Welfare - The British Position
- 7 Nov 07, 04:45 PM
The Conservatives think the public mood on welfare has changed. The big shift they think has happened as a result of last week’s revelations about the numbers of foreign workers employed in the UK over the past decade. The current official estimate is 1.5 million. Parliamentary answer 18 July 2007
Over the same period it appears that the number of welfare claimants has fallen hardly at all. According to the former welfare reform minister Frank Field:
"The economy has been growing each quarter since late 1992 but the numbers of working age claimants moving into work has been modest. I calculate the numbers have fallen from only 5.7 to 5.4 million. The government asserts the total is 4.7 million. The independent Statistics Commission has been asked to arbitrate.
"Yet, whatever the outcome, the spotlight will be on the failure of the £84 billion welfare to work programme.”
Frank Field MP - Daily Telegraph 3 November 2007
The big question that the Conservatives now think the public is asking is a simple one:
“How come all these foreign workers can find jobs in the British economy when so many British people seem stuck on welfare?”
Before the clock ran out on him Tony Blair was desperate to push through changes, perhaps sensing that he hadn’t done enough on welfare reform in the past. He appointed David Freud to propose radical reform. Mr Blair predicted this review would throw up some pretty difficult political challenges for the government.
He told the House of Commons Liaison committee on 6 February 2007:
“When we publish David Freud's Welfare Reform Programme.......there will be some quite difficult proposals in relation to how people come off benefit and into work - lone parents, people on incapacity benefit and so on.”
So it proved. The Freud report recommended a radical shake up of the welfare system. Contracting out welfare to work programmes to all sorts of organisations, including private sector providers, who will be paid by results.
Gordon Brown’s government has so far not fully embraced the Freud Report - Peter Hain MP, the Work and Pensions Secretary told an audience in September:
“I have yet to be convinced that David’s specific proposal based around 11 regional contacts, thereby replacing a one-size-fits all state monopoly approach, with a one-size-fits all private monopoly approach is the answer.” Peter Hain MP 12 September 2007.
This kind of welfare reform is already commonplace in the United States. Wisconsin led the way in the mid-90s.
Under the then Republican Governor Tommy Thompson the state cut out cash welfare benefits almost entirely, instead the money was spent on helping people find work. In his conference speech this year David Cameron praised what had been achieved in Wisconsin:
“....where they've cut benefit roles (sic) by 80%, and the changes we will make are these: we will say to people that if you are offered a job and it's a fair job and one that you can do and you refuse it you shouldn't get any welfare.”
Having seen the Wisconsin system in action I have a few thoughts on the chances of introducing it in the UK:
1. In America it only worked because both parties signed up to it. Although the idea came from the Republican Party, it took Bill Clinton, a Democrat trying to connect with working class Republicans to sell it nationwide.
It is the first law of public service reform that the People who think they will lose out under any change usually have more motivation to make a lot of noise.
This includes not just the recipients of welfare under the current system but also the public sector employees (and their unions) who administer the current system. If all political parties are signed up to the changes then there is less chance that one or other party will backtrack in the face of hostile headlines.
2. In America the politicians managed to change the way the public thought about welfare. It was no longer seen as cruel or mean to cut someone’s welfare in order to force them to get a job. In fact thinking changed 180 degrees. It was actually seen as cruel to keep someone on welfare a day longer than necessary. The only way out of poverty is through work, not bigger, more generous handouts. Although many British voters have started to ask questions about welfare it’s by no means clear that the link in the public’s mind between cutting benefits and “meanness” has been broken. If people suspect that the motivation for welfare reform is purely to save money it becomes a far harder political sell. It only worked in the US because voters became convinced it was a better system for everyone including the welfare recipients themselves.
3. The American system relies on a huge and well-resourced charitable sector. In Wisconsin I went to the amazing Open Door Cafe at the Cathedral of St John the Evangelist in Milwaukee. Here volunteers provide over 200 hot meals a day, six days a week for homeless people. It appeared to me that many of the people who use the service are not really in a position to get a job however much the welfare system “incentivises” them.
They have in the jargon “multiple barriers to work” for example mental health problems, drug or alcohol dependency, and are often illiterate. Someone needs to help these people if the state withdraws from providing a universal right to welfare benefits. All British political parties say they want to beef up the voluntary sector in the UK but we are nowhere near American levels of charitable action.
What happens now?
The Conservatives are set to publish their proposals on welfare reform early in the new year.
The government’s green paper In Work Better off: Next Steps to Full Employment was published in July. The consultation period on it has just finished. It’s not yet clear when and even if the government will introduce a new welfare reform bill.
Watch David Grossman’s film about Welfare in Wisconsin here