Unimpressed: Cameron's Ideas on Welfare

Author: S.H Barnett

David Cameron’s latest ideas on the future shape of welfare has polarised opinion. On one side are those who say Cameron, and the party he leads, are out of touch: it is a return to the days of ‘the nasty party’. On the other are those who resent their taxes going on the workless, too many of whom are feckless and job-shy. And there are quite a lot of people who think this: otherwise Cameron, politician that he is, would not be appealing to them.

This simplistic debate does nothing to move things forward. So let’s frame it differently. First, in this discussion let’s stop using the phrase ‘welfare benefits’. ‘Benefits’ in most people’s mind equates with things like company cars, sports centre membership, health insurance and company Christmas parties where there is an open bar. So let’s talk about what it is: ‘Money when you are out of work’.

It might be possible to argue that there are three groups of people who get ‘Money when you are out of work’.

Group one really are between jobs. I came back from working abroad. I had no job in the UK. I signed on, received money since I was out of work, found an agency job three weeks later, and signed off.

Group two are in a border line position. They have to balance the benefits of income from work with the costs of working. Childcare is the classic example, transport is another. By the time you’ve paid for these the net surplus from having an income may be negligible. (I know I’ve been there.)

The numbers of people who are in groups one and two vary. At the moment the numbers are going up. When the economy is buoyant the gap between jobs is short and since there are more jobs it is easier to find one closer to home, to extend our example, travel and childcare bills are likely to be smaller. When the economy is sinking the gaps between jobs get longer and jobs physically further away.

Part of the government’s policy is to reduce the ‘marginal gain’ for people receiving ‘money when you are out of work’. This is called ‘making work pay’ i.e. the argument is that by giving them less money people are more likely to accept a job they’d have rejected before.

Er….no. And this is where they are out of touch. In big business people sit around for hours determining whether something would make 1.8% margin or 1.5% margin and then moving heaven and earth to get the higher rate. Admittedly, this makes sense when you’ve got £100 million in the bank. But not when you are looking at the minimum wage.

So in national policy terms a marginal change in ‘money when you are out of work’ gives you … er, a marginal change in the number of people receiving this money. But, of course, you do make an awful lot of people just a little bit poorer.

There are now formerly well-paid professionals who’ve now been out of work for three years. There’s also massive displacement, my home town is full of graduates working in pubs and customer service. They’ve replaced young people who left school at 16 and forced them onto claiming ‘money when you are out of work’. It seems this displacement is also affecting people with a disability: jobs go to the more able and even volunteering opportunities go to the ex-university student. Even infrequent ‘cash-in-hand’ casual labour is jealously hoarded and given to a cousin rather than the local neighbour and young man with a learning disability.

So groups one and two are expanding. But there is also group three.

Group three is the classic multi-generational workless family. Unless you are exceptional not working really is a problem. Your health deteriorates. You loose social skills. You get on to weird time schedules (sleeping at day, awake at night). Punctuality becomes a distant memory. So you are not simply unemployed you become unemployable.

For many people this is a toxic legacy. Their interaction with the education system has not left them with the basic skills for the modern jobs market. Limited social interaction means social skills are limited. Limited experience means that thinking it might be possible to do all this differently is as practical as saying ‘Let’s go to Venus’. Confidence is at rock bottom and this is masked by the angry comments about ‘the state should support me’ which the media love to report.

There’s a subset of this group who also have major additional problems: domestic violence, drug and alcohol abuse and mental health issues. These problems can be beaten on an individual basis but all three together in the context of long term unemployment are a deadly cocktail. Estimates of the size of this sub-group vary from 120,000 to 500,000 people. Usually, this cocktail then creates an ongoing hangover of youth crime and anti-social behaviour (the police attending yet another ‘domestic’ at No. 5).

Group three is what are labelled among those receiving ‘Money when you are out of work’ the feckless and jobshy. Depending where you live they are very visible. And just as there is ripple out to the neighbours in terms of anti-social behaviour there is toxic ripple out as this group’s behaviour tarnishes groups one and two.

So what is the effect of reducing ‘Money when you are out of work’ for group three or introducing other measures e.g. no Housing Benefit for under 25’s or a cap at three children? In terms of getting them back into work no effect whatsoever. At present they are unemployable, tragically, even when the economy was booming they were unemployable. It would make them poorer and their children even more vulnerable.

So what is the solution? Groups one and two are dependent on the economy. If and when the economy picks up they will return to paid employment. Group three needs a very different approach. It needs nothing less than a shift of culture and environment. Different communities will need different approaches. But in essence it will involve stating and demonstrating that an alternative is both possible and necessary. It took several generations to create this mess it’ll take several generations to make a wholesale difference.

I suspect that out there is at least one heroic school working in partnership with a heroic voluntary sector or community organisation charting the route back for these families and challenging them and supporting them every step of the way. You are real pioneers and your experience needs to be shared and learned from. If you read this, get in touch, heros are always worth meeting and your stories always worth telling.

The publisher is The Centre for Welfare Reform.

Unimpressed: Cameron's Ideas on Welfare © S.H Barnett 2012.

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