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.

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.

Stopping in-work benefits for EU workers

It’s been widely reported (for example, in the Times, the Mail and the Sun) that Theresa May has plans to restrict in-work benefits to EU workers, putting them on the same footing as non-EU claimants.  I’ve been puzzling about what this means.  The only benefits specifically mentioned in the reported briefings are Tax Credits, which in any case are supposed to be being replaced by Universal Credit.  In most cases non-EU migrants are entitled to benefits as long as they meet the various tests – residence, presence or habitual residence,  depending on which benefit we’re talking about.  So, for example, to be entitled to Child Tax Credit, Working Tax Credit or Child Benefit a non-EEA migrant is expected to have lived in the UK for three months.  Refugees and family members don’t have the three month test; but both EU and UK citizens returning from abroad, who are not working, are subject to the  test.  If Ms May was saying only that there’s to be a three-month residence requirement for everyone, she wouldn’t need to wait for Brexit; it would be compatible with EU law now.

The main restriction that actively affects non-EU migrants is something quite different:  the restriction of the terms of entry on their visa, where they undertake not to be dependent on public funds and are threatened with deportation if they do.    Treating EU migrants in the same way could only happen after Brexit.  It would mean that the issue is not mainly about benefit law at all, but about the way that Britain deals with foreign citizens.  It’s only workable if we have a straightforward way of identifying who is, and who is not, a migrant, and a clear record of the terms of entry.  That could affect millions of people.

Some responses to the consultation on social security

The responses to the Scottish consultation on social security have been  available online for about a month, but I’ve just got round to sifting through them.  I’ve not looked at most, because there are 460 of them, but what I have read reflects a great deal of thoughtful engagement, from individuals, professional groups, local authorities and the third sector.   (There are also some things to disagree with,  but I’ll leave people to find those for themselves.)

Here are some links to get you started:

It’s difficult to make sense of the submissions by reading them one by one – which is all that was possible at first.  The web page has been redesigned in a way that pretty much invites readers to enter a key term  – “cold weather”, “funerals”, “maternity”, “hearings” and so on – to see what people are saying about the topic.   However, that doesn’t work for every topic – there are 196 submissions with bits relating to assessments.  It also doesn’t show material from entries that have referred to evidence in PDF documents.  So, for example, the fullest discussion of Industrial Injuries benefits I’ve found so far is made by Thompsons Solicitors, but it doesn’t come up on a search.

The welfare cap is due to be breached

The ‘welfare cap’ was another wizard wheeze from the government that George Osborne hoped would embarrass opponents in the future.  The idea was to limit total spending on some benefits to a set figure, so that if the cap was exceeded, the government would then have to explain why.  There has just been a debate on the welfare cap, and (despite a particularly well-informed contribution from Ian Blackford of the SNP) it has said nothing much.  The motion approved in the House was this:

“this House agrees that the breach of the Welfare Cap in 2019-20 and 2020-21, due to higher forecast inflation and spend on disability benefits, is justified and that no further debate will be required in relation to this specific breach”.

There are good reasons, however, why expenditure on benefits should on occasions go up.  The main one is that many benefits are designed to go up when people’s incomes go down.  It’s also intriguing to note that the government is now expecting to spend more on disability benefits, when it initially claimed that PIP was going to save money (and fined Northern Ireland on that basis).

There is, of course, a simple way to make sure that the cap is not breached, and that would be to increase the level of anticipated expenditure to a more realistic figure.  But it’s far from clear that the global figure is telling us very much about what governments are doing.  Most benefits aren’t really ‘spent’ – they’re transfer payments, moving money from one person to another – and precious little work has been done to see if the global extent of transfers really has much impact on the broader economy.   It’s much more important what effects the benefits have on people’s lives.  In evidence to the Treasury committee yesterday , Chancellor Philip Hammond was refreshingly candid about the fact that he’d cut the living standards of people on low pay, and said directly that it was something the government had intended.

“We were elected on a manifesto that included the commitment to reduce welfare spend, particularly the spending of welfare on in-work benefits … self-evidently, the preponderance of people receiving in-work benefits will be in the lower income deciles. … At the heart of this is the decision to reduce spending on working-age welfare.” (16.21-22)