BBC slavishly follows government line on impact of benefits cap

It is disappointing to again see the BBC reporting government statistics on the benefits cap without even the remotest hint of challenge as to what they mean.

Iain Duncan Smith 3

Ashwin Kumar is the director of Liverpool Economics

It is disappointing to again see the BBC reporting government statistics on the benefits cap without even the remotest hint of challenge as to what they mean.

I know that statistical competence isn’t going to be in the skill-set of every journalist; but surely the BBC understands the need not to repeat government figures without a more sceptical eye?

So what are these disputed figures? Well today’s announcement by the Department for Work and Pensions (DWP) of the national introduction of the benefits cap says that, of people contacted by Jobcentre Plus to warn them about their potential for being hit by the benefits cap, 12,000 moved into work and 32,300 ‘accepted employment support’.

Why do these figures prove almost nothing?

First of all, we don’t know how many people were contacted by Jobcentre Plus. Without this information, the 12,000 and 32,300 figures are totally meaningless. Was it 1 per cent of the total, or 90 per cent?

Surely the BBC must understand that the difference is crucial.

Secondly, what matters when making a labour market intervention is the additionality – technical speak for how many more people responded to the intervention than would have done anyway. If all of those 12,000 were very likely to have moved into work anyway, then calling them on the phone can’t be said to have had much effect.

When Labour introduced the New Deals and new ways of operating by Jobcentre Plus such as compulsory work-focused interviews for many claimants, these measures were subject to huge amounts of evaluation. Departmental economists attempted to estimate the counterfactual – what would have happened if nothing had been done – in an attempt to work out how much effect these new measures actually made.

Clearly no such rigour constrained today’s DWP announcement.

Thirdly, all these figures could at most tell us is the effect of a phone call from the DWP. All of that rigorous evaluation evidence from the Labour years tells us one thing absolutely clearly. How and when Jobcentre Plus engages with claimants makes a difference to their work-seeking behaviour.

So even if the Jobcentre Plus phone call has made a difference to some of the people in question, it is quite conceivable that it was the fact of receiving a phone call that made the difference, rather than the benefits cap.

Research by the DWP has shown that the actual financial incentives in the system have less impact on work-seeking decisions than expected because of lack of knowledge. Coupled with clear evidence that the nature and timing of Jobcentre Plus interventions does make a difference, there is a reasonable question as to whether the phone call was more likely to have an impact than the benefits cap itself.

This has additional resonance because the DWP took one of the larger cuts to its revenue budget in the recent Spending Round. This of course means it is less likely that the department will have the resources to accompany the benefits cap with a phone call to every claimant.

Let us not forget that Iain Duncan Smith has form for misusing statistics about the benefits cap: see here for a letter from the UK Statistics Authority criticising DWP claims about the employment effects of the cap.

Given this history, surely the BBC owes it to us to be more careful not to use government figures without challenge.

10 Responses to “BBC slavishly follows government line on impact of benefits cap”

  1. Jacko

    Well, it’s too late now. Can you imagine any politician trying to reverse this. “We’re going to make sure that claimants can once again receive more in state benefits than working people”. I don’t think so. Those days are gone, and they are gone forever. And nothing anyone says here is going to change that.

  2. OldLb

    Correct. Given the size of the true goverment debts – 8,000 bn, its going to get worse.

    That’s why Ed’s cap on welfare spending is shorthand for setting the pensioners against the benefits claimaints, in the hope they fight it out rather than turn on the fraudsters – MPs.

    So who is going to win? Welfare claimant or pensioners? Actually neither they are both going to lose. However I predict the welfare claimants will be the worse off of the two.

  3. OldLb

    Given this history, surely the BBC owes it to us to be more careful not to use government figures without challenge.

    =======

    So Ashwin. When you are modelling pensioner incomes, how do you work in the 6,500 bn that is owed to pensioners for past contributions or employment?

    ONS figures. 5,010 bn present value, rising at 734 bn a year, and two years out of date.

    That’s the elephant in the room isn’t it? The state cannot make good on its pensions.

  4. stuart knox

    the BBC is a puppet to the government of the time but prefers the torys they get richer under them

  5. TristanPriceWilliams

    Actually all this garbage that they trot out about “hard working British families up and down the country” being worse off than “lazy scrounger layabouts who have made a life on welfare payments”… all designed to make us love the workers and hate the unemployed and the sick, is just that. It’s rubbish. This article in the New Statesman shows the real situation.

    http://www.newstatesman.com/politics/2013/07/five-things-iain-duncan-smith-doesnt-want-you-know-about-benefit-cap

    Politicians never want to mention “in-work” benefits, because what that really says is that in Britain, companies are allowed to pay so little that people working full time have to go cap in hand to the state and beg for benefits… and that we taxpayers subsidise big business by paying benefits to their badly paid staff.

    The country stinks on ice. Neither Labour nor the Tories will reverse any of these policies, (even though they will end up costing more money), because neither of the parties wants the rich to think that they are soft on the perceived scum.

    The Liberals have probably imploded so it doesn’t really matter what they think.

  6. george maton

    i agree, well said. this is the same system that happens here in Sweden where i live and is being adopted by all Governments throughout the world, if we care to really look at it. crush the poor and unemployed, make them look like criminals or insane. scare the existing workforce in to becomming obedient slaves.it’s what the bosses want cheap labour subsidised by the state. makes the unemployment figures look low. stops people ever obtaining a real job on real salary. free labour being provided for by the state to the companies. very easy to figure this out and what the preplanned endresult is all about. only the people can stop this. withdraw your labour before they reward you with food only. the plan is for them ( the companies ) not to have to pay for employees at all. food stamps for all workers and rent/elect paid by the state.

  7. george maton

    i like it, you are 100% correct. Companies run all world Governments and they say to them, “Listen mate, we’ll allow you to stay in power provided you set up a system that provides us with cheap or free labour how you set about doing it is of no concern of ours. just DO IT !! this so very easy to see. it’s BUSINESS !! you are only a commodity in the eyes of the rich businessman.

    it’s very easy to see whats going on.

  8. OldLb

    Of course it is.

    Now analyse the problem.

    If I go to you and say, give me a million, and you do, who is the idiot?

    Me for asking, or you for giving me the money?

    It’s worse with the state. They give away other people’s money.

  9. george maton

    that’s correct. smart business again on behalf of the Govt. never use your own cash when you can tax the people into funding your scam. Politicians never spend very much of their salaries. they live off the State. they get the Gold Card !! weak leaders who succumb to the bribes of the rich corporates. there is no such thing as an honest politician who strives for the well being of the populace. well, there is at the start of their careers then the corporate power money guys reach out to them and arrange nice things for them. comfy lifestyles if they follow the flow. excessive greed is what’s gone wrong in the world i’m afraid. just dwell on that for a moment everyone. how much is enough ? greedy speculators and investors. why can’t they sit at peace and take a day off . always looking to capitalise . never let up. but i already know why. it’s because they’re scared. they think money will save them.

  10. OldLb

    Not sure what you mean by the last bit about investors.

    The core problem with the state all goes back to when they started a Ponzi pension system.

    Look through the accounts. Where are the liabilities for what they owe people for their pension contributions? They aren’t there. Off the books. So there are two questions, why, and how much have the hidden.

    The why is simple. It’s the same reason Bernie Maddoff was running a set of hooky books. If people knew, they would put two and two together and very quickly see its a bust. So this is the accounting scam.

    1. Make sure pensions do not appear as a liability.
    2. That means you have to make sure that contributions do not create that liability in the accounts.
    3. So instead of booking the contributions as a liability, you have to book them somewhere. Answer is as income.
    4. If its income, it can be spent. Yippee.

    That’s the accounting fraud. They even fiddle with language. Eg. The NI fund has a surplus. What they don’t say, is that a surplus of assets less liabilities? Nope its not that. Is it surplus of income less expenses? Nope. It’s just some money they have lent themselves, enough for a few months of payouts. How can lending yourself money create anything of any value?

    So what do they owe?

    Well the ONS put some numbers to it. 2 years ago, 5,010 bn (present value), rising at 734 bn a year.So about 6,500 bn now, just for pensions.

    Tax = 600 bn a year
    Spending = 722 bn a year.

    They are bust.

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