Tagged: Jonathan Portes

Tory Youth Welfare Plans An Attack On The North

David Cameron’s plan to make 18- to 21-year-olds work for their benefits is “cynical electioneering” as it would hit people hardest in the north and Midlands, where the Conservatives traditionally have little support, the Liberal Democrats have claimed.

The party laid into its coalition partners over the proposals to make school leavers do community work or face losing state support, saying it showed the Conservatives were “choosing to be tough on the vulnerable and young, whilst being weak on the rich and powerful”.

> Well ? It’s not as if they’ve suddenly betrayed long-held values – they’ve always acted like this. A fact which the Lib Dems must have been aware of before they got into bed with them.

Obviously they were quite willing to overlook this in return for a little bit of power. Oh, to sell your soul for such a low price…

 Its analysis of the top 25 places in England and Wales where there are the most young people not in employment, education or training found that 20 of these were in the north or the Midlands.

None of the top 25 areas where there are the most “Neets” are run by Conservative councils, the research found.

John Leech, the Lib Dem MP for Manchester Withington, said it was nothing more than an attack on the north.

“These placements are not designed to help someone into work, more to punish. Just like the Tory plans to axe housing benefit for young people,” he said.

The Tory plans to make £12bn of welfare cuts for the working-age poor means 8 million low-income families will be £1,500 worse off a year.

Under the plans, those aged between 18 and 21 will be barred from claiming benefit unless they agree to start an apprenticeship or complete community work.

It is designed to ensure that the 50,000 young people “most at risk of starting a life on benefits” find that their first contact with the benefits system is a requirement to undertake community work and search for jobs. The claimant will be expected typically to undertake at least 30 hours community work a week and 10 hours looking for jobs.

Anyone required to undertake community work would be paid a youth allowance equivalent to the jobseeker’s allowance rate for young people.

In a speech in Hove, East Sussex, Cameron made an attempt to answer some of his critics who say the planned cuts are too harsh.

“I would ask them: is it compassionate to leave people on the dole for years with no incentive to get into work?” he said.

“Is it big-hearted to leave people on sickness benefit without checking if they can work, if given the right help? Is it kind to sentence people to never going anywhere, of letting people in their teens and 20s sit at home all day slipping into depression and despair?”

> Is it compassionate or big-hearted to subject people to a sanctions culture at the whim of DWP so-called work coaches ?

Following the announcement, Jonathan Portes, from the National Institute of Economic and Social Research, pointed out that pilots conducted by the Department for Work and Pensions suggested “compulsory community work for unemployed had little or no positive impact”.

The Conservatives want to make £12bn of welfare cuts in the next parliament, while the Liberal Democrats are budgeting for £4bn. Labour has not made clear what it would do to the benefits bill in order to balance the books.

Source – The Guardian, 18 Feb 2015

Iain Duncan Smith’s delusional world of welfare reform

This article was written by Polly Toynbee, for The Guardian on Tuesday 12th August 2014 05.00 UTC

Politicians may deal in terminological inexactitudes, but I can’t think of many black-is-white, war-is-peace practitioners as downright deceptive as Iain Duncan Smith.

Originally, the question was whether to put it down to simple stupidity, as he didn’t understand that the numbers he promised were impossible. Yesterday, poring over his big speech on welfare reform, a few of the more polite experts spoke of his “magical thinking”. But his motives and state of mind hardly matter to the millions affected by his evidence-free, faith-based policy-making.

 His speech was a paean of self-praise. To read it, no minister has done such good for so many. This was a sublime response to a battery of critics who include Treasury briefers, the National Audit Office on the failure of his work programme, the chair of the UK Statistics Authority for his abuse of figures, and the Major Projects Authority awarding his universal credit an amber/red warning.

The man does have indefatigable self-confidence: “We are fixing society,” he says. The Times, Sun, Mail and Telegraph happily swallowed it whole, rather than explore the thickets of his benefit system. His great claim is that his reforms have been the key driver in getting people back to work.

Let’s start with where he’s right: this recession has been unlike any other, as employment fell by far less and now grows by far more than economists can explain. Fraser Nelson, the Spectator editor, eagerly backed the view that IDS’s big stick has been the “game-changer”.

But Jonathan Portes, head of the National Institute of Economic and Social Research, formerly Treasury and a Department for Work and Pensions economist, makes mincemeat of the claim. Comparing numbers with charts over time, he concludes: “The idea that those on JSA are getting a job more quickly than before the recession, let alone that welfare reform has anything to do with it, has no support in the data.”

When it comes to the sick on employment and support allowance, numbers fell steadily from 2004, rose a bit in the recession and were starting to fall on trend. But now they’re rising again. Why? Portes says it’s “the result of the administrative chaos surrounding the Atos contract for the work capability assessment”.

Duncan Smith takes credit for one of Labour’s successes: Labour raised the number of single mothers into work from 46% to 58%. He says it’s higher than ever now, which is true – but only up by 2 percentage points in his time. He hurls accusations at Labour’s welfare bill: welfare expert Declan Gaffney says Labour cut the bill and kept it stable as a proportion of GDP – until the crash. It peaked in 2012 on IDS’s watch.

His universal credit was due this April to cover a million people: so far it covers just 16,000 easy households with no children, writing off £130m in failed IT. But you would never guess when IDS says it “completes the cultural shift”. Rolling many benefits into one doesn’t magically simplify them: the online form, 50 pages long, still needs to record every changing detail of every member of the household in real time.

Better incentives? Donald Hirsch, economist for the Joseph Rowntree Foundation, finds that on universal credit, families who work full-time can easily end up with less than if they worked part-time. Worse, it traps mothers at home: if one partner works, the second gains virtually nothing by taking a job. Nor does Duncan Smith say that 65p is cut from every extra pound earned. Raising income tax thresholds for the low-paid hardly applies to those on universal credit: most of the gain is lost as their benefit is cut back.

There are traps, hazards both moral and practical, in any benefit system. These deserve debate – but IDS prefers falsifications of reality. The bedroom tax, he says, is imperative. He doesn’t say that only 4% or 5% of people have moved as a result, the rest taking a huge hit, sending them to loan sharks and food banks. Nor does he tell of the doubling, by next year, of the number of working people drawing housing benefit, due to soaring rents and falling pay.

Take the disaster of his 20% cut and transfer of disability living allowance into personal independence payments (PIPs). Forced to delay existing cases to after the election, that’s a nasty gift of 3.6 million assessments for his successor. But worse, people applying now are held in a long backlog, often very sick.

Macmillan Cancer Support, campaigning hard about waits of over six months for benefits rulings, mentions one typical case: a 25-year-old father with advanced cancer waiting for PIP has almost no money. His wife has had to work while he cares for their baby. Without his PIP, he waits for carer’s allowance, severe disability premium, escape from the bedroom tax, bus pass, taxi cards to get to hospital and heating grant. Latest figures show only 24% of claims have been processed; the rest wait, and some claimants die waiting.

There is a lot of misleading talk about sanctions,” Duncan Smith says. Indeed there is, by him. Any benefit system has to prevent fraud or idleness, but he must know how his Jobcentre Plus offices have become sanction factories, his staff under unbearable pressure to cut people off. Research by Inclusion finds an unprecedented gap between the number of unemployed and those drawing JSA – invisible people living on thin air.

Last week the Guardian reported the tragic death of a diabetic former soldier, sanctioned into starvation. Go to any food bank and you’ll find heartbreaking cases. Every week, my inbox tells of people struck off unjustly – the latest, Jim, was sent on a course by the jobcentre then struck off for not signing on, as if he could be in two places at once.

Tricks abound as staff are forced to hit targets called “spinning plates”. With George Osborne taking another £12bn cuts after 2015, it’s possible Duncan Smith doesn’t know the abominations he oversees.

> Oh, I’m sure he does know, and probably revels in it. After all, he kept his job in the recent reshuffle despite everybody knowing he is incompetent – he probably now believes he can do anything, without personal consequences.

Source – Welfare News Service,  12 Aug 2014

http://welfarenewsservice.com/iain-duncan-smiths-delusional-world-welfare-reform/

Budget 2014: A Budget For The Few, Not The Many

By Jenny Howarth

Chancellor George Osborne has delivered his fourth budget. It was clear from his opening gambit – “If you’re a maker, a doer or a saver: this Budget is for you” – that this budget would help the few and not the many. If you were not a ‘hard-worker’, business owner or saver then there would be no point in listening any further.

For Osborne, the budget was an opportunity to say that their long-term economic plan is delivering security for the people of this country. The emphasis was on support for businesses who invest and export, on support for manufacturers, on support for savers or rather making sure “hardworking people keep more of what they earn – and more of what they save” – all aimed towards the central mission: economic security for the people of Britain.

By the end of his 55 minute speech it was very clear that the economic security he spoke of was for the few not the many. He tried to convince people that his budget was for the “makers, doers and savers”, yet it came across as “I’m hoping to gain the over-50 vote”. He promised a budget of “hard truths” which could be implied as “if you think I’m going to help the unemployed, disabled and vulnerable then think again”.

Osborne’s budget was more ‘out of touch with reality’ than ‘hard truths’. He spoke of economic growth, a Britain on the road to recovery, even mentioning the new resilient pound coin to match the resilient economy. However, for thousands of families waking up the morning after the Budget, life is still a struggle. For them the budget was meaningless, doing nothing to improve their desperate situation and here is why.

Julia Unwin, Chief Executive of the Joseph Rowntree Foundation said:

“This is a Budget for the people who already have, not for the people who need to benefit most from the return to growth. It is a lost opportunity for the 13 million people in poverty who need active intervention to tackle the structural barriers that keep them in poverty”. Adding, “People on low incomes are unlikely to see the welcome benefits of growth unless there is targeted help with household and housing costs, with child care and with the nature of jobs and training. The expense and inefficiency of high levels of poverty continue to put a drag on growth”.

A view shared by other charities. William Higham, Save the Children’s director of UK poverty, said:

“The Budget was a missed opportunity to address the needs of families that are struggling to pay their food bill and children whose parents cannot afford to pay for uniforms and school trips”.

It is for these reasons, George Osborne’s fourth budget was a budget for the few. It failed to address the fact that living standards are falling – despite the 2010 Manifesto promising “An economy where…[people’s] standard of living…rises steadily and sustainably”. It failed to help the 350 000 reliant on food banks or the 400 000 disabled people paying bedroom tax. His “resilient pound for a resilient economy” ignores the fact that working people are £1600 worse off.

Osborne may believe that increasing personal tax to £10 500 will help improve living standards but whilst it lifts three million out of taxation, it does nothing for the many families who depend on housing benefit to top up the little wage they get. “The vast majority of this will be deducted from their benefits – giving with one hand while taking with the other”, says Matthew Reed, Chief Executive of The Children’s Society.

Matthew Reed’s comment raises another important point – benefits. Osborne had nothing to say on this except to announce a cap on the welfare budget. This will see Tax credits and housing benefit limited to £119.5bn in a bid to cut the deficit. Critics say that this limit to benefit claims over the next four years will hit disabled people and the low paid without tackling the underlying causes of Britain’s growing social security bill.

Whilst it may appear to be political suicide by Shadow Chancellor Ed Balls saying Labour will vote for the cap, it is not. According to Jonathan Portes, director of the National Institute for Economic and Social Research (NIESR), the cap was simply a “gesture” and served no purpose other than to kick the “problem of spending cuts into the next parliament”.

For Portes it was “meaningless” to put a number on the cap without having policies in place to deliver it or to state how the cuts would be achieved. Adding that the charter would commit MPs to renewing the cap each year. “As Parliament already votes on measures to change social security budgets, this charter will not make much difference”.

It would appear that Osborne’s welfare cap charter is not new but something that already exists. It could be argued that whilst Labour is voting for it, there is plenty scope to amend the limit and bring in policies that would help not hit. Moreover, the question that needs to be asked is would a successive conservative government do that or would they continue with their long-term economic plan that they insist is bringing security to the people of Britain.

For now it would appear they are committed to helping the few, committed to bringing security to the hard-workers, business owners and savers. Alison Garnham, Chief Executive of Child Poverty Action Group, says:

“Today’s Budget tries to lock-in austerity for millions of low-paid families, poor children, carer’s and disabled people. Announcing a cap for social security spending without a plan to address the root causes of low pay, high rents and high childcare costs, simply forces the most vulnerable in society to pay the price for inaction”.

Source – Welfare News Service,  20 March 2014

http://welfarenewsservice.com/budget-2014-budget-many/