How we are governed

A choice cut from Dr North in Defence of the Realm. The permanent under secretary of state for the MoD talks to a committee of MPs about the equipment programme.

…our ministers would very much like a programme which is, if anything, more focused on the kinds of equipment requirements that come out of current operations like protected vehicles, helicopters et cetera. It would be extremely surprising if the process we are going through did not lead to a consideration of that.

Yes Minister is alive and well. We know what our ministers "would very much like". It would be extremely surprising if we did not in due course get round to giving this our consideration. That would be after we have gone through a previous process [undefined].

Sir Humphrey would be proud. Give that man a gong, and meanwhile lunch at my club.

They do things differently at the DWP, it seems. Apparently within seconds of his return to the department, James Purnell (you remember him, he it was who mysteriously appeared in a photograph when he hadn't been there, he it was who predicted that 24-hour liquor licensing would lead to a café culture) had appointed David Freud as an adviser, to help implement changes in the welfare state. Given that Mr Freud cheerfully reveals Chancellor Brown's opposition to his proposals, did Prime Minister Brown know this appointment was coming?

And Mr Freud is enthusiastic.

Peter Hain was worried about the Left. Purnell is showing astonishing energy, there is going to be a much more single-minded ferocity.

All this change just because the vain one couldn't fill in a donations return! (Amusingly, The Telegraph actually writes "Peter Hain [the previous work and pensions secretary] ...". Is the vain one so soon forgotten?)

The paper tells us Mr Freud's big idea is that the private sector be put in charge of the long-term unemployed. Companies taking part would receive a "huge fee" for getting somebody to stay in a job for more than three years but nothing if they fail.

The Telegraph sets out a bizarre proposal.

Under his system, the market will decide who should receive benefit and who should go out to work. "The private sector will have to start making assessments about who they can get back into work at what cost.

If somebody is really clinically depressed, for example, [the company] might say, 'I'm not going to get this guy to hold down a job for three years because he's not up to it so I'm not going to expend my efforts on him at the moment'."

This only increases the incentive for the skivers to make themselves look like hard cases. And Mr Freud thinks there are plenty of them. "Fewer than a third of those on incapacity benefit are really too ill to get a job." There is talk of some slicing of benefits for those who won't co-operate, but how meaningful will this turn out to be? And how easy will it prove to be to get dubiously motivated people off benefit and into work against competition from enthusiastic Poles?

To be sure, Mr Freud highlights other measures in a carefully unspecific way. He says

If you want a recipe for getting people on to IB, we've got it: you get more money and you don't get hassled. You can sit there for the rest of your life. And it's ludicrous that the disability tests are done by people's own GPs - they've got a classic conflict of interest and they're frightened of legal action.

So there has to be a big change in the procedures for people entering incapacity benefit, and for their continued entitlement.

As the Financial Times points out, some people make a deliberate choice to live off state welfare payments for the quality of life.

And Mohammed Nawaz Raja, an alleged Islamic terrorist organiser says in the News of the World

"Praise be to Allah I have a car of my own. I have a five bedroom house in High Wycombe. The government is paying me. When I go to Pakistan, my family still gets paid. The system in Britain is that the government pays.

"Take for example a small family with four children, if the husband works he would get £300 to £400 a week. And if he doesn't work the government still pay him around that, so why should he work?

"If he works he gets around £350 a week and if he doesn't he gets £300. For just £50, who would work?"

Reading the account of his activities, it's hard to imagine anyone would ever employ him. Carrots can't work in his case, so a pretty useful stick has to be available. Effective policy has to go beyond the touchy feely.

Never mind. Happily for Mr Raja a solution beckons. Husbands with multiple wives have been given the go-ahead to claim extra welfare benefits following a year-long Government review. If two can live as cheaply as one, what of five?

Mr Freud claims his system can be in place within five years. Hey, hold hard there! Meanwhile, better get working on some pretty serious sticks.

If the officials are prepared to give that consideration in due course.

Robber Conway is still an MP.

Is the tide turning against big government?

According to journalistic lore, if an article is headed by a question, the answer to it is usually No. Perhaps this is an exception.

Brown is Labour's Edward Heath, not because he is set on closer EU integration, but because both men lacked empathy, lacked imagination, were intolerant, and got stuck deep in the ruts of their own mindsets - in Brown's case, tax and spend.

It's only a few weeks ago that Brown was calling for his government to be judged by its competence. How distant that trumpet call sounds now!

Since then we've heard dire news about the nationalised health service. Respondents to the Patients' Association say they want to continue to pay for healthcare through taxation rather than insurance. But that is not the point. The question is, should the government continue to make such a mess of running this nationalised industry, or become just a purchaser.

We have also seen the misjudgement on capital gains tax. This will prove worse than entrepreneurs' protests alone suggest: there are plenty of short term speculators quietly astonished at the drop in their tax rate from 40% to 18%, and the City especially will be working on plausible-looking schemes to convert income to capital gain. I'd guess the marginal rates will be the same again within five years.

Mr Balls has demonstrated the disadvantage of being educated in the Brown school of government, where you never consult, you just spring a policy on the country. To push through a contentious policy like clawing back part of schools' surpluses, include it as part of a larger package you put out for consultation. Then it may slip through unnoticed. If not, you can withdraw it without too much loss of face.

Easily the worst and most dangerous incompetence concerns immigration and jobs. The numbers have changed and changed again, merely reinforcing the correct perception that the government doesn't know what it's doing in this area.

This is dangerous enough. But what's worse is that the government has minimal power in this area.

There are still some signs of decent growth, including the rise in retired people working and the increase in hours worked in the economy. But it is hard to see how, with the flow of immigrants, the UK’s relatively poor starting position and an environment of weakening economic growth, the employment outlook could improve in the near term.

And the government has sacrificed power over immigration to the EU and on the altar of human rights.

Brown's promise of British jobs for British workers is generally and rightly derided for the feeble spin that it was, but the government thinks that it has found a way round its dilemma, by urging employers to introduce programmes to favour those on welfare.

This policy has several problems.

1. The last thing many of those on benefits want is a job
   
   
2. Immigrants are often better qualified, with a better work ethic
   
   
3. This is surely "indirect discrimination", since it tends to be British workers who receive British benefits. Government has promoted the concept of "indirect discrimination" to limit employers' freedom to do things it doesn't like. It deserves to be hoist with its own petard.

This starts to make incompetence look routine, which in turn makes ministers look tired. Every example of waste adds to this impression. Today, for example, the Home Office's penalty payments of £35m over cancelled centres for asylum seekers are back in the news. Every week brings more examples of public sector incompetence and waste.

Tories - panicked into conference policy announcements by the threat of an election they didn't want - are starting to look fresh in contrast with this governmental tiredness. Some commentators worry that they might let some of these policies drop as their panic recedes.

Michael Gove does sound serious about giving parents a greater choice of schools, which has to be coupled with a policy making it easier for schools to grow and contract, for new schools to be set up, and for unwanted schools to die.

If the Tories hold their nerve, their empowerment of parents can make an attractive contrast with a left-wing think tank's statist proposal that all secondary school places should be allocated by lot.

As part of the debate about jobs and migrants, attention is focusing on the unwillingness of many on welfare to give up their comfortable lifestyles for the demands of paid employment. Questions are sure to be asked about the Wisconsin policy. For instance -

• In Wisconsin, benefits could be linked to performing tasks, such as sweeping up leaves in parks. How would this sit with trades unions and minimum wage legislation?
  
  
• How would we tackle the ridiculously high levels of officially recognised incapacity?
  
  
• How would time limiting of benefits work? Would women be able to stay on benefits for decades by regularly producing children?
  
  
• What happens to the able-bodied whose entitlement to benefits has expired? Should they be compulsorily supported by taxpayers, or helped through charities by those who actively want to continue to pay for their support?

On welfare the theme will have to be one of tough love, with limited reliance on taxpayers for a temporary hand up rather than lifelong support. The government could return welfare savings to taxpayers as a lump sum dividend each year, to make them more prominent.

A third theme should be that the government wastes taxpayers' money almost every time it spends it. Governments need to curb their enthusiasm to do everything.

What of big government on a wider canvas? Across the EU, migration may become a pressure point before the euro. Certainly if lawless Romanian migrants set up shanty towns outside London, as they have done outside Rome, the government would find the legal remedies at its disposal entirely inadequate.

Maybe that is only a matter of time.

Where your money goes (continued)

Gordon Brown foolishly wants the government judged on competence.

Benefits worth £500 million were paid out in error last year alone - in a decade, £5 billion has been lost through fraud and error. Over £1 billion went in benefits to those who had jobs and were not entitled. Other substantial sums went to students and prisoners.

How is enforcement going? There were 11,403 convictions in 2000-2001, but only 8,573 in 2004-2005 - a drop in the ocean. Fraud and error in the benefits system is estimated to cost each taxpayer about £100 a year.

11,000 out of the prison population of 81,538 are from overseas. Prisoners cost us £24,000 each a year. They should be a profit centre. The government hopes to repatriate foreign non-EU prisoners to serve their sentences abroad, in what The People engagingly calls "lag swap".

The People calls Alison Goulding "the mother of all scroungers". In essence she thinks she has the right to raise her large and increasing family in comfort at the state's expense without working. She shouldn't be able to.

And in the nationalised health service, most nurses spend more than a third of their week filling in forms, while one in five said that over half of their time was tied up by NHS red tape, according to a survey.

Governments just don't give taxpayers value for money.

We can't afford this welfare state

Someone commented here recently that "the few who do abuse the [social security] system are a very very small number". But is this true?

The News of the World has an (unnamed) minister admitting that nine out of ten people claiming central government benefits are fit to work.

The paper says nearly 4.5million people are claiming handouts totalling £36.4billion a year, but has their cabinet source saying, "We reckon FOUR MILLION of them could be in work."

Incapacity benefit is claimed by more than 2.6million, 934,600 are on income support and 852,9002 claim jobseeker's allowance.

Many are given large, comfortable homes, says the paper, "while workers—who pick up the bill through their taxes—scrimp and save to pay their mortgages".

There are 660,000 vacancies notified to jobcentres alone. Hundreds of thousands more jobs are available through private agencies and ads or taken by immigrant labour, because Brits won't do them. Poles travel across Europe to find work, but we subsidise people who won't leave areas of high unemployment.

The paper says this would change if they were forced to seek work. But we have seen that people will go to job interviews just to get a tick on their card, so that they continue to qualify for benefit. And many won't take jobs because they say they wouldn't be better off.

The Paper reports Labour blaming the Tories for taking millions off the dole in the Eighties and putting them on incapacity benefit to massage jobless figures.

Now the children of many claimants think the state owes them a living too, say Cabinet sources. Many have never seen their parents work and have no idea how to get or hold down a job.

All this of course is in addition to the benefits councils pay. We have seen that £650m in housing benefit is probably overpaid annually in the UK through fraud or error. Harrow Council alone estimates that benefit fraud costs it £250,000 a year.

Even Peter Hain admits that a significant number of people on benefits could work. The system is complex and expensive, and some of the benefits are perverse.

Back at the sharp end, a Jarrow builder was caught on camera doing block paving work and pushing wheelbarrows while claiming sickness benefits. He had claimed around £8,000 in incapacity benefits between August 2003 and February 2006, although at times he would have been legally entitled to some of the money. And a Liverpool man fraudulently claimed more than £12,000 in benefits because he owed money to a loan shark.

But these are just pinpricks. And we taxpayers have to keep shelling out because the politicians have still not got a grip of the problem.

More social security fraud

The Telegraph reports (but not on its website) that a woman has been charged with claiming up to £75,000 in child tax credits for 16 non-existent children.

She is alleged to have realised she did not have to send her "children's" birth certificates to tax officials.

Why not?

And how could it reach anywhere near £75,000 before anyone rumbled it?

Our bloated welfare state

More from the front line. In Great Yarmouth a man claimed £3,531 more in council benefits than he should have done after inheriting £42,000 on the death of a relative. The council uncovered the money in a spot check. He has also been receiving incapacity benefit for depression.

In Northampton a man who claimed £34,363 incapacity benefit while pretending to be unable to work was jailed for 18 months. In theory he could take over 300 years to repay the money. According to the report, "his bogus claim for incapacity benefit had been brought to the attention of fraud investigators" - presumably by an informant.

A Runcorn woman has been fined £300 for failing to declare a change in circumstances which meant she received £2,824 overpayment of benefits. The council's housing benefit matching service discovered she had been receiving working tax credits but not declaring them. But it took them 9 months to bring this to light.

Electro-kevin on his blog tells us that he and his wife earn £47,000 a year between them.

I know that my remuneration will be modest compared to many readers but it is still in the region of 30% above the national average - I don't expect to live like a king and yet I am continually brassic!

But -

Here's the rub. My brother who is welfare dependant (incapacity benefit) along with his stepdaughter and her illegitimate two year-old lives no worse than I do. They also live in a three bed semi (provided at subsidy by the council) - but they have:
- Sky telly
- A modern flat screen surround sound entertainment system
- The latest PS3
- Each has a mobile phone
- They all smoke
- They have a take-away curry every week
- They are all obese
We have, and are, none of the above. Our expenses generally go on educating the kids, involving them in activities and my wife and I belong to karate and a council gym. Bruv spent his summer holiday in a chalet, we spent ours in a tent.

"You'd expect my brother and his brood to be grateful and courteous about their good fortune", he says, "but they are not".

They are often rude and look like shit - his stepson has already taken to the dependency lifestyle and at the ripe old age of 17 lives in a flat with his girlfriend and their illegitimate daughter - furnished courtesy of the taxpayer.

The simple rule of thumb ... is that if you pay people to act like scum then that is exactly what they will do.

Jeff Randall reports the view of a small business owner.

He despairs at local youngsters' poor work ethic, but heaps praise on the four Poles he employs. "They work harder and are eager to do the job properly. Absenteeism has fallen since they arrived. What's more, they are really nice people."

This is a theme that I will hear time and again on my travels. "We are too soft on welfare claimants. Some locals come along for a job interview with no intention of working. They simply want their cards signed so that they can claim benefits."

The political classes don't consider it nice to advocate policies which would deal with this scrounging. So working taxpayers like Kevin continue to subsidise them - which doesn't seem to trouble politicians' consciences at all.

Incapacity benefit

Trade union representative Dorothy Abbott, who was given a six-month suspended sentence after admitting a £28,000 benefits fraud, remained suspended on full pay by her state sector employees Wigan Council, it was reported on August 13. It took an ex-councillor to call in the Local Government Ombudsman to investigate what he dubbed an "outrageous waste of council taxpayers money". Mr Brierley said: "When Ms Abbott admitted to the fraud charges on July 17, Wigan Council continued paying her full wages and that continues today even though her position is now absolutely untenable".

A couple in Norwich claimed more than £12,000 in benefits while working as florists. John Knott, 60, has been sentenced to do 150 hours unpaid work and there is a four month curfew on his wife. Alcohol consumption led to 2,300 claims of incapacity benefit in East Anglia during 2006/07. Astonishingly, one in five people in Norwich is classed as a binge drinker.

Walter Porter, 60, of Jarrow, admitted claiming £8,000 in sickness benefit while working as a builder.

Karen Hyndman, 47, of Carmarthenshire, admitted wrongly claiming thousands of pounds in benefits while working as a cleaner. She cited financial hardship. She was overpaid £940 in rent allowance, £171 in council tax benefit and £3,250 in incapacity benefit. She has repaid the overpayments. She was sentenced to a 12-month supervision order and ordered to pay £75 costs.

In Swansea, Richard Todd, 38, was claiming incapacity benefit and disability living allowance while working as a labourer. He has asthma and diabetes, and was claiming benefit between June 2005 and January 2006. But he had failed to tell the benefits agency that he was earning a wage and received £4,011 in benefit payments which he was not entitled to. Todd admitted failing to inform the department of a change of circumstances, namely that he was working, when claiming income support. Look at the other benefits he was gathering in. He admitted similar offences in relation to claims for incapacity benefit, disability living allowance, housing benefit and council tax benefit. He was sentenced to do 80 hours of unpaid work for the community and pay £75 towards prosecution costs.

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In Harrow, Stephen Wackett, 53, applied for housing and council tax benefit in 1997 for himself and his wife. Wackett told Harrow Council the couple's only income was incapacity benefit, but in 2005 it emerged he had been receiving a pension since 1990, while his wife had a part-time job. He illegally claimed £14,887.65 in housing benefit and £4,895.20 in council tax benefit, between June 1998, and March 2005. He got four months in prison, suspended for 18 months. He was also given 100 hours community service, and a six month overnight curfew, as well as being ordered to pay £250 costs.

In an attempt to snare more benefit cheats, the council has become the first authority in the country to pilot voice recognition analysis. The software detects stress patterns in a caller's voice, showing if they are lying when applying for benefits.

Callers are asked a series of questions as a control.

Benefit fraud costs the council £250,000 a year, and they are hoping VRA will help save them some money.

Since its introduction in May, the council say the system has spotted 126 fraudulent claims, totalling nearly £40,000.

Finally in this review the Coventry Telegraph reports that a fraud investigation team based in one of the county's Job Centre's clawed back £527,000 in payments from cheats last year, resulting in 148 prosecutions. The paper reports that investigators "now" have the authority to check suspects' bank accounts to see if they are earning, or receiving money in addition to their benefit claim, and to check employment records. "Local councils and utility companies are also free to give information which could help snare culprits." It adds that "Anyone paid too much benefit has to pay all the money back to the taxpayer. Those who don't could face a criminal record." Eh? Surely all benefit fraudsters should?

Doubtless this is the tip of the iceberg.

Skivers and scroungers

Unemployed Pauline Rees is delighted that her teenage daughters have two children each. Like their mother, they and their families all live on benefits, at an annual cost to the taxpayer of £34,000, not including their free accommodation.

Gillian, 19, says her two youngsters are a welcome distraction from watching television. "I wasn't worried about it changing my lifestyle. I never did anything but stay in and watch TV anyway."