Tagged: National Institute of Economic and Social Research

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/

North politicians must form strong voice in wake of Scottish Independence vote

Regional economic policy must be revamped if the North East is to get a fair deal in the wake of the Scottish independence vote, a national research director has said.

Dr Angus Armstrong, director of macroeconomic research at the National Institute of Economic and Social Research, said the Treasury does not prioritise the North East and politicians must form a strong and unified voice to correct the imbalance.

At a debate on how September’s vote will impact on the region, regional leaders also heard of a “growing realisation” Scotland may not lower corporation tax, allaying fears the country would suck business from its neighbours.

It comes as all seven North East councils, from Durham to Northumberland, agree a Combined Authority which will allow it to bid for more Government funding.

Dr Armstrong said regional policy is not a priority for the Treasury when it calculates how to spend Government cash and the North should look to reconsider a regional assembly to be heard above its southern counterparts and in Europe.

He said: “I used to work for the Treasury during the crisis and regional policy does not register. I hate that that is the case, but I really don’t think it is part of Treasury policy. I think the whole concept of regional policy needs to be re-thought.”

He added: “People in the South East underestimate the extent to which power is centralised, so, although they have a feeling there is something of an imbalance, that imbalance is greater than that feeling would suggest.

“The reason I say that is because of the financial crisis. The only reason they could support the City of London is because of the taxpayers of the rest of England.

“When it goes wrong we pay, it is quite remarkable and I find it amazing that places outside of the South East don’t have more to say about that. I do think the degree of imbalance is extremely significant.”

Pat Ritchie, chief executive of Newcastle City Council, said the region’s airports and universities could lose out due to a possible relaxation in border controls which might see students flock to Scottish universities.

She added there were fears changes to the Air Passenger Duty tax could see carriers opt to begin routes from Scottish airports.

Ms Ritchie, however, said there was an opportunity for the region to export goods to the country and, with Edinburgh closer to the region than London, collaborate with Scottish national leaders.

She said: “We should and can be confident in our strengths. This is a region which exports more than any other region and it is already used to working with different markets.

“Whilst not wanting to marginalise what is an important debate, we should not get too hung up on what Scotland might or might not do.

“We need to really develop the strongest possible economic offer that we can for the North East and collaborate as local authorities and businesses and be confident.”

Professor David Bell, professor of economics at the University of Stirling, also spoke at the debate, organised by the Institute for Public Policy Research (IPPR), and said Scots are keenly aware of the need to collaborate with the North.

“I don’t think that the North East is particularly disadvantaged because for Scotland to get anywhere with these negotiations there would have to be a cluster of compromises, and it would make no sense to have poor relations with its near neighbours.”

He added the North East faced being drowned out by the South East but there was a “growing realisation” that Scotland could not drive down corporation tax as it risked becoming a tax haven for businesses.

He said: “I go to talk about independence on a regional basis and the elephant in the room is the lack of political impetus, particularly in the North East.

“It is just not there and it isn’t part of the issue.

“If Scotland votes yes or if it votes no and gets more powers, you will have a heavily asymmetrical system in England which cannot continue to be stable.”

Source – Newcastle Journal,  28 March 2014