by Dale Bassett
Today the Commons will debate James Purnell’s much-discussed Welfare Reform Bill. When the DWP published its green paper last month it was lauded by many (myself included) as a rare show of reforming zeal from the Government. It talked tough, promising to end the something-for-nothing culture and the perceived “right to a life on benefits”. It promised sanctions for claimants who refused to try to get back to work.
In a new paper published today by Reform, Frank Field criticises the Government’s proposals as “toothless”, saying that they will not help people back into employment. The former Welfare Reform Minister argues that welfare should be “an important weapon” used to fight unemployment as it surges in the recession.
Recession is not an excuse to avoid welfare reform. Quite the opposite – as unemployment soars it is essential that the Government provides both a proper security net for unfortunate people who have worked hard, and strong incentives for them to return to work as soon as possible. At the height of the last recession, more people were leaving unemployment benefit than at the height of this decade’s economic boom. Over three million new jobs have been created since 1997, but welfare rolls have fallen by just 400,000 (to 5.1 million). And this despite the staggering £75 billion spent on the New Deal.
The Government’s current approach to welfare reform is wrong for two main reasons. The refusal to time-limit benefits allows claimants to continue receiving welfare, ad infinitum, while making little or no attempt to find work. Mr Purnell attempts to compensate for the lack of conditionality by using training as a sanction. Not only is this an ineffective stick, since no serious threat is made to claimants’ entitlements, but it results in the devaluation of a positive, worthwhile activity.
Mr Field believes, correctly, that only radical reform – benefitting both claimants and the public finances – will really allow welfare to become a tool to help combat the recession. There are four key pillars.
The only real test of willingness to work is the offer of a job
Benefit claimants who turn down reasonable job offers should have their benefits stopped – that is probably a no-brainer. But Beveridge never wanted unlimited, unconditional welfare payments. Time-limiting benefits provides a real incentive for the unemployed to work hard to find work. Mr Field suggests that this change could begin by applying only to young, single people in areas where there have been net job gains.
Evidence from myriad countries suggests that, far from driving families into desperate poverty, implementing the kind of conditionality that Beverage envisaged is an effective stick to encourage claimants to find employment. Bill Clinton’s sweeping 1996 welfare reforms, which involved limiting the duration of benefits, resulted in a 65 per cent fall in the number of claimants, meaning that more money could go to those who really needed it.
Let local experts take control
Mr Field’s paper advocates freeing the Jobcentre Plus network from central bureaucracy and devolving full power and budgetary control to local people. Allowing people who know and understand the local job market to make decisions will help more people into work – and has the added benefit that they are best placed to spot fraud. Turning Jobcentres into mutually owned businesses would drive up standards and facilitate the development of innovative local programmes to create jobs.
Training is valuable
Many young New Deal claimants complain that their attempts to up-skill are disrupted by a large element who, in Barbara Castle’s words, simply “monkey around”. The unemployed should want to up-skill – training is of direct value to them and their careers. Using it as a crude stick for benefit claimants serves to devalue it in the eyes of the people who need it most.
Help those who are down on their luck
As the recession bites, long-term hard workers will lose out as redundancies continue to grow. These people are the antithesis of those who are part of the “right to benefits” culture, and they deserve to be helped. Mr Field proposes a restructuring of the National Insurance scheme, allowing for higher Jobseeker’s Allowance payments dependent on a long term contribution.
These four reforms would begin to end “money for nothing” welfare and start the shift to a “money for something” culture. A sustainable welfare system that actively helps benefit claimants return to the job market will put the UK in the best possible position to fight the recession and minimise the long-term impact on employment. As Mr Field says: “the workless deserve nothing less”.
Dale Bassett is New Media Politics Executive at Reform
Help! Refashioning welfare reform to help fight the recession is published today and is available at http://www.reform.co.uk/helprefashioningwelfarereformtohelpfighttherecession_608.php