howard mcsweeney1 wrote:
Subscription only to the FT but complicated is an understatement,
Here's a cut and paste then:-
(Though I must say the cost of the W/E FT by subscription at £2.90 a week is an absolute bargain for the arts reviews alone https://sub.ft.com/spa2_weekendsub/)
Seventy-five years ago come December 1, the Beveridge report, the founding document of Britain’s modern welfare state, was published. It fell mainly to the postwar Labour government to implement it. Since then the social security side of it has been subject to repeated revision.
That is hardly surprising. The world and population changes, and the welfare state — if it is to survive and be of any use — has to adapt. But only rarely are the revisions uncontroversial. And right now, it is universal credit that is in the eye of the storm — the flagship welfare reform of first the coalition government and now of this Conservative one.
Universal credit — despite being touted, yet again, as “the biggest reform since Beveridge” — is in fact merely the latest manifestation of one of the few really big conceptual shifts that have taken place in welfare policy since 1948. Up until the 1990s, means-tested benefits were chiefly paid to the unemployed with relatively few conditions other than that they did not work. But as globalisation took effect, forcing down wages in lower paid and less skilled jobs, it dawned on politicians of all parties that, rather than pay people on condition they did not work, it was better to use benefit money to subsidise them to be in work — and to require them to look for it. Out of that — a shift started by the Conservative Kenneth Clarke when chancellor, and then pursued much more vigorously by New Labour — came welfare-to-work programmes and Gordon Brown’s in-work tax credits.
Tax credits undoubtedly improved the lot of those in low paid work. But they were not without their problems. There were huge over and underpayments with many billions of pounds of the overpayments proving unrecoverable. And while tax credits did in practice ensure that, for pretty much everyone, being in work paid more than being on the dole, the calculations, with their interactions with housing, council tax and other benefits could be horrendously complex.
So the idea of universal credit was born: the merger of six in and out-of-work benefits into a seamless, and initially, more generous one. This would be a benefit that could take advantage of newer technology to assess changes in income and circumstances in more or less real time, every month, thereby making it easier to move into work, and back into it if a job is lost.
This was — and remains — an honourable goal, even if, in the words of one of the most senior civil servants there at its inception, implementing it was bound to be “the mother and father of all challenges”. A wholly unrealistic timetable was set. The first version of this smartphone and online-enabled benefit proved so insecure that the government effectively had to start again and build a new one.
On top of that, universal credit as originally conceived by former work and pensions secretary Iain Duncan Smith was always going to cost more. Its withdrawal rate as earnings rose was more generous to ensure that work really did pay; and it supports people in “mini-jobs” of a few hours a week, rather than in-work support not really kicking in until at least 16 hours a week are being worked.
But as the deficit failed to come down as fast as projected, George Osborne, the then chancellor, kept returning for further cuts to the working age benefit bill in general, and to universal credit in particular.
The IT, as far as one can judge, appears to be working tolerably well and the current row is over the six-week wait for payment that has been built into the new benefit. The government raised from three to seven days the period that claimants have to wait before they can claim — saving some £50m. It gives itself a week at the end to notify the payment date and get it on to a monthly rhythm. And it assesses income over a month to establish entitlement — even though, as David Gauke, the work and pensions secretary, conceded to MPs this week, a rough estimate of entitlement can often be made much faster.
And the six-week wait — currently longer in about a fifth of cases — is plainly causing problems. As Heidi Allen, a Conservative MP, and Frank Field of Labour have put it, “no one waits six weeks for a pay cheque”. The result for people already on low income is debt, rent arrears and food banks. And in the more extreme cases homelessness and a lost job. Precisely the opposite of what was intended.
These problems are in fact fixable without undermining the principles of universal credit. The problem is they will cost money, and the government believes it has not got any. But one reason it hasn’t is the way it has, over seven years, tackled a benefits bill of an estimated £230bn.
While working age benefits (by far the smaller part of the bill) have been cut and capped and cut again — with homelessness rising and rough sleeping, which had been all but invisible for a decade, returning — pensioners have seen their benefits not only protected but enhanced. They still do not pay national insurance contributions. They have a “triple lock” on pension increases, which one day will have to go, plus winter fuel payments that go to all regardless of need, and free travel passes (for which there is a stronger case).
Pensioners are now the household type least likely to be in the bottom fifth of the income distribution. But, as one Conservative minister put it somewhat despairingly in private not so long ago, it is the working age benefits bill that has been “the milch cow for austerity”. There is an answer in there.
The writer is author of ‘The Five Giants: A Biography of the Welfare State’, an updated edition of which is published on November 2
"You know, there really exist certain people to whom it is assigned, at their birth, to have all sorts of extraordinary things happen to them" Mikhail Lermontov