Category: Social security

This blog includes discussion of issues in British social security policy, along with new material to complement my book, How Social Security Works.

A debate on Universal Basic Income

From one point of view, I ‘won’ a debate in the Chartered Institute of Housing’s conference on Tuesday, when I was sounding a sceptical note about the idea of Universal Basic Income.  After hearing the arguments, people were much more critical of the idea.  There’s a short (and not very balanced) report on a CIH blog here.   If you read it, you might get the impression I had swayed people with my fiery rhetoric and compelling oratorical powers.  But the truth is that the case was largely won for me before I opened my mouth.  At the outset the CIH Chair asked people to vote electronically.  The first question was whether or not people were generally in favour of the idea; 75%, of an audience of about 200 said they were.  Then he asked if they would still support it if they had to pay more in tax, and approval fell to 51%.   Laughter in the hall.  Job done.

Reforming PIP

The Government’s proposals for the reform of PIP make for curious reading.  The DWP press release explains that the purpose of the proposals “is to restore the original intention of the benefit which has been expanded by the legal judgments.”  The fullest account of the rationale for the policy is however given in the Equality Analysis, which covers the detailed arguments without saying much about equalities.

The problem that the proposals are supposedly addressing is that a couple of legal decisions have accepted that people with a range of disabilities might reasonably be said to qualify for support under the rules as passed.  Those disabilities mainly relate to people who have to manage a medical condition or therapy, which is expressly provided for in they regulations, and people who suffer from mental disorders that interfere with their capacity to travel.   The responsible minister has explained that

The Government continually monitors the effectiveness of PIP to ensure it is delivering its original policy intent and supporting those who face the greatest barriers to leading independent lives. Two recent Upper Tribunal judgments have broadened the way the PIP assessment criteria should be interpreted, going beyond the original intention.

The Equality Analysis goes into more detail about the apparent intention.

PIP is a payment that is intended to be broadly proportionate to the overall need of a claimant. The greater someone’s need, all else being equal, the greater the cost they will face as they go about their daily lives.

The analysis argues that  the tribunals’ interpretations of the points schemes go further than the DWP intended.

There are three problems with this account.  The first is the question of what PIP is supposed to be about.  If PIP is really supposed to be an extra cost benefit, it makes little sense to offer it without reference to people’s ability to pay.  The truth is that when the non-means tested benefits were introduced, they had a very different objective.  The Disablement Income Group had been campaigning for a recognition that the incomes of people with disabilities were consistently lower than for others.  Alf Morris explained, in Parliament (10th and 15th Jul, 1970):

“It is not only a question of finance we are discussing, but also the dignity of disabled people. … This provision must be seen as only part – a very minor part – of an entirely new financial deal for the severely disabled. … This is only one stage towards improving the financial status, and therefore the dignity, of every one of our severely disabled fellow citizens.”

The point of the non-means tested benefits was to introduce a   general income supplement, recognising that the incomes of people with disabilities were consistently lower than for others.

The second problem lies in using an assessment of functional activity as the basis of an assessment of costs.  This makes no sense – and the Equality Analysis explicitly acknowledges that it doesn’t work.  Testing people’s activities is “a proxy for their overall need”, but then it goes to explain that assessing costs is not practical:  “it would not only lead to inconsistent outcomes but would also be expensive and difficult to administer.”  If there was a direct relationship between need and cost, this would not be true – and the outcomes wouldn’t be inconsistent.  As far as I can tell, there isn’t such a relationship, or at least not one at the level there would need to be to make it the basis of an individual assessment.

The third problem concerns the Government’s intention.  It’s clear that the Government thought that introducing PIP would save money, and that the benefit would be more restrictive than the Disability Living Allowance.  I challenged that assumption more than four years ago, when I wrote this:

the target is a reduction of 600,000 people taken off benefit by 2018. I am not sure how a cut in numbers of that size is supposed to be achieved, but it is most probably made up of three elements: people who will lose the lower rate for the care component, people who fail to turn up for assessment, and people whose conditions have improved sufficiently not to qualify. (There is a fourth element, which is the attempt to individualise assessments more closely – blind people, for example, will no longer qualify automatically for higher rate mobility – but that can work both ways.)

On general principles, I think the predictions are likely to be wrong. The common experience of selective benefits has been that when governments try to impose firmer boundaries, they are liable to discover that needs are deeper, more complex and more difficult to reject than they imagine. The distinction between the lower and middle care rates on DLA has always been confusing, and many people can argue persuasively for higher banding. There are new opportunities to include people with psychiatric disorders. And the PIP rules do not exclude the growing numbers of older people claiming DLA.  Short term reductions have to be offset against the general trend, and as time goes on, inexorably, there will be pressure to extend protection. That happened with Single Payments, it happened with Incapacity Benefit, it has happened with DLA, and it will probably happen here, too.

And so it has proved.

Basic Income continued

It’s a problem with social media that there are so many ways to respond, so people following this blog won’t necessarily get to see the comments that people make on Twitter and in other ways.  Some of the criticisms that people made yesterday were directed at my Evil Assertion that the best way to deal with the loss of jobs was to make jobs.  Another  person challenged my argument that Basic Income wouldn’t leave poorer people better off if it got knocked off their benefits – we’ve seen this before, because it’s what used to happen to Child Benefit.  “I’d like to see Professor Spicker’s basic income proposals that leave poor people no better off, as I have seen none-such that do that.”  So here are a few.

Reed and Lansley, authors of the Compass schemes, do their best to hold losers to the minimum (7% of the second income decile for their Scheme 1, while about a third are no better off.) They explain:

“it is not possible to design a scheme that is revenue neutral, pays a decent sum and withdraws most means-tested benefits without significant numbers of losers.”

Malcolm Torry is Director of the Citizens Income Trust, and the author of a clutch of recent books on Basic Income.  He has produced three schemes for the CIT, labelled A, B and C. (The RSA scheme is also based on the CIT models.) He acknowledges that there will be losers:

“A feasible way to implement a Citizen’s Income showed that in 2012/13 a Citizen’s Income of £71 per week (with less for children and young people, and more for elderly people) could have been largely funded … but that at the point of implementation such a scheme would have imposed losses of over 10% of disposable income on 21.12% of low-income households (defined here as households in the lowest disposable income decile). … In relation to schemes A and C, while it is true that the high losses imposed on households at the point of implementation are the result of the complexity of the current tax and benefits scheme, and not of the Citizen’s Incomes, such losses would make the schemes impossible to implement.”

Scheme A would leave 28% of the lowest paid households worse off by more than 10% of current income, Scheme C would leave 29% worse off. Scheme B is the one that leaves existing benefits in place, and takes BI off them; while scheme B largely avoids losers, the poorest who currently receive benefits will remain in the means tested system.

That’s six schemes so far. Neither Reform Scotland nor the Green scheme do the same kind of modelling, but while they aim to be more generous, which is one of the ways of reducing dependence on means-testing, both abolish Tax Credits. There will be losers as well as gainers.

The Maseres scheme for life annuities

I found a copy of Nicholls’ History of the English Poor Laws in a second hand shop, and it’s taken me a few months to get round to it.  My attention was caught by a couple of references to schemes for avoiding the Poor Law, which I hadn’t come across before.  One was Acland’s Universal Benefit Society, effectively a proposal in 1786 for  a scheme of National Insurance.  Another was proposed by Baron Maseres, who attempted in 1772 to create a universal savings plan which would deliver a lifetime annuity of between £5 and £20 a year for men over fifty, and women over 35.

Maseres worked out the costs scrupulously on the basis of actuarial tables of life expectancy.  He argued that

 The design of this bill was to encourage the lower rank of people to industry and frugality, by laying before them a safe and easy method of employing some part of the money they could save out of their wages, or daily earnings, in a manner that would be most strikingly for their benefit. …  if they saw an easy method of employing the money they could spare in such a manner as would procure them a considerable income in return for it in some future period of their lives, without any such hazard of losing it by another man’s folly or misfortune, it was probable they would frequently embrace it: and thus a diminution of the poor’s rate on the estates of the rich, an increase of present industry and sobriety in the poor, and a more independant and comfortable support of them in their old age than they can otherwise expect, would be the happy consequences of such an establishment.

The measure, watered down to allow for reluctant parishes to opt out,  passed the House of Commons,  but it was blocked in the Lords.  It’s not a Citizens Income scheme, but it has some of the characteristics and aspirations of a partial basic income, nearly twenty years before Thom Paine’s more radical and more universal approach.

Additional note:  I’ve appended an extract from Maseres’ text, where he explains the scheme,  in PDF form here.  

A dispiriting review of sanctions

David Webster’s 13th briefing on sanctions makes for disturbing reading.  The figures from DWP have consistently and substantially underestimated the numbers of people undergoing sanctions; the effect of taking account of the high rate of sanctions for Universal Credit claimants is almost to double the reported figures.  Key issues, such as suspension of Housing Benefit, have been misreported to Parliament.  Although the rate of sanctions has slowed, sanctions have by now been imposed on most longer term claimants of JSA, and 85% of those unemployed for more than three years.

0-3 months 3-6 months 6 months-1 year 1-2 years 2-3 years 3-4 years 4-5 years
% of individual claimants
36 19 20 15 6 3 1
% of these claimants sanctioned 6 15 24 37 49 85 n.a.

The long-awaited report from the Public Accounts Committee does not address these issues.  Their strongest criticism is that the DWP seem not to know what the effects of sanctions are.  They are attracted by the idea of a warning system, which has been trialled and, David argues, has already been shown not to work.    They call for greater evidence for consistency between offices – in other words, for targets.

What’s wrong with social security benefits?

What's wrong with social security benefits?: Book coverI’ve just received the first copies of my new book, What’s wrong with social security benefits? It’s a short book; Policy Press has it on sale at £7.99.

From the cover:

“In this thought-provoking book, Paul Spicker challenges readers to rethink social security benefits in Britain. Putting a case for reform of the system, Spicker argues that most of the criticisms made of social security benefits … are misconceived. … Spicker assesses the real problems with the system, related to its size, its complexity, the expectation that benefits agencies should know everything, and the determination to ‘personalise’ benefits for millions of people. This stimulating short book is a valuable introduction to social security in Britain and the potential for its reform.”

The Big Questions

I was part yesterday of a studio discussion for “The Big Questions”, a Sunday morning TV programme. I’d been asked along to say something about Universal Basic Income, which was being put forward by Guy Standing and Glasgow councillor Matt Kerr. Other questions considered in the programme (each question gets twenty minutes) were about Scotland’s voice in Brexit, where I did get my oar in, and reparations for slavery, where I didn’t.  (There’s a hilarious take on the programme’s format here – I went in the full knowledge that it was going to be tough.)  The programme is on Iplayer for a little while.

I’ve said plenty about both Basic Income and Brexit on this blog, so let me fill a gap by saying where I stand on reparations for slavery.  While there’s no doubt about the depth of the historical injustice, I don’t think we can rewrite thousands of years of world history to rectify it.  I come from a long line of refugees.  I can’t accept the principle that I should be compensated for the injustice they suffered; I’ve done nothing to justify that.  (That also means, by the way, that I think the UN’s current position on hereditary refugee status is nonsense; if they’re right, I should be thought of as a refugee from three other countries.)  When my great grand father, grandfather and father came to Britain, the first in the 1880s and the others in the 1940s, they didn’t come to join a slave-traders’ club; they came to one of the few countries that had stood against slavery and oppression.  Britain has things to be ashamed of, sure enough, but it’s also got something to be proud of.

The DWP misleads tenants about benefit changes

I know that Scottish Housing News may not be everyone’s constant study,  but they’ve been covering an interesting dispute about housing support.  The Director of Angus Housing Association, Bruce Forbes, had talked to the Dundee Evening Telegraph, expressing some criticism of the coming introduction of Local Housing Allowances in social housing, and particularly the ‘horrendous’ effect on younger single people.  The DWP replied with a general justification of the policy:

These changes are about restoring fairness to the system and ensuring that those on benefits face the same choices as everyone else. The reality is, nothing will change until April 2019, and existing tenancies signed before April 1 2016 will be unaffected.

That prompted a furious public response from Mr Forbes.  The DWP statement was irresponsible, “blatantly untrue” and “totally false”. The DWP were “peddling lies and misleading the public”.   Since then, the Scottish Federation of Housing Associations has expressed concern about the inaccurate information.   (I should declare an interest here; I have previously been a consultant with SFHA  and have worked with them on issues about benefits.)

There’s a point at which propaganda tips over into misinformation, and the DWP statement has done that – claiming that existing tenants won’t be affected.  This is not right – everyone coming onto Universal Credit will be subject to the new rules, and in due course that should be everyone of working age.  The main problem here is, of course, that people with very limited resources are suffering further cuts.  The same cuts also threaten the financial security of social landlords, which is another reason that the housing associations are worried about it.  Having said that, it is also worth remarking on the secondary issue.  The DWP has to make sure that the information it gives out to claimants is reliable, and that has to be more important than scoring political points in the local papers.

The IEA fails to understand some basic facts about disability

The Institute of Economic Affairs has published a briefing on Disability Benefits.   They claim that the cost of disability benefits could be reduced by making sure that more people with disabilities went into work.  The approach has been sympathetically reported in the Mail and the Independent.  Unfortunately, the briefing is written with a cavalier disregard for the most basic facts about disability benefits, which rather tends to undermine any arguments they wish to make about what should be done.

There are three quite simple reasons why a greater emphasis on work will not do very much.

First, disability benefits are mainly provided for people who are not part of the labour market.  Half the population with disabilities consists of elderly people (the figures used to show more than half; the 2011 census puts it at 48%).   Claims for Attendance Allowance, and a third of the claims for Disability Living Allowance, are made by older people.

Second, disability benefits are provided for many reasons which have nothing to do with work – among them meeting special needs like mobility, supporting care,  compensation for injury and even (in War Pensions)  reward for merit.  The main justification for DLA is not really to cover extra costs, as many suppose, but to compensate for long-term low incomes of people with disabilities.   None of these reasons disappears if people are in work.

Third, and following from that, many disability benefits (such as DLA and PIP) are provided regardless of people’s income or employment status.  The main benefit supporting disabilities for people of working age who are not in work is Employment and Support Allowance – and while it is true that ESA has been used to cover a hotchpotch of different circumstances, sometimes including disability, it is a sickness benefit, not a disability benefit.  Disability is neither a necessary or sufficient reason for getting it.

It’s true that the numbers of ESA claimants have persistently failed to go down, unless it is by the rather brutal approach of using disentitlement and sanctions to throw people off benefits with no income.  The main reasons why so little has been achieved for ESA claimants  are

  • the failure of psychiatric services to achieve valuable outcomes for people with long-term mental illness
  • the use of ESA as the low-income equivalent of schemes for early retirement
  • the preference of employers for employees who do not have long-term limiting health conditions
  • the penal treatment in the benefit system of part-time and therapeutic work, and
  • the perverse emphasis on individual effort to find a job, mainly focused on people who are too ill to work.

If what the IEA is saying is that more people on ESA need to work, they have about 25 years of policy failures to show that policies which try to do this are ineffective.

 

California gets rid of a nasty rule

It appears that the rule in California, which stopped families claiming extra benefits for any child born while they were receiving welfare payments, has been abolished.  The ‘maximum family grant’, introduced in 1994, is the model for the scheme in the UK, about to be introduced in April, to limit benefits to the first two children; both are based in the idea that people who receive benefits shouldn’t have babies.  Unusually the measure was opposed simultaneously by both the Catholic Church and Planned Parenthood.  Because having children is not always a choice, it included exemptions for mothers who had tried to be sterilized and those who had been raped. There is no way of administering a scheme of this type without intrusive inquiries, injustice and distress.