Sunday, 15 December 2013

The future of "welfare", part one

In my last post we looked at the history of the concept of welfare, or social security.  An understanding of that history is essential to any discussion of the future.

First, let's get to grips with Iain Duncan Smith's concept.  There are those who believe that he wants to end the welfare system altogether.  I don't think that was his intention when he came into the job.  He had a messianic sense of his personal mission to transform it, certainly.  First, with the Work Programme, he was going to put the majority of the unemployed back to work.  But the first year's results were so terrible that his own party were furious with him.  The second year was little better, and it was obvious to everybody that people were only finding work because the economy was picking up.  The long-term unemployed, young people and those kicked off incapacity benefits onto ESA, remained stubbornly out of work.  IDS turned his wrath on them.  They were the enemy, scuppering his vision, and he has become more and more determined to punish them.  Then, Universal Credit was going to remould the system, "making work pay"; and it would bear his name as its creator for ever, just as the NHS was the creation of Aneurin Bevan.  But that hasn't worked either.  So IDS is an angry and disappointed man who has no place in the future.

I have said before that the mindset of the right today reminds me very much of the climate of opinion which produced the Poor Law Amendment Act of 1834.  There was then no real concept of a "public sector".  Governments and councils (corporations) could hire people to carry out the work.  And there was no thought of insurance against misfortune for the masses, at least not administered officially.  The poor did create "friendly societies" into which they paid a few pennies a week, as well as burial clubs which ensured that there was money for a decent funeral.  But National Insurance had to wait until 1911.  It has now become almost irrelevant.  Worst of all, we have gone back to the notion of the deserving and the undeserving poor, with the former being thought of as very few in number.  (In the mind of the right, of course, there are contradictions.  There's plenty of work out there if people were not too idle to do it; but some unemployment is necessary for capitalism to work.  People should equip themselves with skills and qualifications; but employers shouldn't have the expense of training their workforce.)
A clear demonstration of the "new" thinking comes in an article in the Express today.  It's not so much in the plans put forward by a member of the Conservatives' policy board, Nadhim Zahawi MP, as in the phrases he uses.  Take, "Mr Zahawi said that the welfare state was established as a 'last resort, not a lifestyle choice'" and it was "trapping people into a life of dependency on the state".  Later he says that he wants to "help the next generation think more carefully about their relationship with the welfare state".  His words show no understanding of how "the welfare state" grew up, or why.  He sees it as a project set up by the tax-paying majority to provide benevolently for the non-working minority, rather than as what it was; a system of mutual aid and insurance.  Not a "safety net" (as he also describes it) but a guarantee of security for all.
The right has, in effect, scrapped all the thinking which produced the progress of the twentieth century, the progress towards social security paid for out of general taxation.  Indeed, it has gone further than its 19th century predecessors by putting all services in the hands of profit-making companies.  In this vision of the future there would only be private insurance against misfortune, not public provision.  The state pension will have less and less value at the same time as the pension age rises, so private pensions will replace the state pension.  What about those who never earn enough to pay private insurance?  Tough.  Perhaps they'll come round to the idea that for those who really can't do anything for themselves and would otherwise be littering the streets, there should be special hostels ....

It doesn't have to be like this, as I shall explore in another post.


  1. Mr Zawahi says (capping) limiting child benefit to 2 children would save billions but does not back this up with figures. What percentage of families have 3 or more children? His "idea" would only apply to families who had a third child after 2015 too.

  2. For a long time Tories, esp those on the right of the party have had an aim similar to that of their Republican kin in the United States. Namely to reduce the state and reduce government spending to below 40%. Of course this plan blew a gasket when George W. Bush pumped trillions into bailing out the US banking system as Gordon Brown did here. Of course, Brown is labelled as careless with the nation's finances. I wonder if Cameron and Osborne would be so bold as to label Bush the same? Indeed, they would have done the same in Brown's position.

    Now far be it from me to suggest the Tories are happy at the banking crisis of 2008 and the subsequent recession. However, one does get the feeling that perhaps, just perhaps they are happy at being able to put their core beliefs and ideologies into practice. AND with a lot of public support using certain sections of the media namely the right wing press sporting derogatory buzzwords (sponger, workshy, feckless, lifestyle choice, etc.), they can get the public on side.

    Even when the odious Smith wastes £billions on the failing WP and tens of £millions more on delays to Universal Credit and Universal Jobmatch, he amazingly still has people cheering him on.

    As for Nadhim Zahawi , how he has the brass neck to preach on welfare when he claimed £5822 expenses for electricity to heat his horse riding school stables and a yard manager's mobile home!!! He apologised andpromised to pay this back, only after the Sunday Mirror broke the story of course!!!

  3. Have we even had year 2 (which is this year) results for the Work Programme?

    1. @Ghost Whistler. Yes, the WP stats for Year Two were published eventually.

      Meanwhile, I’m waiting to see what A4E’s next set of statutorily filed accounts will look like when those appear on the Companies House website:

      After all, we know that Deloitte are trying to sell their stake in the Ingeus Deloitte joint venture and that the McVey woman was talking rubbish when she screeched that Deloitte’s hoped-for sale is because the WP scheme has proven to be so profitable for the joint venture. If the WP scheme really were successful, Deloitte wouldn’t have had to brandish the begging bowl in the souk.

      I’ve completed my 2 years on the WP scheme but I was conscripted to A4E. Therefore I’m wondering how many £££££ of losses A4E are willing to bear for the sake of one, singularly useless, W2W Scheme foisted onto them by the pollies?

  4. I've just left the work program, they didn't help me find a job in the 2 years I was there. Although I suppose having free internet access and free printing / mailing was better than nothing I suppose.

    Here is a nice horror story for you though. I recently found work, outside of the A4E program. I've been doing the pre-employment checks and the usual rigmarole, however because this job comes across as a 0 hours contract to the Jobcentre (which is technically is, but I'm guaranteed work every week) I'm still expected to do 30 hours documented jobsearch per week via the jobcentre.

    And because I haven't done that, and I have to work a month in hand at this job. I'm now on sanction until the end of Feb. Great news for those actually trying to get back into work isn't it?

    You can't make rubbish like that up either.

  5. Best post yet, Historian. Sums up the Tory state of mind and policy perfectly. As you say, the Tories ultimate objective is to replace the welfare state with private insurance funds. This will have the effect of bunkrupting the middle-classes who depend on it for affordable medical treatment, pensions, education (which was part of the Beveridge Report) and wage subsidies.


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