welfare

The question raised by Labour’s intervention – and the various Conservative announcements, past, present and future – is ‘where does this end?’ Curbing migrants’ access to condiments, the Paddington Bear movie, Cafe Nero loyalty cards? Contrary to what politicians seem to think, there is no reluctance among Britons to talk about immigration – quite the opposite. The Labour and Conservative parties have talked a lot about migration. They’ve incrementally become tougher on EU migrants’ access to benefits. And has it curbed the rise of Ukip? It doesn’t seem so.  Read more

Welfare, migration and Britain’s membership of the EU – three areas of policy that are unlikely to prompt cool thinking. Throw them together, as in the question of which benefits EU migrants should be entitled to, and you have a recipe for opacity.

On Tuesday, a European Court of Justice ruling cleared a few things up. It could – could – make for more comprehensible policy in an area that has been full of confusion, empty rhetoric, and public anger. It will also encourage the prime minister to think he can go further in restricting access to some benefits for some EU nationals, a move he is reportedly considering. This is not because the ruling changed EU law but because it clarified the law, implying that, broadly, the approach successive UK governments have taken is legal.

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This week the UK government began sending letters to income taxpayers that suggest how the state spends its citizens’ money. For example, someone paying £10,000 in direct taxes will be told that they are “contributing” £1,900 to public spending on health, which accounts for 19 per cent of state expenditure; £100 to overseas aid, which makes up 1 per cent of spending, and so on (see picture). George Osborne says that by giving people bespoke descriptions of how their contributions equate to spending by various parts of the state, he is increasing transparency.

On the contrary, the chancellor is being opaque. What is pitched as an exercise in numerical transparency is also a lesson in how language confuses public policy.


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On Tuesday morning George Osborne was asked by the BBC’s Evan Davis whether he’d rather fund Crossrail 2 or trans-Pennine rail, assuming that both projects had a positive benefit to cost ratio. Politicians tend to shun hypothetical questions but the Chancellor of the Exchequer used this one to make the following argument:

‘I hope we don’t have to make a choice between the two. I think the real choice in our country is actually spending money on this big economic infrastructure, transpennine rail links, Crossrail 2 in London and the like, and spending money on, for example, welfare payments which are not generating either a real economic return and at the same time, are trapping people in poverty.’

Whenever someone mentions what the “real” this or that is, be careful. There are many choices involved in how the British state should spends its tax revenues and indeed what size the state should be in the first place. To reduce them to one “real” choice representing a fraction of overall spend is like saying that the real choice I face is between a Heart of Midlothian season ticket and feeding myself. (Essentials, both.)  Read more

At Wednesday’s Budget, the chancellor announced details of the “welfare cap”, which was first proposed in 2011. This is different from the benefits cap: the limit on the amount one household can receive in benefits per week. The former is a big, potentially sensible idea; the latter is a small, stupid idea.

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The previous post looked at the changes announced on Tuesday to “childcare accounts”, a subsidy to working parents to help pay for nursery and/or childminders. But for lower income parents, there was a more important change announced regarding Universal Credit, the government’s all-singing, all-dancing, not-yet-working reform to the benefits system, due to be rolled out at some point in the next few years.

Most of the coverage on the childcare changes has focused on the subsidy. But the Universal Credit changes are important and they affect a lot of people: about one half of all households with dependent children will receive UC.

The childcare fix announced today suggests how, in a complex system where rates are being changed from year to year, such disincentives can still emerge. The change sounds simple: under UC, the government will now pay for up to 85 per cent of childcare costs, rather than 70 per cent, as previously proposed. This is why it was necessary:

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David Cameron, prime minister, has described his government’s “welfare” reforms as a “moral mission”. I support much of what the coalition is trying to do; for example, the effective marginal tax rate for people such as Natalie should come down under Universal Credit. (It could also have come down without a massive project but that is for another post.) Any government taking power in 2010 would have had to cut the social security budget.

But the government’s haughty self-righteousness is risible in the face of evidence of unnecessary suffering. The rhetoric around benefits and the millions who receive them is already toxic. We could do without the idea that pointing out problems is somehow treacherous. If you look at what the Christian leaders are saying, as this atheist has, they are careful to focus on the practical consequences of specific decisions. There was only one side talking the language of crusade last week and it was not the ones whose job it is to promote the idea of ascension. Read more

Universal Credit is the government’s flagship reform to the benefits system. It is also in complete disarray, according to a National Audit Office report released on Thursday. The document is perhaps the most scathing NAO verdict I have read on a large public project. Read more