important to society.

It doesn't reduce the cost of the welfare state, rather it increases it, but you do get something for the money.

 

[Tetchytyke]

But it remains the case that these people are receiving more in mobility allowance than they need; it's just going on other luxuries or being saved up instead.

Citation needed.

If someone can afford a BMW through their combined benefits and other income then they are receiving more than they need

As with any lease scheme, what you are actually paying for is the depreciation of the vehicle.

A BMW has a higher purchase price but, by and large, it will also have a higher resale price. A Dacia has a lower purchase price but, by and large, it will also have a lower resale price. The highest advance payments were actually for some pretty mundane electric cars, as these had the highest depreciation.

This is why on PCP or lease schemes you can often acquire a car with a higher spec or a more prestigious brand for little or no extra money than a car with a lower spec or less prestigious brand.

So taking a hard-nosed financial perspective, it doesn't actually matter if someone gets a BMW or a Dacia on Motability, the financial cost to the taxpayer is the same.

The VAT changes haven't changed anything. Motability have cut the mileage allowance to reduce the depreciation of the vehicles, and they use this to pay the VAT and the IPT. Before they used to charge you for the higher depreciation based on the higher mileage allowance, and if you didn't do those miles you didn't get any money back, Motability pocketed the profit. But even after change the mileage allowance is still 10,000 miles a year, which is far beyond what most people drive, so the net effect is zero. But at least those disabled people don't have a BMW, eh.

Again, housing is an enormous drag on the country, and no more so than in welfare, where the costs of housing keep having to be met or contributed to.

We sold off social housing at a steep discount and a lot of this social housing has ended up being owned by residential landlords.

The taxpayer is paying for this folly twice- first time with the discount, and second time with the higher rents charged by private landlords.

The last government have tried to restrict this by capping housing benefit/Universal Credit housing element at the cheapest rents in an area. But this is also just moving the expenditure to another budget line. Private landlords- entirely understandably- don't price according to the housing benefit rate, they price according to what the local market will bear. People who can't pay that will either end up with their rents being topped up by local authorities under discretionary housing payments or they'll end up presenting to the local council as homeless.

You want to cut the welfare bill? Start by building lots of social housing.

== Doublepost prevention - post automatically merged: Wednesday at 10:13 ==

Job creation schemes to do stuff like improve the public realm (e.g. bring back park keepers and lavatory attendants) aren't such a terrible idea. At least the Government gets something for the money, and the individual gets the satisfaction of being important to society.

But the right wing view is the opposite: demonise the person for not having a job, then force them to work as a park keeper or lavatory attendant for free. "You can't expect to get benefits for nothing."

So you get the benefit of the work and you get to save a ton of money by not paying the person doing the work.

We saw this with Poundland all those years ago. Lots of people working for them for free as mandatory "job experience." When it came to applying for a job at the end of it there were no vacancies. Of course there weren't: why would Poundland pay someone a wage when they could get free labour instead?

 

[Cdd89]

So taking a hard-nosed financial perspective, it doesn't actually matter if someone gets a BMW or a Dacia on Motability, the financial cost to the taxpayer is the same.

The cost to the taxpayer of Motability isn't relevant anyway since it's a foregone benefit. The only salient point is that they are purchasing a vehicle higher than the base model for their requirements. I agree it may be "good value" but it doesn't cost the customer less.

The other points are basically debating at cross-purposes and a distraction from whether disability beenfits should be means-tested, which was the issue being exposed by schemes like Motability in their pre-revised form.

Citation needed.

I didn't expect that to be the point being challenged! I'm not sure how I can further support what I see as an incredibly obvious statement of fact.

 

[Bletchleyite]

The other points are basically debating at cross-purposes and a distraction from whether disability beenfits should be means-tested, which is the issue being exposed by schemes like Motability.

The answer to which is that some probably should and some probably shouldn't. The idea of them is to bring someone with a disability, as far as possible, up to the standard of living of the same person but without the disability. This will in part be practical stuff, e.g. we should probably provide grants to enable adaptations of the home of people who have newly become disabled, but also partly to compensate for the fact that a disabled person will likely be paid less over their lifetime than an able bodied person due to fewer (or no) jobs being suitable.

Even that latter thing varies a lot, though. If I was to be in a wheelchair it'd wreck my hobbies (mostly stuff involving mountains) but I could do my job exactly the same as it involves sitting at a desk. But a builder who doesn't have an "IT brain" might be the other way round. Actually that "IT brain" thing provides an interesting aspect to all this - mild autism tends to predispose people to be good at "rules based" jobs, be they IT (the computer will always do exactly what you tell it to, however silly that thing is, though AI changes that a bit), be they engineering (stuff like calculations), accounting (more maths) or the railway, so in some ways it's a disability and in others it can be an actual advantage.

The problem with means testing though is that it can be demeaning depending on how it's carried out.

 

[GusB]

Multiple ideas have already been provided in this thread - why don't you thread back through the posts to see the suggestions and discussion? Equally, I would also say your proposals for ever more taxation and are far removed from reality - we need to grow the economy to increase taxation, not beat it to death with taxation on the small percentage of net contributers.

As for whether there should be gaps in the safety net. Well, there already are and inevitably they will have to be enlarged. There are too many people on welfare to make it sustainable and affordable longer term - and it is trending the wrong way.

Answer the question! What do you propose to do with people who cannot work? I'm happy to hear what others have to say, but you're the one proposing cutting benefits when there's really no more that can be cut.

When the country's finances are in a state, I don't think it's unreasonable to expect the pain to be shared out across all sections of society. Those at the bottom end have already borne the brunt of previous cuts, so surely it's time that the wealthiest took a hit too.

Firstly there needs to be better distinction between those that cannot work (due to severe medical condition), and those that are more choosing not to.

The whole system of overlapping welfare credits, taper withdrawals, and lumpy marginal tax thresholds is having effect of limiting work hours for too many.

Can we please get rid of the idea that people are choosing not to work? There may be a few who are at it but, by and large, it's not really a choice. You're also forgetting that many people who are claiming Universal Credit are actually working; if you work full-time and still cannot afford to live on what you earn, it's the system that is broken.

I agree with your point about tapers, though. There needs to be a more gradual reduction in benefit payments as people earn more.

There have already been multiple suggestions in this thread about work. Even the famous economist John Maynard Keynes said it was better to pay someone to dig a hole in a road and fill it in again than give them welfare. That's what led to new works schemes of 1930s, manual work doing something that would be needed by the country.

But another big problem is the current housing policy where Councils and Home Office are swallowing up hotels and bedsits, so it is hard to get people to move to work because even if there is jobs, there is lack of rental accommodation. Nobody in Government seems to grasp the concept of jobs need workers who can easily get accommodation within reasonable distance.

Let's build more public housing, then! It provides jobs and apprenticeships and will have the added effect of reducing the housing benefit bill by not spending that money on private rented accommodation. The problem with that is NIMBY homeowners who don't want such housing anywhere near theirs and who fear that the value of their property will drop. People would be more likely to relocate for work if they could easily find similar accommodation when they get there, but if you're currently in a council house and have spent a considerable amount of time on the waiting list, there's a reluctance to give that up if there's a fear they you could end up homeless at the other end.

Transforming how housing works would provide the single largest cut to the welfare bill before you start getting into the ideas of performative cruelty and Darwinism perpetrated by some in this thread, who like everyone else are one car crash or one stroke or one virus away from permanent disability.

Agreed. There's too much "I'm alright, Jack" mentality from people who think that it could never happen to them. The same people who are then shocked to find out how little they receive if they do suddenly have to claim benefits.

Solving the housing crisis isn't going to happen overnight, but fixing it will be the keystone to sorting out a lot of other problems. The sooner we get on with it, the better.

== Doublepost prevention - post automatically merged: Wednesday at 11:27 ==

But the right wing view is the opposite: demonise the person for not having a job, then force them to work as a park keeper or lavatory attendant for free. "You can't expect to get benefits for nothing."

So you get the benefit of the work and you get to save a ton of money by not paying the person doing the work.

We saw this with Poundland all those years ago. Lots of people working for them for free as mandatory "job experience." When it came to applying for a job at the end of it there were no vacancies. Of course there weren't: why would Poundland pay someone a wage when they could get free labour instead?

Ah yes, Ian Duncan Smith's slavery workfare scheme. Blair's lot were also at it to an extent. It's laughable, really, because if you have to work for 40 hours a week to get benefits, by definition you're no longer unemployed.

 

[Bletchleyite]

Answer the question! What do you propose to do with people who cannot work? I'm happy to hear what others have to say, but you're the one proposing cutting benefits when there's really no more that can be cut.

I think we could do retraining of people much better. There are people who can't do the job they have done all their life due to a new injury or condition e.g. a builder who ends up in a wheelchair, but there are jobs such a person could do.

Indeed I think we should do better at retraining people into different jobs even if they simply want to, regardless of disability.

When the country's finances are in a state, I don't think it's unreasonable to expect the pain to be shared out across all sections of society. Those at the bottom end have already borne the brunt of previous cuts, so surely it's time that the wealthiest took a hit too.

While I don't disagree at all, they do to some extent already.

Can we please get rid of the idea that people are choosing not to work? There may be a few who are at it but, by and large, it's not really a choice.

There are plenty who are choosing that, though the choice is sometimes slightly back in the chain of decisions e.g. a choice to have unprotected sex when not in a stable relationship and thus ending up stuck as a single parent. It should not be removed from the discussion, no.

However most disabled people who don't work aren't doing so by choice, but we could get more of them into work by doing retraining and the likes better.

You're also forgetting that many people who are claiming Universal Credit are actually working; if you work full-time and still cannot afford to live on what you earn, it's the system that is broken.

Broken, or we accept that some areas of business require a form of hidden subsidy to be viable yet are valuable to society. Imagine if we had to pay £40-50K to central London checkout staff at supermarkets and what that would do to affordability of food?

It's more hidden in that form than say the rail subsidy, but I don't think it's always a problem in either case.

I agree with your point about tapers, though. There needs to be a more gradual reduction in benefit payments as people earn more.

Agree.

Let's build more public housing, then! It provides jobs and apprenticeships and will have the added effect of reducing the housing benefit bill by not spending that money on private rented accommodation. The problem with that is NIMBY homeowners who don't want such housing anywhere near theirs and who fear that the value of their property will drop. People would be more likely to relocate for work if they could easily find similar accommodation when they get there, but if you're currently in a council house and have spent a considerable amount of time on the waiting list, there's a reluctance to give that up if there's a fear they you could end up homeless at the other end.

Mixing social housing into estates tends to work quite well. It wasn't built in that way but I know the Council own the one next to me (and I only know that because I did a land registry enquiry to see who bought it when it was sold out of pure nosiness) and a perfectly normal family occupy it, you simply wouldn't know it was social housing without doing a land registry search. Classic "Council estates" and blocks tend to cause antisocial behaviour and the likes and are probably best avoided. One advantage of right to buy (much as it probably has more disadvantages than advantages) is that it created more situations of mixed tenure which create a wider mix of demographics and lead to much better outcomes in my view.

 

[Krokodil]

You're also forgetting that many people who are claiming Universal Credit are actually working; if you work full-time and still cannot afford to live on what you earn, it's the system that is broken.

Not only that, certain big employers like Tesco don't offer full-time work at all (at least at entry level). Pretty much anyone who's been working in a Tesco supermarket for less than 15 years now will be on a part-time contract.

 

[JamieL]

Looks like the Conservatives are lining up to present a tough on welfare narrative for their next manifesto.

Kemi Badenoch on Wednesday night launched plans for a tough crackdown on Britain's ballooning benefits bill.

The jobless who have paid little in taxes will see their handouts docked and be banned from spending them on vices such as drinking, smoking or gambling if the Tories return to power.

Under the proposals, targeting those who can work but choose not to, the long-term unemployed who have not contributed enough to the system would see their Universal Credit payments cut by 30 per cent.

Under the proposals, claims for Universal Credit Standard Allowance – currently £338.58 a month for a single person under 25 and £424.90 for those over 25 – will have a six-month limit.

After that period, those who are deemed to be capable of getting a job and placed in the 'searching for work' category will be divided according to their history.

Every two years someone has worked over their lifetime will buy them a year on the full allowance. So a 58-year-old who had worked for 40 years since leaving school, only to lose their job, would have built up enough entitlement – 20 years' worth – to see them through to state pension age.

By contrast, someone who had only worked for a year by the age of 30 would be moved on to the new Subsistence Allowance – 70 per cent of the full rate and the conditional prepaid card.

Kemi vows benefits crackdown: Handouts cut 30% if not paid enough tax

The jobless who have paid little in taxes will see their handouts docked and be banned from spending them on vices such as drinking, smoking or gambling if the Tories return to power.

www.dailymail.com

Of course, whilst the Daily Mail describes it as a "ruthless crackdown", it barely scratches the surface of what is needed. Nevertheless, some good ideas there mooted by the Conservatives.

 

[GusB]

I think we could do retraining of people much better. There are people who can't do the job they have done all their life due to a new injury or condition e.g. a builder who ends up in a wheelchair, but there are jobs such a person could do.

Indeed I think we should do better at retraining people into different jobs even if they simply want to, regardless of disability.

Lifelong learning is something that I'm very much in favour of, but inevitably you'll get people crying about how we pay for it. It used to be the case that the then DSS (Department for Social Security) would cover the cost of certain courses if it was likely to get someone into a job, but it wasn't really an option available to those who weren't claiming. Personally, I think that employers should be meeting some of these costs and that on-the-job training should lead to a recognised qualification with credits that can be used towards building something like a HND or Degree.

A rather ludicrous example was when my dad left the RAF. He had been able to certify aircraft as fit to fly after maintenance, but when he moved into civvy street he had to gain multiple civil licences in order to do the same work, and at his own cost; essentially, the skills he'd learned on the job over 22 years couldn't automatically transfer. I believe that the armed forces now do provide vocational qualifications, but it needs to be done across the employment spectrum.

There are plenty who are choosing that, though the choice is sometimes slightly back in the chain of decisions e.g. a choice to have unprotected sex when not in a stable relationship and thus ending up stuck as a single parent. It should not be removed from the discussion, no.

Are there really plenty who are choosing such a life, though? Most people who are readily employable will find work fairly quickly, one way or another. However, there are people who are essentially stuck in the system because they lack the skills, experience or confidence (or a combination thereof). There are courses available but these are often provided by private companies whose primary aim is to make money, rather than equipping people to get back into the workplace. Some of them will offer SVQ/NVQ qualifications, but won't allow people to choose which level to take the course at. The "tailored help" that was promised by successive governments hasn't really materialised.

Furthermore, there are a lot of people whose barrier to work is health, particularly mental health. It really makes my blood boil when certain politicians conflate conditions such as depression and anxiety with laziness; these are real stumbling blocks in the way of people who really want to get back into work, but can't because they simply cannot get treatment for conditions that often have physical knock-on effects and can be extremely debilitating. Fixing mental health provision should be done as a matter of urgency.

I'd also like to point out that having unprotected sex when not in a stable relationship is not the only way that people end up being single parents on benefits. Bereavement, relationship breakdowns or domestic violence can happen to anyone and can often place people in situations that they'd never imagined they'd be in. Sadly, there will also be situations where pregnancy results from non-consensual unprotected sex and the mother doesn't want to have an abortion. Forcing them to terminate the pregnancy has serious moral implications and whisking the new born child away for adoption can have serious life-long effects on both the mother and the child.

Not all single parents are like Vicky Pollard and your comment comes across as being more than a little out-of-touch and quite snobby.

However most disabled people who don't work aren't doing so by choice, but we could get more of them into work by doing retraining and the likes better.

I'd need to see some figures for this claim, but I agree that retraining is certainly an option, as is making sure that employers make reasonable adjustments. We also need the same for people who are usually well enough to work but have health conditions that flare up from time to time, my late mum being one of them. She was mostly well enough to work, but completely unable to do so when she did have a relapse; good luck finding an employer that will accommodate that.

Broken, or we accept that some areas of business require a form of hidden subsidy to be viable yet are valuable to society. Imagine if we had to pay £40-50K to central London checkout staff at supermarkets and what that would do to affordability of food?

In that case, we have to accept that the lowest paid will have to have a state-funded top-up. It's no use complaining that the welfare bill is too high while refusing to do anything that either increases earnings or reduces day-to-day costs.

Mixing social housing into estates tends to work quite well. It wasn't built in that way but I know the Council own the one next to me (and I only know that because I did a land registry enquiry to see who bought it when it was sold out of pure nosiness) and a perfectly normal family occupy it, you simply wouldn't know it was social housing without doing a land registry search. Classic "Council estates" and blocks tend to cause antisocial behaviour and the likes and are probably best avoided. One advantage of right to buy (much as it probably has more disadvantages than advantages) is that it created more situations of mixed tenure which create a wider mix of demographics and lead to much better outcomes in my view.

Would you mind explaining what you mean by "perfectly normal family"? Are you suggesting that most people who occupy council houses aren't normal? What a bizarre thing to say - methinks you've been watching too much Channel 5!

While there are indeed some "sink" estates where crime is a problem, there are also other areas that are perfectly fine. It's not just down to owner-occupation, either; there are council tenants (some of whom actually have jobs!) who are equally as proud of their surroundings as their property-owning neighbours. It's incredibly patronising (and somewhat offensive, to be honest) to suggest otherwise.

Some years ago I had a council flat in an area that was considered to be fairly rough. Yes, there was crime and anti-social behaviour and there were a fair few people who had addiction issues, but the majority were working families. Of the people I met who did have some sort of issue, most were good, kind people who had simply fallen on hard times and were desperate to get out of their situation. It's too easy to simply write people off and group them into some sort of homogeneous underclass when you don't understand the issues that they face.

---

I waited until I could find an article that wasn't from the Daily Fail before responding to this.

Tories would prevent long-term jobless spending benefits on alcohol and cigarettes

The proposals would also see benefits cut for people who are able to work but have failed to hold down a job.

www.bbc.co.uk

The Conservatives have promised to prevent long-term jobless benefit claimants from spending their welfare payments on alcohol, cigarettes and gambling.
Under the party's proposals, claimants who have been unemployed for more than six months would see their Universal Credit cut by 30% if they have not previously paid enough into the system, despite being able to work.
This reduced rate would be paid onto a "Back to Work" card, which would not allow cash withdrawals or spending on these items.
The Tories said the proposals were designed to encourage people back into work and cut the soaring welfare bill but Labour branded the scheme "unworkable".
A Labour Party spokesperson said: "The Conservatives had 14 years to fix our welfare system but they completely failed to make meaningful reforms.
"Now they are proposing an unworkable new card scheme, which does nothing to tackle the numbers of people their system left signed off and written off."

What a load of nonsense! It's is a gross invasion of privacy for starters; if someone is fulfilling their commitments (ie, looking for work as agreed with the DWP work coach), what business is it of the state to dictate how people spend their money?

The "Back to Work" card is unworkable anyway. What's to stop someone from going to Tesco, buying £x worth of groceries with their BtW card and then asking a friend or family member to buy a booze to the same value? Unless you want to put in place legislation that criminalises anyone who knowingly buys alcohol for an unemployed person, it's just silly.

In any case, someone buying alcohol or tobacco from a supermarket is instantly handing a large proportion of their money back to the treasury.

 

[Bletchleyite]

Furthermore, there are a lot of people whose barrier to work is health, particularly mental health. It really makes my blood boil when certain politicians conflate conditions such as depression and anxiety with laziness; these are real stumbling blocks in the way of people who really want to get back into work, but can't because they simply cannot get treatment for conditions that often have physical knock-on effects and can be extremely debilitating. Fixing mental health provision should be done as a matter of urgency.

Yes. The NHS is woeful at most things other than "I'm broken physically, fix me", and one of the things it's worst at is mental health treatment.

I'd also like to point out that having unprotected sex when not in a stable relationship is not the only way that people end up being single parents on benefits. Bereavement, relationship breakdowns or domestic violence can happen to anyone and can often place people in situations that they'd never imagined they'd be in. Sadly, there will also be situations where pregnancy results from non-consensual unprotected sex and the mother doesn't want to have an abortion. Forcing them to terminate the pregnancy has serious moral implications and whisking the new born child away for adoption can have serious life-long effects on both the mother and the child.

Absolutely. That's why I didn't mention those cases - I was mentioning specifically those who don't take seriously who they have sex with and what the impacts of that are - and there are plenty of such people out there. The difficulty is that you can't penalise the parent without penalising the child - but we certainly could do with stigmatising more the irresponsible use of one's nether regions (and of course treat rape and the likes extremely seriously - personally I think it's very close in magnitude to murder and should be penalised with a similarly long mandatory prison sentence). "Sh*****g around" unprotected in your teens and twenties should be seen as the dirty and inappropriate practice it is; it is not hard to use protection and, with a very high level of confidence, avoid creating a life you're not in a position to nurture. Those who end up creating such a life genuinely unintentionally (i.e. not having chosen to undertake an act likely to lead to it i.e. unprotected sex by choice) and decide to keep it should be helped to give that life the upbringing it deserves.

Some people end up as single parents through no fault of either participant as you say, such as bereavement. Those people should be paid well to enable the child to be brought up as they would have been brought up had the parent lived. I'm very strongly in favour of an excellent safety net for those who acted sensibly and responsibly but were still disadvantaged through situations that were not any of their fault at all. Same with a woman who was raped and decided (as it is their choice and nobody else's) to keep the child.

The great challenge is how you give those with good intentions who have just suffered from really bad luck really good benefits and those who have acted with irresponsibility a bread and water existence, which is what I see as deserved. Proving intention can be very, very difficult (hence why in some cases we have strict liability offences, as proving if something happened is far easier than proving if it was intended to happen).

Not all single parents are like Vicky Pollard and your comment comes across as being more than a little out-of-touch and quite snobby.

There are plenty who are. Obviously my views are aimed at those people. If we were required to list all exceptions to a statement in a post rather than concentrate on the subject posts would be rather long!

I'd need to see some figures for this claim, but I agree that retraining is certainly an option, as is making sure that employers make reasonable adjustments. We also need the same for people who are usually well enough to work but have health conditions that flare up from time to time, my late mum being one of them. She was mostly well enough to work, but completely unable to do so when she did have a relapse; good luck finding an employer that will accommodate that.

This is where "job creation" type schemes might help. if the Council is down a few cleaners at a time it's probably not that great an issue. We get cleaner streets and people in this position get better self esteem.

In that case, we have to accept that the lowest paid will have to have a state-funded top-up. It's no use complaining that the welfare bill is too high while refusing to do anything that either increases earnings or reduces day-to-day costs.

I think that may be worth accepting, though how we make people accept it is an interesting challenge. But think of it this way - there's no real reason I in IT (say) should be paid more than a bricky in terms of effort, but I am. Taxing me and subsidising the bricky just evens out some unfairness (as well as building more much needed houses ).

Would you mind explaining what you mean by "perfectly normal family"? Are you suggesting that most people who occupy council houses aren't normal? What a bizarre thing to say - methinks you've been watching too much Channel 5!

A perfectly normal family is one who brings up civil, well educated children and which behaves civilly in public e.g. not effing and blinding at their offspring all the way round Asda (and don't pretend that stereotype doesn't exist, as if you go to Asda on any Saturday morning there will be at least one such family). We shouldn't pretend that there are an awful lot of families living in Council estates to whom this does not apply. Plenty who it does of course who often have a hard time of things as a result!

While there are indeed some "sink" estates where crime is a problem, there are also other areas that are perfectly fine. It's not just down to owner-occupation, either; there are council tenants (some of whom actually have jobs!) who are equally as proud of their surroundings as their property-owning neighbours. It's incredibly patronising (and somewhat offensive, to be honest) to suggest otherwise.

I don't agree. Council estates as a concept have been proven not to work for years. That's why interspersing social housing among owned estates is pretty much the only system used these days, except a few edge cases.

Some years ago I had a council flat in an area that was considered to be fairly rough. Yes, there was crime and anti-social behaviour and there were a fair few people who had addiction issues

That's the problem and you can't write it off. In middle class areas of owner occupation these things aren't rife, in social housing they very often are. This shouldn't just be accepted - we need to find ways to prevent it, which is going to be a combination of education, improving prospects but also stronger policing and strict punishment.