Balancing rights and responsibilities – rebuilding the social security system in the 21st century

May 11, 2012 4:42 pm

Among the very many challenges facing the next Labour government will be to rebuild trust in the social security system. By 2015 the system will be characterised by mass unemployment and low benefit levels. Labour’s challenge, if it gets back into power, will be to rebuild new public confidence in a system based on rights and duties.

In recent decades, British politics has been weakened by the Left’s almost exclusive focus on rights (in contrast to a more traditional and equal emphasis on duty, whether as a member of the friendly society, the union or the co-op), and also by the Right’s equally narrow emphasis on duty, turning its back on an earlier ‘one nation’ tradition.  To focus on either one without the other is crass, too narrow, merely partisan and, in practical terms, leads up a policy cul-de-sac. What we need is a proper balance between the two.

A recent survey found that, in answer to the question ‘do you agree or disagree that “the government pays out too much in benefits; welfare levels overall should be reduced”, the total agreeing was a massive 74% – more Tory voters, yes (94%) but including 59% of Labour voters.  A further question concerned “scroungers”:  respondents were asked how many welfare claimants fit this description.  39% of the total said ‘a significant minority’, a further 22% suggested ‘around half of all claimants’.

Now not all public grievance can be taken at face value. But public anxiety does contain very strong grains of truth that need to be recognised and acted upon.

A benefits system based on ‘rights’ alone is a system built on sand, rather than the granite rocks of citizenship, reciprocity and conditionality.  It is one reason why we are losing the battle of public opinion on social security.

A 21s century social insurance strategy

A building block for a modern social security system must be the renaissance and modernisation of the contributory principle, one based by definition on a proper balance between rights and duties.  The idea of life-cycle accounts is worth exploring.  These might include the following characteristics.  First, they would be individualised accounts, accessible via the internet. Individuals should have a sense of ‘ownership’ of the account.  Second, there should be flexibility, including the ability to access money at certain, albeit limited, points in one’s life cycle, ahead of retirement. The ability to ‘borrow’ certain amounts against future contributions should also be a feature. I do not under-estimate the need to build up funds for a decent pension, but the ability to draw on social insurance for specific purposes pre-retirement is attractive.  Third, the scheme should enable individuals to make payments into their own account.  This would be a welcome feature, not least at a time when many commercial schemes resemble a confusing savings swindle.

Unemployment

The current coverage of National Insurance is the starting point, but surely we can do better for the major risk of unemployment. Many of those who might subscribe to a popular perception that benefit levels are too high are shocked when they come face to face with the actualité of unemployment, as many are now doing.  Unemployment insurance now lasts only six months, after that, if their partner is in work, there might be no Jobseekers’ Allowance at all.  Rates are very low: for the under-25s the benefit is just £56.25; for the over-25s it is £71 a week.

But more realistic unemployment benefit rates must rest on two things: a tougher stance on the duty to work and locating the goal of full employment at the heart of public policy.

Pensions

As for National Insurance pensions, why should not individuals be enabled to make extra contributions into the system in exchange for guaranteed enhanced benefits?  Given the low administrative costs of National Insurance, the system could offer a far better deal than those currently available from expensive private pension schemes, typically defined contribution schemes with low annuity rates.

Child Endowment

Life cycle accounts should include the reincarnation of child trust funds, not least to inculcate the savings habit early.  A new child endowment should be vested in favour of every child at birth.  There would be strict rules about the use of such an endowment.  These might include the funding of post-16 or later further education; a deposit for home ownership, etc.

Childcare

Ideally a new social insurance scheme should recognise the changing patterns of care within the nuclear and extended family, in the light of increasing women’s (and mothers’) employment and the care crisis posed by an ageing population.  These represent challenges which were not present in the society that Beveridge experienced when he devised the post war social security system.

Long-term care

While Beveridge has much to say about pensions, surely today he would also have emphasised frailty in old age and the burden of long-term care as one of the important risks to be covered by social insurance.  The Dilnot Commission on Funding of Care & Support has made important recommendations in this area, essentially proposing a sharing of costs between the individual and the State.  Is there scope for a new insurance contract that would help meet these costs?

100 years after the introduction of National Insurance, and indeed 70 years after the publication of the pioneering Beveridge report, it is time for fresh thinking about the role that social insurance might play in our national social security system. This is not about history or nostalgia, but rather the search for a system of social security that commands public respect (and must therefore follow public consultation and debate) and one based on sound public finance.  A hotch-potch of benefit provision, based on neither clear values nor public consensus, will fail to see us through in the difficult years that lie ahead.   A new social contract between citizen and state, based on clear rights and duties, is the way forward.

Malcolm Wicks is the Labour MP for Croydon North.  Prior to his election in 1992 he was Director of the Family Policy Studies Centre.  Among his Ministerial posts in the last Labour Government, he served as a Minister in the Department for Work & Pensions between 2001-2005, latterly as Minister of State for Pensions.

This article is based on an IPPR lecture given by Malcolm Wicks on the 24th April 2012 at the House of Commons.  The full text of the lecture is available here

  • Dan Filson

    National Insurance contributions should be merged into income tax. When Tories talk of over-high levels of tax they rarely mention that the lower paid suffer a combination of income tax, national insurance and progressively withdrawn means- tested benefits which taken together can have an effective marginal rate for every extra pound of earnings higher than the top rate of income tax for the living idly on investment income. The whole article overlooks that Iain Duncan Smith is honing a new benefits structure of a far-reaching nature, one dreads to think what exactly, something Labour failed to do when in power despite appointing Frank Field to think the unthinkable or Hutton in later years. we lost the initiative when we had power and are now bystanders whilst the Tories mould the system according to their own warped perspectives. Malcolm’s last paragraph is mere hand-wringing sadly.

    • AlanGiles

      Dan let’s be frank about it: Duncan Smith and Grayling are embroidering the plan of David Freud. James Purnell was the man who introduced the self-described “welfare expert” Freud’s “reforms” – Purnell was railroading this report through Parliament at the very time Freud was bought by the Conservative Party. Purnell is an ex-MP/minister (who – unlike Malcolm Wicks -),  fiddled his own expenses,  and left parliament when he got found out – so in truth the long term plans are Tory ones anyway – Freud was commissioned by Blair/Hutton, who are frankly Tory in all but name – and Hutton “advises” the coalition.

      The Freud plans always have been flawed, because the man knew nothing about his subject – and it is rather foolish to expect a multi-millionaire investment banker to have real knowledge of illness and poverty and how the two are intertwined. 

      ……..

      That’s my lot for today: the link today was that all the names I gave play or played tenor saxophone – the A.M one’s British the P.M. ones American. 

      • treborc1

        I do not see a hell of a lot of labour saying it’s wrong even Miliband knows a bloke who can obviously work, without even knowing what was wrong with him.

        Purnell and Freud may well have brought in welfare reforms it was the labour leaders who signed off on them

  • http://twitter.com/robertsjonathan Jonathan Roberts

    An excellent,  interesting article. Thoughtful and practical ideas are what will help us reform and secure the welfare system.

    The concept of ‘rights and responsibilities’ is what brought me into the party, and it’s great to see people proposing ideas that will put that philosophy into practice.

    • treborc1

       You came to labour because you thought it was closer to Thatcherism, now you have nowhere to go.

      • http://twitter.com/robertsjonathan Jonathan Roberts

        oh give it a rest. You were suggesting the other day that taxpayers should pick up the cost of people smoking and drinking – hardly a Labour sentiment.

        Your version of ‘Labour’ is one no-one has voted for for decades. If ever.

        • treborc1

          Silly little Tory

          • http://twitter.com/robertsjonathan Jonathan Roberts

            No ideas, no substance, no detailed analysis,  just incessant whining.

          • Dave Postles

            Some might consider it incessant whining, but some of us perceive him as an authentic voice of people with disabilities to whom Labour should be listening.  If you don’t tolerate and heed his voice, you are denying the empathy which should pervade Labour.  It will only be when Labour responds to his needs that some of us will be able to respect Labour again.

          • http://twitter.com/robertsjonathan Jonathan Roberts

            I actually think that’s an insult to disabled people Dave.  Every disabled person I’ve met has inspired me by their positive thinking no matter how difficult their life is.  Treborc does not represent them.  Empathy for people who are struggling – absolutely.  Empathy for people who do nothing but snipe bitterly at others – none whatsoever.  Nor do I respect people who claim to be Labour but have no good word to say about it whatsoever.  Our party persistently helps people from all backgrounds, but for some it is never enough.  More more more. Me me me.

          • treborc1

            No smoking no drinking no sex no children third way third Reich.

            says it all really

          • AlanGiles

            Jon. Disability affects people differently, and sometimes even the most stoic individual can despair, especially when you have politicians (of all parties) pandering to public prejudice and using words like “scroungers” in articles like Mr Wicks – especially when some of them are quite relaxed about their own personal honesty (I exclude Mr Wicks from this since unlike Byrne and Grayling he is innocent of such charges).

            As neither of us are disabled, how can we say how we would conduct ourself if we were to  know we were going to be trapped for the rest of our lives in a malfunctioning body?

            Robert is angry because of the extra indignities and insults both Labour and Conservative/LibDem  politicians have inflicted on him. On LL he can at least give vent his anger and frustration – I am sure every disabled person feels something similar – I remember years ago reading how the late Queen Mother reacted when somebody had told her how well she was coping in the aftermath of the King’s death – “you should see me in my private moments”.

            Robert feels he can share his anger and despair with us – let’s not denigrate that, Jon, because, if we do, we are as bad as idiots like Duncan-Smith, who are aloof and indifferent to suffering

            ——–

            the link yesterday and this morning thus far has been that these were another group of trumpet players.

          • treborc1

             I rather be called a  moaning old git then a new labour Blairite who cannot leave the party now it’s leader has gone, your  really empty mate.

        • treborc1

          What people spending their benefits as they see fit is not a labour ideal, it may not be a New labour ideal mate then again I do not believe in new labour, or people like you who are hanging around waiting for the new labour party to start again.

          I’m sure the Tories or liberal would welcome you

          • http://twitter.com/robertsjonathan Jonathan Roberts

            Or people like you hanging around waiting for Labour to become unelectable neo-communists. 

          • treborc1

            Note me mate I left the party, unlike you who only arrived with Blair, and are now re waiting the rebirth

          • treborc1

            Note me mate I left the party, unlike you who only arrived with Blair, and are now re waiting the rebirth

  • Ninja

    “A recent survey found that, in answer to the question ‘do you agree or disagree that “the government pays out too much in benefits; welfare levels overall should be reduced”, the total agreeing was a massive 74% – more Tory voters, yes (94%) but including 59% of Labour voters. A further question concerned “scroungers”: respondents were asked how many welfare claimants fit this description. 39% of the total said ‘a significant minority’, a further 22% suggested ‘around half of all claimants’.”

    All this shows is that the general public is absolutely clueless about welfare and benefits.  Politicians, who should know better, should never base policies on ill-informed surveys like this. If asked the men and women surveyed what the maximum rate of Jobseeker’s Allowance currently is none of them would have a clue.  

    • leslie48

      Whether we like it or not – there is no going back to the mid 2000s. Even the concept of “structural deficit”  recognises that. As many non Tory commentators said last year any  income governments have to spent on the public sector will go to investment projects such as infra structure such as housing or high speed rail or into Higher Education to foster graduates in technology developments and science parks. It ain’t going to couples who are unmarried, jobless and  who have too many kids as 75% of the public often perceive.  Moreover the self-employed  tradesmen working cash in hand with his very big 4 * 4 wheel drive will have to pay up taxes  too as will the big boy tax evaders who dominate down hear in the South East.

      • Ninja

        The 75% of the public you are talking about believe nonsense about benefit claimants because nobody tells them the truth. Such people live their lives in ignorance of the facts. If properly informed of the status quo by respected men and women their ignorance would be dispelled and eventually they would be compelled to think differently about the welfare state.

        I really would enjoy seeing any political party go into a general election promising prosperity to some by visiting Victorian standards of poverty on hundreds of thousands, even millions, of others in a progressive modern European nation like the United Kingdom in the second decade of the 21st century. Imagine a situation where masses of British children become malnourished and suffer associated childhood diseases on these shores when billions of pounds are donated charitably each year by our citizens to prevent foreign children from the falling prey to an identical fate overseas.

        It just isn’t ever going to happen no matter how large the deficit is.

        The British people are better than that (even if British politicians aren’t).

  • Quiet_Sceptic

    Interesting article.

    I think housing benefit needs to brought into consideration, it almost makes a mockery of any reform of the welfare system to exclude it. The disparity between the levels of entitlement for housing benefit and those for unemployment or disability benefits or other forms of welfare benefit has grown too large.

    You cannot really talk about a contributory principle when a lifetime of National Insurance Contributions entitle you to 6 months on £71/week (£1846 in total) when you’re unemployed and yet, as we’ve seen from the recent debates, families can claim up to £26k per year in housing support with no record of contribution or  programme in place to reduce their level of dependency on the state.

    Even this article suggests that any increase in welfare benefits, presumably however miserly, needs to be tempered with measures to ensure a ‘tougher stance’ is taken yet entitlements which pay out ten times more, without end, escape effective scrutiny.

    For info, the summary and introduction of the original Beveridge report are available online, anyone have a link to the full version?

    http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/19_07_05_beveridge.pdf

  • Mark

    Because it’s in fashion every political party wants benefit claimants to run the gauntlet. None of them want to tell the truth about welfare and benefits and try to restore some semblance of sanity into the debate. Not even the Labour Party. The truth of the matter is that according to the DWP the amount of benefit fraud has fallen to a meagre 2.1% which is next to nothing really in so large and complicated a system. Why isn’t the Labour Party shouting from the rooftops that 97.9% of benefit claims are genuine and that almost all fraud has been squeezed out of the system! Why does the Labour Party help keep alive the lie that large numbers of benefit claimants habitually fiddle the system, which mythology leads directly to the demonisation of legions of completely innocent men, women and children unwontedly and unjustly? Why is the Labour Party so craven? Why doesn’t it stand up and defend the weak and the needy in the way that it used to? Or if nowadays championing the right is too big an ask for modern politicians then why at the very least doesn’t the Labour Party simply tell the truth to the public about these matter and challenging the tabloid lies about benefit claimant in the way they deserve? 

    • treborc1

      Somebody has to take the the blame it was not Thatcher Blair or Labour was it, it was all those on benefits. I’d be surprised if labour did not say the reason MP s fiddled expenses was that  welfare was getting away with it

    • Winston_from_the_Ministry

      Because it’s an estimate. And because many people view some benefits that are correctly claimed as unjust.

      A bit like the MPs that didn’t break any rules but took the piss with their expenses.

  • Daniel Speight

    You are being dishonest Malcolm if you are not prepared to say how we came to this present high welfare dependency crisis. It didn’t come about in 1945 because we were an industrialized nation and there was work for all that could.

    Deindustrialization didn’t come about by itself. It was a conscious decision taken by Westminster politicians. Thatcher’s switch of support from traditional industry to the City’s finance industry was intentional, not an accident. There was a choice as both Germany and France show. Blair and Brown made no real attempt to rebalance the economy, just being happy to spend the income from City taxes.

    Up until the failure of the banks, politicians, going all the way back to Thatcher, were content to finance this benefit culture from those City taxes. Now it’s all gone south the politicians want to cut the level of benefits, not by getting more people back to work, but by reducing the money available. The dishonesty in digging up old Beveridge quotes is particularly galling.

    So having created the problem in the first place, politicians, just like Malcolm here, are now ready to punish the weakest in society. It’s of no surprise when we read just recently that Britain’s richest are getting richer. That we knew Tory MPs very much represented the rich is a given, that many Labour MPs also identify with top sectors of society is a crime. At times I do wish we had a Cromwell in the party who would clear out this ‘third way’ deadwood.

    “You have been sat to long here for any good you have been doing. Depart, I say, and let us have done with you. in the name of god, go!.”

    • AlanGiles

      Ed will look very weak if he doesn’t sack Byrne in the coming week, and given last weeks good election results, this may well be his one and only chance to stamp his own authority on his party.

      As Mark points out elsewhere, the amount of benefit fraud is very small, an excellent post by the way,  compared to those people who either avoid or evade tax  it is a very small problem, a much smaller problem than MPs fiddling their expenses – Mr Wicks was in a minority of those who didn’t! – but just like defence and the Home Office – Labour always feel they have to be as beligerant as right-wing Tories to gain the approval and acceptance of tabloid readers.

      It will be very interesting in week commencing May 14th, to see if EM has the courage to get rid of Byrne and equally interesting to see who replaces him.

      * Phil Seamen (1926-1972)

      • treborc1

         The amount of benefit fraud as been 0.5% for years, but this is not about fraud is it’ a person loses two legs uses a wheelchair, well a wheelchair is like  having legs, that is the way Labour looked at it.

        All building now have access, this is another labour idea, but look around.

        In the end it’s about lowering benefits by moving people or removing them from benefits, I know four people who have   young teenagers who are disabled they have now been removed from all benefits and the family has to keep them, but who keeps them when the family has gone bust.

        But it’s  new labour now it’s next labour

  • JoeDM

    The fundamental question is “should people be paid anything more than a subsistence benefit if they do not contribute to our society?”

    • Daniel Speight

       Or Joe we could let them and their kids starve. That would teach them wouldn’t it? You never know maybe a charity will take up the slack.

    • treborc1

       So why not put down children born with a disability, the simple fact for me I can work, but if you would like to see the file I have on what I’ve done to find work you’d be surprised, the simple fact nobody is interested. I ask you a question how many wheelchair users have you seen in your local Tesco, they will not employ people in wheelchair, while Asda have a quota which is illegal.

      So because I can work, should i get no benefits now then comes the problem if I work I will need a carer, after a year the carer must be paid for by the employer, so of course they will not employ me.

      The fact is all these silly employment agencies which labour loved cost billion do nothing at all to get people employed because they do nothing with local employers.

      • wg

        “The fact is all these silly employment agencies which labour loved cost billion do nothing at all to get people employed because they do nothing with local employers.”
        Well said – I attribute the breakdown of the relationship between the people and those governing us to the use of all these various assemblies, agencies, and consultants.

        The people don’t deal with their elected representatives now – they deal with a bloody agency.

        I’m sorry, but I believe that this was a deliberate move to enforce upon us a different form of regional government.

        Call me a conspiracist but I strongly believe that the origins of this regional way of thinking came from across the channel.

        Whatever – the people have been completely disenfranchised.

        • Alexwilliamz

          You are a consipracist. The reasons agencies were involved is because politicians did not know what to do and shuffled the problem onto people who claimed they could solve the problem. Not sure why the channel had much to do with it.

      • Alexwilliamz

        No these agencies directly employ some people. Of course probably not the best way of spending the money. They could probably have saved more money by directly employing the people the agencies were meant to ‘support’.

        • treborc1

          I applied for a job it stated office Clerk needed 20 hours a week min wage, they said the Job would not be suitable for a disabled person as you would need to be able to work fast.

          That was with a Pathways to work agency which went bust a year later.

          • Alexwilliamz

            Clearly they failed to employ fast enough employees. In case it did not come across my previous post was not supportive of the system.

    • Ninja

      And the fundamental answer is: Yes! 

    • Mark

      Erm. The highest rate for Jobseeker’s Allowance is currently £67.50 PER WEEK!!!! How much more “subsistance” do you get than that?

    • Aldous

      Very Brave New World, especially coming from an Epsilon.

    • Liam Byrnes Mummy

      Is that you Liam? Sorry son but you’ve Byrned all your bridges now.

    • treborc1

      Well it all depends I suspect should a soldier of eighteen have benefit for having his leg blown off, after all he has not done a hell of a lot.

      Should a  teenage mother be placed in work houses as Gordon wanted.

      Should a person born with a  head twice the size or spina bifida really expect a country to have enough feeling to pay them a pension or benefits, should then be put down I’m sure labour and the Tories will come to it one day.

      Third way. labour new way I know what the third way sounds very much like

    • Dave Postles

      The fundamental question is perhaps this one: are all the Tory-led government’s changes illegal?  The EHRC, invited by justices in the case brought by the Fawcett Society to rule on whether a proper impact assessment was made by the government in its actions, has decided that no sufficient impact assessment was made by the Treasury.  Perhaps all these changes contravene the 2010 Equality Act.  The issue might extend, some newspapers report, to ethnicity and the EMA. 

  • Brumanuensis

    I don’t see why the CTF shouldn’t just be recreated. If you’re trying to inculcate a savings habit, restrictions on what it’s used for don’t seem very sensible. People will just resent it and they won’t necessarily learn the value of spending money wisely. 

    Similarly, I sense you haven’t thought through the additional contributions for pensions section. That could turn regressive very rapidly and end up diminishing the equality the NI system was designed to enshrine into public services and public benefits.

  • Brumanuensis

    Feeling less charitable after reading this:

    “Indeed, some on the left seek to belittle the size and significance of benefit abuse or, by comparing it with tax avoidance, speak of its relative insignificance. They doubtless assume that raising the question undermines public confidence, yet the reverse is the case. We avoid this issue at our peril.Abuse is clear, certainly to many living on our estates and in poorer communities. Sidestepping benefit abuse is a grave disservice to legitimate public anger about the failure of some to comply with the duties that must accompany rights, if the system is to be perceived as fair. Fraud is difficult to quantify but the DWP’s central estimate for 2010/11 is that fraud cost £1.32 billion, some 0.8 per cent of total benefit expenditure. A further £1.3 billion loss was due to customer error. For tax credits, fraud is estimated at £400 million. The scale of abuse was clear to me when I had ministerial responsibility at the Department for Work and Pensions for tackling the problem”.

    So, to paraphrase Wicks:

    1). Some on the left suggest belittle the size and significance of benefit abuse.

    2). I will now provide figures showing that benefit abuse, according to our best estimates, represents a minuscule fraction of the DWP budget and is roughly the same as honest mistakes.

    3). ?????

    4). We must be tougher on benefit fraud.

    No, I’m none the wiser either after reading this. 

    • treborc1

       DWP report

      INCOME SUPPORT: 2.8% fraud level
      JOBSEEKER’S ALLOWANCE: 3.4% fraud level
      PENSION CREDIT: 1.6% fraud level
      HOUSING BENEFIT: 1.4% fraud level
      INCAPACITY BENEFIT: 0.3% fraud level
      DISABILITY LIVING ALLOWANCE: 0.5% fraud level
      RETIREMENT PENSION: 0.0% fraud level
      CARER’S ALLOWANCE: 3.9% fraud level
      COUNCIL TAX BENEFIT: 1.3% fraud level

      http://statistics.dwp.gov.uk/asd/asd2/index.php?page=fraud_error

      • Dave Postles

        Thanks, Robert.  I shall use these data to disabuse the local press here when it reports benefit fraud.

  • M Cannon

    Utter nonsense! 
     
    The decline in heavy or old -fashioned industry started before the Second World War.  And the ship-building, steel and coal industries were in massive decline well before 1979.  The decline was the reuslt of (i) in relative terms the impossibility of maintaining market share enjoyed in the nineteenth century; (ii) useless management; (iii) myopic trades unions.
     
    There was no conscious decison by Westminster politicians to “deindustralise”.  There was a recognition in the 1980s that industries such as coal and steel could not survive and provide the level of employment which they had in the past.
     
    If you want some figures, as an example, the number employed in the South Wales mines fell from 106,000 in 1960 to 30,000 in 1979 (Sandbrook, Seaons in the Sun, 2012, page 510).
     
    And before replying, note that I blame management too.

    • M Cannon

      This was supposed to be a reply to Daniel Speight below, but seems to have ended up in the wrong place.  I am not saying that the piece above is utter nonsense.

    • Brumanuensis

      Partly true, but the decision to implement high interest rates during the early 80s – criticised as excessive by Milton Friedman no less – and Ms Thatcher’s antipathy towards the trade unions, meant that the government essentially allowed large swathes of manufacturing that could have been reformed, to simply go to the wall. The obsession with a strong pound and the financial services industry didn’t help either. 

      • Daniel Speight

         Brumanuensis see my reply above. I have no idea of your age, but if you are old enough you will remember Keith Joseph. He put into words what a lot of his colleagues thought, which was precisely the ending of any support for industries in trouble. “Lame duck industry” was I think his catchphrase. It wasn’t accepted by all the Tories, certainly Heath wasn’t impressed by Keith Joseph’s ideology as wasn’t Heseltine later in the Thatcher government. The importance of Keith Joseph to Thatcher shouldn’t be under-rated. He really was her main guru for many years although many thought he was more than slightly mad. Anyway I will stand by claim of it being a conscious decision by politicians.

        • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

          Of course it was. In Liverpool we remember this only too well

        • Brumanuensis

          With regards to Ted Heath, ‘The Mad Monk’ didn’t change his mind until 1974 and subsequently, as you say, had a strong influence on Thatcher. However ‘Selsdon Man’ ideas pre-dated him. I’d mark Nicholas Ridley down as another major influence (interestingly for an ardent privatiser, Ridley always oppose privatising British Rail). It was he, Enoch Powell and Peter Thorneycroft who really laid the foundations for Thatcherism.

          I am not, I will concede, old enough to directly remember Sir Keith however.   

          • Brumanuensis

            ‘The Mad Monk’ being SKJ.

          • Dave Postles

            Yes, ‘Selsdon Man’ exercised Heath, but he u-turned over Rolls-Royce. 
            The economic adviser to Thatcher was Alan Walters and she probably ultimately paid more attention to him than anyone else. 

          • treborc1

             You can say that of almost all political leaders they all seem to have gurus behind them, except brown who was his own Guru.

          • Daniel Speight

             I’m think it was Keith Joseph that run Thatcher’s campaign for the Tory leadership. It seemed that Thatcher always had problems finding a place in cabinet for him because he was a pretty unstable character. As you say and I say above, Enoch Powell’s influence on the economic ideas of Thatcher’s governments shouldn’t be neglected. Funny as the only idea I remember he had that wasn’t pure neo-liberal was on was immigration. Interesting to see Daniel Hannan quoting him in the US last year.

        • Brumanuensis

          But. M Cannon does have a point in that structural factors were also harming UK manufacturing and reducing overall employment in the sector.

          • Dave Postles

            Coal industry.  In 1974, after the country was reduced to a 3-day week, the miners’ strike effectively resulted in a change of government (along with Barber’s inability to control the economy).  In 1983, Thatcher believed the coal industry could be diminished because N. Sea oil was on stream and she preferred to import cheap Polish coal.  Those decisions were political not merely economic.  Those decisions were equally short-termist rather than having a long-term vision for a mixed energy policy.  

          • Brumanuensis

            The coal industry is an area of clear comparative advantage for the UK, environmental impact aside. For industries like cotton and steel, it’s less clear, although there are still ways of retaining them in country, albeit with smaller workforces.

          • Daniel Speight

             My argument is that there were problems affecting industry in France and Germany also, but there the governments didn’t turn their backs as they did here. That British government turning of its back is where it becomes a conscious decision made by politicians. It can’t be clearer than that. When politicians lecture on welfare dependency they should remember that policies made in Westminster gave us the crisis level we now have. It wasn’t the welfare system that failed but yet again politicians.

    • Daniel Speight

       There was no conscious decison by Westminster politicians to “deindustralise”.

      Oh no Mr/Mrs Cannon it is you who utters nonsense. There was a very conscious decision made at the beginning of the Thatcher governments. Behind the decision was Keith Joseph*, Thatcher’s guru. The Centre of Policy Studies was set up by the pair to make just the plans that would see industry going to the wall. This was about laissez-faire in an almost pure form. Didn’t Thatcher make Joseph her Minister of Industry? This would have been putting the fox in the hen house.

      You see I do remember the Keith Joseph speeches against investment into British industry to save them. As I said below, that there was another way can be seen by Germany and France both of which did support their industries. Of course Thatcher thought she had the answer, The City beckoned with its promises of money enough. Once government financial policies were tied to the City’s gravy train, help for British industry declined even further.

      Two things need to be said about the above. First that the Blair governments made no attempt to change these policies, and second that for a long time, far longer than many like Vince Cable thought, it worked. The problem being that like any gambling habit, once it goes wrong it tends to do so spectacularly.

      But Mr/Mrs Cannon will not believe this. His/her arguments are first that it was inevitable anyway, second that the management of British industry was poor, and of course third that it was the fault of the trade unions.

      So let’s look at these. That it was inevitable is disproved by Germany and France making the adjustments needed to keep industry.

      Second, that management could be poor was probably true, but it’s worth remembering that in the examples he/she gives, the senior management were actually political appointees. If government was worried about management quality it could have intervened. (Didn’t Wilson intervene in the electrical and electronic industries by encouraging their merger into the giant GEC? Not a positive intervention by the way in how it turned out.)

      Third that the unions did it? This is a hoary old chestnut of 1970′s Tory propaganda. Again Germany in particular is an example of how government can help bring sides  together. Workers represented on the board anyone? Let’s look at France. Were the French trade unions any less militant than their British brothers? I seem to remember that they almost bought down the French government in 1968. They stayed strong when British industrial unions are an almost forgotten footnote in history. I would have been happy if it were the other way round and British workers had a 35 hour week.

      *I could have dug a bit deeper and talked about Enoch Powell’s influence on the ideology of those around Thatcher. Although now remembered for his race speeches, he was at heart the flag bearer of neo-liberalism. I could have also looked at Friedman’s monetarist influence on that Centre of Policy Studies, but I will let Mr/Mrs Cannon do this if he/she really wants to learn rather than spout the nonsense above.

    • AlanGiles

      Mrs Thatcher frequently said in terms Britain should concentrate on becoming a services industry country, as did many of her ministers. Many of us at the time thought this wasn’t a great idea, since if Britain became the call centre of the world, it would only be a matter of time before other countries started to compete with us – and many British companies, as we all know, started to outsource that work to the Far East.

      From her time on, though manufacturing was in decline, government actions tended to hasten the demise. Note I say from her time on – Blair and co did little to assist industry – especially after appointing the hapless Stephen “Taxi For Hire” Byres as minister at DTI.One of our problems has always been that we allow our early work on producing innovative products to be overtaken by developments abroad (Radio and TV were early examples of this, and I suspect our early  lead on Graphene will go the same way.There are many reasons for this – not least the unwillingness for British companies to “waste” money on intensive R&D – they frequently forget that old adage about having to “speculate to accumulate”. * Philly Joe Jones (1923-1985)

  • Sharoncooper

    We are reaping what you have sown.Atos is busy taking benefits off some of the most vulnerable people in our country and you ,the so called Labour party started this off with your witch hunt against the sick and disabled.You sit in your ivory towers babbling on about rights and responsibilities and all the while people are waiting for the summons to the Atos sausage factory. where more often than not they are pronounced  cured. It is almost like Jesus has come back to heal the sick by computer.I do not recognize the Labour Party that exists now.You are so busy chasing the votes of the middle class you have forgotten why you where formed as a political party.You are supposed to exist for all of our citizens, including the ones whom due to no fault of their own making, have to rely on the state for their income.You have aided this disgusting government in their war on the disabled,you are silent while decent people are scapegoated and scorned by the media, you have colluded with the intentional media blackout of what is truly happening with the welfare state, you the Labour Party except for a few honorable members are a disgrace.

    • AlanGiles

      Believe me, Ms Cooper, I agree, and sympathize, with your view, as do many of us who regard ourselves as mainstream Labour – we are as disgusted with the late minister James Purnell as you at inflicting Freud on the vulnerable. The problem is the leadership of Labour drifted so far to the right that – even now – those of us who dare speak up about this are regarded as being “hard-left”, “Trots” or SWP supporters.

      Labour has to regain it’s sense of decency – hopefully if Ed Miliband sacks Liam Byrne this week – a cheerleader for Purnell’s policy – it will be a small start.

      * Ed Thigpen (1930-2010)

      • treborc1

        As Ed Miliband told the BBC last week, despite tangible successes in
        getting people into work, for example in relation to sickness benefits,
        we should have gone further to reform welfare. Now the Government are
        implementing the plans we started in 2008 to move people off incapacity
        benefit and onto the improved Employment and Support Allowance and they
        have my support in doing so.

        And yet with the down turn has come the sacking and redundancies of the sick and the disabled, my local Asda who had five people employed two in wheelchairs, all have now been sacked well OK not sacked because the disabled only get a eleven month contract.

        I belong to a group in my area an access group, so far we have seen the vast majority of people who were in work now out of work.

        But if so many of labour success was a success, how come the figures for the disability is still the same 2.5 million, why is it that people who are not on IB are not going through the medical if after all it’s about getting people back to work, it does look more like putting people onto lower benefits.

        And it was labour that started this.

        Nope sorry I see sod all in Miliband.

        • AlanGiles

          If Ed Miliband doesn’t relieve Byrne of his post this week he will look weak, and a very hollow vessel.

          If he doesn’t replace him with somebody with more compassion he will look devious.

          If he were  to replace him with Yvette Cooper, who was Purnell’s henchman, it will show he has no intention of changing.

          I hope he will show some understanding towards the sick and vulnerable, but we have to wait and see.

          * Ken Wray (1925-1977)

  • Ninja

    What a complete and utter idiot Malcolm Wicks must be to argue that the welfare state must be “reformed” or “fixed” or whatever so that it chimes with the general public’s sense of right and wrong when the majority of the general public’s beliefs are COMPLETELY WRONG in every particular when it comes to welfare and benefits. This kind of pandering to hysterical public opinion reminds me of the Salem witch-trials, where dozens of completely innocent women and some men were punished for impossible crimes that they could not possibly have committed because of the prevailing hysterical, whipped-up public opinion at the time. You should not give the public what it wants when the public is wholly wrong about some issue, especially when large numbers of innocent and harmless people will suffer as a consequence.

    Malcolm Wicks and others of his ilk who work overtime promulgating false inflammatory garbage should NOT be listened to. Or no more than any other idiot you might bump into on the street who claims to possess solutions to a variety of problems he has failed even to properly understand.

  • Dave Postles

    As comments below contend, this exegesis is popularist, but not in a beneficial way.  The print media must bear much of the responsibility (since we are referring to responsibility).  Whenever there is a criminal case of benefit fraud, editors place it on the front page as a feature with in-depth reporting.  Isn’t it about time that they placed these isolated cases into a general context of the global nature of benefit fraud – i.e. its minimalism? 

    • Dave Postles

      BTW, we perhaps all should write into our local newspapers when they report such benefit fraud to explain the real levels of benefit fraud. 

  • AlanGiles

    From the Evening Standard in London today (14th May):-

    http://www.thisislondon.co.uk/panewsfeeds/500000-to-lose-disability-benefits-7743792.html

    Do we REALLY want to get down in the gutter with this creature? -= do we, Mr Wicks?

    *  George Chisholm (1915-1997)

  • PaulHalsall

    I think the basic mistake here is to think that full employment – with jobs paying decent wages – is no longer possible in modern western economies.  We need *fewer* people to work, not more.  

    Some ways to do this we already do. 

    - Since I was at high school in the 1970s the age of school leaving has been raised from 15 to 16, and to 18 for most pupils.  We also now send around half of 18-22 year olds to some kind of college – in other words we removed them from the labour force.

    -We now have more paid vacations, which again overall decreases the hours worked per worker.

    -We now also have extensive maternity leave, which does the same thing.

    We need other ideas to decrease how much work people do. Perhaps paid mid life career breaks would be an idea?  Lowering the retirement age? Working a 4 day week?

    The alternative to this spreading the work around is to have a large unemployed underclass who face social exclusion.

    There was an article in Time magazine last year on this very subject.http://articles.cnn.com/2011-09-07/opinion/rushkoff.jobs.obsolete_1_toll-collectors-robots-jobs?_s=PM%3AOPINION 

    Extract:

    New technologies are wreaking havoc on employment figures — from EZpasses ousting toll collectors to Google-controlled self-driving automobiles rendering taxicab drivers obsolete. Every new computer program is basically doing some task that a person used to do. But the computer usually does it faster, more accurately, for less money, and without any health insurance costs.We like to believe that the appropriate response is to train humans for higher level work. Instead of collecting tolls, the trained worker will fix and program toll-collecting robots. But it never really works out that way, since not as many people are needed to make the robots as the robots replace.And so the president goes on television telling us that the big issue of our time is jobs, jobs, jobs — as if the reason to build high-speed rails and fix bridges is to put people back to work. But it seems to me there’s something backwards in that logic. I find myself wondering if we may be accepting a premise that deserves to be questioned.I am afraid to even ask this, but since when is unemployment really a problem? I understand we all want paychecks — or at least money. We want food, shelter, clothing, and all the things that money buys us. But do we all really want jobs?We’re living in an economy where productivity is no longer the goal, employment is. That’s because, on a very fundamental level, we have pretty much everything we need. America is productive enough that it could probably shelter, feed, educate, and even provide health care for its entire population with just a fraction of us actually working.

    • Peter Barnard
    • Daniel Speight

       We could look across the Channel at their 35 hour work week.

    • AlanGiles

      Good morning Paul. I think one of the most ridiculous ideas of recent years, endorsed by both the real Tories and Tory-Lite New Labour was increasing the retirement age (I also think creating 18 year old resentful non-academic schoolboys and girls is a bad idea, but that is an argument for another day).

      The reckoning is because everyone is living longer, they must, perforce be healthier. This isn’t necessarily true, people ARE living longer, but that is often because medicine has improved, but there are limits: you cannot “cure” arthritis,  for example, merely dull the pain with anti-inflammatories etc, so now the government propose police officers work into their 60′s – it will be more a case of 67 year old P.C. Smith feeling a young tearaways ankle, rather than his collar, as he collapses with fatigue after chasing an 18 year old suspect on foot, and has to hoist himself up.

      People should be retiring earlier, to give younger people the chance to progress. I just do not understand the mindset of people who go to court for the “right” to work into their 80s. It is a fact of life that you don’t have the energy you had at 30 when you get to 50, and even less when you are 60.

      Also of course many of the people who want the “right” to work till they drop have interesting, or lucrative jobs  - politician certainly have the latter – they don’t consider the lady in her mid 60s working on the checkout of Tesco, or the man doing a repetitive and perhaps physically demanding job, where ennui set in years ago. Not everyone can be doddering about at 80 in the House of Commons fiddling their expenses and wondering if the OCD will be a good enough excuse to buy an £8000 TV set with public money, or the 70 year old Conservative MP for Birkenhead.

      If politicians had actually worked in our real world they might realise that for many retirement is eagerly looked forward to.

      * Hank Shaw (1926-2006)

  • Mark

    What is the correct figure as far as fraud goes then, if you dispute the DWPs own figures? Are you actually suggesting that entire policy agendas should be launched based on urban myths and whispering campaigns rather than actual statistical estimates made by the civil service? I am assuming that the army of governmentally employed statisticians, mathematicians and economists, each with more academic degrees than you can shake a stick at, who have access to ALL of the raw extant data available, have a much better grasp of what is actually going on than a non-professional man or woman on the street.  

    • Peter Barnard

      Mark, The Annual Fraud Indicator 2012 estimates (with an “excellent” level of confidence) benefit fraud at £1.2 billion and tax credit fraud at £0.4 billion (fiscal 2010/11, if I remember correctly).

      Tax fraud was £14 billion.
       
       

    • Winston_from_the_Ministry

      You clearly aren’t aware of how they came up with their figure.

Latest

  • Comment Going for the student vote: Postgraduates matter more

    Going for the student vote: Postgraduates matter more

    In a politics dominated by efforts to chase the grey vote it is nice to see a bit of electoral competition at the other end of the generational divide. As Labour weighs up what to do about tuition fees it might seem that a big offer to students could yield important gains next year at the general election, as well as shoring up any post-2010 support tempted to return to the Lib Dem fold. 40.5% of students voted Lib Dem […]

    Read more →
  • Comment Independence won’t deliver for Scottish women

    Independence won’t deliver for Scottish women

    As the referendum debate in Scotland picks up pace, there is an increased focus on how women will vote. So far, it would seem that women in Scotland are steadfastly resisting Salmond’s overtures. It’s no surprise, given that his central offer for more childcare has been dismissed by the experts, and women are starting to understand that the SNP are being led by polls and not principles. Women are asking why, if the SNP’s commitment to equal representation is real, […]

    Read more →
  • News Weekly survey: Cost of living, elections and devolution

    Weekly survey: Cost of living, elections and devolution

    Average wages are set to rise faster than prices – so is there still a cost of living crisis? Ed Balls says there is, the Tories are arguing that there isn’t. What do you think? And with the European and local elections coming up next month – how much campaigning is going on in your area? And when were you last out on the doorstep? Also in our survey – Ed Miliband has pledged to devolve at least £20 billion to be […]

    Read more →
  • News Labour have a mini reshuffle

    Labour have a mini reshuffle

    Labour have had a very mini pre-Easter reshuffle, with two new role announced. Thomas Docherty, formerly Angela Eagle’s PPS, has become Shadow Deputy Leader of the House, while Angela Smith moves from that position to become a Shadow Environment minister. Congratulations to both on their new roles.

    Read more →
  • News Tory housing shambles: Over budget and behind schedule

    Tory housing shambles: Over budget and behind schedule

    It’s no secret that Britain faces a housing crisis – and new figures show David Cameron’s big plan to “Get Britain Building” is turning out to be an abject failure. The Get Britain Building fund was launched in November 2011 by then-Housing Minister Grant Shapps, who announced £400 million to build 16,000 homes over the next three years. Cameron then relaunched the project in March 2012, with the cost soaring to £570 million and the deadline extended to March 2015. […]

    Read more →