Not so tough, not so fair: The coalition cannot be trusted on welfare reform

Mr Osborne's attack today on out-of-work benefits and his rhetoric on 'fair play' lack credibility, and mean the coalition cannot be trusted on welfare reform.

Our guest writer is Declan Gaffney

Last May, ministers arrived in Whitehall convinced there were vast savings to be made by cutting exorbitant out-of-work benefit payments.

Knowing without needing to look at the figures that Labour had allowed these benefits to ‘explode’ during its time in office, dazzled by the £200 billion total for welfare expenditure (oblivious to the fact that most of this went on pensioners and children) and enchanted by the prospect of mobilising populist grievances against claimants, they demanded that government statisticians torture official data to produce evidence of Labour’s profligacy and the workshy underclass which had benefited from it.

Week after week over the summer recess, tabloid journalists were briefed with ‘new’ statistics ‘unearthed’ by Chris Grayling showing how Labour had allowed a ‘Shameless’ generation of workless households to flourish – statistics to which the Department of Work and Pensions seemed strangely reluctant to accord an official press release and which were not made available to the general public through its website.

Details of a handful of families and individuals receiving high levels of payment found their way into the public domain and were shamelessly exploited by ministers and their rent-a-quote allies in the Taxpayers’ Alliance. Broadsheet commentators fell into line:

“There must be no sense that one group is exploiting others: the rich the poor, or the poor (through welfare) everyone else.” – Julian Glover in The Guardian (July 4 2010)

The obvious question that hardly ever seems to have been posed was just how much Labour had wasted during its out-of-work benefits spending spree. It is not a difficult question to answer: there is a wealth of detail on benefits expenditure available on the same DWP website which failed to offer a home to Chris Grayling’s more feverish claims about ‘intergenerational worklessness. This chart summarises the data on how much was spent on the working age client group from DWP’s expenditure tables:

Out-of-work-benefits-expenditure

Source: DWP expenditure tables – includes expenditure on in-work benefits such as housing benefit (about £3bn) and Disability Living Allowance as well as other elements which are not out-of-work benefits; does not include child tax credits to out-of-work families but this expenditure (about £4.5 bn) is easily outweighed by the elements which are not out-of-work benefits, so these figures can be taken as a (slightly overstated) proxy for out-of-work expenditure on the working age client group.

Measured as a proportion of GDP, expenditure on the working age group fell sharply under Labour and even with the onset of recession has never recovered even to its 1996/7 level, let alone the peak of 4.5 per cent of GDP it reached during the last recession. Measured in real terms, expenditure is very slightly higher than in 1996/7 – the level in 2009/10 was £1.6bn more, hardly an explosion and roughly equivalent to growth in expenditure on statutory maternity pay and maternity allowance, which are included in these figures.

Rather than representing the mythical ‘one in three of every pound we spend’, working age benefits account at present for 7 per cent of public expenditure. This is the expenditure which George Osborne, Danny Alexander and David Cameron describe as “out of control”.

Over the last 24 hours the shape of the coalition’s approach to welfare reform has become clearer. We now know that Iain Duncan Smith’s proposals for a ‘Universal Credit’ – a policy floated by Labour in government and a logical development out of the last 13 years of welfare reform – will not be implemented this parliament. Instead, we will get George Osborne’s ‘cap’ on benefits.

Payments will be limited to reflect the ‘principle’ that “no family should get more from living on benefits than the average family gets from going out to work”: a populist gesture against a shadowy target appealing, of all things, to the ‘British spirit of fair play’ and delivered with a frankly embarrassing posture of historical destiny:

“Money to families who need it – but not more money than families who go out to work. That is what the British people mean by fair – and we will be the first Government in history to bring it about.” – George Osborne, today

The model for this bizarre claim is presumably Gordon Brown, who was also sometimes given to grand historical claims: but the contrast between aiming to be the first government to end child poverty, a real and massive social problem, and aiming to be the first government to stop benefit recipients from getting more than working families – an artefact constructed out of spite and ignorance-  could  hardly be more striking.

Given the choice between an incremental but challenging reform programme in clear continuity with the policies of its predecessor and a brazen appeal to the politics of grievance, the coalition has made its choice. “We’ve got to be tough but fair,” said the Chancellor today. There is nothing tough about stoking grievances against those with the least opportunity to defend themselves, and nothing fair in trying to implicate those at the sharp end of the coalition’s expenditure cuts in the state of the public finances.

Toughness would be to tell the Conservative party conference, as Keith Joseph did a generation and a half ago, that much of what they believed about the benefit system and its users was nonsense. In the present day, that would mean telling them that there has been no spending spree on out-of-work benefits, that individual cases of high payments tell us nothing about the situation of most claimants or about trends in expenditure, that the UK has a particularly ungenerous system of out-of-work benefits, and admitting that tax credits, the minimum wage and Sure Start have improved labour market outcomes for hundreds of thousands of families.

There are plenty of things to criticise in Labour’s record, but letting out-of-work benefits get ‘out of control’ is not one of them. As long as the coalition continues to allow policy to be guided by mean-spirited fantasies about what has happened to welfare expenditure over the last 13 years, it does not deserve to be trusted on the serious business of welfare reform.

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27 Responses to “Not so tough, not so fair: The coalition cannot be trusted on welfare reform”

  1. Owain Gardner

    RT @leftfootfwd: Not so tough, not so fair: The coalition cannot be trusted on welfare reform: http://bit.ly/aXmoWQ

  2. Shamik Das

    Not so tough, not so fair: The coalition cannot be trusted on welfare reform: http://bit.ly/aXmoWQ by Declan Gaffney on @leftfootfwd

  3. Chris Goulden

    RT @leftfootfwd Not so tough, not so fair: The coalition cannot be trusted on welfare reform: http://bit.ly/aXmoWQ

  4. Harry Harris

    RT @leftfootfwd: Not so tough, not so fair: The coalition cannot be trusted on welfare reform http://bit.ly/aXmoWQ

  5. Justin

    RT @leftfootfwd: Not so tough, not so fair: The coalition cannot be trusted on welfare reform http://bit.ly/aXmoWQ

  6. Chris Montgomery

    RT @leftfootfwd: Not so tough, not so fair: The coalition cannot be trusted on welfare reform: http://bit.ly/aXmoWQ

  7. kevin leonard

    RT @leftfootfwd: Not so tough, not so fair: The coalition cannot be trusted on welfare reform http://bit.ly/aXmoWQ

  8. John O'Shea

    RT @shamikdas: Not so tough, not so fair: The coalition cannot be trusted on welfare reform: http://bit.ly/aXmoWQ by Declan Gaffney on @ …

  9. Fred

    Funny but remind me who used the words work shy, oh yes Blair, who used the BBC with the scroungers program and the other BBC programs which arrived just before the green papers. Remind me who was it would said DLA was a benefit which was wasted, sorry remind me oh yes Gordon Brown, remind me who put forward the new new medicals which have told a young solider with no legs he is fit to work, who told a gent who has Parkinson’s and had just had a triple by pass he was fit to work, was it the Tories nope it was Blair and brown.

    Who said last year in his dying period of his leadership DLA should be stopped for people over sixty, Gordon brown.

    Moan as much as you like labour got the blame on this one, yes maybe the Tories will go further, but right now it’s Labours.

  10. Redstar PCS Stoke

    RT @leftfootfwd: Not so tough, not so fair: The coalition cannot be trusted on welfare reform: http://bit.ly/aXmoWQ

  11. steve

    RT @leftfootfwd: Not so tough, not so fair: The coalition cannot be trusted on welfare reform: http://bit.ly/aXmoWQ

  12. The Unconservative Conservatives « Bad Conscience

    […] tax benefit is going to affect a lot of people’s lives. You can read various good analyses here, here, here, here and here. Personally, I’m still reeling from the extent of Osborne’s […]

  13. John Ruddy

    How spending on welfare went down under Labour RT @leftfootfwd:The coalition cant be trusted on welfare reform http://bit.ly/aXmoWQ

  14. Mr. Sensible

    It’s alright Osborne telling people to get back to work, but when we examine what the government’s job cuts are going to do to the labour market, you can have all the ‘Work Programs’ in the world, but you can’t force employers to employ people.

    This is just trying to appeal to the Daily Mail and the Daily Express.

  15. sophiaparker

    hear hear. great piece. RT @leftfootfwd: Not so tough, not so fair: The coalition cannot be trusted on welfare reform http://bit.ly/aXmoWQ

  16. Seamus

    This is one subject where the media has truly persuaded the country that black is white and the moon is made of cheese.

    `Everyone` knows jobless benefits went up under Labour. Figures? Stats? Why? `Everyone` knows it’s true.

    People will tell you with a straight face that Labour allowed Incapacity Benefit claims to rocket, even though the number of IB claimants is the same now as in 1997 and the real explosion in such claims happened in the 80s and early 90s.

    The irony is that Labour passed welfare legislation that was so vicious and punishing that Thatcher herself would have baulked at it.

    They thought they could appeal to tabloid sentiment, but tabloid sentiment is impervious to facts and legislation. The narrative is more important than reality.

  17. StephenH

    RT @leftfootfwd: Not so tough, not so fair: The coalition cannot be trusted on welfare reform http://bit.ly/aXmoWQ

  18. Emma Dyer

    RT @leftfootfwd: Not so tough, not so fair: The coalition cannot be trusted on welfare reform http://bit.ly/aXmoWQ

  19. Matt

    Declan

    >Rather than representing the mythical ‘one in three of every pound we spend’,

    I’m looking for this mythical claim. Do you have a cite, or is it really mythical?

    Rgds

  20. Ash

    This is another mythbusting article on welfare spending that’s worth a read:

    http://www.bbc.co.uk/news/magazine-11443372

    …it focuses not on the ‘one in every three pounds’ rhetoric, but the ‘spending has rocketed by 40% in 10 years’ rhetoric – pointing out the inconvenient fact that a 40% rise in 10 years is pretty modest by historical standards.

  21. The very un-conservative George Osborne | Liberal Conspiracy

    […] tax benefit is going to affect a lot of people’s lives. You can read various good analyses here, here, here, here and here. Personally, I’m still reeling from the extent of Osborne’s […]

  22. Getting worklessness wrong, again | Left Foot Forward

    […] dependency’ are parasitical on data which does not concern these phenomena, as has been pointed out here […]

  23. There is an alternative | Left Foot Forward

    […] recipients – there may be some modest changes that are acceptable but the vulnerable will lose most; […]

  24. Having your cake…and paying for it « martincoward.net

    […] to misrepresent crime statistics when in opposition (or indeed how it has managed to perpetuate the myth that welfare spending ballooned under labour). Were the general population more concerned with understanding the manner in which knowledge is […]

  25. Declan Gaffney

    @nicolatuc @FullFact Short answer is no- see link. Long answer turns on what they're including in welfare- pensions?
    http://t.co/13B4ssFB

  26. Declan Gaffney

    @hopisen well I said 'would'…starting with ref to 'spiralling cost of benefits' which is just wrong http://t.co/13B4ssFB

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