Monday, 2 July 2012

Welfare Reform: the cart before the horse

Welfare reform is a clear example of where the Coalition has got it badly wrong and its approach falls down in three key areas: fairness; strategy; and timing.

First, a few words on the rhetoric used by the Coalition when talking about welfare. They state that we should make work pay and that no one should get more on benefits than if they were working. Every reasonable person can agree to that, but the examples that they use, with the support of the gutter press, are so extreme that they are further stigmatising an already vulnerable and disadvantaged group. As a result the 'benefit scrounger' becomes the dominant character in the debate when they deserve no more than a small cameo role. Very few people actively chose to live off benefits. Their perspective has been ignored as it is politically inconvenient, and the debate has been distorted.

This leads to my first point of criticism: fairness. As the Government's greatest expense, they claim that they have no option other than to slash the Welfare bill to reduce our large national debt. There's no real consideration of the needs of benefit recipients here, simply a focus on saving money. That's why it suits the Coalition to skew the debate to focus on the minority that abuse the system, rather than take a more holistic view that seeks to address the underlying causes of worklessness and social disadvantage.

Call me an old fashioned social liberal, but I think that making those who can least afford it your first port of call when looking at ways of reducing the deficit is a little unfair, don't you? A tough approach to raising revenue from those who can afford it through appropriate taxation would be a better starting point. Emergency taxes levied on the financial sector would be a good start. After all, the banks got us into this mess and they are desperate to get back into our good books.

While benefits claimants are feeling the brunt of the Coalition's sythe, the rich enjoy a five pence tax cut. Fair? I think not.

Secondly, strategy. Welfare reform is progressing on the basis that claimants must engage in return to work schemes delivered through the Work Programme in return for state support. The Universal Credit will be tapered so that someone taking up an employment opportunity will never be worse off than if they were on benefits. All fine in principle, but it lacks one essential ingredient: jobs.

The Coalition's obsession with cutting, rather than taking a realistic approach that seeks to reduce some of the deficit and manage the remaining debt over a longer period, has come at the expense of an economic growth plan. In fact, it has sent us into recession and caused government borrowing to go up. Jobs are disappearing, tax revenue is consequently dropping and, surprise, surprise, the deficit is getting bigger, not smaller. Welfare spending may actually go up as a result of projected future job losses.

Where is the sense in a Welfare reform package that is designed to encourage people into jobs that don't exist and that the Coalition has no strategy for creating?

This underlines my last criticism: timing. By creating a system that is based on getting people into non existent jobs the cart has been well and truly placed before the horse.

Before weilding the stick, you need to grow the carrot. The coalition needs to provide the fertiliser. They seem more than capable of producing one particular type of fertiliser, just not the type this country needs or wants.