Could a new national insurance system protect the welfare state?


10:55 am - May 3rd 2012

by Richard Exell    


      Share on Tumblr

Could a revived National Insurance system help win back support for the welfare state and address key economic and social changes?

That is the question addressed in a forthcoming Touchstone pamphlet, Making a Contribution by Kate Bell and Declan Gaffney.

In a recent opinion poll, 74% of British people agreed that “the government pays out too much in benefits; welfare levels overall should be reduced.” And yet as recently as 1996, 52% said benefit levels were “too low and cause hardship“. What has happened?

The last government’s emphasis on the commitment to fighting fraud and not tolerating work avoiders may or may not have worked at neutralising welfare as a reason why people didn’t vote Labour, but it certainly didn’t help maintain support for benefits.

The British Social Attitudes Survey has been asking people whether they think benefits are too low or too high for nearly thirty years and there’s a real difference between the results before and after 1997:

Benefits too low

Benefits too high

Average 1983 – 97

45.5%

30.5%

Average 1997 – 2010

26.0%

48.5%

Of course, the stance of the last government isn’t the only relevant factor, there’s also been an astonishingly vituperative press. We’ve had that before but what is new is the TV joining in.

Attitudes have gotten worse over the previous 12 months.

How can we turn this round? The ‘othering’ of people on benefits would not have developed such momentum if it hadn’t reflected the reality of the changing welfare state.

Over the last 30 years, the benefits system has become more and more means-tested, with the result that there is very little in common between the people who receive benefits and the people who pay for them.

When people think about the taxes they pay that fund the welfare state and the people who rely on it their thoughts will develop on very different lines according to whether they think of this transfer as simply money out of their pocket or as an insurance policy they may need to use themselves one day.

A generation of reforms has chipped away at the notion that social security is there for everyone.

As Kate and Declan argue, the claims that we have a “something for nothing” welfare state are precisely wrong – part of the reason for the crisis in support for social security is the rise of the “nothing for something” system.

A strategy for reviving support for decent benefits must tackle this. Workers will support a generous welfare state – but part of the deal must be a promise of security for all.


An extended version of this post is here

    Share on Tumblr   submit to reddit  


About the author
Richard is an regular contributor. He is the TUC’s Senior Policy Officer covering social security, tax credits and labour market issues.
· Other posts by


Story Filed Under: Blog ,Economy

Sorry, the comment form is closed at this time.


Reader comments


1. So Much For Subtlety

Well without belabouring the obvious there are other points to make as well:

1. We cannot afford welfare at the present rates. The Baby Boomers are ageing. Their demand for pensions and health care is rising. The number of able-bodied workers is declining. Thus the welfare state needs to be wound back,

2. Fraud exists. And on a massive scale. There is no point pretending it doesn’t. Any change to the system aimed at restoring trust *must* have fraud detection and punishment at its core if it is to win public support.

3. Immigration. Welfare states usually exist where countries are ethnically homogeneous. Britain was, it is no longer. The OP says:

Over the last 30 years, the benefits system has become more and more means-tested, with the result that there is very little in common between the people who receive benefits and the people who pay for them.

But that is to only look at class. There is even less in common between the people who receive benefits (who are often African, Afro-Caribbean or Asian in origin, while of non-Christian backgrounds) and the people who pay for them (who tend to remain White, Middle Class Anglicans or similar).

It is a brutal and cruel fact that people care most about the people closest to them. We have chosen to make Britain more like Brazil through immigration. We will end up with Brazil’s welfare state as well – policemen gunning down street children too in the end I expect. The rich will fly to and from work in helicopters from gated community to guarded building, while the poor live in make-shift shanty towns. As you are beginning to see in parts of London.

What is happening is the end of Britain’s welfare state and its replacement with an insurance state. This campaign by American insurance companies began nearly 20 years ago with Unum’s meetings with Peter Lilley. Can’t afford insurance? Tough shit.

I’m sure that the change in people’s opinions of the welfare state have nothing to do with Gordon Brown’s massive expansion of it, and the tax rises that were needed to fund it

Such a system is already in place that is financed through taxation and national insurance. People have paid tax and national insurance whilst working which entitles them to protection should they fall ill, accident, redundancy or simply laid off for a multitude of reasons. This is what fair and civilised countries do. They do not leave people in total hardship and poverty should bad times come.

The United Kingdom is a rich country and can afford to help it’s most vulnerable. I have some information right in front of me called “Benefits Awareness Month” by Turn2us. This leaflet/information claims that over £19 Billion goes unclaimed in welfare benefits each year. It goes on to say : are you one of the millions of people missing out on money you are entitled to?

To be honest if £19 Billion goes unclaimed it is obvious that there is an allocated amount of money there with the high unemployment count that already exists.

My point is : even at this time with high unemployment with £19 Billion not claimed the system is not quite as broken as they want us to believe and the system is not subject to as much fraud as Cameron and company would have as believe.

The system is already effective if £19 Billion goes unclaimed each year. This Government has it’s hands on the purse strings of the welfare system which makes it an easy target so that they can take from the most vulnerable in society and pass it on to the wealthiest as they did in the last Budget in March.

This Government enjoys inflicting misery and it is conning and taking everyone for a ride.

Did you eally believe all those false and misleading lies regarding the welfare system as Cameron and company discriminated the most vulnerable in society.

Any savings this Coalition of evil makes will only be diverted to the richest in society. It’s all about feathering the nests of the richest.

“The last government’s emphasis on the commitment to fighting fraud and not tolerating work avoiders may or may not have worked at neutralising welfare as a reason why people didn’t vote Labour”

Really? Apparently 45% of people thought benefits were too low before 1997, which suggests it wasn’t a problem. Now Labour has put it on the agenda, it’s likely to be more of a problem whatever they do, because of perception.

@1: “We cannot afford welfare at the present rates. The Baby Boomers are ageing. Their demand for pensions and health care is rising. The number of able-bodied workers is declining. Thus the welfare state needs to be wound back,”

This is rubbish, the UK’s real GDP doubled from 1980 to 2008. Life expectancy and the numbers of pensioners have not doubled and will not double.

“Fraud exists. And on a massive scale.”
The DWP estimates a cost of about £1.2 billion in benefit fraud – this is the same amount as we pay to run back-end IT services for three of the 32 London boroughs http://www.theregister.co.uk/2012/01/24/council_contract/

“win back support for the welfare state”

Lets hope not. Its spent the last 50 years since its invention ruining public finances.

“74% of British people agreed that “the government pays out too much in benefits; welfare levels overall should be reduced.” And yet as recently as 1996, 52% said benefit levels were “too low and cause hardship“. What has happened?”

13 years of a Labour government. Thought that was obvious? you don’t see the connection that Labour got into power in 1997?

“the benefits system has become more and more means-tested”

As it should be. I don’t personally support someone on 50k claiming benefits.

7. David Warner

“So Much For Subtlety” has overreacted. It’s all about community values and loopholes.

I know two Nigerians who are British because they were born here whilst their parents were students (back in the 1970s). They both were brought up in Nigeria, but despatched back to Britain at the age of 18 to live in social housing on benefit: both having had families with 2 and 3 children respectively.

In my own case, I have been for the last 2 years on ESA having lost my job I managed to jump the hurdles, appeal against ATOS etc and get what is effectively sick pay. I have now had my benefit stopped, as the Welfare Reform Act limits NI based benefit to one year, and my assets are in excess of the means tested level.

Whilst it is true that the TV programme “Saints and Scroungers” has highlighted benefits abuse in a new and very direct way it is clearly the case that the benefits system is being misused by various types of claimants. Indeed one type of claimant is still almost immune to cut backs: unemployed over 60 year-olds can claim Pension Credit and associated entitlements, thus effectively retiring at 60, despite those warning letters from DWP saying you cannot now retire until 2020 for those of us under 60.

The payment and entitlement to benefit is becoming more random, and dependent on legal advice and the support of advocacy groups and social workers. That is why it is becoming discredited.

This all goes back to a cynical Thatcher-era mistake: “parking” the long-term unemployed on Invalidity Benefit, as the founder of “The Big Issue” so charmingly describes it. Of course most are still parked there, which is why the Welfare Reform Act has tackled newbees like me. Ian Duncan Smith’s Big Lie is that there are jobs there for those who want them. It’s like saying there are husbands there for women who want them. Even if I had a major desire to be a toilet attendant, I don’t think it would be considered normal for a nearly 60 year-old graduate to apply. Of course IDS and DaveCam say “You could always do voluntary work”. Well I’m certainly not doing voluntary work for this government when they have left me soley dependent on my own savings!

Meanwhile whilst the “Thatcher experiment” parked and forgot millions of long term unemployed, the subsequent Blair/Brown boom sucked in a millions of migrants to do the jobs the lumpen former employed could have been deployed to do. Of course that assumes state-sponsored training and social housing mobility as well as the will to work on the part of the claimant.

The only approach to this mess is a Manichean one: the individual must accept that the whole welfare system is corrupt and corrupting. The state must try to adjust the welfare system to minimise suffering without encouraging abuse.

Where “So much for Subtlety” could have reasonably stopped is to say that without proper immigration and benefit controls, benefits will inevitably be cut back on the American model.

Unfortunately the Coalition have abolished the Identity Card scheme, which might have helped control the fraud and abuse.

1
people who receive benefits (who are african, afro carribean or asian in origin, while non white Christian backgrounds) and the people who pay for them(who tend to remain white, Middle Class Anglicans or simular.

So not true. When i worked with special needs children, it was middle class parents who got the most from the system.Their children would go to special schools because they would have disabilities such as Downs syndrome etc….. Obviously working class children had these disabilities, but some of them went these schools because they could not function in mainstream schools, and i doubt their parents got any help from the Government.

My daughter gets help with her sons autism, but then my son-in-law is a very high earner and pays a lot of tax which he has never begrudged paying.

The ethnic mix of people claiming benefits surely depend on the area you live in.

Well all Knew Hitler was not all bad, his idea were worth looking at as we get older or we get blown up or injured or ill, you should be given six month to return to work, or your down to the big building with a chimney and then gassed and turned into ash in the New Green power station.

I knew Hitler was worth something.

If, as the right would have it, a welfare state encourages indolence, why did it not do so in the 1970s when benefit rates were worth nearly double what they are now in real terms?

Tyler @ 3

Gordon Brown’s massive expansion of it, and the tax rises that were needed to fund it

You have forgotten to publish evidence for this claim, but of course being a Tory means you have no time for such things, relying instead on a considerable list of prejudices instead.

I can’t find a single factual statement in SMFS’s three points that has any basis in evidence. Care to actually post it rather than support assertions with more assertions?

It is simply a fact that some people are w orse off in work than unemployed. This has been the case for more than 50 years* but it is now more common and more noticed thanks to Gordon Brown. The non-deductibility of travel costs means that in my town a parent who lost his/her job would be worse off accepting a job in London on £20k. No wonder any commuter on £18k resents the system (and the few but visible free-riders)! A couple of years ago I had one child at school and one at University and deliberately avoided working out my marginal tax rate in case my wife asked me and insisted that I gave up work (her job has higher “social value”).
Lord Freud’s welfare reform, including the universal credit, is VITAL for social cohesion.

14. So Much For Subtlety

4. Mr James

This is what fair and civilised countries do. They do not leave people in total hardship and poverty should bad times come.

Except Britain has long since left those days behind. No one in the UK has much chance of living in hardship and poverty unless they work hard to make it happen. The problem is that the welfare state encourages the sort of dumb behaviour that means more people are vulnerable. It is hard to know what fair and civilised countries do in that situation.

This leaflet/information claims that over £19 Billion goes unclaimed in welfare benefits each year. It goes on to say : are you one of the millions of people missing out on money you are entitled to?

And there’s the problem. If people don’t need the money they should be thanked for not claiming it. Not encouraged to take money they do not need. Thus the system is spending itself into bankruptcy. And that money is not sitting in a bank somewhere. It is money that will have to be found by cutting something else if people claim it.

Jon

This is rubbish, the UK’s real GDP doubled from 1980 to 2008. Life expectancy and the numbers of pensioners have not doubled and will not double.

No but spending on them might.

The DWP estimates a cost of about £1.2 billion in benefit fraud – this is the same amount as we pay to run back-end IT services for three of the 32 London boroughs

The DWP is asked to estimate how often they screw up. They claim not very often. I am sure if you asked the police how often they arrested the wrong guys they would say not often as well. So it must be true.

David Warner

It’s like saying there are husbands there for women who want them.

Indeed there are. What is wrong with saying that.

Even if I had a major desire to be a toilet attendant, I don’t think it would be considered normal for a nearly 60 year-old graduate to apply.

Well we need a new normal then. Why shouldn’t 60 year-old graduates do this work? Why is it preferable for the rest of us to work to preserve what looks like a class based objection to work?

Where “So much for Subtlety” could have reasonably stopped is to say that without proper immigration and benefit controls, benefits will inevitably be cut back on the American model.

America has surprisingly generous welfare. I don’t think the threat is to be cut back to those levels, but to the levels of Hong Kong. Or as I said Brazil.

Lynne

So not true. When i worked with special needs children, it was middle class parents who got the most from the system.

The fact that you have found one area where it is not true proves nothing. I doubt many working class people go to the Opera. But that does not prove that working class people consume more government spending.

The ethnic mix of people claiming benefits surely depend on the area you live in.

Which is also irrelevant. What matters is that people think their money is going to strangers who are hostile to them and their values. Then they will be reluctant to pay. The welfare state in Europe is doomed precisely because there is no national community any more.

Schmidt

If, as the right would have it, a welfare state encourages indolence, why did it not do so in the 1970s when benefit rates were worth nearly double what they are now in real terms?

Ummm, it did, didn’t it?

Mason Dixon, Autistic

I can’t find a single factual statement in SMFS’s three points that has any basis in evidence. Care to actually post it rather than support assertions with more assertions?

You’re inability to find facts is not my fault or my problem. What is it you think needs evidence?

“No one in the UK has much chance of living in hardship and poverty unless they work hard to make it happen”

LOL confirmed troll

Parts of the Welfare State work well and enjoy huge public – if not political – support. These include National Health Service, old age pensions, winter fuel allowances and attendance allowance.

What has failed are the benefits specifically created in the last 25 years, i.e. those created by the last two Conservative Governments (the third term of Margaret Thatcher’s Premiership and that of the last Conservative Government led by John Major i.e. the period 1987-1997) and were subject to repeated amendment rather than proper reform by New Labour between 1997-2010.

The seven lean years of benefit thinking and their results which are our welfare state today are:
Housing Benefit – created 1987
Income Support – created 1987
The Social Fund – created 1988 ( John Major’s concept)
Community Charge Benefit – created 1990 – abolished 1993
Council Tax Benefit – created 1993
Job Seeker’s Allowance – created 1995

These benefits have become notorious for their bureaucratic complexity and cost.

Of these housing benefit is the worst. Currently the Government plans to introduce Universal Credit but if housing costs are not sorted out, then the whole structure will fail. Housing benefit is a welfare state of landlords, and foreign landlords as regards London.

Housing benefit at £21 billion is the second most expensive benefit payment from the welfare state, following old age pensions (£64 billion). The reason housing benefit has escalated from £1 billion in 1987 is because the Housing Act 1988 took away rent control. And it encourages a huge amount of fraud .

In London it is becoming a rarity to find a landlord in who is actually domiciled in the UK and is a UK taxpayer – the housing market in London is beyond the price of all but a small proportion of British nationals.

The old adage “follow the money” has been forgotten or rather the Government would prefer you to ignore it . Who actually gets housing benefit ultimately? – The answer in London is that it often goes abroad to an ex-pat or foreign landlord. For example – £425 paid weekly for a badly repaired two bedroom flat near Baker Street with the landlord believed to be in Morocco.

In another case which went to court in 2010 the ultimate recipient was a landlord apparently resident in South Africa, Ethiopia and Namibia – – with a UK bank account never once in credit in 4 years – who received regular payments of £900 -1200 per month from Westminster City Council in housing benefit, with a further £400 coming from the tenant. The property was an ex-council flat he had bought.
After receiving the monthly payment, the next withdrawal on the gentleman’s bank statements – which were produced in evidence in court – shows that the same money withdrawn in Cape Town or Johannesburg or Namibia through the banking system. This can be repeated in the case of tenants on housing benefit whose landlords live respectively in Ireland, Italy, Nigeria, Ghana, the Lebanon, Singapore, Malaysia, Latvia, Cyprus, Bangladesh and the United States of America etc

That’s why foreign investors are flooding to the London property market, forcing prices up higher because free money is available in the form of the HB system. However, the whole Coalition and a great many Labour politicians would like you to pretend this isn’t happening . South African chardonnays and Latvian vodkas all round!

The only way to reform the system and tackle this abuse – which also promotes a huge amount of fraud – is to restore the 1988 rent controls. However, that will take politicians who have the courage to defy their colleagues and associates who are or may be profiting from this. It will also require the current generation of university graduates to realise that unless rent controls are restored in the UK the bulk of them are never going to be able to afford a home of their own.

Alan Murdie

You forgot DLA Disability Living Allowance which was massive for me, once I lost the use of my legs I spent two years going around on my back side as I waited for the NHS to get me a wheelchair, in the end I applied and got DLA for which I used the money to get a wheelchair.

Brown of course felt this benefit was a wasted benefit.

18. Mr James

So Much For Subtlety @ 14

Hi there, this is a wealthy country and we pay out taxes along with national insurance which protects us from all unpleasant eventualities that also includes unemployment.

I thoroughly enjoy your views and respect your opinions but I do honestly think that you over exaggerate when you push your point regarding fraudulant claims for unemployment benefits.

I know several people that work in this area and I can tell you that fraud involving any benefits is not on a scale that has been exaggerated to justify this present Governments handling of the benefits system. I know that when people do committ any type of benefit fraud to day it is short lived because the system is so tough/thorough and any irregularities or wrong doing is picked up very quickly. The system is very, very effective and has been so for some years. If you was to make a claim today you will soon learn/know what I mean. Also the reluctant people that evidence shows they have not worked and cannot be bothered have been targeted to be dealt with, rest assured these people will not get away with this behaviour under any circumstances.

Tax avoidance/evasion is by far the biggest crime against society today and if all monies were paid to the taxation office/treasury this country would not, by far have such a financial problem and this Government would not have to lie to justify taking from the vulnerable in society to make up for that loss in tax. The rich are again responsible for milking the system at the expense of others. You are an intelligent person and I have know doubt that you already have the figures so I will not go into that area.

Because I have worked hard all my life and paid into the system I expect the state to provide for me because I have worked hard to support it. I must confess that I have also taken the precaution of also paying into a pension fund that may not cover me at a later date. I have also been fortunate enough to be able to afford other benefits such as insurance to pick up other expenses such as accidents, sickness but many people cannot afford these luxuries for a mulitude of reasons, for example low wages.

The welfare system was put in place to support all and to stop outright poverty. We have all paid into it and people should not live in poverty because a few dodgy people have abused it in the past. Also because unemployment is rising the Government should not cut the benefits to make up for the short fall to pay the newly unemployed. They should stop the tax evasion and try and create jobs.

19. So Much For Subtlety

15. Jon

LOL confirmed troll

Glad to amuse you, but it is true.

16. Alan Murdie

Who actually gets housing benefit ultimately? – The answer in London is that it often goes abroad to an ex-pat or foreign landlord.

So what? The purpose of housing benefit is to house people. If paying someone in Morocco means that someone in London has a house, how is that a bad thing? You object if people in Morocco make money providing what the State cannot? Why?

The only way to reform the system and tackle this abuse – which also promotes a huge amount of fraud – is to restore the 1988 rent controls.

Except we tried that and it was worse than any problem could be. Not that it was ever a sensible idea. Besides, it would make owning a house in London less attractive, but it wouldn’t force Moroccan landlords to sell up.

20. Churm Rincewind

@14 SFMS

In response to Mason Dixon Autistic @ 12 – “I can’t find a single factual statement in SFMS’ three points that has any basis in evidence” – you say “Your inability to find facts is not my fault or problem. What is it you think needs evidence?”

Well, here’s a start. One of your three points concerned ethnicity, and you claimed that there is “less in common between the people who receive benefits (who are often African, Afro-Caribbean or Asian in origin, while of non-Christian backgrounds) and the people who pay for them (who tend to remain white, Middle Class Anglicans or similar).

However, statistics released in 2011 by Department of Work and Pensions produced the following figures comparing the proportions of income received by way of wages, salaries, and self-employed income against benefits for various ethnic groups, as follows:

White – work 73%; benefits 19%
Mixed Race – 79%; benefits 19%
Indian – work 83%; benefits 16%
Pakistani/Bangladeshi – work 66%; benefits 30%
Black British – work 76%; benefits 18%
Black Caribbean – work 75%; benefits 22%
Black non-Caribbean – work 76%; benefits 18%
Chinese and others – work 78%; benefits 13%

N.B I’ve excluded other miscellaneous income, which is why the categories don’t total 100%.

As you’ll see, with the egregious exception of the Pakistani/Bangladeshi community, white British people earn less of their income from paid work than any other ethnic group and are among the top recipients of state benefits. In short, your point appears to have no basis in fact. Which I guess is why Mason Dixon called for your evidence.

I repeat his call.

20

SMFS doesn’t do evidence, his arguments are based on nothing more than his own subjective bias. Even when he is confronted with evidence, he will either ignore it, introduce a straw man or assert that the evidence is false.

Well, ‘nothing for something’ is precisely what’s happening now that the Coalition have time-limited contributory ESA to one year… meaning that no matter how many years you’ve worked and paid NI, you only get one year’s worth of this benefit. Charming isn’t it?

I actually agree that some benefits shouldn’t be means-tested, because then everybody sees the good results of paying taxes and it leads to more of a sense of fairness and less of the old ‘so-and-so’s got this, why haven’t I got it’, etc. Plus when the bar is set as low as it is for ESA (£7,500k/year to support two people? On what planet?) it’s a nonsense to claim that only people who ‘need’ the benefit are getting it.

David Cameron obviously agrees with me seeing as he claimed DLA for his son… oh wait.

#21 steveb:

Indeed, it seems not to matter how many times commenters have pointed out that the DWP’s own figures show very low levels of benefit fraud (particularly for disability benefits). SMFS will believe what he/she clearly wants to believe.

@ Violet
Without wishing to support SMFS on this because I think the problem created by the over-complicated benefit system is an order of magnitude greater than benefit fraud (as well as being a contributory factor to the latter) – the DWP’s own figures relate only to the fraud they discover or suspect (a cynic would say only to the amount that they admit to), not to total fraud. Few people believe the DWP’s figures, which is why HMRC are having a crack-down on anyone who pays cash (not those who receive it, those who pay it). So SMFS will continue to believe what he wants to believe.

24. Planeshift

“the universal credit, is VITAL for social cohesion.”

Don;t often agree with you here, but I’d have to say the principles of universal credit – 1 payment that gets more gradually withdrawn (though I’d reduce the taper rate beyond what IDS hs proposed it as) is far preferable to the current system.

23

Agreed, statistics only reflect what is know and extrapolation of the actual figures could be said to be questionable. However, this also applies to the statistics which show the amount of benefit which goes unclaimed and also the level of tax evasion .

@ 24 Planeshift
Ta!
Agree with you that the withdrawal rate should be lower but IDS is struggling to get the additional cost past Osborne and if he reduced it to 60% we couldn’t pay for that on top of NHS and Education. On principle and as a matter of practical economics I think the marginal rate of effective tax should be lower for people on lower incomes than at the top

27. So Much For Subtlety

22. Violet

Well, ‘nothing for something’ is precisely what’s happening now that the Coalition have time-limited contributory ESA to one year… meaning that no matter how many years you’ve worked and paid NI, you only get one year’s worth of this benefit. Charming isn’t it?

Sorry but isn’t that how contributory schemes work? You pay in. You take out if you need to. But how much you take out is limited.

Indeed, it seems not to matter how many times commenters have pointed out that the DWP’s own figures show very low levels of benefit fraud (particularly for disability benefits). SMFS will believe what he/she clearly wants to believe.

The DWP is asked to assess how competent they are. They think for a while and say they are very good at their jobs. This proves what precisely? Shall we ask the police to determine how many people they fitted up? The Army how efficient their tendering process is? The DWP figure is meaningless.

28. So Much For Subtlety

18. Mr James

Hi there, this is a wealthy country and we pay out taxes along with national insurance which protects us from all unpleasant eventualities that also includes unemployment.

In theory. In reality, well reality exists and we cannot cover all eventualities.

I know several people that work in this area and I can tell you that fraud involving any benefits is not on a scale that has been exaggerated to justify this present Governments handling of the benefits system.

We imported some three million Eastern Europeans. We have about three million people on the dole. Roughly every single one of them could have taken a job those Eastern Europeans took. But they chose to sit on welfare instead. How is that not fraud? Atos is finding massive levels of what looks a lot like fraud in Disability schemes. Fraud is a massive problem.

Also the reluctant people that evidence shows they have not worked and cannot be bothered have been targeted to be dealt with, rest assured these people will not get away with this behaviour under any circumstances.

So you work for the DWP do you? No they will not be targeted. And they will continue to get away with it. Millions do. Every day.

Tax avoidance/evasion is by far the biggest crime against society today

No it is not. One of them is not even a crime. The other simply does not exist on any scale in the UK. British people are law abiding sheep who pay their taxes on time and in full more or less voluntarily. There is not crime in this area worth talking about.

and if all monies were paid to the taxation office/treasury this country would not, by far have such a financial problem and this Government would not have to lie to justify taking from the vulnerable in society to make up for that loss in tax.

This is nonsense. The government has more than enough money to do everything it needs to. Its problem is that it is financially incontinent. It cannot decide what is vital, what is necessary, what is desirable and what is not. Thus it cannot set priorities. It spends whatever it has to hand. If they had another 3 billion, they would piss that away too and we would still be in the same situation. We have a moral obligation not to pay tax. But even if we didn’t, it does not get spent well and giving them more will not help.

The rich are again responsible for milking the system at the expense of others. You are an intelligent person and I have know doubt that you already have the figures so I will not go into that area.

No they are not. Even if someone dodges tax, it does not increase the burden on anyone else. Because governments do not have a fixed amount they must spend. They grab what they can and then spend it. The figures do not exist. They are a figment of some retired accountant’s imagination.

Because I have worked hard all my life and paid into the system I expect the state to provide for me because I have worked hard to support it.

Good for you. I expect that you will be disappointed.

I must confess that I have also taken the precaution of also paying into a pension fund that may not cover me at a later date.

And claimed tax relief on it? There’s some of that tax avoidance!

The welfare system was put in place to support all and to stop outright poverty

And it has failed massively. It creates more poverty than it cures. We need a rethink.

We have all paid into it and people should not live in poverty because a few dodgy people have abused it in the past.

Poverty is not an issue in the UK unless it is self inflicted. The system works. A few reforms will not drive anyone else into poverty.

Also because unemployment is rising the Government should not cut the benefits to make up for the short fall to pay the newly unemployed. They should stop the tax evasion and try and create jobs.

When should they cut then? We do not have a choice now. We could piss around in the past because we had a healthy economy. We do not know. We need to cut or we will go the way of Argentina. There is no tax evasion but if there was, then persecuting the rich even more will result in fewer jobs. Because this is just what Argentina tried to do. How is that working out for them?

We need lower taxes, fewer regulations, more entrepreneurs and hence more innovation and more jobs. If unemployment is high, it is because benefits are too.

29. So Much For Subtlety

20. Churm Rincewind

Well, here’s a start. One of your three points concerned ethnicity, and you claimed that there is “less in common between the people who receive benefits (who are often African, Afro-Caribbean or Asian in origin, while of non-Christian backgrounds) and the people who pay for them (who tend to remain white, Middle Class Anglicans or similar).

I have just had a look at the figures from the ONS. They show that of the Jobseekers Allowance, a full 31% of claimants are ethnic minorities. What is their percentage of the population again? They are also more likely to have been on the scheme for a long time if they are Black. Especially if they are not African.

What is more, some 2.5 % of the population of England is on this scheme. But the only ethnic group under-represented is White people. Well them, the mixed White Asian, the Indian and the Chinese, but they are not usually given a separate grouping:

Total – White 2.0
British 2.1
Irish 1.8
Other 1.4
Total – Mixed 3.6
White and Black Caribbean 5.5
White and Black African 3.8
White and Asian 1.4
Other Mixed 3.7
Total – Asian or Asian British 3.2
Indian 2.1
Pakistani 4.1
Bangladeshi 5.6
Other Asian 3.3
Total – Black or Black British 6.7
Caribbean 7.3
African 5.8
Other Black 10.2
Total – Chinese or Other Ethnic Group 4.7
Chinese 0.9
Other Ethnic Group 8.7

As you can see, Blacks do much worse than people of Pakistani origin.

However, statistics released in 2011 by Department of Work and Pensions produced the following figures comparing the proportions of income received by way of wages, salaries, and self-employed income against benefits for various ethnic groups, as follows:

So if I am talking about apples, you are going to talk about oranges?

30. Churm Rincewind

@ 29 SFMS: In your original post you spoke only of benefits, and this is exactly what my figures illustrate. The ONS figures which you now quote are limited to Jobseekers Allowance.

31. Churm Rincewind

@ 29 SMFS: I’ve now had a chance to compare the ONS figures you quote with the DWP figures I listed, and I find that they are entirely consistent. Just as you say, the ONS figures demonstrate that the Jobseekers Allowance accounts for a higher proportion of total state benefits in (say) the “Chinese and Others” community than (say) the ethnically white. But this is not incompatible with the fact that overall the “Chinese and Others” derive substantially less of their income from state benefits than the ethnically white.

So, yes, you are indeed comparing the “apples” of your post (1) – benefits – with the “oranges” of your post (29) – jobseekers allowance. I’m just not sure why you would want to point this out, as the ONS figures would not seem to have any particular relevance to your original assertion.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Could a new national insurance system protect the welfare state? http://t.co/Pwfw1S0Z

  2. Jason Brickley

    Could a new national insurance system protect the welfare state? http://t.co/vzyeZnlg

  3. Wulfy

    Could a new national insurance system protect the welfare state? http://t.co/Pwfw1S0Z

  4. BevR

    Could a new national insurance system protect the welfare state? | Liberal Conspiracy http://t.co/oZ5BiMd1 via @libcon

  5. eindiainsurance

    Could a new national insurance system protect the welfare state … http://t.co/nh7TmGJh

  6. eindiainsurance

    Could a new national insurance system protect the welfare state … http://t.co/3zmVTeqJ

  7. Could a new national insurance system protect the welfare state? « jerrywaggon1

    [...] Source: http://liberalconspiracy.org/2012/05/03/could-a-new-national-insurance-system-protect-the-welfare-st… [...]

  8. Jacob Javed Welfare

    Could a new national insurance system protect the welfare state … http://t.co/3zmVTeqJ





Sorry, the comment form is closed at this time.