Thursday thoughts

"This is a shocking tragedy", said Superintendent Paul Morris, after 17-year-old Sharmaarke Hassan died of a gunshot wound.

It's a sad waste, but it's not a shocking tragedy. He was an outlaw. Last month he was found guilty of possessing cannabis and offering to supply it, for which he was given a one-year Community Punishment Order and 40 hours of community service.

Sharmaarke was also convicted of breaching the terms of his Anti-Social Behaviour Order at Thames Youth Court late last year.

The Asbo was imposed on November 2 and ordered the teenager to stay away from Buck Street in Camden - less than half a mile from where he was shot. He broke it the following day.

Sky News also tell us that "he is believed to have been a member of the north-west London gang The Money Squad, one of a number of Somali gangs in the area". So it is a sad waste but it is not a shocking tragedy. Can we have a sense of proportion, please?

========

Looking out at the rain, it's hard to believe the strawberry picking season is upon us. Radio 4's PM programme has just carried an item from a strawberry farmer saying he can't get enough labour because the government is limiting employment of temporary labour from Bulgaria. Temporary Polish workers don't come any more because the Pound has fallen against the Zloty, so UK earnings convert into considerably less Polish money than last year. And local English people aren't interested. So a proportion of the crop will rot in the fields.

As a taxpayer, why should I pay unemployment benefit to fit people within reach of this work who refuse to take it? But the politically correct BBC concentrated on the awful restrictions on immigration.

========

And if this isn't unkind enough, let me now invite you to show no sympathy for members of Labour's NEC. Remember the Labour Party's loans? It still owes millions of pounds and The Guardian's report suggests it is an unincorporated association. So officers would be liable if the party couldn't pay its debts.

Of course it's unlikely to come to this, but such are the loans building up for repayment that it's certainly not inconceivable. Remarkably, however, this multimillion pound organisation seems never to have considered it. Did high flying whizz treasurer Jack Dromey never ask the question? Evidently not. David Pitt-Watson did, and that's why he declined the post of general secretary, reportedly after a furious row with Gordon Brown. And it's evidently acceptable for the GMB union to indemnify what The Guardian calls "its two members on the NEC".

NEC member Janet Anderson MP is clearly a woman of the world.

I am very concerned and we should look into the situation immediately. If this is the case, I can't see how anyone, unless they are very wealthy or are indemnified, like in the case of the GMB, can serve on the NEC. I can't see who would want to be general secretary following this advice.

Where has Janet been all this time? How many years have Mr Brown and Mr Blair served between them on the NEC? And Mr Blair's previous job was ... wait, it's coming to me ... ah yes, he was a lawyer.

Clearly the people running the Labour Party are fit to run the country.

Why welfare reform is popular

Why does the government want to outflank the Tories on welfare reform with a proposal that unemployed people will be forced to take on placements or volunteer work once they have claimed benefits for more than a year?

It's partly stories like this from Southampton -

A benefits cheat, who ripped off the taxpayer for more than £40,000 over six years, has been jailed for 12 months.

It doesn't seem to have been difficult - he had three jobs. The defence lawyer said that "this was not a particularly sophisticated fraud." He just seems to have asked and have been given. For six years.

Or the story that down in Hounslow

A convent worker who used a string of false names to claim nearly £30,000 in benefits has narrowly avoided jail.

The council became suspicious when data-matching showed there was another person wth one of her surnames at the same address. The fraud lasted for four and a half, years, though. One reader comments there that

The sad fact is, pursuing benefit cheats is not cost effective.Recently released figures showed around £150 million spent to recover just £22 million.The quality of evidence required to secure a successful prosecution is a major stumbling block.

Bizarrely, the government has been accused of failing the North East over returning unemployed people to work, with the region having the country’s highest proportion of benefit claimants.

It's not up to government to find jobs for people. What happened to responsibility?

Maybe that's why the BBC (of all people!) invited a member of two conservative US think tanks to South Wales. His line is that welfare money should be cut and put into creating local jobs. He argues that the number of people claiming incapacity benefit in Wales could be reduced by two-thirds if American-style reforms were adopted.

In the US we cut people's cash benefits in the 1990s and told them they were going back to work.

They are some of the most successful policies we've ever introduced. In some states, money from benefit claimants was taken and used instead to create jobs in local companies, boosting employment opportunities.

As this blog has argued, we need the stick as well as the carrot.

To reform incapacity benefit, there have to be losers

Last May 504,000 people below the age of 35 were claiming incapacity benefit or severe disablement allowance. This includes more than 300,000 claiming for “mental and behavioural disorders”, which are among the hardest to check.

We can't afford to support all these people through their working lives. It might be a nice, touchy feely thing to do if we could give the state unlimited amounts of our money. But we can't.

Choices have to be made. If the state is to spend all of this money, perhaps improved cancer care or proper flood defences would be better choices.

Eager immigrants coming to England have taken most of the extra jobs. People on incapacity benefit are in competition with motivated people from other EU countries. The UK government can't stop them coming.

Labour's policy has two main thrusts. First, they want to coach people back into work one by one. This is expensive and slow, but probably the most cost-effective route is to pay private companies by results.

Their other new policy is tougher assessment of new applicants for incapacity benefit. But this does nothing to deal with the huge lump of people already enjoying the benefit.

Chris Grayling sketches the Tory approach.

Our initial aim will be to offer most people a place on a structured programme of support to find them a job. We know that as many as a million people claiming incapacity benefit say that they hope to get back into the workplace. We will offer them the help they need to achieve that.

Those who don't want to accept that offer will be expected to undergo a full medical check to confirm what they can and can't do now, and what they might, with the right support, be able to do in the future. It will be done by someone independent, so the relationship with a family doctor doesn't affect the outcome.

Those found to be perfectly capable of working will lose their entitlement to incapacity benefit immediately. Many have been abusing the system. They will be transferred into the normal process for Jobseekers and will be expected to start looking for work straight away. Based on the experience of other countries, we expect at least 200,000 people to be affected.

This is accompanied by warm words about helping people out of the poverty trap. But many people don't aspire to more money, just an easy life on benefits.

The carrot is going to become less and less effective, as employers can choose between keen, English speaking immigrants or natives with a poor work history. We will need to see more of the stick too. Almost every claimant can contribute something, unless they are physically housebound.

Regular and more rigorous assessments, and in the vast majority of cases you have to give something back or it's no benefit for you.

A disappointing contribution

The Adam Smith Institute has produced a disappointing report about benefit reform, Working Welfare. The proposals won't work.

Something does have to be done. The reports notes there are "at least" 51 separate benefits, and less than 19% of current working age welfare benefits are in any way conditional on getting work. As Burning Our Money points out -

There are currently 5.4m people of working age who are not working but drawing benefits instead. And overall, we're spending in excess of £100bn pa on "social protection" (excluding that spent on pensioners). That's about £4,000 pa per UK household.

The paper claims that time limiting of benefits in the USA hasn't worked (without explaining why), but suggests that there should be more conditionality in welfare benefits, and that they should be administered by counties, with block grant from central government. Thus local best practices could be passed around.

This is quite a touching little paper, replete with references about US experience but short on any feel for the UK. Indeed, it reads as if the author might be an American graduate student.

First off, counties are not States. They are smaller, and doubtless a higher proportion of the workforce is employed across county boundaries than across the boundaries of US States. Some local authorities have a higher proportion of their populations out of work - Manchester, Liverpool and Glasgow for instance spring to mind - and with depressed economies they would have less scope for placing people in jobs.

States were doubtless sympathetic to the general thrust of the US welfare legislation. This is unlikely to be true of left wing local authorities in the UK - Manchester, Liverpool and Glasgow for instance spring to mind. Can anyone see them determinedly implementing a welfare to work policy which was highly likely to be unpopular with their own voters?

Consider next how efficient local authorities are. Think of the duplication of effort among police forces as they each struggle to understand data protection legislation. Then consider how efficiently counties would enforce a system of "at least 51 benefits".

The proposals consider differences in practice amongst counties as an advantage, since best practice could then be spread.

Best practice would spread between different areas ... councillors would start speaking of “adopting the Surrey model” or “introducing Essex–style reforms”.

And MPs would start speaking of post code lotteries - and central government would respond to the prospect of such unwelcome controversy by churning out ever more detailed rules.

Even if counties had the same proportion of local workers living within their boundaries as States - an unrealistic assumption - would they be able to bring the same influence to bear on local employers as State governments on theirs? With fewer taxation powers and lesser powers of patronage, it seems unlikely.

And even if they could, would it be legal? Brown is now spinning that what he meant by British jobs for British workers was preference for those on benefits.

The Prime Minister said that he was only seeking to persuade firms to offer jobs to people on the unemployment register and said no-one would be discriminated against.

Which they are free to do now. So the policy is meaningless without some degree of positive discrimination. But it's clear that many employees would prefer to recruit workers from overseas rather than locals on benefit, as the foreigners can be more highly qualified and tend to work better.

Nor is it clear that such discrimination would be legal. Keith Vaz has said that the policy risked fuelling racism, would introduce 'employment apartheid' and implied foreigners were 'stealing jobs'. We know that it's illegal for the Nationalised Health Service to discriminate in favour of British doctors when filling vacancies. And if an employer discriminates in favour of applicants on benefits, that is surely indirect discrimination, as it will tend to be British applicants who are receiving benefits.

This is an impractical contribution to an important debate.

Bring me your sad and your fat

What does it mean to be officially disabled?

There's a lot of it, about according to The Times - 10% of people aged 16 to 24 are disabled, and one third of people aged 50 to 65.

We are also told that

There are 6.9 million disabled people of working age in Britain – one in five of the working population.

Ill health must be sweeping the nation. Why is this epidemic not headline news every day?

Some 50.4% of disabled people are employed compared with 80.2% of nondisabled people.

So maybe official disability isn't always as bad as we first thought. Ah ha, the World Health Organisation predicts that depression will be the leading cause of disability by 2020. Why should this be? Is the future really going to be so sad?

Here's another strange thing.

There are regional variations in the prevalence of disability. Northeast England and Wales have the highest number of disabled people, with one quarter of the working age population in these regions disabled. London, the South East and the East of England have lower than average proportions of disabled people at 17 per cent.

It couldn't be, could it, that they are skiving out there in Wales?

The common complaints among the disabled of depression and back pain are among the hardest to be sure about. Sure enough, when we look more closely -

In February there were 2.43 million people claiming incapacity benefit in Britain – 41 per cent were claiming for mental and behavioural disorders (my italics).

What will be the next - ahem - big thing? More of us are going to get too fat to work. But no need to worry, reports the BBC -

Individuals can no longer be held responsible for obesity and government must act to stop Britain "sleepwalking" into a crisis, a report has concluded.

The 250 experts said excess weight was now the norm in our "obesogenic" society. The government, of course, pledged to draw up a strategy to address the issue, though the report's authors admitted proof that any anti-obesity policy worked "was scant".

So there we are. We'll be a nation of depressed fatties - doubtless with bad backs too - unable to work, bailed out by the taxes paid by immigrants.

We saw disability has regional variations. And lo! when we look at obesity -

By 2050, as many as 70 per cent of men aged 20 to 60 living in Yorkshire and Humberside, the West Midlands and the North East are likely to be obese, according to the report.

About 65 per cent of women in Yorkshire and Humberside could be obese by then.

In contrast, obesity is declining among women in the South West, with seven per cent expected to be obese by 2050 – far below the present level of 17 per cent.

About 38 per cent of men and women are predicted to be obese in the London region.

Looks like the south will be subsidising the north even more than it is now.

That is, unless the nannies can save the day. The head of nutrition and health research at the Medical Research Council said: "We need to take responsibility as a society [whatever that means] for our unhealthy lifestyle."

The minister responsible will be Dawn Primarolo, she who couldn't get tax credits right, so what hope does she have of making us thinner? "We as ministers", she said, "have to balance encouraging people to engage with information without looking like we are being dictatorial" (my italics, though I don't think there's anything sinister in the phrasing, I think she's just rather thick).

In future, will suppliants for tax credits have to send her quarterly weight charts?

The charity Weight Concern, however, differ. They say the Government will indeed have to take some unpopular decisions ... such as restricting fast food outlets (eh?) and tackling food manufacturers. But "this is not something the Government can solve on its own", they added - I'll say that again - "and people do have to exercise personal responsibility".

Exercising personal responsibility was a Perth shoplifter who stole £7000-worth of clothes because he was an alcoholic and his incapacity benefit wasn't enough to buy as much drink as he wanted. Pretty able-bodied if he could carry that many clothes. And disposing of them showed initiative too.

And a Cambridge man on incapacity benefit was well enough to fulfil a supervisory role as a favour sometimes in a restaurant, as well as driving home after he had been disqualified for drink-driving.

What a system - corrupting of individuals, unaffordably expensive.

If so many people are "disabled", then the definition of "disabled" is wrong. We need to move the goalposts, so that fewer people are subsidised.

And if I am fat, that is my fault. Not the supermarket's, not the restaurant's, not even Dawn's and Gordon's. And certainly not society's.

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.

Welfare payments are too high

Frazer Nelson gives an example of what's wrong.

As I type, a frustrated cleaner has just come in my room in Bournemouth. To my amazement, she’s English. We get talking about Brown’s “British jobs for British workers” mantra, and it dawns on me that she’s a living example of why it won’t work. She says she’s one of only three Brits in the hotel’s huge housekeeping staff. She’s doing an NVQ in housekeeping, enjoys her work but is still considering going on to benefits as she’s struggling to make ends meet. She lives in a council estate, few of her neighbours work and think it’s strange that she does given she’s no better off than them. But she says she enjoys cleaning “strange as it may seem” and wants to be self-sufficient. She’s been taxed at the emergency rate for six months, and even at the normal tax rate she’s finding it increasingly hard to balance her budget and justify what she does. My thoughts: when welfare financially competes with work, no one should be surprised that 5.4 million British workers rationally choose welfare. It’s an outrage people like her should be taxed at all. Until the incentives change, things won’t improve.

This is what we are paying for. Too much welfare, and those who do work treated badly by the bureaucracts pampered by their inflation-proof final salary pensions. We pay for those too.

Holding their hands out

The Swansea Evening Post reports that "a pregnant mum-of- four who pleaded with the council to end her overcrowding hell has hit back at critics who branded her family irresponsible spongers".

They are 23 and 21. "Their calls for help to find a more suitable council home for their three daughters, aged five, four and one, and son, aged three, have provoked a fierce backlash from indignant Post readers."

"I don't know how we're going to cope when the new baby arrives," says the unmarried mother.

There was some brisk reader reaction.

• Iain McCallum, from Gorseinon, wrote: "Sorry as I am about their plight, if you are unemployed and living in these circumstances, stop breeding."
  
  
• Another wrote: "I sympathise with Miss Leyman for having to give up work through ill health, but there is no excuse for her partner not to find a job."
  
  
• Richard Burkinshaw, from Swansea, said: "If you can't afford kids, don't have them. Why should my taxes bail you out?"
  
  
• Another reader added: "Stop forcing us to pay for your lack of responsibility and get jobs."

Would these views get a hearing on the BBC? Among the chattering classes? From Cameron's Conservatives? One suspects not.

Thus does the taxpayers' voice usually go unheard.

Crime pays

Carolyn Fernie swindled taxpayers out of £56,000 over 19 years by pretending to be unemployed tenant in a flat rather than its owner.

She was given council housing benefit to cover her “rent” of up to £270 a month — and used it to pay off the mortgage in eight years. She also used it for a £1,000 annual maintenance charge and was exempted from paying council tax.

Even after settling up the mortgage she went on claiming handouts for another 11 years. She bought the flat for £30,000 in 1987 and it is now worth £100,000, so she has made at £70,000 profit. But no application has been made for her to hand it over because she has repaid the money she cheated out of Bournemouth Borough Council — using her elderly parents’ savings.

She admitted 35 deception offences and asked for 213 others to be taken into consideration. The judge said she had “benefited enormously from fraudulent claims”. But he didn't send her to prison, after hearing she is her parents’ carer - he gave her a ten-month suspended sentence and 200 hours’ community service.

Dorset Police and the Department of Work and Pensions confirmed they would not be pursuing her for the flat. And the council said: “She has paid back what she owed.”

Why should "hard working families" respect the law if cheats can prosper? The profit is the proceeds of crime. Those public sector jobsworths should take her profit and use it for the good of the community. There are plenty of more deserving cases than her.

The state is careless of our money. Are these people fit to give our hard earned money away?

Subsidising the underclass

Labour has failed on the welfare payments front. As The Sunday Times highlights, children experiencing family breakdown are 75% more likely to fail at school, 70% more likely to be a drug addict and 50% more likely to have alcohol problems.

In the past 10 years the number of lone parents has risen from 1.6m to 1.9m, and the evidence on unmarried versus married couples is persuasive; nearly half of the former split up before their child has reached the age of five, compared with one in 12 for the latter.... Yet Gordon Brown has presided over tax and benefit changes that discriminate against married couples, particularly those on low incomes.

A one-earner married couple in which the earner moves from part-time to full-time work faces a marginal tax rate of more than 90% in Britain, the highest in the western world, compared with an average of 55% for other industrial countries. A two-earner couple with a combined income of £35,000 would be nearly £5,500 a year better off living apart, thanks to the perverse way Brown’s tax credits work.

And the cost is huge. "Britain spends more on welfare benefits excluding pensions, £79 billion, than on education, £73 billion."

Family breakdown costs the taxpayer a conservatively estimated £24 billion a year. Add in the costs of educational underachievement, £18 billion, and crime, £60 billion, and the bill comes to more than £100 billion.

The News of the World highlights a case where "a married couple revealed how they split up — because under Britain's crazy benefit system they are better off living apart". The husband says:

There's no point in us being together if we get more money by living apart. It's ridiculous. Surely if you work you expect to earn more than you'd get on the dole.

We live in a society where people can have children and get them supported by the state.

It's unfashionable, and it sounds hard. But should taxpayers be paying out £73bn a year on welfare benefits? The Times points out that

3.5m are on benefits that place no requirement on them to work; 350,000 children have drug-addicted parents and 1m parents who are alcoholics; 10% of children leave school with no educational qualifications. The link between this failure and crime is powerful; 73% of young offenders admit to no academic attainment.

Martin Wolf made the point some time ago in the Financial Times that people respond to incentives. If you give them an economic incentive to have children outside a stable relationship, many will take the money.

Labour has comprehensively failed on welfare benefits. And who was the major architect of Labour's welfare strategy? Step forward, Gordon Brown.

Addressing the benefits burden

FT journalists have been fed the line that Gordon Brown is to "press on with" welfare reforms.

The budget for benefits to people of working age is £50bn, almost a tenth of public spending. Only £1bn of this is spent on encouraging people back into work.

Leaving aside the politics, the article talks up a review commissioned by John Hutton which is said to concentrate on four areas.

1. Extending "conditionality", or requirements on claimants to attend interviews, take up training or look for work


2. Do benefits contain the right incentives and penalties to encourage people to get back into the labour market?


3. A "vastly expanded" role for the private and voluntary sectors in running employment schemes and administering benefits - the idea is for charities and private employment agencies to compete on a level playing field with the government's Jobcentre Plus "after they showed they were more successful at getting people into stable jobs"


4. The use of capital markets to fund welfare-to-work programmes when public resources are tight. Contractors would be able to borrow on the markets against future revenues from the government. They would be paid according to their success in getting people back to work and keeping them there for up to three years.

If this is going to be effective, how will it play with the unions and the labour party members whose votes Brown will want in the leadership election, and whose money he will need when the general election comes?

Some employers of immigrant labour are quoted anecdotally as saying immigrants are better workers than local people. Any change that is worth while will have to address this.

And Poles will travel to SE England to work, while many in the UK are content to stick in their local areas relying on handouts paid for by London and Eastern and South East England, as discussed in an earlier post today.

Don't expect any effective action. These are Labour strongholds.

Welfare payments still not under control

So the National Audit Office has qualified the accounts of the Department of Work and Pensions (DWP) for the seventeenth year.

The amount lost from payments in all benefits in 2005-06 because of fraud and error is approximately £2.7 billion, representing 2.2% of the DWP’s total expenditure in 2005-06 of £124.2 billion.

Regarding fraud, the DWP estimates there was a £200 million reduction in losses in relation to Income Support, Jobseekers Allowance and Housing Benefit. In respect of error, initiatives are underway to target the most significant causes of officials’ mistakes regarding Income Support, Jobseekers allowance, Pension Credit and Disability Living Allowance, which are estimated to account for some 60 per cent of the total amount of loss caused by official error in these benefits.

The DWP is also working to strengthen controls on customer overpayments and to improve recoveries of the losses. New systems rolled out in 2005-06 will help the Department track and thereby recover identified customer overpayment debts. Currently, a significant number of potential overpayments are delayed in their recovery by a combination of system backlogs and poor debt referral processes. From 2007-08, chief executives from each departmental Agency will be responsible for ensuring timely referral of overpayments debtors to a centralised Debt Management function for action.

Worryingly, the NAO adds that "when compared to the government departments in other countries tackling this problem, the DWP is at the forefront". Which leaves one wondering how big the leakage is across the developed world.

Do we just have to shrug and accept waste on this scale and cases like the Sheppards? Hard cases may make bad law, but perhaps they also suggest that the law is wrong. As the Taxpayers' Alliance writes

For all those who work hard, pay their taxes, and struggle to budget each month, saving for Christmas is a real hardship – which often means plenty of small sacrifices along the way. And that’s without the extra disaster that has befallen many who had spent hundreds of pounds on presents with the Farepak mail order firm, which went bust without warning last month. What message does it send out, that without working, and with enough commitment in the bedroom, you can live quite comfortably on the benefits paid for by everyone else – including having plenty to go round at Christmas?

They rightly say that "Our welfare system needs urgent reform, so it encourages work, rather than rewarding those who chose not to. And we need to decide whether we want a system that pays people so well for having children, when it is after all, their own decision."

Being kind to all welfare applicants is a gentle, easy option. But what about those who work hard and pay taxes on low incomes? - a point Boris Johnson made.