Being Blasé About Benefits:

Listening to the various spokesmen and women from both sides of the political divide, it is perhaps no surprise that most people would come to accept the idea that Britain has within its borders a rampantly acquisitive welfare underclass who are robbing the country's coffers blind, in order to pay for their expensive cars, foreign holidays, flat screen TV's and the latest digital devices. Of course, if you happen to be a Daily Mail reader, then you won't need to be told that most of those who are unemployed are simply jobless layabouts, who sit at home making babies, filling out the latest benefit claim form, whilst balancing a bottle of cheap cider on one knee and a butt laden ashtray on the other, as their reporters will tell you about them virtually every day of the week.

 

In order to fully illustrate the fact that any sort of two or three party politics is well and truly dead and buried in modern Britain, it was interesting to watch Labour's Rachel Reeve and the Conservatives Philip Hammond tried to outdo one another in their separate party's proposals to exert some form of control over the unbridled excesses and failures of the British Welfare State, with the equally obnoxious Jo Coburn and Andrew Neil helping to drive them along. Both main political parties agree that the current Welfare State is generally unsustainable and therefore plan to review, examine and reassess the entire benefits system, but not before they waste millions more of the taxpayers hard earned money in trying out a series of ill judged and misconceived computer systems that are clearly beyond their abilities and timescales. For Labour it was the billions wasted on an NHS IT system, for the Tories it was the millions wasted on attempting to build the Universal Credit network; and then they have the sheer nerve to call the Welfare system wasteful.

 

What was both alarming and annoying about Ms Reeve's and Mr Hammond's united denunciation of a system that supports the pensioned and the poor, was that they were equally damning about an administrative and fiscal monster that both Conservative and Labour parties have helped create in the first place. Margaret Thatcher's de-industrialisation of Britain helped ensure that many of the high skilled, well paid jobs of the past either went elsewhere or disappeared completely, leaving industrial wastelands in their wake. The financial bounty from North Sea oil, that might otherwise have been spent on re-tooling, restyling or rebuilding our old fashioned and badly maintained industrial heartlands was used instead to maintain the dole queues in the former manufacturing and coal mining centres of England, Wales, Scotland and Ireland. Yes, an all encompassing welfare safety net can be a bad thing! But just who exactly created the social and economic conditions to make it so vital and necessary for millions of people in Britain today? 

 

Although the country survived Thatcherism, its survival came at a very high price, not least in terms of the loss of traditions, communities and skills that had taken generations to create and to learn. Just whose fault is it that there is little if any large scale industrial manufacturing in Britain today? The successive governments who have singularly failed to attract such businesses? The businesses themselves who have relocated themselves to the low wage economies of Asia? Or is it the fault of the 17 year old who leaves school with few qualifications, few real practical skills, but might be lucky enough to get a full-time job in a local factory, or in a local supermarket? Obviously, if you accept the Labour, Conservative or Liberal Democrat's line of thinking then its the 17 year olds fault, as it has nothing to do with them whatsoever.

 

And where does the Labour Party fit into the equation? Well, let's not forget that it was Tony Blair and his trusty Scottish sidekick Gordon Brown who took the view that in order to compete with the likes of China, India and the other low wage economies, then Britain too needed to be a low wage destination. Of course the only flaw in Mr Blair's plan was that he then thought it would be a good idea to flood the country with millions of European workers, who were more than happy to work for lower than average wages, beginning a "race to the bottom" in terms of wage rates that's still being run. But still, with increasing numbers of low paid jobs, part time posts and escalating living expenses, Mr Blair was able to offset the worst effects of the low wage economy by rolling out a whole new set of benefits for people, including the likes of Working Tax Credits and Child Tax Credits. So now, instead of having millions of people sitting on welfare doing nothing, we have millions of people on welfare doing something, including keeping employers costs down and making the welfare bill bigger and bigger. So once again we make the same old point. Yes, an all encompassing welfare safety net can be a bad thing! But just who exactly created the social and economic conditions to make it so vital and necessary for millions of people in Britain today?

 

Part of the problem when people start talking about welfare is that the concept and the actual conversation most commonly associated with the term itself is that regarding the idle and the indigent, in fact the comparatively small numbers of claimants who choose to see benefits as a viable alternative to paid work. However, if you take a look at the specific breakdown of welfare benefits paid out in this country on a yearly basis, most people would be surprised at what the Welfare State is comprised of and what exactly is paid out by the benefits system.

 

Strictly speaking the Welfare State covers the provision of basic healthcare, education, employment and social security, rather than as one might suppose the provision of money alone, which is the one particular aspect of Welfare that seems to agitate people's opinions the most virulently.

 

Interestingly though, it wouldn't occur to most people that the biggest part of Britain's Welfare budget, around 46% of it, or some £74.2 billion of the monies spent on it in 2011-2012, actually went on old age pensions. A further £16.9 billion, or some 10.6% of the total Welfare pot was spent on Housing Benefits, whilst another £12.6 billion, or 7.9% was spent on providing Disability Living Allowance. At the same time an estimated £8.1 billion, or 5.1% of the total budget was spent on Pension Credits, whilst a further £6.9 billion, or 4.3% was paid out in Income Support. Rent Rebates totalled £5.5 billion (3.4%) Attendance Allowance accounted for £5.3 billion (3.3%), whilst Jobseekers Allowance amounted to £4.9 billion (3.1%) of the total. Incapacity Benefit came to £4.9 billion (3.1%), Council Tax Benefit £4.8 billion, Employment & Support Allowance £3.6 billion (2.3%), Sickness & Maternity Pay £2.5 billion (1.5%), Social Fund Payments £2.4 billion (1.5%), Carer's Allowance £1.7 billion (1%), Financial Assistance Scheme £1.2 billion (0.8%) and other Welfare expenditure £4.7 billion (3%).

 

However, when considering some of these apparently eye-watering sums of money, it is worth bearing in mind perhaps that in 2013 the Coalition has set aside, or is planning to spend around £97 billion on education alone. They are also estimating that our debt interest payments, the cost of borrowing money from the markets is going to cost £51 billion from our national budget, at the same time that George Osborne and Danny Alexander are planning to borrow a further £108 billion to help fill in our country's financial deficit. Recalling that the cost of Jobseekers Allowance was around £5 billion for 2011-2012 and yet this year we were going to spend ten times that amount just to pay off the interest on our national loans should help put the question of Welfare into some sort of overall perspective.

 

And for those who might question the need for basic Welfare payments of any description, please remember this. Attendance Allowance, which cost £5.3 billion in 2011-2012 is provided to those over-65's (pensioners) who have a disability, or are seriously ill and require help with personal care. Should their benefits be cut? Approximately 5 million people rely on Housing Benefit to keep a roof over their heads; and to keep them safe and secure. It cost the country £17 billion in 2011-2012. Should their benefits be cut and the claimants be made homeless? The largest part of the Welfare budget goes to the estimated 10 million pensioners that we have living in this country, a number that is guaranteed to rise in the coming years. Should their benefits be cut? As of May 2012 there were an estimated 2.3 million people claiming Disability Living Allowance, which amounted to £12.6 billion. Should their benefits be cut? Pension Credits designed to help top-up the incomes of our most impoverished old aged pensioners cost the country £8.1 billion. Should their benefits be cut? Income Support, which is provided to those not registered as unemployed, working less than 16 hours per week, with little or no pay, cost the Treasury an estimated £6.9 billion. Should their benefits be cut? That is not to forget of course the 5 million households (perhaps more) who are in receipt of either Working Tax Credit, or Child Tax Credit, both of which will be costing the treasury billions every year through the HMRC; who are entitled to financial help in order to offset their often meagre hours or basic pay; and without which work would certainly not pay. Should their benefits be cut?

 

Even though no-one can seriously doubt that huge savings need to be made to Britain's overall expenditure, as testified to by the fact that the Treasury is having to borrow just over £100 billion just to help balance the books as it were. However, the very idea that finding substantive savings by essentially penalising the very poorest or the most needy has to be a recipe for disaster; and would doubtless be seen as such, were both Labour and Conservative parties not trying to appeal to the very same small group of potential voters in time for 2015.

 

The concept that significant numbers of the unemployed, the young, the low paid or the large numbers of those workers who are under-employed are somehow deliberately taking advantage of an overly generous Welfare State is a complete nonsense created by a tabloid press that would be well advised to get out of its offices more. If we have a major financial problem in this country, both Labour and Conservative politician's might do better than to take their eye off the Welfare football and cast a glance at their own creations, such as Overseas Aid that is costing this country around £9 billion a year, Free School programs that are costing £1.5 billion, contributions to the European Union which is costing us £9 billion, or large scale infrastructure projects that have been estimated at hundreds of billions over the next 20 years or so. Full employment in any country is essentially a myth, it always was and always has been. It is pointless exercise for the political classes to constantly carp and complain about social and economic situations that they themselves have helped to create. If you close down industrial capacity, then expect unemployment to rise. Fail to invest, then expect a lack of international competitiveness. Only offer workers part-time and low paid work, then expect them to take up the welfare benefits that are on offer. Withdraw or reduce those necessary benefits, then expect people to struggle to survive. It isn't rocket science, just good financial commonsense, but just being blasé' about benefits doesn't help anyone, least of all those people who want to be elected by the very same welfare recipients that the politicians are currently threatening to target.