How do we allocate welfare benefits?

The Beveridge reported advocated collective government assistance to individuals from “cradle to grave” funded by social insurance.

State benefits would be paid to the sick, the old and the unemployed. These would be paid for from taxes and national insurance payments from the working population.

Post war reconstruction

The founding principles of the welfare state were that the state would look after each individual “from the cradle to the grave”.

Beveridge’s five giant evils

Idleness (unemployment)

Want (poverty)

Disease (lack of health care)

Squalor (poor housing)

Ignorance (lack of education)

21st century challenges

Beveridge’s founding principles were designed in the 1940s. By the 1990s, British society had changed in many ways.

How do we pay for

Long term care for the elderly?

The long term unemployed?

Lone parents?

Beveridge’s welfare state did not foresee these challenges!

Should the rich pay more?

Lakshmi Mittal, the UK’s richest “resident”. He is a non domicile.

Ramon Abramowich, owner of ChelseaNon-doms to pay tax shock!

The UK is home to some fabulously rich people who pay little or no tax.

According to George Monbiot, tax avoidance in the United Kingdom, deprives the Exchequer of between £25bn and £85bn a year. That’s more than the UK spends on the entire NHS.

Political challenge to the welfare stateThe Individualist Philosophy

The individualist philosophy is not new. It is, in principle, no different from the “laissez faire” approach of the 19th century.

Individualists believe that the state should have as little to do with the workings of society. It should tax as little as possible and leave individuals to be responsible for their own wealth and health.

Yvette Cooper was responsible for the delivery of the Welfare Reform Acts of 2007 and 2009 which sought to reduce the numbers of people on long term benefit.

New Labour’s 3rd way was a mix of state help and individual responsibility. The state would provide a “hand up, not a hand out”.

David Cameron’s “Big Society”

“Circumstances; where you’re born, your neighbourhood, your school and the choices your parents make have a huge impact. But, social problems are often the consequence of the choices that people make”

David Cameron, Glasgow, July 2008

David Cameron on poverty

Following on from his theme of “Broken Britain”, Prime Minister David Cameron has developed the idea of the “Big Society”. In some ways it is the Conservatives’ own third way; between the individualism of Margaret Thatcher and government help for those in need.

Cameron seeks to “heal” the so-called broken society by encouraging greater individual responsibility ( a traditional Conservative approach) and use of the voluntary sector to help those prepared to face up to their problems .

Welfare CutsIt is too early to say for definite how the balance between universal and means-tested benefits will work out under the Coalition Government.

One thing is certain. Benefits will be cut. The Coalition has promised that these cuts will be fair and will affect both rich and poor.

An early priority is to pay fewer people Incapacity Benefit (IB), with the aim of abolishing the benefit completely by 2014. IB is means-tested. But, the Coalition, like it’s Labour predecessor, believes many people are on IB who should not be.

2.4 million people, 15% of Glasgow’s working population, claim IB. The benefit costs the country £12.5 billion per year.

Chancellor George Osborne’s Emergency Budget froze child benefit for three years, cut tax credits and unveiled plans to cap housing benefit claims.

Universal benefits

Child Benefit (CB) is a tax-free monthly payment to anyone bringing up a child or young person.

It is not affected by income or savings, so most people who are bringing up a child or young person qualify for it.

Even Jordan and Peter!

In July 2010, CB amounted to £20.30 a week for the eldest child and £13.40 a week for each additional child.

Means-Tested Benefits

Means tested benefits include;

•Working Tax Credit•Child Tax Credit•Pensions Credit•Housing Benefit•Council Tax Benefit•Income Support

Too complicated?

Tax Credit forms can be very complicated meaning some people do not claim.

Others have been getting too much!

In February 2008 the House of Commons Accounts Committee reported that £1 billion of tax payers money had been wasted in errors or over payments.

The report says that some £65bn has been paid in tax credits since 2003. Of that, £6bn was overpaid in the first three years. By the end of last year HMRC had collected £2bn of the overpayment but written off £700m.

Of the £3.3bn still to be collected, the committee says £1.6bn is unlikely to be recovered.

Incapacity Benefit

Unemployment in the UK, July 2009

2.47 million people were officially unemployed mark in July 2010; 7.8% of the labour force.

This does not include the 2.5 million who receive Incapacity Benefit (IB), those who have chosen to stay in full time education or teenagers who are not entitled to Jobseekers Allowance (JSA).

Glasgow Works

“Last week I took my nieces for a day out and gave them some spending money for their holidays, and that felt good. I used to rely on family and friends subsidising me, now I rely on myself.” Stefan Gutowski

Glasgow Works attempts to help the long term unemployed back to work - and stay in work.

It works alongside health and welfare professionals to tackle the mental health issues many of the long term unemployed have.

SNP’s Collectivist policies

Abolition of prescription charges

Free school meals for S1-S3 could be introduced, there are the funds.

The Graduate tax has been abolished.

But not everyone believes this represents good value

“What’s the value in my kids getting a free school meal? None.

Compare that with the value for somebody in the more deprived parts of Scotland getting a free school breakfast, a free lunch and, if necessary, free food after school.

The blanket approach to health is just nonsense, it’s political naivety”

Andy Kerr, Scottish Labour

How to pay for the welfare state

Means test more benefits?Cut more benefits?Have more universal benefits?How do we fund benefits?Get more lone parents working?Get more NEETs into education/work?Raise retirement age?Raise taxes?