Off topic for this blog, of course, but of great interest to many of our readers; Labour's announcement today of its policy on unemployment benefits.
There's a great deal of misinformation out there, some of it deliberate from the right-wing media. For a straightforward account see Patrick Wintour's article in the Guardian. I'll simply say what I think, and leave it to readers to agree or disagree.
Labour wants to return to the contributory principle, and I support that. If you've been working you've accumulated entitlement to help when you're out of work. That's how National Insurance was conceived, and it's what most people think is fair. If for whatever reason you run out of contributions, or have never made any, you are still entitled to help, but on a means-tested basis. That was the system for years. It doesn't work if you increase the non-contributory benefit (known for years as Income Support level) but don't increase JSA at the same rate. The differential erodes until there is no distinction. To avoid that is expensive.
The policy on youth unemployment has caught the headlines. Those who leave school without adequate skills will have to go onto training to acquire those skills, and will get a training allowance for doing so. If they don't, they will get benefits but means-tested according to their parents' income. There are obvious difficulties with that, and Labour has said that those who don't live with their parents will be means-tested differently. They have not said that the training will be effectively workfare. If that was the case, or if outsourcing companies were involved in any way, I would be dead against it. What they seem to be talking about is courses in FE colleges and the like. I was rather worried by Labour's Stephen Timms today saying that the threshold was "level 3", i.e. A level. That's too high. But I don't have a problem with the principle. Any young person who has had a job will automatically be entitled to JSA.
Those who are outraged by the ideas underlying this policy seem to be claiming that everyone should be entitled to benefits regardless of whether they have made any contribution, including youngsters who come out of school unprepared or unwilling to get a job. Personally I disagree. I believe in a society based on the old Marxist maxim: to each according to his need, from each according to his ability.
So wade into the argument if you want to. But base your comments on facts.
Showing posts with label National Insurance. Show all posts
Showing posts with label National Insurance. Show all posts
Thursday, 19 June 2014
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.
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.
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