Opinion: the problem of Welfare Reform

Ed Miliband has stirred up some New Year’s controversy, not least amongst his own supporters, with the news that Labour is to speak out more strongly against the perils of so-called “benefit scroungers”. Labour are no doubt concerned at consistent polling evidence suggesting that opposition to benefit cuts are out of step with the views of the public.

In reality, there’s little difference between the positions of the different parties, nor much change in the position of any individual party over the last couple of decades.

Across the mainstream political spectrum, few disagree that handing out state benefits too freely causes two big problems. First, the easier it is to get benefits, the more people will abuse the system. In purely financial terms it may not add up to much against tax evasion, but politically it’s very visible and no-one likes to see their neighbours stealing from the State when they’re working every hour to support their family.

Secondly, having whole families – sometimes several generations – hooked on welfare to the extent that getting a job or a decent education just isn’t seen as an option worth considering is bad for those individuals as well as the state.

The answer, of course, is to change the criteria for benefits and the incentives to work so that it becomes harder and riskier to cheat the system and relatively more beneficial to get a job – along with some additional help for those who need it.

Except that no-one has figured out how to do that without it resulting in more people falling through the gaps.

Labour in Government decided to crack down on Incapacity Benefit, believing that many of the people claiming IB could and should be working (for their own benefit, as well as to reduce the bill to taxpayers). The result was that in the process of achieving that aim, many people seem to have been wrongly identified as fit to work and are losing out.

The key to understanding the problem faced by all governments is that this seems to be inevitable for any welfare reform – it’s too big, too complicated and people will always fall through the gaps.

Depending on the politics of the day, parties may choose to stress one aspect or the other in the quest we all have to win votes, but the reality of the challenge changes little.

The government of the day tries to get more people off benefits and attempts to figure out a way of doing it that somehow minimises the number of genuine claimants falling through the gaps, with varying degrees of success. The politicians tweak it depending on their priorities to end up with more of fewer people claiming the relevant benefit.

What politicians say and how they say it can matter – it can affect the national mood, for example. And we political activists will naturally interpret the actions of any government in line with our political views. But behind the words, variations on the same old policies face the same old challenges and problems.

Universal Credit is the latest way many see to square the circle – it looks encouraging but whether it turns out to be more successful than others remains to be seen.

* Iain Roberts is the former leader of Stockport Liberal Democrats and Lib Dem Campaign Manager in Greater Manchester Mayoral election and for Cheadle constituency in the General Election

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44 Comments

  • Simon Bamonte 1st Jan '12 - 7:08pm

    But, Iain, with all respect you say this:
    Labour in Government decided to crack down on Incapacity Benefit, believing that many of the people claiming IB could and should be working (for their own benefit, as well as to reduce the bill to taxpayers). The result was that in the process of achieving that aim, many people seem to have been wrongly identified as fit to work and are losing out.

    You fail to mention the Coalition’s reforms are simply an extension of Labour’s, only nastier and more draconian for sick and disabled people, as well as the genuinely unemployed. I’ve read stories about disabled people who have committed suicide due to Labour/Tory/LibDem reforms & ATOS/DWP incompetence and it shocked me that this isn’t a scandal already. All parties have been letting our most vulnerable down.

    Now Ed M joins the Tories and LibDems in decrying so-called “scroungers” when there is little choice for millions now out of work (thanks to bankers and stupid politicians of all parties) to do nothing BUT exist on benefits or starve. And millions of unemployed people, many highly skilled and educated, will be “working for their benefit” at less than minimum wage stacking shelves or cleaning streets. I know this myself as my educated, intelligent wife faces “working” for Tesco at less than minimum wage in the next few weeks. The very prospect is making her depressed; she now wonders what the point was in going to Uni, working hard for the council in finding homes for abuse victims and now finds herself on the scrapheap where, up here, there are around 25+ people fighting for every vacancy. There simply is no hope for many of us; nothing to look forward to for years and years if austerity & unemployment continues like this

    I also notice Ed M. suggesting those who have paid no tax will not receive any benefits under his proposed plans. Well, that is all well and good (it isn’t actually), but what of those born disabled? What of those who become disabled or very ill in their teens and find themselves unable to work due to this? What of those who worked for only a few years and then had a horrible illness or accident? It looks almost as if his plans would be worse than this government’s. And that, sadly, says a lot.

    Yes, the system needs reform, but not like Labour did it and certainly not the way the Coalition is doing it. As a lapsed LibDem it gives me shame to see our party in government letting the Tories blame the sick and the jobless for the sins of the last gov’t and the bankers.

  • Daniel Henry 1st Jan '12 - 7:40pm

    I agree with Simon on this.
    All three parties have failed on this and have crossed two areas that should be red lines for us:
    1) Jobseekers being forced to work for less than min wage.
    This would be wrong at the best of times, but in a situation where many of these jobseekers are eager to work but can’t find a job due to the recession it’s ludicrous.
    2) The harsh crackdown on sickness related benefits.
    There’s a huge list of problems with the Atos system that Labour introduced and we’ve made harsher. The long and short is people who are vulnerable and sick are being hurt. When in opposition and when the Government first formed, Cameron promised that such people would be protected. This promise clearly isn’t being kept.

    We’re basically seeing a nasty attack on the most vulnerable in society and we as a party need to take a lead in resolving these problems. George Potter managed to pass a motion last conference that addressed some of these problems but it’s not clear how far the parliamentary party has been successful in following it through.

    To be honest, I think that all Nick would need to do is build up a report of what these people are having to face and then if he managed to get Cameron to read it, that would perhaps be enough for Cameron to decide to u-turn on these issues.

  • Many Labour politicians dismiss welfare reforms such as the universal benefit or pension, saying that the real problem is not incentives but the lack of jobs.

    But they need to remember that the current system of means-testing benefits is a tax, often at a marginal rate in aggregate for all benefits of 100% or more, which massively increases the marginal cost of wages and therefore reduces the demand as well as the supply for labour.

    The problem is not that we pay people who are disabled or old have children or need somewhere to live when they are able to work. The problem is that we pay them NOT to work.

  • Daniel Henry 1st Jan '12 - 7:59pm

    Paul, I could understand how it reduces the supply of Labour (if a person is doing okay on benefits then they’re not going to be looking for work) but don’t get how benefits reduce the demand. If I understood it right, you were saying that it drives up wages, which means companies can only afford to employ less people.

    If so, I disagree with your way of looking at it.
    Yes we want to increase unemployment but should driving wages to be even lower be the solution? Inequality is bad enough as it is, with the lowest paid are already getting the smallest slice of the pie.

  • Andrew Suffield 1st Jan '12 - 11:38pm

    decrying so-called “scroungers” when there is little choice for millions now out of work (thanks to bankers and stupid politicians of all parties) to do nothing BUT exist on benefits or starve

    You sound like you actually believe these two things are connected. They are not. “Scroungers” are precisely the set of people who do have a choice, but reject it. Lib Dems don’t have a lot of sympathy for those people, but have never suggested that those who genuinely cannot find work should not receive benefits.

    (It is easy to be misled by the press here, because the Tories are pushing their “eat the poor” line, and Labour are going heavy on the “employ them to count paperclips” idea that they’ve been using for years)

  • joanne hayes 2nd Jan '12 - 4:04am

    penalising the people who need benefits and most are unable to fight for it because so ill.i am disabled..wheelchair..cannot work as much as i would like to…it is impossible.i received dla higher mobility middle care for 5 years..renewal came up..i was refused dla. atos (contracted by government to find ill people well for work even if they are not fit for work( contracted by governemnt for the sum of 500 million pounds.)i need a carer at all times …dla stopped..cant afford a carer..therefore cannot get out..not a self propelled whelchair and too ill to get out alone.i am now a prisoner in my home …however..i say my home ..it is rented.. i may be made homeless too now…i was also on income support with a disability premium..i was asked to go in to esa appointment … to migrate to this benefit..however i was denied this benefit and all benefits ceased asap.(i had to get taxi driver to take me in in wheelchair)..which also meant i lose housing benefit/council tax benefit.i had no money for 2 months no bills paid no electric in the meter and letters from my landlord..no food.luckily i had help from the church for a while and friends.alot of people who are disabled are contemplating suicide or actually attempting it and some sadly suceeding.i can see their point.while i understand they are weedling out the people that can work…they are targetting the most vulnerable too who are too ill to fight back therefore lose everything including their houses.the atos fit for work scrying system is wholly flawed…it is awful.questions they ask are one word answers which isnt possible to give a full accurate account of a persons disability.it isnt done by a medical professional as they say it is done by an atos worker who taps yes or no into a multiple choice computer.this is a sad and broken britain and will remain sad while the coalition is in power.this benefits system needs to be reformed again and not target those most vulnerable…it is discrimination and breaches our human rights to lead an independant life etc.

  • joanne hayes 2nd Jan '12 - 4:14am

    oh and i forgot to mention that dla appeal is minimum of waiting is 18 months due to increase in people being turned down.if appeal is won after that time people have still lost thier homes and thier dignity…no wonder disabled people commit suicide.also in regards to esa if u have to appeal then win which took me 2 months with no money…6 weeks after i won appeal for esa they have now sent me forms to fill in ..same forms..see if im fit for work..means more appointments which no doubt will see me without benefits and worrying about how im going to eat never mind pay bills and rent.so 3 months after winning my appeal i have to go back and do it all agian…with no carer..no money to get there..if im having a bad day i will not be able to go…either way my benefits will be stopped again.alot of us are genuinley disabled ..very poorly people…without having the extra worry of when next we will eat.yes it is this bad if any of you arent on benefits for illness.

  • The problem is the term ‘scroungers’ and ‘benefits’ has become almost indistinguishable in the press, and therefore in public perception .Labour’s Liam Byrne speaking in the Daily Mail stated “decent Labour voters” were sick of people lounging around on benefits while they worked all the hours God sends. This seems to suggest it is somehow indecent to understand people may be on benefits for a variety of reasons and not all disability is visible . Someone ranting on the doorstep about scroungers is likely to be as well informed about the issue as someone ranting about asylum seekers or the levels of illegal immigration. Most reasonable politcians seem to accept the near hysteria surrounding the issue of benefits bears no relation to the reality , yet ALL politicians remain silent in addressing the inaccuracies in case they are seen as soft on scroungers.

  • Richard Swales 2nd Jan '12 - 7:35am

    @Simon, Why are bankers responsible for unemployment? Is it because they started to say “no” to people’s desire to spend ever increasing amounts on their credit cards buying things made in China? I don’t know your economic paradigms, but if you believe that debt = growth then presumably bankers also get the credit for the long boom beforehand, and the economy hasn’t fallen to pre-boom levels.

  • I think you have bought into the propaganda that many families have never worked for several generations. I would suspect that the numbers where this has occured is if it exists very tiny. After all several generations ago the welfare state did not exist and even a few generations ago people with no income and no work either ended up in the workhouse or became criminals. When you consider the loathing people felt for the workhouse I am sure no one would seek to be without work. Instead of propagating this myth you should at least explore it and if it can be proved wrong use denounce it as such, as at the moment it is used as justification to beat the unemployed and disabled with a big stick.

  • Tony Dawson 2nd Jan '12 - 11:17am

    @Simon Bamonte:

    “my educated, intelligent wife faces “working” for Tesco at less than minimum wage in the next few weeks.”

    So will you be reporting Tesco and your wife to the police/DWP for their criminal conspiracy?

    @Joanna hayes:

    “dla appeal is minimum of waiting is 18 months due to increase in people being turned down”

    I have some statistics somewhere, gained a month or so ago, which show this appeal time as being more than 9 months but nothing like 18. Where do you get your figures from?

    Anyone thinking that Benefit Reform and reduction of inaccurate benefit payments, as well as fraud, are irrelevant to either the economy or to good hard working low-paid people’s political perspective are not on this planet. There is no ‘either-or’ thing here in respect of other economic management measures. Britain is in such a mess right now that everything possible needs to be done – and pronto. Technocrat, above, is right to point out the way in which immigrants can be targeted by a resentful indigenous working class. What he fails to mention is that the prevalence of both benefit fraud and worklessness culture is far higher in the white working class estates among 3rd/4th generation ‘shameless’ households than in most immigrant communities in the UK.

  • Colin_Roy Hunter 2nd Jan '12 - 1:31pm

    Notice: not one iota of sympathy (let alone empathy) for the poor lass struggling to exist! The only comment is to pick her up on an inaccuracy.
    There are thousands of folk in a similar position to her. It seems LibDem members are deliberately ignoring the plight of folk who are passed around the benefits system: too ill to claim JSA, (allegedly) not ill enough for ESA; leaving them with NOTHING to exist upon. Folk are attempting and succeeding in suicide attempts. That means DEATH – and the only comment is to correct an inaccuracy which does not really change the point being made. SHAME on you all!
    I’m lucky, I have a partner who does his best to look after me. He was so outraged at the LibDems lurch to neo-liberalism, that he has left the party. I have never been a member, but have been voting for you since SDP days. With one exception: when Nick took over from Menzies; I did not trust him then and I still do not. I gave you the benefit of the doubt at the last election. The LibDems will NOT be receiving my vote again. I am also aware of other folk who have been saying the exact same thing on facebook, including some of my friends. I should prefer for a third voice to survive in English politics: but at the moment there is only one – idealogically authoritarian and economically neo-liberal.

  • Simon Bamonte 2nd Jan '12 - 2:27pm

    @Tony Dawson: “So will you be reporting Tesco and your wife to the police/DWP for their criminal conspiracy?”

    Why would I do that? Working 35+ hours a week for one’s benefit, at less than minimum wage, is a legal policy brought in by the Coalition. I don’t like it, I think it is exploitative and does nothing for the morale of intelligent, previously well-employed people. It only benefits big chains like Tesco and Poundland, lets them receive some free labour (every little helps?) and potentially takes jobs away from unskilled people looking for work. I don’t have the power or money to challenge it legally, although there is a test case I saw a report on recently..

  • Simon Bamonte 2nd Jan '12 - 2:30pm

    @Colin_Roy Hunter: I agree with you completely. I am ashamed, as an ex-LD, that our party supports policy that is pushing vulnerable people to their deaths. I’ve recently seen several reports of suicides due to the DWP, ATOS, and policy which we now support.

    Before the Coalition, compassion seemed to be in great supply in our party. It seems to me, now, that most Coalition-supporting party members and MPs have had a compassion bypass. I never, ever thought I’d see the day when Lib Dems continue to support policy that is leading to avoidable human deaths, but there you go. It’s heartbreaking…to those of us with a heart and a lot of compassion for our fellow women and men.

  • Simon Bamonte 2nd Jan '12 - 4:36pm

    @Oranjepan: “expressions of empathy and sympathy are unhelpful to dispassionate discussion of the issues as they personalise issues and use emotive subjectivity to sway opinion.”

    But these issues, which are leading to DEATHS, are indeed highly personalised already. In fact, if we as a party held up personal examples of those who have sadly committed suicide, maybe we’d get somewhere in breaking this story or getting more of the public onside. Many people are (rightly) critics of the Tories’ frequent callousness. They aren’t called the Nasty Party for naught. Do we really aspire to be nasty party number two, kicking the weakest while those at the top continue to get off scot-free? Apart from George Potter and some grassroots LDs, most Lib Dems don’t seem to care.

    Do you, personally, care about those who committed suicide due to our actions in government? It sounds as if you don’t. Your technocratic words may be all well and good in the Westminster bubble, but most human beings are emotional creatures. If the public by and large knew of what is happening, there would be a scandal. But nobody, bar the Guardian and Channel 4 News, on a national scale, is reporting this.

    Are you not ashamed we have MPs supporting policy that is pushing our most vulnerable to the brink and often over the edge? Is the survival of the coalition worth more than their deaths? Why are we doing this? I see no possible electoral benefit from pushing our weakest members of society, sick and disabled people, further into the dirt.

    And if emotion is not to be used in politics, then why did our party spend so much time appealing to compassion, decency and a sense of fair play while in opposition (over Iraq, freezing pensioners and when Danny Alexander was a big campaigner against Labour’s welfare reforms and ATOS), only to go off and have a mass-compassion bypass once in power?

    Mr. Alexander is a good example of our 180 on this issue. He was probably the biggest defender of the disabled before Coalition, calling for more fairness towards disabled people and for ATOS to be removed. Now? Well, now he supports everything IDS is doing, even though it goes further and is indeed harsher than Labour’s plans. How he sleeps at night, how his conscience changed so quickly, I’ve no idea.

    Further, is there any party left who has compassion and decency at its very heart? Who will put the needs of the people before the needs of finance capital or the mega-rich? To me it no longer seems there is anywhere for compassionate people to turn. Especially when the financiers and bond holders want their money back. So long as they get their money, it seems, the disabled can sod off. That, at least, is the message the government seems to be sending out.

  • Colin_Roy Hunter 2nd Jan '12 - 5:35pm

    @ Jock
    If the DWP/ATOS cannot be consistent and fair, then it is most unlikely that we will obtain equity and equality of treatment with micro-local decision-making.

    @Oranjepan
    Being dispassionate is all well and good, but by ignoring the real impact that actions have on real people’s lives, you condemn more folk to despair and some to death. I totally disagree: the anecdotal can be used to reflect evidence. The Indy & Guardian use examples to back up reports. These are the stories that make policy real rather than abstract. But the ConDems are ignoring what is going on: the effects of your illiberal policies – and there is now evidence aplenty. At all points sympathy should be engaged to ensure that policies are rooted in humanity and not dogma or ideology.

    The lack of understanding and compassion is quite shocking to me…

  • 1) Jobseekers being forced to work for less than min wage.
    This would be wrong at the best of times, but in a situation where many of these jobseekers are eager to work but can’t find a job due to the recession it’s ludicrous.

    So there is work for people, as long as they are paid less than the minimum wage? So all those right-wingers who said the minimum wage would price some people out of the labour market were right?

    All three parties have failed on this and have crossed two areas that should be red lines for us:

    I think you should remember that most of the electorate thinks that current policy has, for a great many years, crossed a more important red line: that no one should be the recipient of an endless supply of free money in exchange for STAYING UNEMPLOYED.

    If you want to persuade people that you are compassionate, you will never do so by proposing to spend other people’s money.

  • Ok, @Oranjepan, since you seem in this thread to be telling people only to think in terms of facts and not emotion, here’s some facts for you:

    1. There have been at least 10 suicides attributable to the current reforms your party supports. The new WCA is also contributing to worsening health in many people going through the process who are strong enough not to have killed themselves.
    2. There is at least one case of a man found “fit for work”, with a severe heart condition, and then dying days later. Also another man actually had a heart attack at the assessment centre but was still found “fit for work”.
    3. Close to 40% of all appeals (for which there is a long, long waiting time) by sick/disabled people are successful, 70%+ when the claimant has a professional representing them. ATOS are not sanctioned when they mess up, but the claimaint is when they make genuine mistakes. This high appeals rate would be unacceptable in the private sector, but we keep pumping money into ATOS’ coffers instead.
    4. The legal aid reforms as they stand will remove nearly all funding from people seeking appeals. I’m sure you know where that will end up.
    5. Several groups who represent sick/disabled people (Macmillian, Scope, Mencap, etc.) have been saying, for years, that the whole system is not fit for purpose and that ATOS’ role in this is also not fit for purpose.
    6. The LibDems in power have done little to nothing to challenge this cruel farce taking place. The grassroots have, but the leadership pays them no attention. In fact, as pointed out above, Mr. Danny Alexander now supports the harsher plans, though he was against Labour’s less-harsh plans. What a man of principle!
    7. Sick and disabled people are genuinely living in fear, many for their lives. We’re wondering how we will eat, where we will live if we have all our support removed. If you do not believe me, there are many many blogs out there which state this truth in cold, hard, emotionless language which should be acceptable to you.
    8. Both David Cameron and Nick Clegg promised “sick and disabled people have nothing to fear”. Cameron, a man worth £30M, who also claimed DLA for his sadly deceased son now refers to disabled people who cannot work, some with the same condition as his son, as “workshy”.
    9. With millions of well and able-bodied looking for work, what chance do sick/disabled people have when most of us require workplace modifications and different duties from a normal person? In today’s climate, what company would spend hundreds and sometimes thousands of pounds to adapt the workplace when they can just pick an able-bodied person?
    10. If someone is found “fit for work”, had their ESA removed and then placed on JSA, they can have their JSA stopped if they state they cannot take any job, for any medical reason. So a sick man now found “fit for work” must lie about his medical condition or lose his JSA. Example: if a man with a serious mental illness is offered a customer facing job and is honest that his condition will prevent him from doing this job properly and then turns it down, his benefit is stopped. Of course the opinion of ATOS is what counts, not the opinion of the patient’s GP or consultant. This scenario, which is very real, is Kafkaesque and highly, highly illiberal.
    11. And who is legally responsible if someone is found “fit for work” and injures themselves or others on the job? ATOS, the DWP? Because this scenario is, I assure you, very real. Especially with those who have illnesses like personality disorders and serious mental illness which now do not exempt them from work.

    So, please tell me what you would like your party to do about all this, if anything? Or do you think sick and disabled people, who modern capitalism normally turns down, should be forced to live a second class life? If the government and the public don’t want to support us, pray tell, how shall we live?

    Or is sick and disabled people dying, becoming homeless or living in even greater poverty acceptable to you and just another “tough decision” to take?

  • Colin_Roy Hunter 2nd Jan '12 - 10:52pm

    @Oranjepan

    By not getting ’emotional’ you are still ignoring the real effects of policies on real lives. Ignoring the human element leads to extreme policies. The few seconds it takes to express one’s concerns is hardly going to prevent any intellectual debate. Stoic responses are not appropriate in the human world where humane responses are needed now. Medical professionals are taught to use the ‘human touch’, when dealing with ill folk, as well as their intellects. I suggest that the same is required of politicians and bureaucrats. Of the latter, for example, those that pass claimants from JSA to ESA and back again are failing in their humanity, with no-one willing to take responsibility and lead the claimant to where they need to be. This failure by those in Govt. is even worse for they are the ones who are meant to oversee the system. Where is the fairness, the equity, the equality of treatment in letting folk go hungry and lose their homes because of failures in the system? In the harrowing tale of the lady above, who has to wait months to have her appeal heard, what is she supposed to exist on? As far as I am aware billions is unclaimed each year according to Govt. stats.: if Govt. spent as much effort in ensuring it was correctly directed as it has in creating a huge myth around benefit fraud then perhaps I should not need to castigate those in power! Where is the righteous indignation, if not downright anger, at what is being done under the part-LibDem régime? What balance needs to be struck to save folk from killing themselves? Action is needed, and not after some intellectual debate. It is needed now. One’s emotions ought to be disturbed at the tales in the media and elsewhere and urge one on to look at the facts and do something about it. NOW.

  • Old Codger Chris 3rd Jan '12 - 2:34pm

    @Andrew Tennant
    National Insurance isn’t insurance at all. The Employers Contribution is a tax on employment and should be abolished a.s.a.p. Employees and self-employed contributions should then be gradually merged into Income Tax.

    On the wider points. There really are some scroungers out there and sorting the genuine from the fraudulent is always going to be a messy business. I’m told that one problem is that the Thatcher government favoured Incapacity Benefit as a means of massaging the unemployment figures. I’m also told that some people haven’t been re-assessed for years, not every original assessment was correct and not everyone who was unfit to work then is still unfit now.

    That said, there really must be a fairer way of treating people who have fallen on hard times.

    And as regards employers taking advantage, hours and hours and hours of unpaid overtime is now standard practice for many – thus adding to the dole queues and the burden for taxpaying employees (but not for certain major employers who have ways of avoiding tax).

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