Paul Vallely: I am poor. You are welfare-dependent

With no fair solution to the benefits dilemma, Iain Duncan Smith is likely to take the most brutal approach
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The Independent Online

I met a young lad in Tesco not so long ago. He was the only one in his crowd of friends to have a job, and the others thought he was odd, because they didn't want one. They could make more money from claiming benefits and selling drugs on the streets of Cheetham Hill. Not long after, in Blackpool, I met a 17-year-old mother with a baby and a two-year-old at a Barnardo's project. She didn't only need help with her physical needs, such as buying a new pushchair; she needed to be taught how to play with her baby.

Let me put that another way. Here are two propositions most people would find it hard to contradict. First, people who are capable of work should work. Second, a decent society helps those in need and enables those people who are unable to work to nonetheless live with dignity.

So far, so good. The problem comes, as so often with dogmatic moral assertions, in acting on both of them at the same time. Iain Duncan Smith will come up against that intractable truth in the radical shake-up of Britain's benefits system he announced last week.

The welfare dilemma is this: by helping those most in need we invariably help people who are perfectly capable of helping themselves. That costs. Britain spent £87bn on benefits last year. That's more than half the total UK annual deficit. And it messes up our labour markets by creating a raft of low-paid jobs which those on benefits won't do (though they object pretty vocally when people come in from Eastern Europe to do them). It has created a web of perverse incentives for lots of people not to work.

It does that by setting up a poverty trap. When people start work they lose benefits. For every £1 they earn they lose up to 95p of their benefits. If they can find a job they end up hardly any better off. That is the equivalent of telling a banker that he will pay 95 per cent tax on his salary. Imagine the outcry.

And if work seems profitless, a culture of dependency arises in which generations in families live and die without ever holding down a regular job. More children grow up in workless households in the UK than in any other EU country. We have set up a self-replicating template. Five million people now rely on state support.

There is an eerie sense of déjà vu about Mr Duncan Smith's ideas. This is not to decry his good intentions, nor his application. After a shocking trip in 2002 to Easterhouse, the massive housing estate of low income and low expectation on the edge of Glasgow, he set up the Centre for Social Justice and began years of work to understand the complex interaction of social, medical and cultural forces that institutionalise worklessness. But Labour's Frank Field had been there before, having been urged by Tony Blair to "think the unthinkable" – and then being sacked when he did. A whole succession of Labour welfare reform ministers have been shipwrecked between the same rock and hard place.

So it is worth examining the ethical underpinnings of the IDS plans to ask where are the boundaries of social solidarity. What are natural entitlements and what have to be earned? Where, to use the language of Blair, is the balance between rights and responsibilities?

There is a basic human right, or what Aristotle would call a just claim, to adequate food, clothing and housing; they are there for everyone in nature, in what theologians would speak of as a "creation ordinance" which modern jurists enshrined in the Universal Declaration of Human Rights. They are essential not just for individuals but for the good of society, for "the common good", to use a phrased coined by a 14th-century German mystic.

And yet there is a clear western philosophical tradition which requires the individual to contribute to that. More than that, it sees work as the quintessential human activity. "It is the defining act which makes us fully human," to quote a pope, John Paul II. "Work expresses human dignity and also increases it."

Work is more than just a right, or even a responsibility, it is a part of human fulfilment. That is an important insight in our economic system, riven as it is with contradictions between social justice and efficiency, labour and capital, full-employment and the control of inflation.

By that light, Britain's benefit system is not only wasting billions of pounds, it is squandering human potential. Mr Duncan Smith's pledge to be tougher on claimants who refuse work has been condemned as less Big Society and more Big Brother. But that is not always true if work is seen as something positive rather than merely necessary, though some may be wary at the IDS suggestion that "people who are fit to work should not be fussy over what jobs they take".

There are only two ways out of the poverty trap: cutting benefits or raising wages. Labour tried the latter with the national minimum wage and tax credits. Britain's huge public spending deficit will push the Tories towards the former. IDS is trying to nuance that by saying he wants to scrap programmes that fail to improve people's life chances. He also wants to restore an honesty to the system by addressing the nation's sick note culture which has transferred large numbers of people from unemployment to disability benefit – primarily because they get £25 a week more on the sick than on the dole. We currently have more people classed as invalids (2.65m) than we do as unemployed (2.5m). Almost 7 per cent of the working population is now said to be physically incapable of working.

Good intentions are not enough. Labour said many of the same things but the National Audit Office has just branded its flagship £500m programme, Pathways to Work, as poor value for money. And Mr Duncan Smith should be alarmed to hear that the private companies and charities brought in to help get people off incapacity benefits did no better than JobCentre civil servants.

If Britain failed in a time of economic plenty to make work more attractive, at a time of drastic public-spending belt-tightening cutting benefits even more deeply may seem the answer. So it looks as if the poor will bear the burden. How unusual. And things will be worst in Cheetham Hill and Blackpool where, as throughout the North and Midlands, the jobs market will recover more slowly than in the south.

The rhetoric is easy here. But it leads us into pitfalls. We talk about the poor when we feel sorry for them, and the welfare-dependent when we don't; yet the intractability of the problem is that these are the same people. We think about the Government when we see the problem as theirs, but the taxpayer when we see it as ours. We have for years assumed that poverty and inequality are the same thing, but they may not be, as I learned from the mother in Blackpool who had to be taught to play with her baby because her mother had not played with her. If fundamental benefit reform was straightforward, it would have been done by now.

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