Cameron pledges end to poverty trap for jobless
Tory leader blames the benefits system for keeping people out of work
Digg
del.icio.us
Facebook
Reddit
Google
Stumble Upon
Fark
Newsvine
YahooBuzz
Bebo
Twitter
Independent Minds
enlarge
Some of Britain's unemployed are worse off when they accept a job, David Cameron claimed yesterday as he promised to simplify the country's benefits system and put an end to the "poverty trap".
Welfare reform was a central theme of the Tory leader's conference speech earlier this month, during which he said that some single mothers who choose to work would lose 96p in every pound they earned as a result of tax and the loss of benefits. But he went even further yesterday after new data suggested that some people would actually lose money by moving off benefits and into work. Using research by the Office of National Statistics, Mr Cameron said that an unemployed couple with no children would be £9.27 a week worse off if one of them decided to take a part-time job, while an unemployed couple with three children also faced losing out by accepting low-skilled work once travel costs were included.
"What sort of crazy signal does this send out?" Mr Cameron asked. "Don't strive for independence, don't try to provide for your family, don't try to do the responsible thing."
George Osborne, the shadow Chancellor, will now draw up plans to reform the system along with Theresa May, the shadow Pensions Secretary, and Iain Duncan Smith, the party's former leader, who now advises on welfare reform.
The number of people receiving benefits has been stubbornly stuck around 5.4 million for the last decade. Around 2.1 million people currently receive income support, more than one million are on jobseeker's allowance, and 2.6 million receive incapacity benefit.
The move signals that Mr Cameron has dismissed radical recommendations already made by Mr Duncan Smith as unaffordable. His Centre for Social Justice (CSJ) had called for some vulnerable groups to be allowed to hold on to some benefits once in work, which would have cost an extra £2.7bn a year in the short term. "It would be wrong to commit yourself without full consideration of something that could cost a lot of money," Mr Cameron said.
The Government immediately accused Mr Cameron of spin, arguing that the statistics he had cited only referred to "potential scenarios" rather than real households. A spokeswoman for the Department for Work and Pensions also said that the number of people who would not benefit financially from finding work was effectively zero, down from 5,000 families in 1998.
Mr Cameron also revealed that his shadow Cabinet would begin to publish details of their priorities once in Government in a bid to counter claims that his party is light on policy. In an echo of New Labour's 1997 billboard campaign that set out five "pledges" to voters, shadow ministers have been told to begin unveiling their priorities for their departments from next week.
"We want to give people confidence that we can, in government, make change happen," he said. "I don't think ministers can accomplish much unless they have an incredibly clear idea about what they want to achieve and how they will go about it. Ministers can't deal with everything at once and they shouldn't try to. Instead they should prioritise what really matters and reforms that will make the biggest difference and be single-minded about achieving them."
96
Number of pence in the pound the Tories claim some single mothers lose by taking a job.
View all comments that have been posted about this article.
Offensive or abusive comments will be removed and your IP logged and may be used to prevent further submission. In submitting a comment to the site, you agree to be bound by the Independent Minds Terms of Service.
- Print Article
- Email Article
-
Click here for copyright permissions
Copyright 2009 Independent News and Media Limited
Comments
Labour played it safe in 1997 for several years to avoid being seen as old Labour and being kicked out five years later.
But the Conservative are really going to go for it from day one, so it seems. oops!
But the real problem is the lack of jobs that pay a living wage. Even here in the north east, the minimum wage on its own will not support a family. Around here many of the jobs that paid a decent wage went in the recession of the early 1980s and have not been replaced.
We have two problems. Firstly, the tax system tends to penalise the poor and the modest earner while the rich can pay less tax as a proportion of their income. Capital gains tax, for instance, which only affects those with money, is set at a far lower rate compared with the top rate of income tax.
And secondly we don't have enough reasonably well-paid jobs that would support a family. Too little attention has been paid to the needs of those who are not academic and can't or won't qualify to go to university. We are facing a skills gap as older craftsmen retire. Benefit dependency has become a way of life because there is little to strive for in some communities.
Cameron is not the first politician to bleat on about the benefits system. Like the rest it is clear he doesn't really understand the problem. Communities have become stuck in a vicious circle of hopelessness. No one has yet come up with a long term solution to get these communities back to work. But then politicians only do soundbites and short term wheezes these days.
Mrs. You-Know-Who tinkered with the system. At the time the rhetoric was 'targeting'. This created a poverty trap, where if you started earning they grabbed a lot of it back from you. Thus housing benefit can be thought of as a rather severe kind of income tax on the less well off. It can also be seen as a state handout to landlords.
Sorting out housing is the key to sorting out the economy. And sorting out housing benefits is a big part of sorting out housing, along with making sure that there is an adequate supply of roofs for people. Gentler tapers may be part of the solution, along with a house building plan and regulating rents and house rationing. I don't have the complete answer to this problem.
It is of course admirable that David Cameron would like to solve this classic problem. Wanting to find a solution and actually doing it are different things.
I wonder if I am alone in wishing that an "opposition" does not see its role simply as to "oppose". If they actually believe they have a good solution they should share it and make it happen. If it is simply a "wish" then it has no value that i can see.
Note the careful use of 'begin' and 'priorities', but no doubt said with that Blair-earnestness.
So, one has to ask the question, if they DO have a solution and they DO care about those in poverty and they ARE sincere - why not tell the Government and the country what this wonderful solution is? We can't believe that David Cameron would wish the suffering to continue as long as the Conservatives aren't in power, can we?
I see this as the cheap rhetoric of 1978 all over again, taking the electorate for gullible soundbite fools.
would you have me turned out into the cold to die? and what about the many millions that cannot afford to buy orrent?- would you evict them and their children in winter?- do you have a warm comfortable home?
The problem we are talking about here is what happens when someone starts earning money, or getting income from some other means. You can have a generous benefit system which allows them to keep quite a lot of the extra income, or you can have a less generous tightly means tested system (usually what the Conservatives prefer)which means that most of the new money they are "earning" is off set by reduced housing benefit.
David Cameron has rightly identified that this (conservative approach) does act as a disincentive for people to go back to work. What is puzzling us all is how he intends to get round the problem without spending a lot of money on it.
What I don't know is if Cameron's assertions take into account the effect of Tax credits. My assumption would be that tax credits are there to ensure that people going back to work do benefit financially. Does anyone else know the answer to this?
Maybe in the future the people who have little money and consume the least will be considered more worthy than the people who have great stacks of it and consume the most ?
Governments seem to think that all people want is loads of money and are terrified of the politics of envy.
Some rich people are some of the most amoral unpleasant people one could meet and some people in 'poverty' have hearts of gold that could stretch to the moon and back.
Please oh please redefine poverty :-)
The 80's taught the US and the UK that money-rich is virtue-rich. Politicians still believe, with no little justification, that votes can be bought.
I AGREE WE DO NEED TO GET THE BENEFIT CHEATS BACK TO WORK, BUT WHAT ABOUT THE PEOPLE WHO GENUINLEY CAN'T WORK.
UNDER GREEN DAVE WE WOULD BE REINTRODUCING WORK HOUSES AND DRIFTING BACK INTO DICKENSIAN TIMES.
THE TORY PARTY ONLY KNOWS ONE WAY TO GO, KEEP THE RICH, RICH AND THE POOR, POOR, THEY HAVE ICE FOR HEARTS AND POUND SIGNS IN THEIR EYES, DESPITE ALL THE RHETORIC, THEY ARE STILL THE SAME OLD BOYS CLUB
these guys are nothing but hot air. they´d sell their mother to get the votes. enough is enough and its time for a major overhaul of the system otherwise this mafia gang business better known as two party politics will just go on and on for ever. the resources are drained even further and public services driven to nothing. the country is rotten in the core and that is where parliament and government reside.
Or do your principles prevent you from joining the capitalist running dogs who earn a living?
This statement depends upon a very strange form of presentation to be found in the ONS annual publication "The effect of Taxes and Benefits on Household Income". The 2005-06 edition of this publication shows, quite clearly, that the bottom ten per cent of households receive on average, 5,182 pounds p.a. in terms of cash benefits but pay only 3,695 pounds p.a. in taxes, (including the so-called "intermediate taxes"). They are therefore better of as a result of the tax and benefits system than they would otherwise be.
In contrast, the same document shows that the top ten per cent pay 31,079 pound p.a. in taxes but receive only 1,641 pounds p.a. in cash benefits.
The whole of your story is based on the taxes apparently paid on benefits - and is mainly driven by the sums supposedly charged in VAT. However, something is clearly wrong with the VAT figures. Indeed, much of this document fails a whole battery of "sanity checks" when the poorest households are considered.
For example, non-retired households apparently spend all their money on items that are subject to VAT - i.e. they spend nothing on food, rent, mortgage interest, domestic heating, children's clothes etc. etc. Clearly this is rubbish!
I am convinced that the problem lies with the income that these poor households supposedly have. Other ONS documents on Family Spending show that the spending of these poor households is much greater than their apparent incomes would support - yet there is far too little spending on debt servicing and plenty of evidence that they could not be supporting their spending out of savings. Both the ONS and the DWP are aware of this problem - and have even published papers attempting to explain the discrepancy. However, the rubbish statistics continue to be issued.
these claims mean nothing , the british public must know by now. the system is so corrupt that no one can save this country but the people themselves. none of these politicians rotten to the core can be trusted as they all have one agenda .
Cameron and Osborne are transparently putting together a hotch-potch of Blair mannerisms and frantic headline chasing on a solid foundation of 'what worked for Maggie'.
Sadly, many voters are unable to form a balanced view due to lack of memory.
Ok having established that there are not, nor ever have been any wrong doer's in society who have cheated the system, I still am at a loss as to exactly how the Tory reduction in benefits may move people into jobs to get money. According to you lot there are no jobs, or the people are to sick to work. In other words no cheating or lead swinging whatever.
As for your assesment of the Labour Partys appeal, they should be way in front, after all the wicked banker story is now fully fleshed. By the way my memory is just fine, but I dont remember (and I am 63) a balls up in general, not just economic, as this.
The point being made earlier was that the stock Tory doctrine is that by making benefits so appallingly low, employment of any kind would be preferable.
As for a general non-economic balls up, we would have to go back to Suez to compare with the folly of Iraq and Afghanistan. As for economic turmoil we would have to go back to Black Wednesday and then back to Black Monday. As for unelected Prime Ministers we would have to go back to Alec Douglas-Hume and Macmillan. As for political upheaval we would have to go back to the Poll Tax. As for political corruption we would have to go back to Jonathan Aitken and the Hamiltons. As for political use of the police force we would have to go back to the miners' strikes.
Of course Labour has had it's share of betrayals of public trust. I do remember Lady Forkbender et al. and more besides.
I completely abhor this one-sided patronising hypocrisy from Cameron, Osborne and their ilk, portraying the Tories as white knights, and wish that the British people would come to opinions based on FACTS.
Ecclesiastes ch 1, vs 10, 11.
Promises from politicians, "Jobs for us all", "No child below the poverty line .." "feed the world" " A system that will work .."
Politicians believing they are the Gods.
Accountants would claim that this would cost a lot - and in gross terms it would. Economists would claim that it costs nothing - we would not be paying anyone to do, (or not do), anything, so all payments would be merely transfer payments.
I have worked out, (using Treasury data), that a flat rate income tax, (with no allowances), and a universal non means tested benefit could actually improve the lot of the poor. The rich would be better off as well. It would be those in the middle who would be a bit worse off, but, since there a many more of them than there are of the poor or the rich, their individual losses would be minuscule.
Of course this won't happen. The votes are with the majority - the very minor losers!
'Developed' capitalist system inherently creates fewer jobs than number of citizens
REASON:
Over-production, 'efficency', imports cheaper, immigrant labour, but better for industry & capital that way; big labour pool & lower wages
PERCIEVED PROBLEM:
Cost of supporting jobless framed as waste rather than inherent result of chosen economic system
REASON GIVEN BY ELITE POLITICAL CLASS:
People don't want to work. Politically easier to blame victims of chosen structure than expose the inherent and predictable result of it.
FACTS LITTLE KNOWN TO UK CITIZENS:
In Ireland dole is £200/week. In Spain, 70% last wage for 2 years.
Minimum wage in Holland: Over £300/week. UK dole: £65/week (i.e below 'official' poverty line)
MORE FIGURES:
Annual dole Budget £2.7 Billion Result: The poor don't rob you, riot or cause revolution
Olympic Budget £9.7 Billion Result: People do Pole Vaulting & Ping Pong
Military Budget £35 Billion Result: Makes UK a terrorist target costing billions more in security costs (not seen as waste like dole, but a 'growth industry!')
Goldman Sachs bonus pool 2009: £25 Billion+!!!!!!!!!! (this last should put my capitalist critique into jaw-dropping perspective)
SOLUTION (Fantasy based!): Voters realise the system they vote for inherently creates unemployment, they refuse to vote for scammers like Labour/Conservative and support pols with 'reality-based' policies (if any can be found). A quick trip to France, Holland or Scandanavia will show them that combining capitalist business with socialist/humanist government only reasonable choice of system. Main thing: Government treats unemployed as the victims, not the scourge of capitalism and supports them in a dignified way. If we can afford endless, goalless wars, banker bonuses, MPs expenses and Olympic ping-pong, we can certainly afford to help those left out of the system. People who don't want to work are fine - they don't take jobs away from those who really want to work.
REAL SOLUTION: None. The UK population/media swim blindly in a capitalist fish bowl unable to comprehend the true nature of the system they live in, hence unable to see that what is framed as a 'problem' - unemployment, is, in fact, an inherent, implicit and for the elite, desirable part of the capitalist/consumer economy they have supported in every election since the industrial revolution. Cameron is merely doing what would be expected of any elitist/capitalist and blaming those in poverty for costing the moneyed too much. This government does not give the dole out of compassion but TO STOP THE POOR ROBBING YOU DAILY IN ORDER TO EAT and TO PREVENT THE OVERTHROW OF THE SYSTEM.
Yes, now we have seen a comprehensive failure in "This Great Party of Ours" you are all espousing far left politics again. Both here and in the Guardian it is the same, you will have go and live in North Korea.
Stephen Morgan
Also is there an unofficial poverty line? If so how much is it per week?
First do not tax anyone earning less than a reasonable amount. Opinions will differ but I suggest £20,000 per annum. We currently tax people earning £7,000 p a which is ridiculous.
Secondly get rid of National Insurance. It is a tax on incomes and a tax on jobs. Scrap it and put it on income tax.
Third scrap all benefits except one. So there is no separate old age pension, housing benefit, tax credits, job seekers, disability etc etc - its a confusing nightmare.
Just have one benefit amount.
To qualify for benefit you have to be unemployed, incapacitated or retired.
Set it at a reasonable level- £X a week to include housing costs.
By taking this approach it exposes the real problem.
Trying to set the benefit level at a sensible figure is very difficult.
"George Osborne, the shadow Chancellor, will now draw up plans to reform the system along with Theresa May, the shadow Pensions Secretary, and Iain Duncan Smith, the party's former leader, who now advises on welfare reform."
Time to leave the country then.
Don't forget the other failures like Hague, Letwin, Maude, Fox and Willets. And then the dinosaurs like Clarke and Young. All the rest are complete nobodies. Surely the Conservatives can do better than field glove puppets like Gillan and Gove?
The central problem in all of this has been identified by some of the other writers. At present there is not enough of the right sort of low skilled flexible employment. Many of the people who are not in work are in that position because their health is up and down, or they lack confidence, or they have not felt valued in jobs they have tried.
As society ages we are moving into a time when we cannot really afford for people not to be in work. Developing the caring economy and the green economy in the right way may be the way to create the different kind of jobs we need.