Politics
How Labour's tough talk on benefits missed the point
Published 24 July 2008
The biggest fraud has been the manipulation of unemployment figures by successive governments
Tough talk for who? Genuine benefit claimants deserve more than tough talk
Launching changes to the incapacity and unemployment benefit regime just as the job market is starting to contract was never going to look soft-hearted. Not that James Purnell's launch was intended to bring comfort to the jobless or the sick. Labour played its new reforms almost entirely to impress the right-wing press, talking tough about bogus claimants and getting people off benefits. Even the former Tory minister Peter Lilley (who boasted of having a "little list" of benefit cheats) praised the secretary of state for taking over where he, Lilley, left off in 1997.
The tough talk was, at the very least, insensitive towards those less equipped to withstand the deepening economic gloom. Even if the government believes a large proportion of the 2.6 million incapacity benefit claimants are bogus, the substantial number of genuine claimants deserve some respect. Making weaker members of society feel insecure at a time of rising food and energy prices smacks of bullying.
That said, Purnell's proposals, most of which have been the subject of widespread debate since Labour came to power, do address an increasingly intractable problem. After all, if almost 4.5 million people are on either incapacity or unemployment benefit at the end of a long period of growth in the labour market, this is surely a clear sign that we have the wrong policies.
It needs saying, too (but shouldn't), that it is a worthy ambition to get as many as possible of the 2.6 million people currently on incapacity benefit back into work. Purnell is also right to simplify the system. Indeed, he could have gone further and dispensed entirely with the idea of a separate incapacity benefit since the biggest of all benefit frauds has been the way in which successive governments have used this provision to massage unemployment figures. They have preferred to have millions on incapacity benefit rather than admit the real level of unemployment.
A unified rate need not mean lowering benefits. There is a fair rate for those who need help because they are out of work, and all should get it. The unemployed and sick alike have to eat and pay housing and utility bills. Some incapacities may require further financial help, but that is a different matter.
The emphasis on helping people return to work is also welcome, though it remains a mystery why Purnell believes further involvement of the private sector will achieve this. As the veteran poverty campaigner Frank Field argued when the proposals were launched, staff at local benefit offices are far better placed to understand who genuinely needs help and who is swinging the lead. This pool of expertise could be utilised immediately and more cheaply.
For, and this is another argument the let's-talk-tough tendency in Labour seems unwilling to make, getting people off benefits and into work is not a cheap option. When, in the 1990s, Bill Clinton's administration pledged to "end welfare as we know it", it found that it cost more than twice as much to get someone into work as to pay them benefit for a year. The more important statistic for Britain, though, is that someone on incapacity benefit for a year is likely to be there seven years later.
But people do not stay idle on low benefits if they can work for a decent wage. Why does Labour so readily acknowledge that the rich need incentives to work (high pay, bonuses, a friendly tax regime) yet fail to apply the same logic to the poor? Supporting the Living Wage campaign would have an immediate impact on unemployment levels, but that is not a signal the government is prepared to send out.
Nor is it likely to take up another "soft" suggestion from Field, which is that long-term claimants should have invalidity benefits guaranteed for a year after they find work. At present, those who make the leap to take a job find themselves penalised when attempting to reclaim benefits if the job does not work out for them.
A government that did not always have one nervous eye on how its proposals might be interpreted by the right-wing press would dare to be both more generous when that would be effective and more radical when an honest reappraisal of past practice showed change was needed. Trying to be tough, Purnell has been too timid.
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