What should we do about the welfare state? That’s the question that has been preoccupying me over the last year or so while I’ve been making a television documentary about what’s come to be known as the 'entitlement culture'. Have we created a system in which too many people have come to believe that they are entitled to be dependent on the state for their livelihood, a system that is hugely expensive, unfair and, perhaps above all, that is actually harmful to the very people it’s supposed to help? If so, how can we change it?
The origins of the welfare state can be traced back a long way but undoubtedly the most important moment in its development was the publication of the Beveridge Report in 1942. In it the Liberal peer, Lord Beveridge, set out a plan to slay what he called the five evil giants of society: want, disease, ignorance, squalor and idleness. It’s the effect of his proposals on the last of these that has proved most controversial. Many believe that far from vanquishing idleness, the welfare state that has come into being since his report has actually fostered it. It has encouraged people not to work.
As it happens, I was born a few months after Beveridge first set out his plans. I grew up in a working class district of Cardiff called Splott, where an old lady still living in a house in the street where I lived told me during the making of the documentary that, back then, there was a 'pride in working'. There was only one man in that community who chose to live on the dole rather than go out looking for work and he was universally treated with contempt.
I grew up sharing that attitude to work and to those who chose to shirk it. And I know for a fact that my parents’ generation would have been not only astounded but utterly disapproving if they had been told that seventy years later, in a society hugely richer, one in four people of working age in the area were living exclusively on benefits. The old lady summed up the attitude of any when she told me: 'If they can get money without working, they will.'
In the country as a whole, 840,000 people have been out of work for over a year and claiming benefits. The total number unemployed is 2.57m and a further 2.5m do not work but claim sickness benefits of one sort or another.
Of course not all these people choose not to work. Far from it. The numbers can be divided into those who are forced to live on benefits because they have no option and those who choose to do so.
There is no doubt, however, that there are plenty of people in the latter category. I met several of them. There was Pat Dale, for example, a single mother with seven children who lives in my old street in Splott. She professes outrage at those who have never worked in their lives. But she herself has not worked for twenty years and her older children don’t work either. She explained why she chose not to. 'If I worked for the minimum wage I’d get paid £5.50, right? That means I’d lose out on my rent benefits and I’d be working for nothing. I think it’s disgusting. Honestly it is really, really disgusting.'
Then there was Steve Brown, in Middlesborough, who, with his partner and three children, take in an untaxed £20,000 a year in benefits. He acknowledges he might be able to make a few quid more by working but he is not remotely tempted to do so. It would mean 'I’d be missing my kids growing up'.
What these examples and others show is that there has grown up a system of perverse incentives in which it is rational (in a simply financial sense, anyway) for people to choose not to work. One result has been that the number of households in which no one works has doubled over the last fifteen years.
Some of these perverse incentives have come about as the unintended consequence of otherwise good intention. Attempts to reduce child poverty, it’s argued, have created a benefit system which deters working. Some of the perverse incentives have been the result of political calculation. Governments in the 1980s tried to cut the electorally toxic numbers of unemployed by simply transferring huge numbers on to sickness benefit.
So what can be done to make it harder for people to choose not to work? The Government is already tightening the eligibility rules for sickness benefit. David Cameron claimed recently that of the 1.3m who put in a claim for the new sickness benefit, a million either proved capable of working or withdrew their claim before facing the obligatory medical.
More generally the Government plans to simplify the complex benefit system by replacing the myriad benefits with a single, universal benefit. The Work and Pensions Secretary, Iain Duncan Smith, put it like this: 'This is a two-way street…We expect people to play their part… Choosing not to work if you can work is no longer an option… We are developing sanctions for those who refuse to play by the rules.'
This follows what has happened in America since President Clinton introduced a workfare system back in the 1990s. The effect has been, according to its author, Professor Larry Mead, that 60% of those who were on benefits before have now taken jobs.
But that leaves the 40% who have not taken jobs. The 'sanction' against many of them has been that after a period their state benefits have stopped altogether. They have had to sell what possessions they had, bit by bit, just to get by. In order to eat they queue up for meals in soup kitchens and local churches.
Many people would say that’s fair enough for shirkers who choose not working as a lifestyle. But there are plenty more people dependent on benefits who are desperate for a job but simply can’t find one. How can we create a system which accurately distinguishes between the two?
That’s the rub. If we try to kill off the entitlement culture by making the safety net of benefits sufficiently less comfortable that no one will choose not to work if they can, it seems inevitable that we will end up making life a lot harder for those who would work if they could but can find no opportunity to do so. Is that a price worth paying?
What’s your view?
- Do you think we have created a welfare system that is just too easy for those who choose not to work?
- Do you think people should be made to work even if the net financial benefit to them from doing so is pretty small or even non-existent?
- Do you support, or not, the Government’s attempts to tighten up on eligibility for sickness benefit and to introduce a single universal benefit?
- What changes do you think should be made to the system?
- And if getting rid of the entitlement culture were to result in increased hardship for some of those who do not choose to be idle but who simply can’t find work, do you think that would be a price worth paying?