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.

Stigmatising disability

The stigmatisation of claimants with disabilities is not a new phenomenon – people with disabilities have always prompted a combination of apprehension, mistrust and vilification. Precisely because it is deep-rooted in society, it can be dangerous. Governments which are critical of vulnerable groups are liable to legitimise the process of social rejection and exclusion; in the worst cases, they can exacerbate the process. That is behind the concern expressed by certain charities in a recent Guardian report.

Social security benefits for people with disabilities are not provided for a single purpose. They are provided for many reasons – among them, need, low income, social protection, compensation, earnings replacement, social inclusion and rehabilitation. Part of the problem with “othering” disability – and indeed, part of the problem with treating disability as an issue in identity politics – is that so many different issues are folded up together. Anyone can become disabled; it can happen suddenly as well as gradually. A benefits system needs to protect people from the things that might happen to them, and a system which excludes disability fails in several of its primary purposes.

Stimulating the economy: a partly baked proposal

I have written before about plans to inject money into the economy, and for the present I am going to leave aside the arguments for and against doing it. The Conservatives are pleading for tax reliefs; Liberals, for a rise in the tax threshold; Labour, for a cut in VAT and more quantitative easing. The question I want to address is a simple one: what is the best way to inject money into the economy?

There seem to me to be three main criteria. The first is effectiveness: the money needs to arrive in places where it will stimulate the economy. Too often in the past, indiscriminate financial stimuli have led to inflationary demand or to money leaking abroad. Second, there needs to be some consideration of the distributive impact. Third, the stimulus has to be practical: one of the reasons why Labour went for a VAT cut was that it could be done immediately, when changes to income tax would have been much slower. Cutting income tax fails on all three criteria. VAT meets the third criterion; it has limited benefits for the second, because VAT is only slightly regressive; and it fails on the first.

Some benefit payments could serve more effectively as a stimulus than tax cuts could. Although there is a case for higher benefit levels in general, the implementation would be too slow and complex, and it would be politically controversial. It is however feasible to make additional payments to the recipients of certain benefits. Child Benefit goes to every family with a dependent child; Winter Fuel Payment (disregard the label!) is an ad hoc payment to every older person. In other words, the administrative mechanisms exist to deliver one-off payments directly and rapidly to individual households. The distributive effect would be generally progressive (it could be made more progressive still if the payments are treated as taxable); and it would lead to an immediate, localised stimulus to spending that would fall roughly in proportion to the prevalence of deprivation. And if such payments happened to do a little to alleviate child poverty, that is a side-effect I think we should be able to bear with equanimity.

Widowed Parent's Allowance: closing down national insurance

There are so many dimensions to the benefits system that it is easy for smaller parts to be overlooked, but the Government is leaving no stone unturned. The payments made for widows and widowers are no longer quite the same as they were after the Beveridge report, but they are one of the last vestiges of an insurance system where people paid contributions to protect themselves against certain contingencies and were protected by the principle of insurance. Last month, the government issued a consultation paper proposing a reform of bereavement benefits. The consultation paper comments that these benefits tend to have been overlooked when other benefits have been reformed, and aims to bring it into line. In this case, the particular target is the Widowed Parent’s Allowance, which is payable as an insurance benefit, regardless of other income or earnings. The numbers claiming it have been falling – with only 99,000 claimants, all bereavement payments come to about 40% of what they were ten years ago. The consultation paper complains that the existence of WPA can lead to long-term dependency. “The ongoing nature of payments under Widowed Parent’s Allowance, which can continue for up to 20 years in extreme cases, without any encouragement to maintain contact with the labour market, risks creating welfare dependency.” The argument seems to be that an insurance based pension might encourage a select group of people to withdraw from the labour market – but if that is so, why are these criteria not applied to occupational pensions? What it comes down to is simple enough: this government does not believe that the state should provide insurance, and is not content to have benefits which are designed on that basis.

The consultation is open until March 12th.

The cap

The government’s proposal to cap the total amount a household can receive in benefits seems to have caused some confusion, among opponents as well as proponents. The cap gives the impression that benefits are much more generous than they are; the DWP estimate is that this will affect 67,000 claims out of 5.5 million. Neither disability, nor having a large family, would be enough to explain why some people might have an income level over £26,000 a year. The main element in the calculation has to be coverage for housing costs, either in the form of rent or interest on mortgage repayments.

The government has said that no-one will be poor because of the cap. That must be true, because if poverty is defined in terms of median income, anyone receiving median earnings (which are higher) is going to be defined as not being poor. The misleading part of the statement rests in the assumption that benefits are only there to respond to poverty. One of the fundamental principles of social security is captured in the word “security”; it’s about social protection. People who become sick, disabled or divorced should not have to strip themselves of assets in order to claim benefits. People who live in expensive houses are not forced to move out of them – or have not been up to now.

Statistics for a purpose

Part of the use of statistics, in the Coalition’s narrative of “broken Britain”, has been to show the social dysfunctions associated with benefits. The category of “out-of-work” benefits is one of the Coalition’s major innovations: it lumps together benefits related to unemployment, disability and caring in one undifferentiated and increasingly stigmatised category. The most recent release refers to people who claim benefits when they have not been born in the UK. There are some interesting and subtle findings, and the report is worth looking at. There are marked differences in different migrant groups – for example, people from Asia and the Middle East, who rights are often restrict by their terms of entry, made up a quarter of the job seekers, but more than half of those caring for people with disabilities. It emerges that more than half the people in this category are actually British or have indefinite rights to remain, and that overall foreign born migrants are nearly three times less likely to claim benefits than others. That didn’t stop the Daily Mail from reporting a fraud crackdown or the Daily Express referring to benefit tourism. Such a shame that the evidence ran in the opposite direction.

The hostile press was fed by the tone of the official statements. It is only a couple of weeks since a DWP and Ministry of Justice report revealed that 1.23 million claimants on out-of-work benefits have been convicted of criminal offences in the last five years. I find this more difficult to evaluate, because there were no comparators given in the report, and the English crime statistics have not been my constant study in recent years; I have a rough sense that crime figures are strongly skewed by age, and it might be expected that as more younger people are unemployed, and more younger people have committed offences, that more unemployed people will have committeed offences. As there have been some 8.7 million offences in the same period, the proportionate of benefit recipients with a criminal record seems if anything surprisingly close to what might be expected in the population as a whole. It appears again that the primary intention of the statistical release is to illustrate the moral deficiencies of benefit claimants.

Both these statistics have been produced for the first time. Both announcements were made by Chris Grayling MP. Looking back at the record, he was criticised last year for a tendentious and misleading release about the reassessment of claimants with disability. As Shadow Home Secretary he was told in February 2010 by the Chair of the UK Statistics Authority that his misuse of statistics was likely “to damage public trust in official statistics”. His response was that “As an opposition party, we don’t make the statistics.” Now he is no longer in opposition, he does make the statistics.

Additional note, 25th January: Today, the Chair of the UK Statistics Authority has publicly criticised the release of the statistics on foreign claimants, and the comments of ministers. “These statistics are both highly relevant to public policy and highly vulnerable to misinterpretation.”

The power of well-being and the Social Fund

With the coming abolition of the Social Fund, local authorities might be expected to do something to fill the gap. Local authorities used to offer loans before the introduction of the Social Fund in 1988. Local government in Scotland now has a general power to promote well-being, and I have to confess that I had blithely assumed this power would make it possible to develop alternative systems for delivering financial assistance. The recent debate about the powers of the Scottish Parliament has prompted me to rethink.

Under the 1998 Scotland Act a range of powers were devolved to the Scottish Parliament, with a large number of explicit exclusions. In 2000 the UK Parliament devolved additional powers to English and Welsh local government, including a general power to promote well-being (Local Government Act 2000, s 2). The promotion of well-being includes a power to “give financial assistance to any person” (s 2 (4)). In 2003 the Scottish Parliament followed suit, creating a general power to promote well being. The 2003 Local Government in Scotland Act grants Scottish local authorities the same powers (s.20), using the same wording as the Act for England and Wales.

However, the Scottish Parliament does not itself have these powers. It is expressly denied that role by the definition of reserved powers in the Scotland Act. So, it cannot make provision for “Schemes supported from central or local funds which provide assistance for social security purposes to or in respect of individuals by way of benefits.” (Scotland Act 1998, schedule 5 F1) If the Scottish Parliament did not itself have a power to give people financial assistance, it could not have granted that power to local authorities – the only authority could have come from the UK Parliament. If that is right, it is possible that English and Welsh local authorities now have a power that the Scottish Parliament and Scottish local authorities do not.

Further note, 15th February 2011. The Scotland Office has written to say that they will be addressing the issue of competence in the legislation to ensure that the necessary powers will be in place. That should resolve the specific issue with the Social Fund, but it may recur in other fields if the general issue of competence is not addressed.

Assessing cancer patients for ESA

Most people in receipt of Employment and Support Allowance are treated as needing preparation to return to work. It has taken a little time for government to realise the implications of that process, but an informal consulation on the circumstances of cancer patients suggests that the penny has started to drop. When I was interviewed on Radio Wales on 28th April last year, I took the treatment of cancer patients as an illustration of the problems. What I said was this:

“Of the people who are down here as having neoplasms, which are various tumours, we have 33% who don’t get signed off. Some are being found fit for work and some don’t complete the assessment. Now of course, it’s not that people basically say, ‘I’ve got cancer, I’m stopping work.’ What happens is that people are uncertain. They don’t know. They want medical assessment. They want clarification. They are unsure about the situation. Theyhope that things will be different. It takes time to sort this out. And what we’ve increasingly got is a system that is treating people mechanistically, ticking boxes, and saying ‘sorry – wrong boxes – go away.’ “

The consultation on Personal Independence Payment

In a previous posting I expressed concern about the announcement of policy decisions before consultations had been closed (see “A failure to consult”, 21st February 2011). A new report, Responsible reform, criticises the consultation on Personal Independence Payment because the government has misrepresented the responses. The authors have mainly counted the responses, which is not necessarily a valid criticism – consultations are not numerically representative, and large umbrella organisations cannot sensibly be counted in the same way as individuals submitting standard responses. However, the overwhelming opposition to the reforms is well conveyed by the quotations.

This contrasts with the government’s response to the consultation, which suggests broad support for the principles even if there are differences on specifics. Responsible Reform thinks the government’s response is misleading, and it is hard not to agree. The report cites a standard legal principle: “once a public body decides to consult it has to do so properly.”

Rising unemployment

The Chartered Institute of Personnel and Development estimates that unemployment figures are likely to reach 2.85 million in the coming year, equivalent to 8.8% unemployment.  In principle, this figure should be independent of the claimant count – people who are unemployed do not necessarily qualify for benefits.  In practice, it may not be.  Part of the government’s current policy is to disqualify people from long-term incapacity benefits, in the form of Employment and Support Allowance.  The medical reassessments have led to many people leaving the benefit rolls – 36% of reassessments are brought to an end because the claimant is no longer entitled, but that reflects a certain turnover in the figures anyway (for example, among women who have had to claim sickness benefits while pregnant).   More important for the unemployment figures are the further 39% who are found to be fit for work.  It is not immediately clear how many of these people will go on to claim Jobseeker’s Allowance instead of ESA, but those who do will be redefined as actively seeking work.  If only a third of them make that shift, it will increase the unemployment figures by more than 300,000 – taking the figures well over three milllion.

Scotland refuses consent

The Scottish Parliament has refused legislative consent to the Welfare Reform Bill. There is considerable concern about the direction of welfare reform, especially relating to the treatment of disability, but it would be misleading to say that the concerns have gelled into a solid body of opposition. If people’s concerns have been diffuse and difficult to focus, it is because the Bill itself is so vague. It outlines principles for action, but it is still desperately thin on detail. The Coalition Government has taken the view that the Bill is only about broad outlines; the details will go into secondary legislation. More than a year after the White Paper, it is still far from clear how Universal Credit will work, what will be included, and what its implications will be.

The Legislative Consent Motion effectively asked the Scottish Parliament, then, to agree to the Bill without knowing what they were signing up to. The Health and Sport Committee (the Scottish Parliamentary committee that reviewed the motion) expressed concern that the effect of passing the motion would be to commit Scottish Ministers to come forward later with secondary legislation that would not be subject to scrutiny. Equally, the vagueness of the proposals makes it difficult for the Parliament to be sure what will happen after refusing legislative consent. The Parliament’s consent is needed mainly to ensure that UK legislation is compatible with Scots law, and refusing consent will not prevent the UK legislation from being passed. The most positive interpretation is that the UK government will have to bring forward primary legislation for the system to work in Scotland; but witnesses to the Committee raised concerns that the effect may be the suspension of benefits to Scottish recipients.

The Parliament’s action is more than a gesture. Benefits are a reserved matter – that is, they are governed exclusively from Westminster – but training for employment is a shared responsibility. When the Department for Work and Pensions has taken action in Scotland in the past, it has been done with the active cooperation of the Scottish government. The view of the government was that “they rely on our support”. Scotland will have to take responsibility, under the reformed system, for Council Tax Benefit, and it is likely that other responsibilities, including Housing Benefit and work formerly done by the Social Fund, will gravitate to the Scottish Government. It is difficult to see how Westminster’s programme can be implemented in Scotland without the Scottish Government’s co-operation.