Sunday, 5 February 2012

The Welfare Reform Bill

The most acrimonious debates on Twitter are between myself, and a few like-minded libertarians, and a purple-twibbon army of disabled people, about the Welfare reform bill.

When asked what was his greatest political fear, Tony Blair once answered "the disabled". Sure enough when his administration attempted a similar set of reforms to those proposed at the moment by the Coalition, a passive-aggressive disabled mob chained themselves to railings all over the place and the reforms were defeated. Labour ran scared from an issue at which the leadership was at variance with the activist base, for whom "benefits cuts" are an anathema. The problem is that the Welfare system has become too cumbersome, too bureaucratic and as a result too generous to many, replete with perverse incentives preventing a class of permanent benefits recipients ever getting work, with marginal withdrawal rates in some cases over 100%.

At present the system doesn't do any of the things a decent benefits system should do. Any redistribution is effectively between the poor, as the low-waged are taxed to pay the benefits of their non-working neighbours. Their income is then topped up from the benefits system in a bizarre and bureaucratic abortion of tax-credits. This bureaucratic leviathan doesn't protect incentives to work, the very complexity of the system creating a fear, preventing people taking the low-paid, insecure jobs which are a necessary first step on the employment ladder. The poorest are trapped in a bureaucratic nightmare, and those with jobs are forced to pay through the nose for it.

Surely no-one denies that the system needs reform?

I have seen two mutually contradictory positions. First that these are the wrong reforms because they won't save the Government money. All reforms save less than they are supposed to. The other is that these are treasury-led reforms designed to take money from the neediest in society. Of course some people will lose out, most widely publicised being those Households of housing benefits recipients mainly in London who are in receipt of a total amount in excess of a benefits cap of £26,000. That's the point.

These people should do what cash-constrained working people have to do and move to a grottier part of town. No-one has a right to a £1m pad in St. Johns wood. Exempt from this benefits cap are, of course, the disabled. So far, so reasonable.

Next up seems to be the demise of Disability Living Allowance, a payment designed to help the disabled with increased living expenses. A wheelchair user's car is likely to be more expensive, everything else being equal. They may need a home expensively modified and so forth. The DWP estimated that this benefit is not subject to fraud, but this is questionable. Overpayment was equivalent to over 9% of expenditure, mainly because "customers'" conditions change over time. DLA's replacement with Personal Independence Payments or PIPs mainly changes the frequency of assessments, so "customers'" who get better, lose benefits more promptly. Yes, people will lose benefits they've come to rely on, but working people lose jobs from time to time. Again. I struggle to see how the changes are throwing disabled people under a bus.

The problem is that being signed off sick has become for some an income in perpetuity, absolving a person of ever seeking any work. It shouldn't always be. Some people who have become used to generous welfare payments may well have to do without. Again, that's the point.

Finally the Universal Credit aims to replace Housing benefit, tax credits and various income related benefits. A simpler system is necessary to remove the obscene marginal withdrawal/tax rates faced by many people moving from benefits and into work. Many people will face lower benefits receipts, but as they will also face lower tax rates thanks to a higher personal allowance, this increases the incentive to work, which is the ONLY way out of "poverty". (The scare "quotes" are to indicate relative measures of poverty, rather than absolute, which simply doesn't exist in the UK, except by choice). Some form of universal credit represented one of the two main reasons for supporting the Tories (along with the education reforms) at the last election.

Of course a number of people are going to face cuts to income, and are going to have to make choices. But these choices are not materially different from those faced by working people on low wages, who faced (and still face) over a decade of tax-rises. They are not going to see people "on the street, starving" as many of the more hyperbolic purple twibbon army regularly claim. Given the broad thrust of the reforms strike me as being in the right direction, unless anyone can point to people suffering more than a few more assessments or losing a bit of money and facing hard choices, I will continue to confront the hyperbole.

Disagreement isn't "bullying". Just because someone's in a wheelchair, doesn't mean they occupy the moral high ground.



13 comments:

Anonymous said...

Motability accounts for 10% of all new UK car sales.
That's a lot of "disabled drivers".
Can this figure be real, are one in ten new car purchasers really disabled?

cheeky chappy said...

Dear British Dude.

May I please copy and past this post and use it on my blog? (obviously, giving you full recognition for it.) I think it sums up perfectly why we need the benefits cap, and as I couldn't write anything better, it seems silly not to use it and give you some more publicity.

I look forward to your response kind sir.

Best wishes,

CC

Bill Kruse said...

You might want to do some research based around mode 4 and immigration. The government will be enabling transnational companies to bring in cheap foreign labour to replace the existing paid workers. They won't pay income tax, or National Insurance, and the companies that hire them (they'll be outsourced) won't pay employers' NI either. The workers they replace will of course have to go on benefits at enormous cost to the country. Look at the reforms in that context. Still think they make sense?

Jackart said...

Anon. I suspect that's mainly due to an ageing population. It's cheaper to subsidise a car that provide residential help.

Cheeky Chappie. Of course you may.

Bill. The problem isn't "cheap foreign Labour", it's the fact that our own chavs think themselves above labouring in the fields or cleaning bogs and would rather rot on benefits.

JimmyGiro said...

If the bus takes a wrong turn, should we blame the passengers?

Benefit recipients have no executive power regarding the running of the benefits bureaucracy. Neither do they select who is to be employed or unemployed; that is the 'job' of the HR departments, or their equivalents.

If you want to stop the profligacy of the 'benefits culture', you must broach the bureaucracy itself; for it is the Leviathan that preserves itself, via its client base as hostage.

And here we see the cowardice of the Tory party; they want the populism of appearing to address the problem by 'getting tough on benefits recipients', who have no union base, whilst ignoring the more pertinent Leviathan in the room, the Unite Union based bureaucracy of the Civil Service.

Weekend Yachtsman said...

"A wheelchair user's car is likely to be more expensive, everything else being equal."

Sure, definitely, no problem with them being helped.

But when the disabled person gets a brand new car every three years, no questions asked, all problems dealt with, while those who are paying for it (the middling employed, more or less) have to buy five-year-old cars and run them till they disintegrate, then there's something wrong with the system.

Anonymous said...

From personal experience, I would question the DWp assumption that DLA is not "fiddled". I personally have two relatives who are fiddling it!. One, married with working husband, formerly worked as a civil servant in DWP. Went sick about 10 years before retirement age and obtained £500/month DLA for the next 10 years. For all I know she is still getting DLA on top of her state pension. The other, has not worked in the real economy for the past 25 years. He operates as a painter and decorator, using his motobility car to travel to his jobs on the side. No doubt when he "retires" the motobility car will continue. The trick is to get in before you are 65. You cannot begin to claim after you are 65, but if you get on the benefit before 65, then it continues for life.

Anonymous said...

Here's some ideas for welfare/raising money
http://offgrid1001.blogspot.com/

Skimmer said...

"Motability accounts for 10% of all new UK car sales.
That's a lot of "disabled drivers".
Can this figure be real, are one in ten new car purchasers really disabled?"

Motability cars are automatically replaced every three years, whereas the rest of us often drive our cars into the ground.

My (2nd hand) car was previously a motability car. Despite working as a finanacial professional all my life, I have never owned a new car.

blindcyclists said...

"A wheelchair user's car is likely to be more expensive, everything else being equal."

That rather depends on individual circumstance. My dear old dad (gawd rest im, etc) qualified for a motability vehicle. He was a "wheelchair user" in that he couldn't walk very far so we'd push him most places, however the car was never modified. He ran a bog standard motability Ford for many years. This is the use case for many - if not most - motability vehicles,

An entirely honest assessment of this particular situation would have seen the high rate mobility allowance that enables access to a motability vehicle either withdrawn or never offered as there was no additional cost in his particular case, and any additional access requirements were handled by the blue badge.

One of the issues that the purple twibbon crowd have is that they simply do not wish to be assessed in this manner, e.g. as individuals, with conditions and circumstances varying along a continuum, and possibly subject to change over time. And that is because they know that many of them would get less, or would have benefits withdrawn from them if they improve.

I personally blame this partly on mission and definition creep, but this is not the place to get into a discussion of the semantics of the word "disability", especially since the DDA and later the Equalities Act make any dictionary definitions largely irrelevant.

@Weekendyachtsman
"But when the disabled person gets a brand new car every three years, no questions asked, all problems dealt with"

As I understand it, this is largely because the motability scheme is a lease scheme, so it makes no sense for the leasor to lease out a vehicle that is old or out of warranty since they bear the cost of, as you say, dealing with any and all problems. Ford, etc then reclaim the vehicles before they have depreciated to far to be commercially useful. Comparing a lease scheme with buying your own is probably a bit apples and oranges. But I could be wrong.

And certainly there is at least one question asked, that being "where is the money ?". Motability users are those who qualify for the higher component of the DLA mobility allowance, and they are expected to use part or all of it to fund the motability lease. It isn't 'free at the point of use', so to speak.

Anonymous said...

There is also the factor of the assessments and the company ATOS who run them on behalf of the DWP. This company is an American Company which was and still is banned from operating in the USA. They use Health professionals, not Doctors, to assess claimants. There currently is an eight month backlog of appeals from people having been passed fit for work (In 3 cases the appellants died whilst awaiting appeal).

Anonymous said...

Ultimately, would you or anyone else like to be assessed by a non doctor who has no specialised knowledge of your complaint? Plus I would ask why the DWP is transfering people onto this new benefit, when it clearly cannot be put on the Statute Books until April ?

Jackart said...

Anon. ATOS is a French company. I know "American company" is a boo! word for lefties but the location of the brass plaque is irrelevant.

The fact you're being assessed by a non-doctor is likewise irrelevant. You have an appeals process. Given the numbers involved, 3 people dying while waiting sounds about normal. Post hoc ergo propter hoc.

Basically, opponents of the bill, don't want to be assessed as individuals, because a great number of them might be passed for work they could do and get less. Who wants less? No-one.

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