Welfare reform: who, whom?

Peter KellnerPresident
January 07, 2013, 9:33 AM GMT+0

YouGov President, Peter Kellner, discusses the public's views on welfare reform

As governments down the years have discovered, welfare is a political minefield. Most people think they pay more into the government’s welfare pot through taxes than they draw out in benefits. They find the system horrendously complex but have the strong, if vague, feeling that the insurance principle was abandoned long ago. They still applaud the idea that we should pay in when we can afford to do so, and draw out when we need it; but they fear that this is no longer what happens.

Want to receive Peter Kellner's commentaries by email? Subscribe here

Successive governments have known, or quickly discovered, all this. They announce that the system is broken, and set out to change it. That is when they encounter one of the most enduring of all political truths: that when you create winners and losers, the winners quietly pocket the bonus without rewarding you at election time – while the losers scream blue murder and threaten to bring you down.

This problem can be overcome when the Treasury is flush with cash. Reform can please plenty of winners without angering too many losers. On the other hand, when times are good, there is little pressure to reform at all. But if, as now, money is short, reform is vital, but losers are everywhere – and, if there are any winners, they are keeping very quiet.

That is the backdrop to the current contest on welfare between government and opposition. The politics are extremely tricky. And YouGov’s latest research contains lessons for both main parties.

In our poll for the Sunday Times:

  • 77% support the Government’s decision to stop child benefit for households where someone earns more than £60,000 a year. Only 13% oppose it. If the implementation is botched, the government might still suffer; but for the moment, opposition is limited.

  • Backing is almost as strong for the plan to cap the benefits available to any single family to £26,000 a year. Supporters outnumber opponents by 74-11%.

  • Both Labour and the Conservatives are tapping into a rich vein of public support when they talk about stopping out-of-work benefits for people who refuse offers of employment. 76% support this, while just 10% oppose it.

  • On other welfare plans, voters are more divided. By 45-35% they back limiting benefit increases to 1% for the next three years. Conservatives divide 4-1 in favour, while Labour voters divide 2-1 against.

  • By 43-32% the public opposes the Conservatives’ wish to stop those under 25 years old from claiming housing benefit. This time it is Labour voters who divide 4-1 on the issue (against), while Tories divide by 2-1 in favour.

  • The public divides evenly over the idea floated by Paul Burstow, a Lib Dem MP and former welfare minister, that benefits such as the winter fuel allowance should be withdrawn from better-off pensioners. 43% support the idea, while 40% oppose it.

  • Overall, voters send the parties a mixed message. Labour is more trusted than the Conservatives over welfare benefits, by 30-22%. On the other hand, just 28% share Labour’s view that ‘the government is being too harsh towards people on benefit, most of whom would like to work if they could’. Many more, 47%, think ‘the government is not being tough enough towards people on benefit, and more should be done to force them into work’. (14% think the government has got the balance ‘about right’.)

These results are broadly consistent with the findings of research we conducted early last year for Prospect. Most people think Britain’s welfare bill is too large and that much of the money goes to scroungers; we are divided on whether the social benefits of universality justify the financial cost when money is tight.

A large part of the problem facing any government is that the welfare system is so complex that few of us have any real idea just where the money comes from or where it goes – which benefits are based on national insurance payments and confined to those with a sufficient contributions record, and those which are paid from general taxation and go to people according to circumstance rather than their NI contributions record.

YouGov research for the Trades Union Congress identifies the gulf between public understanding and reality:

  • Average public perception: 41% of Britain’s welfare budget goes on benefits to unemployed people. Reality: just 3% does.

  • Perception: 27% of the welfare budget is claimed fraudulently. Reality (according to the Government): 0.7%.

  • Perception: an unemployed couple with two school-age children receive £147 a week in jobseeker’s allowance. Reality: £111.45p.

  • Perception: only 21% think this family would be better off if one of them got a 30-hour-a-week job on the minimum wage; and this 21% thinks, on average, the gain would be £59 a week. Reality: the family would be £138 a week better off.

There is plainly a link between the perceptions of scrounging, and the lack of public knowledge about the financial advantages of working, even for 30 hours a week on the minimum wage, compared with life on the dole.

What, then, is to be done? Lenin’s old question is relevant: who, whom? In this case, who should pay for our welfare system, and to whom should the money go? Perhaps the biggest challenge is to reconnect the two, so that people feel that we are returning to the insurance-based principles set out by William Beveridge seventy years ago. It won’t be – and can’t be – precisely like private insurance. There is bound to be an element of redistribution from the better-off to the worse-off. But if we are to retain some of the system’s most cherished features, such as universality, it must be on the basis that we all draw out because we all pay in.

The party that will win the welfare debate with the public will be the one that can persuade us that theirs is a prudent, compassionate, workable, something-for-something strategy, replacing a system that most of us, rightly or wrongly, regard as a bloated something-for-nothing mess that drains from the public purse far too much of the taxes we pay.

PS. Like other bloggers I am generally delighted when my words cause fluttering in the dovecotes. However, last week’s blog, when I imagined a Conservative victory in 2015, caused the dovecotes to heave and tremble more than I intended. Judging by the reactions in the blogosphere, I seem to have upset Labour activists who fear that Ed Miliband might lose – and Tory right-wingers who fear that David Cameron might win.

For the benefit of those who thought I was predicting the outcome of the next general election, let me explain. I was not. My blog was my response to a challenge from a well-known MP: suppose that the next election has taken place and the Conservatives have won outright. What has happened?

To answer this hypothetical question, I considered where Labour is vulnerable – on Europe, welfare and the economy – and also sketched the conditions that could give Cameron an overall majority – the economy coming good, UKIP’s support collapsing, the Tories winning back two dozen seats from the Lib Dems and doing better than nationally in Con-Lab marginals. My contention was, and is, that IF Labour succumbs where it is vulnerable, and IF conditions prove clement for the Conservatives, then Cameron could end up heading a majority government.

‘If’ is the key word. David Cameron’s problem is that the events I imagined are unlikely all to come true. Ed Miliband’s problem is that some of them probably will. That is why I still think, as I have thought for the past few months, that it is 50-50 whether Labour or the Conservatives will be the largest party in the next parliament, but, say, 80-20 that the result will be a hung parliament rather than an overall majority for either party.

But if things pan out precisely as I imagined last week I shall, of course, claim amazing powers of foresight.

See the full Sunday Times survey results here

Click here for the full TUC survey results

Want to receive Peter Kellner's commentaries by email? Subscribe here