Mr Cameron’s speech this week on welfare reform was a thoughful and important contribution to the debate about the future direction of welfare policy.
He acknowledges that welfare accounts for almost £1 in every £3 the government spends. He rightly wishes to be generous to those in need through disability or ill fortune. He also wishes to promote work as the best kind of welfare for most people of working age. He identifies many of the perverse incentives in the system.
There are 400,000 more people in work than in 2010 when the government was formed. This is good progress, against a difficult economic backdrop. The private sector has comfortably created many more jobs than the public sector has shed, despite all the dire warnings to the contrary when critics saw the forecasts for job reductions by government. Mr Duncan Smith’s programmes to help people back into work are having some favourable impacts. The numbers for both employment and retail sales also make one wonder how accurate the GDP figures are, as they tell a different story.
Mr Cameron says he wants to carry on with his welfare reforms to show he is on the side of “those who work hard and do the right thing” He wishes to end features of the system which trap people in poverty and “encourage irresponsibility”.
He asks if it is a good idea that last autumn out of work benefits were increased by 5.2% in line with the RPI, when wages rose much less. This is a good question. If you wish to make it more worthwhile to work, raising benefits by much more than wage rises sets you back in your task.
He asks if it is right that Housing Benefit can lead to young people in benefit dependent households leaving home to set up their own benefit dependent household, when the children of working people have to stay living at their parent’s home for longer until they can afford a place of their own.
He asks if people who have been on out of work benefits for years should have to do some work in return for their benefit. He asks if there should be a higher rate of benefit for people out of work for a short period, reducing if they are not successful in returning to the workforce. He rules out the Clinton approach of removing benefits altogether from people out of work for a long time.
Looking at the size of the current welfare bill and the substantial increases recently reported, there is need for more reform. Welfare benefits are not high for most people who need to rely on them. There are too many people on them. The government needs to do more to encourage people off benefits. It needs to do more to limit eligibility in future for potential new claimants where Mr Cameron has identified unfairness in the system between benefit claimants and the rest of us. Some of this work needs to be done now, not later.
June 30, 2012
Well done Mr Redwood. Measured yet spot on as usual.
June 30, 2012
So Cameron might finally do this in time to bequeath a better economy for Labour to destroy again.
Too little too late, the attempts to reduce the state sector have been pathetic. There is still a vast incentive for most to behave fecklessly, split up, or work on the black market. Indeed the system (and their mates) virtually tells most to do this.
People on welfare getting 5.2% increase people in the wealth creating sector pay this getting nothing in many cases. Often the worker after paying to get to work etc. are worse off in time and money.
Meanwhile still no sensible banking. I see a letter from Barclaycard today out of the blue for no reason – “your standard rate (including purchases) will increase from 26.9% p.a. to 29.9% p.a.” Not that I borrow on it but why the increase when I am a far better risk than Barclays are and base rates are 1/2%? Sort the banking out it is crippling much of industry and robbing them.
June 30, 2012
One of the main problems for business is that employees keep so little of any extra or overtime you pay them after NI, tax and loss of tax credits etc. (they often get just 10% of the overtime) hardly enough for them to pay for the petrol to come in on an extra day so they won’t they would rather have the time.
It is insane.
June 30, 2012
And you cannot get rid of them if they do not perform what chance have businesses got of competing in the UK?
July 1, 2012
The amount of builders and other tradesman forcing the building trade to kept them on on by the absurd and pointless employment laws must be sending the industry to the wall and have you ever heard of a company sacking a lazy cleaner? Never happens.
July 1, 2012
Given that it’s harder to fire people in every other western European country I’d say the UK has a pretty good chance. After all the EU employment laws apply to every EU country.
July 1, 2012
If you earn £10 ph and overtime is time + 1/2 then you would take home about £10 Where you get 10% from I don’t know. If you are saying that a person on 40-50% would only get 10% this is another non reality as most employees on these tax rates are paid a salary and do not get overtime. Someone on the 50% rate would also not even get paid. They would be laughably remunerated and compensated like royalty.
The hourly paid employees are when pushing the higher tax rates often forced onto salaries to reduce their pay and often this overtime is to save employing another person so they are under pressure to do the hours. Or have the overtime rate reduced as they are ‘enjoying’ more work hours.
July 1, 2012
Employer and Employee NI, tax and then reductions in tax credits, rent tax benefits and similar benefits (plus costs of getting to work for an extra day)- these often result in just 10% of the cash given by the business ending up with the employee. Do the sums as I have!
July 2, 2012
So cutting employers tax and cutting tax credits, rent tax benefits? and other benefits would see an increase in the employees pay. Not real again as you are talking about very low paid jobs. Give a specific example.
June 30, 2012
Listening to Question Time last night on Radio 4, it was easy to spot the way that the bleeding heart liberals immediately assumed the moral high ground. But the question remains: “Why should I help other people?” It is as true for the Germans as it is for us on this blog. Why SHOULD I help other people?”
The ones who shout the loudest never appeal to our Christian roots. They just blandly assume that “you” should.
But that is certainly not what the Bible, our traditional source of morality, demands of us. In no place is anyone forced to support people who will n0t help themselves. Those who cannot help themselves – cripples, blind, gynaecological threatened, mugged – are all helped. But the woman, for example, who is taken in adultery or the woman at the well are both simply left to get on with their lives.
I have been working on Islam too. I cannot see anywhere in there a demand to help people who will not help themselves.
So next time a do gooder (themselves usually living very nicely thank you) assumes the moral high ground, please can we make sure we ask this question: “Why should I help someone else?”
June 30, 2012
In a modern society leaving swaths of the population to dereliction is not acceptable and will not be accepted. The poor and working poor are not going to be lectured on how to live their lives from multi millionaire arm chair Generals on what hardship is. Like the Generals they are often victims of circumstances. Good enough for you Mike?
July 1, 2012
What the Libbo’s actually mean is not, ‘I am prepared to dip into my own pocket and help someone in need’ rather, I will dip my hand into someone else’s pocket and use their money to alleviate hardship.
In the mean time I can spend my free time in my villa in Tuscany, or Provence, safe in the knowledge that somebody else is dealing with all those nasty British poor people.
July 1, 2012
Or in offshore tax haven putting their money there leaving the rest of us to pay with the state sanctioning this as a legal course of action. How this creates jobs has never been explained.
July 2, 2012
Bazman: “Or in offshore tax haven putting their money there leaving the rest of us to pay with the state sanctioning this as a legal course of action.”
Do you mean in the same way the Scott trust (set up in 1936), the former owners of the Guardian, arranged its tax affairs in such a way to minimize its tax obligations in the United Kingdom.
What’s that you say? A lefty firebrand arranging its own tax affairs in the United Kingdom in a perfectly legal manner designed to minimize its own UK tax liabilities.
Avoiding tax ( perfectly legal ), yet arguing for higher tax rates at the same time. A tad hypocritical no?
That’s the left for you, the cheeky dears!
July 1, 2012
Bazman you say – “leaving swaths of the population to dereliction is not acceptable and will not be accepted.”
But it is your policies of over taxation, over regulation and transfers to the feckless that would do this exactly this!
July 3, 2012
Bob would say different. Up to date enough? LOL!
July 2, 2012
Which society would that be, that of China or India who disagree with you, are our competitors and have taken so much of our poor’s employment?
Speaking as someone who is decidedly not a millionaire nor a general, simply a net tax payer, people can live their lives as they wish, just not at my or my children’s expense or to their detriment thank you.
The world doesn’t owe you anything let alone a living. You want my support or cash for yourself or to help others or clear up the dereliction then you need to earn it or convince me it is worthwhile. Just taking it forcibly through taxes is simply theft and will never have my support. If anything it will make me find legal ways to deny you being able to take so much of the fruits of my lanbour.
And before I am accused of being a hard hearted capatalist minion etc etc, my family always come first but I donate time and money to charitable causes.
June 30, 2012
In the Christianity, God, love and charity are synonymous. They all involve the giving of self to others. The instinct to help others is very powerful in humanity – it is, arguably, why Christianity has survived over the millenia. But the act of giving is a personal commitment, not something imposed from the outside. The Good Samaritan is remarkable because he helped someone who he might have been expected to disdain.
The relevance to the debate on our Social Security system is this: can the state force us to be moral? The act of giving to the needy is clearly noble, but if the state excises the money to give to the poor by the coercive means of taxation, might this not nullify its generosity?
June 30, 2012
Of course you should help other people, where you can do and where they need and deserve the help.
Just do it directly in person, give them a job or some other real & lasting help. Certainly do not do it through the state who will pinch most of the cash on route. Or indeed through many of the so called charities that so often do the same.
July 2, 2012
Accepting the need for charity and personal convictions I think the question should perhaps be – “why should I help that person ahead of seeing to the needs of myself and my family?”
As a net tax payer I don’t see why I should suppoirt individuals who chose not to work yet receieve in benefits more than I and the average working person does.
It strikes me that a society which demands a parent give more support to another’s children than to their own is pretty warped and likely to be relatively short lived.
June 30, 2012
Talk is cheap and when Cameron talks tough watch out for a massive U turn shortly afterwards.
June 30, 2012
Usually the day after – has he given any more Billions to the PIGIS yet?
I see France in another anti-motorist and fine scam is forcing people to buy and carry breathalyzer kits for their cars this year. No double Cameron or the EU will follow to get more fine income.
July 1, 2012
Lifelogic
Also, although not widely publicised.
If your bog standard SAT Nav has speed camera locations embedded into its software, you will also be fined, even if it is in your glove box and not in use.
Because it could be used !
The use of ANY speed location/detection equipment is illegal in France.
Welcome to the EU where all rules are supposed to be similar, and where all Countries work together..
I wonder how this would go down in a European Court when you purchase a sat nav “for use in Europe” which of course includes the UK and France.
Who would get fined the purchaser or the manufacturer ?
July 1, 2012
The speed cameras for France are deleted and replaced with areas where caution is to be taken in updates to the software.
July 2, 2012
Thanks Bazman
I will see if my SAT NAV can be updated with new software.
I have to say we always use it when abroad, especially in cities where we find them invaluable.
Mrs J does not do Map reading very well !!!!!
July 1, 2012
It is clearly a con to enrich someone and the state through fine income. Who holds the shares in the company that sells these nonsense devices and who “lobbied” to get them made law?
July 2, 2012
The speed camera companies more than likely just comply with French law.
July 1, 2012
That’s because of French cafe’ culture allowing you to get wrecked without realising it. Very civilised, in fact so civilised you need to carry a breathalyser kit. You have got to admire the French being able to live well all without seemly doing much in the way of work.
June 30, 2012
“He asks if it is a good idea that last autumn out of work benefits were increased by 5.2% in line with the RPI, when wages rose much less”
Good question. As he was Prime Minister at the time I wonder if there is anything he could have done about it?
Cameron talks a good game – I’ll give him that.
June 30, 2012
John C
He asks ……….
I agree exactly with your comment
He should have asked all of his questions BEFORE it was approved by HIS CABINET.
Please do not tell me this went through without him knowing about it.
His speech was good, but talk is cheap, its action that is needed.
Why do I feel this speech is all about PR to try and retain for a little longer the core Party vote.
Mr Cameron Needs to take action BEFORE the next election on a whole host of the Country’s problems, not make promises for the future, because he and his Party may not have one come the time to vote.
June 30, 2012
“Please do not tell me this went through without him knowing about it.”
No budget has EVER gone though in the history of the UK without the OK of the Prime Minister apart from 1997 – 2007. (When the (word left out) Gordon Brown had an inferiority complex.)
June 30, 2012
He doesn’t even do that now….he is a busted flush
Zorro
June 30, 2012
“Cameron talks a good game – I’ll give him that.”
Now I wonder who that reminds me of…….
July 1, 2012
Indeed he is a joke! Now float vague support for an EU referendum that would clearly never come and be after he has been sent packing by the voters! He will not be trusted by anyone at all on anything at all.
It is just endless empty and vague words.
June 30, 2012
After two years of assorted big intentions from Cameron do you really think anyone takes any notice of his words anymore?
June 30, 2012
I’m waiting for an update on the progress of “The Big Society”.
July 1, 2012
John C: “update on the progress of “The Big Society”
Big flop.
[sotto voce] Quietly stop talking about it and brush the fragments under the carpet.
July 1, 2012
I see that the Archbishop of Canterbury slams the big society as ‘aspirational waffle’ I agree fully with him for once.
But it is a bit rich coming from an Archbishop whose whole career (and indeed his industry) seems to have been build on ‘aspirational waffle’ appeals to envy and irrational emotions – rather than logic and what works.
June 30, 2012
Employment may be up, good news, but The Spectator produced a piece recently showing 97% (or thereabouts) of new jobs created were filled by immigrants (mainly from the EU one imagines).
So Mr Duncan-Smith’s may be having some favourable results but for who?
‘He asks if it is a good idea that last autumn out of work benefits were increased by 5.2% in line with the RPI,’
Maybe he should have brought that up with the Chancellor when he applied that rate, despite protests, in his last budget? Are they still on speaking terms or is it that the right hand doesn’t know what the left is doing?
June 30, 2012
What you say about job creation is correct – and is absolutely critical to factor in John’s argument about the provision of jobs and large numbers of benefit claimants…
Zorro
June 30, 2012
………..and a large number of the increase were part time jobs
June 30, 2012
400,000 new jobs over the last 2 years…………….. with net migration running at 200,000 plus per year. As usual with this coalition, the whole picture is never presented.
Economists tell us that if we increase the supply of something, the price goes down and useage or exploitation of that resourse goes up. So are we surprised by this race to the bottom in wages and conditions for British workers ?
A better topic for Mr Cameron to examine would be the strange disparity between stubbornly high levels of of unemployment and the total number of people in work that keeps going up. Oh but that isn’t quite such a rosy picture is it.
It’s the same trick Gordon Brown tried to play with his job creation figures. What matters to the electorate is the unemployment rate. But I don’t expect Mr Slippery or Mr Osborne to do things any differently.
June 30, 2012
Employment may be up, good news, but The Spectator produced a piece recently showing 97% (or thereabouts) of new jobs created were filled by immigrants (mainly from the EU one imagines). Norman
“There are 400,000 more people in work than in 2010 when the government was formed. This is good progress, against a difficult economic backdrop” John Redwood.
I would be interested to hear why Mr Redwood thinks this is ‘good progress ‘ – that pressures on housing stocks , roads, schools, the NHS etc. have been increased.
I think it annoys many people when politicians with the means to buy private healthcare and send their children to fee paying schools refuse to take these issues seriously or even acknowledge that the problem exists.
So I assume that Mr Redwood alludes to economic benefits ?. If so where is the evidence ?. As far as i’m aware there hasn’t been a boost in income tax reciepts over the last 2 years. Why is there such a huge disparity between the total number of people in work and the number of unemployed ?.
Reply: It is good news that the economy is generating new jobs. I have in another post explaiend why we need to bring migration numbers down, and have also set out what the government is doing to try to bring this about.
June 30, 2012
According to Channel 4 this week, Chris Grayling’s jobs program is hitting the buffers.
A4E, who have most of the contracts, have only managed to get 3.5% of people into work for more than 13 weeks. This is after 10 months of the first base line year. The contract states that the minimum should be 5%.
It seems like yet another government has found that it is extremely difficult to get people int work if they have few skills.
Surely, we must move away from big providers like A4E (or “nice little earners” as I call them) and encourage small companies to take people on and train them internally.
Instead of paying companies like A4E with all their overheads (£8.6 million dividend payout for example) why not give the money direct to employers?
June 30, 2012
Many of these jobs created even if you believe these figures are part time short term and low paid. In some areas due to geographical location there is no work. Not like no work in London, just no work.
June 30, 2012
He is asking these questions after being in government for 25 months. By now, the questions should have been asked, answered and acted upon. As you are fond of saying, if a private company took this long to ask why they were losing money, they’d already be bust. Which of course this government is.
June 30, 2012
Mr Cameron talks the talk, but very rarely walks the walk.
His pronouncements on welfare were made to send a signal to disaffected and deserting Conservative members/voters that despite the liberal exterior, he really IS a Conservative at heart. Unfortunately, his actions generally prove otherwise.
People who will only ever be suitable for unskilled, minimum-wage jobs will not get them all the time the employers have a limitless stream of skilled and highly motivated foreigners to select from. The combination of their apathy and employers’ self-interest will see to that. To get unemployment and welfare down, you also have to see immigration massively down – and Cameron wants to be at the heart of the EU so he will do nothing to stop it.
June 30, 2012
Unemployment reduced by 400,00. Good, well done. Of course unemployment would be reduced far more if we stopped immigrants from strolling through our borders.
Oh! sorry, i’m not allowed to say that am i ?
June 30, 2012
Do you regard British people who move to Spain immigrants?
July 1, 2012
Employment numbers have gone up, but it does not mean that those claiming benefit has reduced…..net migration
Zorro
June 30, 2012
It’s easy to be cynical about the Cameron speech, but at least he is making some important points. From an electoral perspective it seems to me to be a no-brainer. I suspect there is a substantial portion of the community in this country that is fed up with skimping and scraving to pay their own way, being burdened with an ever rising tax demands, whilst realising that some of their neighbours are sitting in their tax-subsidised homes watching TV all day.
June 30, 2012
A propos of nothing, had anyone else noticed that they have been getting a lot of requests recently to accept cookies on their browswers? It’s been a real pest recently. Then I noticed this, from delivery company TNT, which is about to send me a package:
“The grace period for any UK website to comply with the UK Privacy and Electronic Communications (EU Directive) (Amendments) Regulations 2011 comes to an end on May 25th 2012. From this date onwards, any UK website should request your consent to deploy cookies onto your computer or mobile device. ”
Can we have our referendum now please?!
July 1, 2012
Robert K: “Can we have our referendum now please?!”
Too polite Robert. The Tory party doesn’t think you mean it.
June 30, 2012
An interesting piece John, but I detect a heavy hint of irony in some of the questions…….
Perhaps he could reconsider his proposals to get rid of REMPLOY factories which support disabled people in a work environment and give them a safe working environment. Of course, some disabled people can work in the open market but Cameron’s current proposals are wishful thinking and I think are quite shameful, bearing in mind he continually pays out RPI increases to the able bodied feckless ones, and then has the cheek to ask a question. Was he asking himself the question? I doubt that he would have got a sensible reply!
Research has shown that all these (mainly low paid service sector) new jobs are going to EU nationals and recent immigrants, hence the huge number of new National Insurance number applications each year. Why? Because we pay people who have contributed nothing money to do nothing. That is why so many people are on benefits.
He’s on the side of ‘those who work hard and do the right thing’……Right, now you are being ironic!
As usual, the only way to tackle this problem is by ensuring that there are entry level jobs for young people in this country to get in the work habit. That means cutting off the infinite supply of foreign labour from abroad for these type of jobs……Otherwise, it is all talk and no trousers…….followed up by a PR inspired poll guiding strategy and telling him that a U-turn is required.
Zorro
June 30, 2012
Just thinking about it, who in their right mind would think it a good idea to ask that question…..’was it right to update benefits by RPI?’……after being told from several quarters that it was not a good idea and would disincentivise those seeking work….and then going ahead and doing it!
Zorro
July 1, 2012
Comment from 0837hrs 30/6 not showing….Any problem?
Zorro
July 1, 2012
Reposted from 0837hrs 30/06…..
An interesting piece John, but I detect a heavy hint of irony in some of the questions…….
Perhaps he could reconsider his proposals to get rid of REMPLOY factories which support disabled people in a work environment and give them a safe working environment. Of course, some disabled people can work in the open market but Cameron’s current proposals are wishful thinking and I think are quite shameful, bearing in mind he continually pays out RPI increases to the able bodied feckless ones, and then has the cheek to ask a question. Was he asking himself the question? I doubt that he would have got a sensible reply!
Research has shown that all these (mainly low paid service sector) new jobs are going to EU nationals and recent immigrants, hence the huge number of new National Insurance number applications each year. Why? Because we pay people who have contributed nothing money to do nothing. That is why so many people are on benefits.
He’s on the side of ‘those who work hard and do the right thing’……Right, now you are being ironic!
As usual, the only way to tackle this problem is by ensuring that there are entry level jobs for young people in this country to get in the work habit. That means cutting off the infinite supply of foreign labour from abroad for these type of jobs……Otherwise, it is all talk and no trousers…….followed up by a PR inspired poll guiding strategy and telling him that a U-turn is required.
Zorro
June 30, 2012
There was a very interesting talk on Radio 4 last Weds at 8.45, now on I player. It was given by Colin Crooks, who has been running recycling businesses in London and specialises in employing long term unemployed people. He is convinced that unemployment is actually much higher than the official figure. If sickness benefit, part time employment and those pushed off the claimant list and fending for themselves are taken into account, a figure four times the official one is more realistic.
I know someone who has all the syptoms of Aspergers Syndrome who lives in his house alone and has to barricade his doors to fend off attacks from neighbours on a sink estate. He has never had a proper diagnosis and the medics will not belatedly admit their lack of support and stick together. I worry that he will be assessed as an undeserving case under the new system and lose his meagre benefit. He is quite incapable of work and lost his only job after causing a major accident at a factory.
We are already hearing that the main problem with housing benefits is ‘greedy landlords’ and Shelter is running an anti- landlord TV ad which would be illegal (if some other generic nouns -ed) were substituted for ‘landlord’. The picture is one of a criminal, harrassing a female tenant, while keeping the propertydeliberately damp.
However, in a survey by the landlords association, more tenants were satisfied with private accommodation than public. The reason for high rents is high property prices, especially in London. The system was set up by the government and those investing in property have done within the rules, which are very pro- tenant. At the same time as complaining about the problem, Cameron has decided to sell off council houses at a huge discount on the false premise that the money can be used to build replacement housing. The sales have increased sixteen fold.
A change of policy will have to be implemented very carefully, otherwise there will be many injustices and mistakes. At the same time, it is undoubtedly true that there are ridiculous examples of over generous benefits to anyone willing to put themselves in a category to qualify. Some families have become expert an using the system and will run rings around officials trying to tighten up.
July 2, 2012
Any more moderation necessary?
June 30, 2012
What is surprising is how ‘soft’ these ‘questions’ sound. Most people are asking “why don’t they do something about it – instead of just talking about it”.
I think the main reason is the fear of the BBC backlash and a media storm that can whipped up as a result even of just talking about welfare reform – let alone implementing it.
Add that to the inertia of the departments of government and you have a recipe for impotence when it comes to making any changes to welfare.
The only way forward is through strong leadership – and sadly we are lacking in that department as well.
My prediction is that by 2020, the welfare bill will have risen as a proportion of GDP – not fallen: that is an absolute certainty! (Sad to say).
June 30, 2012
“My prediction is that by 2020, the welfare bill will have risen as a proportion of GDP – not fallen: that is an absolute certainty! (Sad to say)”
As you seem so certain of your prediction, I would appreciate it if you would supply us with your detailed projections of the welfare bill and how you managed to achieve those figures. I congratulate you on your effort.
June 30, 2012
David Camera On is very good at telling us what we already know, but that’s where it stops.
All mouth and no trousers comes to mind.
June 30, 2012
Isn’t the state pension treated as ‘welfare’?
June 30, 2012
Do we have youth hostels any longer in London or our other major Cities? Where a young person could rent a room for several months with a sink and other communal facilities for less than £100 per week? With a floor of more expensive rooms with a small ensuite faciltity (6ft x 3ft) for less than £150 per week?
We put young forces recruits in shared rooms (dormatories) for no cost or low cost to them as part of their remuneration so why do we feel the need to do more than that for unemployed youths who can’t live with their parents? Why would you give something more than we can afford to do for those teens who are serving the Country?
June 30, 2012
There is no doubt that the state welfare bill is unaffordable. If Cameron`s comments reflect the direction of travel in welfare reform then it is welcome. If it is merely spin, to distract our attention away from HoL reform as some suggest, then it will merely reinforce sceptical opinions about him. These days he is finding it difficult to get the benefit of the doubt.
For me, actions speak louder than words, for example the 5.2% increase in out of work benefits at a time when those in work are getting lower pay increases, if they get them at all. The real solution is more job opportunities. That needs the government to reform the tax system, to encourage employment and investment in businesses, in parallel with welfare reform. The government has hardly scratched the surface in making such reforms.
June 30, 2012
There are some fascinating facts in http://www.ons.gov.uk/ons/dcp171778_268633.pdf . Particularly where all the public sector is hiding all these employees. The demise of some NDPBs (Quangos) you never knew existed is worth a read.
A significant part of GDP is imputed; stuff like the amount of rent an owner/occupier does not pay, that he would have paid, if he did not own it. Actual hours worked has gone up 2% in the last two years to 928 million a week but productivity dropped. See http://www.ons.gov.uk/ons/dcp171778_260753.pdf .
“Average regular pay (excluding bonuses) in the public sector was £475 per week in April 2012. In the three months to April 2012 regular pay in the public sector rose by 1.2 per cent on a year earlier.” I wonder which part of “public sector pay freeze” do they not understand?
June 30, 2012
BTW. Have you noticed a certain trend nowadays. Whenever there is an event like a bunch of houses blow up; allegedly due to a gas leak, it requires a senior police officer or a senior fire officer, to jump in front of a TV camera at the first opportunity. The same goes for a result in a Court case. A senior police officer jumps in front of a TV camera and acts like he is the elected Mayor and prime spokesperson for the community concerned.
This is the natural result of our politicians delegating every major socio-economic decision, to supposedly disinterested technocrats / quangos / lord chief justices. At this rate, the days of parliaments filled with amateur politicians playing “Ya Boo Sucks to You” politic games, are surely coming to an end.
July 1, 2012
Acron: “At this rate, the days of parliaments filled with amateur politicians playing “Ya Boo Sucks to You” politic games, are surely coming to an end.”
By results, they may be amateurish, but our politicians are anything but amateur.
They are paid a salary that puts them in the top 10% of the population by income. Then of course there is the very lucrative magic expenses fountain!
June 30, 2012
“A significant part of GDP is imputed; stuff like the amount of rent an owner/occupier does not pay”
Good for HM the Queen and the rest of the Royal family. I can’t help feeling that our own modest contributions deserve recognition as well, washing and hoovering or carrying golfclubs round courses. Has anyone considered the Carbon Credits that might have been earned during Henley Week? Are our civil servants on the ball?
June 30, 2012
Most new jobs are part time, so people are underemplyed rather than unemployed.
Most young people who receive social housing were brought up in care or have children. If he wants to go after the orphans or make babies homeless that’s up to him.
Benefits did go up in line with inflation, but it is his government’s inflation. He should deal with that.
June 30, 2012
If there are 400,000 ,ore people in work than there used to be and with a decline in public employment, more than that it the productive economy the uinderlying probelm is clearer than ever. Wuth that many more in productive work GFP should be rising fairly fast but it is static.
Why?
Because the corelation between GDP growth and electricity growth is so close and the electricity supply is being deliberately reduced and made much more expensive.
At least 93% of the cost of electricity is political parasitism.
We would be out of recession in days if the LabConDem political class would allow it. They, alone, not bankers or the non-existent “world recession” or “specu;ators” are responsible.
June 30, 2012
This is a minefield, but any system that promotes or even acquiesces to indolence and sloth, is bad, and needs fixing.
There is a growing credibilty gap with David Cameron. He rightly identifies the problems with Britain’s welfare system, and says what we ought to do to put it right, but then continues to permit some of it’s most contemptible abuses.
Nobody in their right mind wants to see child poverty, but the lefty way is to pay out millions of pounds of tax-payer’s money to feckless people who have more and more kids on the state with abandon. That doesn’t solve the problem of child poverty, it creates more of them.
(Analogy removed-ed)
And free council housing should be stopped in such cases, because again, it encourages indolence and sloth. The exceptions should be where a marriage or relationship between two people (the preferred model) has broken down, and homelessness is a consequence of that breakdown. Not where a deliberate pregnancy is a means to circumvent the system, as this incentivises immoral and irresponsible behaviour.
With modern, freely-available contraception, there is less of a reason to get pregnant now, than at any time in the past.
My eldest daughter, who has always worked, and has never once claimed benefits, approached the local authority for a flat and was told that to stand any chance, she would have to get herself pregnant first. That is absolutely deplorable!
And what of the benefits paid to immigrants to the UK, who then claim for an extended family that doesn’t even live in this country and have never even seen this country, let alone paid into the coffers. That surely needs to be sorted sooner rather than later.
Space precludes a more thorough dissemination, but you get my drift. It needs fixing, and we look to Mr Cameron’s government to do it sooner, rather than later, but at the same time, it also needs to be pointed out to those who vote, who allowed this lunacy in the first place!
Tad Davison
Cambridge
June 30, 2012
Not only was the level of the 5.2 % ridiculous all things considered, it was presented appallingly badly and the bad guys managed easily enough to parody it with talk about only matching inflation. There was not a hint of gratitude from any recipient that I saw such is the entitlement mentality and it was all very bad politics.
June 30, 2012
I think you need to be careful on several fronts
1 Most people if they got seriously sick and unable to work would be in trouble. I get the feeling the drop in living standards for an ordinary worker finding themselves too ill to work is far steeper in the UK than most Western countries. Really we need to look after folk who have worked most of their adult life and find themselves genuinely unable to earn enough to cover their bills a whole lot better.
2 I defy any MP to get their family to live on a sink estate, and send their kids to the schools forced on the residents of sink estates to bring up kids educated enough to find jobs, especially in the locality of those worst of those estates where the mines and shipyards they were built to serve have long ago disappeared. It is not the fault of kids forced to go to some of the worst schools in the Western world that they are unemployable.
3 Getting the money from the dodgy tax practises of many large companies paying their tax offshore in complicated ways would be a more profitable way to balance the books.
Which is not to say I think we should fund a large underclass. Sure we need to get the incentives right. But dont demonise whole sections of society.
etc
June 30, 2012
It is so depressing! Two years ago I voted Conservative in the belief, based partly on watching the previous two party conferences on the television, that they would be a tough, competent team who would tackle the many problems that the UK faced and begin to overcome them.
In the case of IDS and Gove I think that they have begun, though the mountains that they have to climb (the civil service, the welfare professionals and the teaching profession) might defeat them. I accept that being leg shackled to the Liberal Democrats and their idiot leader doesn’t help but it is becoming more and more obvious that the tough, competent team that I was hoping for doesn’t exist.
That such teams do not exist on the continent, other than in Germany, is no consolation, as I would expect our people to do better. At the moment we are in the ‘phoney war’ where most things, other than the banks, are still normal but I have a horrible feeling that time is being wasted so that when the ‘real war’ kicks in and the bottom drops out of the economy we are all going to suffer far more than if we had a competent prime minister and government.
If, Mr Redwood, you think that I am being unnecessarily pessimistic please say so. I realise that there is no chance, under the present regime, that you might join (or better still lead) the Treasury team. But your blog is a light in the darkness, even though it often makes grim reading.
June 30, 2012
John,
The problem I have with IDS’s so-called reforms is that they have just exchanged one set of less-than-perfect civil servants for another collection of decidedly less-than-perfect private companies. Believe me, I’ve seen it in action.
Indeed I would say that all the extra paperwork and medicals and medical forms that the replacement to Incapacity Benefit has spawned must be costing us Tax Payers a fortune, given the effective markup any company would apply to such work, cf PFI.
I know what IDS and his assistant have said about ‘payments on results’ – but it does not seem to be working out as claimed.
The final problem I have is that I simply do not believe the rhetoric about trying to ‘help’ these individuals – rather it is purely to cut the cost and those who are genuinely sick can go and hang.
The real cause of the unemployment numbers is that many jobs have been outsourced to countries who have a rigged foreign exchange. Whilst this might have short term benefits to the consumer, in the long run it is not so obvious that it is a blessing.
June 30, 2012
I have an inlaw that is an unmarried mother. She took advantage of various grants to get a degree in English. She appeared to become fed up with part time teaching so now does nothing. The father of her child got fed up with his job at McDonalds, so he does nothing. Last week in conversation I mentioned adjectives and adverbs. She did not know the difference. Something tells me that Welfare and Education are not in a very good state.
June 30, 2012
Of course benefits shouldn’t have gone up by 5.2% when most workers are on a pay freeze, but the Liberals are in charge of this Government. Now Cameron rules out (yet again) a referendum on the EU. The Tory Party are fast becoming unelectable under this arrogant, out of touch leadership!
June 30, 2012
@Timeaction
Replace “…are fast becoming…”
with
“…has become…”
June 30, 2012
There is a growth industry in the constituency where I live(etc ed). That growth is the alarming number of very young girls wheeling their ever increasing numbers of illegitimate children from their “social housing” (25% of all new-build is, to all intents and purposes, “social” these days) to the supermarket where they check if their benefits have been paid in at the ATM and then they proceed to fill up their carts with junk food. These young girls never seem to engage with their offspring other than to tell them to shut up.
I would suggest to all M.P.s that doing a regular shop in any supermarket will teach them quite a lot about their constituents without having to do surgeries to which, if I understand it, lots of the aforementioned types turn up to moan about their lack of “benefits”.
June 30, 2012
Frances
A very valid point. At least your post got used. At the time of writing this reply, mine, which is of a similar kind, hasn’t been. If we don’t address these issues, they’ll never get solved. Never mind, I’ll give it an airing elsewhere amongst true Conservatives.
Tad
June 30, 2012
He can talk the talk with a rehearsed script, but in the context of Cast Iron, ‘core belief’ is oxymoronic, as is well illustrated by this clip on YouTube of him being interviewed by Gay times:
http://www.youtube.com/watch?feature=player_embedded&v=dBlDfp85gP8
Our problem is that he has received his ‘core belief’ implant from those like his ‘Mainframe Computer’ who correlate ‘decent’ or not being ‘nasty’ with stuffing honest, hardworking English people and giving their country away to those without any such ancestral right, and he is still deceitfully using our armed forces in the ME today. If you are English, do not trust this man.
June 30, 2012
An excellent article.
The problem is that years of the Labour governments of Blair and Brown many people have been given the message that they can live out their entire lives on benefits. Instead of many people hating the Conservatives they need to get the message that reality starts here. The benefit culture scenario of Gordon Brown is simply unsustainable.
June 30, 2012
You get the feeling that all we get from the Government at the moment are sound bites and platitudes. So one mentioned on a site the other day.
“The promised “bonfire of the quangos” – well we now have 957 of them, employing 700,000 staff, costing £82 billion and spending over £120 billion.
Instead of tackling these bloated parasites that nanny us and rob us of our freedoms they would rather indulge in a bonfire of the regiments in an Army of 101,300.”
June 30, 2012
I think Cameron is all talk ; he has little experience outside Central Office ; he has displayed extremely poor judgement in the selection of key people , and , yesterday he had the audacity to decide that a referendum on our membership in the EU was not in our best interest . He claims to “listen” , if this is true , then he must LISTEN to the British voter – 80% of them want a referendum – not now (it is a very bad time for all sorts of reasons) , but at the time of the next election . Ed. Milliband seems to have got the message and will use it ! Of course Cameron must be encouraged along when he has done or said something worthwhile and the blog today does that . For goodness sake push him to see sense on the European issue .
June 30, 2012
What no right-wing politician appears to understand is that most people don’t choose to be in a position of needing benefits. As a disabled person I can’t understand why the Government thinks it’s a smart move to push disabled people out of work by removing the help that enables them to be independent and earn a living. Rather than carry on talking as if they understand the issues, why don’t right-wing politicians find out what the detail of welfare reform actually means? Find out, for instance, who will lose their vehicles, their independence and their employability under the proposals for PIP (Personal Independence Payment) due to replace DLA (Disability Living Allowance) from 2013, despite having significant walking difficulty.
June 30, 2012
Jane,
I regard myself as right-wing, yet I think it’s absolutely disgraceful the way some disabled people are treated. When someone is genuinely disabled, we have a duty to lend them every assistance. Same as a person who is out of work through no fault of their own, but that is very different to giving to those who deliberately get themselves pregnant because they see it as a way to circumvent the system.
And this government thinks nothing of giving money to a corrupt and decaying federalist project, and allowing yet more immigrants to take our jobs, whilst the indigenous population suffers.
I really do despise politicians.
Tad
July 1, 2012
Well, this government is making disabled people unemployed by shutting down REMPLOY factories with some vague promise of jobs in the open economy (if they are lucky)….
zorro
June 30, 2012
John, I hope you post your comments on the banks’ ‘manipulation’ of LIBOR. Like many people I don’t really understand what happened. You will. Your comments are always authoritative and to the point.
June 30, 2012
Watch episode 308 of the Keiser Report on RT.
June 30, 2012
I find it particularly difficult to believe what Mr Cameron says anymore. He talks the talk but doesn’t walk the talk. I think he once said that he was ” heir to Blair” and I bet he regrets saying that now! But then so much of what Mr Cameron says appears to be meaningless promises.
Having voted Conservative all my life and been a local party worthy I’m disappointed with the direction the party is currently taking and Mr Cameron imparticular.
Why do the Lib Dems get to bring forward constitution reforms when they represent such a small percentage of the electorate. To hear Clegg talk one would think that the Lib Dems represent some 180 seats on the HoC rather than low double figures.
Having read a couple of your books JR and your blog for sometime you talk the kind of Conservatism that is in my opinion missing at the moment at the top of the party.
If the CP do not wake up soon I’m afraid that the next election may see a terrible defeat for the Party and a return to Labour or even a Labour/Lib Dem coalition government for a generation.
June 30, 2012
Our whole economy is out of balance but maybe out of the present tumoil we may regain some common sense. But I digress.
On the work and benefits front let me take one aspect. It is said most new jobs go to immigrants. Why, and why do they come here in the first place? Let’s take the lower end as they can’t all be high earners.
Wages here must be better than there, and given they take jobs they don’t come for benefits. So wages are better here than there. And the ethnic English don’t want the jobs, if they did they’d make sure they were qualified, and could read and write properly.
So, to make a start, I propose we abolish the minimum wage and all benefits for anyone who has never had a job, (except for the genuinely incapacitated) or has left one voluntarily. I would make it easy to hire and fire though. As for general principles, we should move to an entitlements system, you pay in before you get out.
July 1, 2012
What you’re proposing will make the situation worse, not better.
Immigrants come to the UK because a minimum wage job pays the same as a well paid job in their country, while the English very rarely work in minimum wage jobs because these jobs don’t pay a living wage. So while removing the minimum wage will cause salaries to fall to such as low level that immigrants won’t work for so little money neither will the English. This ultimately benefits no one.
A far better solution is to raise minimum wage to a living wage so that the English can earn a decent wage by working, rather than a pittance. This would actually encourage people to work.
June 30, 2012
Cameron should know the answers to the Welfare Benefit questions he asks. He is in the pole position to do something about it. He talks as though he is not in power but in opposition questioning the current government’s commitment and competence to govern. He is the problem, hanging onto office in a destructive coalition. If he can’t govern and had any gumption (and we could believe what he said), he would go to the country for a mandate to immediately implement welfare reform.
Welfare benefit reform is taking an absurdly long time. Immediate implementation of Iain Duncan Smith’s proposed reforms is a priority.
Meanwhile, as priorities always take a long time in government and whilst we watch the slow train taking us to the final destruction of our economy, in fairness to those who currently work and without hopefully increased bureaucracy, we should immediately because of our work incentive sapping income tax system, deduct Income Tax and National Insurance from all Welfare benefits. Although this would only take up to 30% back to the Exchequer of all benefits paid over the personal tax free allowance of £8,105, it would mean excessive unemployment benefits were not a totally unfair tax free ride.
Government expenditure is out of control due to welfare expenditure. For the love of our United Kingdom, it must be dealt with now.
June 30, 2012
Your post contains more wishful thinking than facts John.
Firstly unemployment is usually increases, rather than decreases, because the public and private sectors aren’t creating jobs fast enough to match the increase in population.
Secondly the private sector has barely created enough jobs to replace those lost in the public sector. It has also fallen short of the Government’s targets whereby firing several hundred thousand people in the public sector would lead to millions of jobs being created in the private sector.
Thirdly Mr Duncan Smith’s Work Programme had failed so badly that the DWP refuses to publish any figures on the success rate of this programme or how much it costs. The mandatory work activity was also publically criticised for being little more than slave labour and legal action was taken against this programme on the grounds that it breached people’s human rights.
Fourthly a race to the bottom is never a good thing. If Mr Cameron doesn’t like benefits increasing at 5.2% while wages are increased at a lower level he should raise the minimum wage by a similar amount. Trying to make the unemployed poorer won’t magically create jobs.
Fifthly I already posted why removing housing benefit for the under 25’s was a terrible idea and asked how it would work for people whose parents’ were dead, lived abroad, or if the young person had lived in care. You didn’t provide an answer. You also didn’t provide an answer when I asked whether under 25’s who were working would be able to claim housing benefit.
Sixthly punishing people for being unemployed for long periods of time won’t magically make them more employable. If the Government wants to help the long term unemployed get jobs they need to pay to retrain them. Forcing them to pick up litter won’t make them more employable.
Finally as long as there are 450,000 jobs and 2.61 million people unemployed the number of people on welfare will remain high. Creating jobs will reduce the number of people on welfare, bullying them will not.
June 30, 2012
@unaime5
How do you “create” jobs?
July 2, 2012
They will be created by the cutting of taxes won’t they Bob? Just like the thousands of jobs created by the cuts to the upper tax rates. You know the ones? The butler shortage must be at famine levels now. Chaps across London are having to answer their own front doors and dress themselves. What does the government propose to do the train more. Obviously they cannot be expected to have a foreign butler. Good God? Imagine the stress?
July 1, 2012
We went through a record boom in the economy and in jobs.
It didn’t bring core unemployment down.
If 450,000 of those unemployed took those 450,000 jobs they’d have money in their pocket to spend which would – guess what – create more jobs.
The question is: would they have more money in their pockets if they took work ?
July 1, 2012
Spending doesn’t create more jobs unless you spend in the real economy. So if you get a job and save your money, invest it, or pay off your debts you won’t create more jobs.
Another problem is that unless these 450,000 jobs are spread out throughout the UK the areas with the highest number of jobs available will experience the most job creation, while areas with few jobs available will have much slower growth.
Regarding whether people would have more money if they work depends on how much they work. At present you lose many of your benefits if you work more than 16 hours per week but if you’re paid minimum wage you won’t make enough money to cover this loss unless you work 38 hours per week. So many part time jobs pay less than being on benefits and many full time jobs pay a similar amount. The solution to this problem is to withdraw benefits at a rate of 66p for every pound earned so working always pays more than not working. I don’t know why the Conservatives haven’t introduced this since it was their idea.
July 1, 2012
Making the unemployed poorer will create jobs because (a) people don’t want their families to starve and (b) conditions are being created to make the provision of low paid jobs more favourable – raising the income tax threshold to £10,000 and taxing people as individuals rather than couples will have that effect; indeed it is probably already doing so. Converting families from no incomes to two low incomes is a very worthwhile project.
Both the 1980s and 1990s recessions came to an end because there were 3,000,000 unemployed and people priced themselves back into employment. Unemployment is a lagging indicator and in most recessions it carries on growing even after GDP starts growing again. So far, this recession is breaking all the rules, probably because the available work is being spread around.
June 30, 2012
I think your last point sums it up – ‘there are too many people on them’
McBroons ‘tailor made benefits’ system unfortunately had a massive impact on this issue which was always there but only became worse – coupled with unrestricted immigration who filled up vacancies that many of the benefit recipients could have filled.
The tories are understandably trying to tackle this issue more than likely against the backdrop of winning socialists and wet libs (nasty tories etc) but this really is a noose around the UKs neck.
I don’t have any figures but my bet is that if every person in the UK who could work just took any job wherever and pushed out the boat a bit further with a can do attitude and travelled a bit further (if they live in an unemployment blackspot for example) and perhaps stayed near their work during the working week then we would probably see the deficit halved overnight (more money to throw at the Euro Zone – only joking).
July 1, 2012
What planet are you on Pete? If it cost £100 a week to travel and you earned £200 for 40 hours you would be working for £2.50 an hour. Ask your self why the immigrants filled the job vacancies and get back to us. You really just have not got a clue have you? ‘Can do attitude’ What are you like? I have ‘can’t do’ attribute to anyone who comes out with this preposterous, absurd, and pointless nonsense. Toodle pip old chap.
June 30, 2012
I find myself in full agreement with John C and Norman. Why on earth is Cameron bleating and scolding about a measure that was enacted under his own premiership?
June 30, 2012
“He wishes to end features of the system which trap people in poverty…”
If your people think it’s poverty then you must be mistaken.
(Young lady-ed) has never worked and got herself pregnant at 14. Now has her own two bed with garage, car, goes out on a Saturday night whilst her equally benefit dependent mum looks after babba.
Unbelievably she has a credit card and has stood guarantor on her equally unemployable brother’s iphone contract.
We are expecting babba number 2 as soon as she starts getting chased up to work.
Same for (some neighbours-ed). It’s everywhere. This must be endemic.
June 30, 2012
They also get interest free loans repayable on ridiculously easy terms for things such as brand new fridges and washing machines.
We got ours second hand from relatives and recycling shops.
A young person would be mad to get a job and try to raise a family and it seems that they agree.
If you pay for benefit dependents then that is what you get.
July 2, 2012
Kevin
The problem is many politicians do not recognise what you say is true.
They seem blind to the truth of how many people manipulate the System to their own advantage, and can thus live for very many years on the State (taxpayer) without the need for even looking for work.
June 30, 2012
Cameron is now saying effectively that he will hold a referendum when the time is right…..but Liam Fox wants one immediately!
Zorro
July 1, 2012
The very extent of welfare touches so many areas of life that it seems to have changed our national character. The dependency culture provides the raw material for crime, it makes our workforce frankly unattractive, it fuels immigration to fill jobs not done by our own population which cannot be bothered, and it saps money from the real economy.
How could Beveridge’s good intentions have led here? I suspect the reason is that the development of a welfare culture was planned and implemented by people who did not know what a sink council estate was like, never had to pay the overheads of a business and did not know how to say, “I have been wrong”.
July 1, 2012
Alte Fritz ,
I’m sure Beveridge would have done a better job stopping his baby getting obese than the people who received the torch .
Still believe that the absolutely unrestrained greed throughout society , following the example of the people at the top , has been the bigger problem .
Bottom line is that we have all been enslaved by the financial services industry courtesy of their agents in the three main parties .
No amount of beating down on the poor and average will fix the problem , it will just reinforce that old motto of being “Strong on the weak , weak on the strong” .
July 1, 2012
JR: “Mr Cameron’s speech this week on welfare reform was a thoughful and important contribution to the debate about the future direction of welfare policy.”
After more than a decade out of government, the Tory party discovers ‘welfare reform’ having wasted two years of actual government.
You all had plenty of time to think what you’d do in government. What were you doing all that time?
Clearly, winning the election against the worst prime minister in history, came as a big surprise to David Cameron.
July 1, 2012
The main point being and in a Paxman like way I ask the question on how making people more desperate will create more jobs? Sorry did anybody not understand that question? If I said roads create more cars. It would be pointed out that roads do not create cars they are built in factories, so answer the question of how cutting benefits will create more jobs and help the unemployed?
In the real world in some where there is no work so travelling three hours on a train will not change anything as the wages will be used for the fare. The working poor pay their full travel costs to work as they do not receive middle class social security payments. In the same vein a single mother thinking about a bit of cleaning work will be no better off as she would have to pay a similar amount in child care costs.
This issue of time, space and money is played out daily with many workers who are on the margins of employment, whether minimum wage London office cleaners and security guards who get up at the crack of dawn and pay out their first hour’s wage for a miserable two-hour journey into the centre of the capital.
If housing benefits are cut in say London this may force the unemployed further away from the places of work increasing the problem. Making benefits more flexible in order to make work pay is the answer not cutting.
July 1, 2012
Where is the town in your example where there is no work and someone would have to travel 3 hrs by train before they reached a town with jobs? How do you explain unemployment of people who live in zone 1 or 2 in London?
July 2, 2012
50 miles outside London to the other side of London would take over two hours door to door on a good day. The End of the Furness Peninsula where unemployment is high takes at least 45 minutes to even reach the motorway. A train journey to a place of work would be expensive for any manual worker looking for decent pay in somewhere like Manchester over two hours. Unemployment in London is caused by there being unemployable people living there. How do you expect anyone on six quid a hour to pay these travel costs?
July 2, 2012
You said that someone on a minimum wage job couldn’t afford the travel costs, yet those already living in London’s zone 1 and 2 wouldn’t have too high a transport cost and other people have to travel miles more than them but do it as you indicate with your two hour travel each way 50 miles outside of London.
Thanks for the information on the Furness situation I don’t know the areas public transport that well and will look into it, are the highest unemployment figures in Barrow or Whitehaven or in the central Lake District. My husband lived in a sleepy hamlet in North Wales, when he left school and there was no work, he had to move to Manchester and take an apprenticeship at a very low wage and live in cheap lodgings so I’m aware of the problem for youths in rural villages.
July 1, 2012
Mr Cameron is asking good questions. It’s high time he gave some good answers. Public expenditure in this area is out of control and he’s the man at the top. In the meantime, he should freeze public sector pay and end the index linking of all state benefits – pensions, unemployment pay, housing benefit, income support, the whole lot – until MPs of all parties are in a more constructive frame of mind to reform the system.