Monday, May 14, 2012

IDS & his welfare reform zeal - so much for the road to Easterhouse


Daily Mail

April 13, 1994


Every day, every working Briton pays £13 in tax to those on state benefit And it's going to get worse...

REVOLUTIONARY new policy plans aimed at reducing the cost of the welfare state will be passed to 10 Downing Street and to Peter Lilley, Social Security Secretary, at the end of this week.
Here the author of those plans gives Daily Mail readers an exclusive preview of the main points.
Byline: Iain Duncan-Smith
ODD, isn't it, that as Britain's standard of living has steadily improved, the number of people claiming State benefits has increased, rather than declined?
It makes no sense, yet it is undeniably true. In 1949 social security spending represented 4.7 per cent of Gross Domestic Product; today it has reached 12.5 per cent. Every day, £13 of every worker's tax is spent on social security and over the coming decade this spending will grow faster than the economy. Unless we reform the system now, we are heading towards crisis. The problem lies in the very way the system works. Far from merely providing people in need with a national minimum level of subsistence, it encourages dependency. This would have horrified William Beveridge, who engineered our Welfare State after the war. In 1942, in his Beveridge Report, he warned: 'The danger of providing benefits which are both adequate in amount and indefinite in duration is that men, as creatures who adapt to circumstances, will settle down to them.'


Social security spending since 1979, despite all the talk of cuts under the Conservatives, has increased in real terms by 75 per cent. The number of people receiving invalidity benefit, for example, has shot up from 600,000 to 1.5 million - this at a time of generally improved levels of health. The number on single-parent benefit has trebled, too.
The scope of the benefits system, and its complicated bureaucracy, has grown to equally mammoth proportions. Vast sums of money are lavished on running something which is, inevitably, prone to abuse on a massive scale. What we need are fundamental changes - and soon.
Most of us do not question the principle of helping those in genuine need and the more prosperous a country becomes, the better it should be able to do just that. However, with increased national prosperity, fewer people should need to rely on State help.
At present we make payments to the old, the sick and those with children, regardless of their financial situation. This nonsense means that a major part of the expenditure goes to help people who don't need the money in the first place. Take child benefit and widow's benefit; only 30 per cent and 40 per cent respectively goes to those with the lowest incomes.
An even greater problem is the way in which the system discourages people from getting a job. In many cases someone can have a higher income through claiming benefits than by earning a wage. Hence people become trapped, remaining dependent on the State rather than on their working abilities. No matter how much someone wants to work, a job is not a particularly attractive option if it means financial loss.
What's more, the system actively encourages people to change or disguise their lifestyles in order to maximise their benefit entitlement. Who can doubt, for example, that some of the mothers now claiming single-parent benefit are actually living with a partner more or less full-time?
Throughout the Eighties, as the Government changed the eligibility criteria, it found that more, not fewer, people made claims. Yet at the same time there is a growing underclass of genuinely needy people who receive nothing, mainly because they don't understand what they are entitled to. The mixture of different benefits is a complex and tangled web to them.
It should make us all angry that while many deserving cases are failed by the system, the greedy and workshy profit from it. Benefit fraud is now estimated at £5 billion per year.
So what can be done to bring about a real welfare society of the sort Beveridge worked so hard to create, instead of the inferior version we have now?
First of all, the range of benefits we now have - universal, flat-rate, contribution-based and means-tested - should all be integrated. There should be just one, income-assessed benefit, with all the relevant factors taken into account to cater for the needs of the individual and his family.
This should be administered by one body, instead of the multitude of offices, each handling one type of benefit, we have now. It would be simpler to understand, cheaper to administer, and would help in the battle against fraud (especially if claimants had to use identity cards).
The new benefit must also aim to make going back to work a more attractive option for the unemployed. The benefit should not be set too high and would need to be 'tapered' so that if people took jobs paying less than current benefits, they would not lose all their benefits immediately. The State would make up the difference between work income and social security income. The reforms ought to go wider still. We should learn from the success of the 15 million people who have opted out of the State Earnings Related Pension Scheme (SERPS) and abolish it altogether. The public has a greater choice and better service with private pension schemes, the State's record is abysmal.
Most people believe that they have been contributing to their future needs through their National Insurance payments. Politicians of all persuasions have been happily misleading the public about this for too long. The truth is that National Insurance is just another form of taxation; it goes towards paying for a number of different benefits right now. It is not, as so many think, like saving for a rainy day with a building society. On the contrary, as soon as it is handed over, the money is paid out - to someone else.
Beveridge's idea was that the insurance scheme would meet all basic needs but, once again, his principle has been twisted over the decades into something else.
Who can argue that State pension reforms are not long overdue? MPs of all parties have, either quietly or vociferously, recognised this as a fact. In so many areas of our lives, choice and value for money is provided by the private sector. I believe it is time to open up this bastion of the inefficient nanny State to the private sector too and allow people to choose how their money is spent.
The Government should also, in due course, merge the tax and benefit systems. This would cut down on bureaucratic costs and give a much more accurate record of income. We need to streamline and simplify our great, unwieldy State machinery, and focus our national wealth where it is most needed. Only then will we begin to be true to the ideals of William Beveridge and his brainchild, the British Welfare State.

4 comments:

Anonymous said...

Iain Duncan Smith

Once a cunt, always a cunt

Carruthers said...

I wonder if he still thinks that, "The public has a greater choice and better service with private pension schemes."

Probably - Unum will tell him so, and they should know.

Shouldn't they?

Anonymous said...

very right wing - the sort of stuff you'd associate with the far right Tax Avoiders Alliance ...whoops sorry Tax Payers ...or the BNP in blazers UKIP ...you can take the centre bit out of centre right with their right wing libertarianism

As for Iain Duncan Smith being a christian - a christian in which century ? ....as an acquaintance said " the thickest ex - guardsman ...I've ever met " ...that's before you get to his " very creative " CV ...that hypocrite has ponced off the State all his life ...his ilks sense of entitlement is shocking ...Do as we say not as we do

Bill Kruse said...

IDS suggests "with increased national prosperity, fewer people should need to rely on State help." Er, no. It depends entirely on how this prosperity's being distributed, doesn't it? If everyone got their fair share then perhaps what IDS pretends to be the case would be true. As it actually was, with the newly created wealth going more and more to the rich and less and less to the poor, more people were becoming dependent on State aid than ever before. So, even back then, then, IDS was basing his punitive policies around utter drivel. I keep saying it; there's something very wrong with this bloke...