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Who advocates for the Poor?

It may surprise you to learn I am not against generous benefits, or even the principle of redistribution.

Much of your wealth or otherwise is down to luck. There are moral and practical reasons for supporting redistribution. The best is based on one simple fact: It’s just much, much easier to get rich if you start with wealthy parents, good nutrition, high IQ, an education costing half a million pounds, height above average (if male) good looks (if male or female) and no regional accent. Start with these advantages, and you’re most of the way to getting into the top 10% of earners straight out of university, which your parents, of course were able to afford. Of course some have some or none of these advantages and succeed, but very few. Those who succeed support those who don’t through redistributive taxes and benefits. This is fair because many of those struggling do so because of bad luck.

There’s a utilitarian argument. The poor have a much higher marginal utility for money than the rich. This is the argument for progressive taxation. A pound on benefits matters more to its recipients than a pound on taxes to a higher-rate tax-payer. So society is better off if some money is moved from one to the other.

Finally, if you make sure everyone has enough money to eat and keep a roof over their heads, there’s less likelihood they’ll pick up pitch forks and re-distribute by force. Think of the benefits bill as insurance against being on the end of a gibbet come the revolution.

So your taxes, about a third of which go to paying working-age benefits, about a third in pensions, and the rest, everything else are part of a decent society in which everyone’s helping everyone else. Or they would be if the system wasn’t comprehensively broken, failing at all the significant tasks the welfare state is supposed to achieve. The welfare state is supposed to prevent poverty. It is, in fact, its major cause.

The problem is one of incentives, and not just those faced by the poor themselves. It’s obvious to anyone who isn’t paid handsomely to farm the poor, that for many people, it’s simply irrational to work. Once they’ve paid for taxes, clothes, transport and lunch, they’re considerably worse off than they would have been had they stayed in their pyjamas and watched Jeremy Kyle. Why would you take a miserable, boring, unpleasant minimum wage job instead of existing on benefits? The job insecurity at the bottom of the pyramid and the bureaucratic complexity of informing the authorities of a ‘change in circumstance’ is a further barrier. So when when the low-waged is “let go” after a couple of weeks, he’s got to re-apply for Housing benefits, Job-seekers’ allowance, Council Tax Benefit, income support and so on, from scratch. He may be genuinely destitute as a result of payments stopped, then restarted again too late, thanks to an abortive effort to “do the right thing”. Is it really any wonder so many feel trapped?

So, who benefits from this system? Certainly not those getting the benefits many of whom are comprehensively trapped in a life they wouldn’t have chosen. Not the Children of those getting benefits, who learn no other life thanks to the distorted incentives faced by their parents, but in whose name the benefits are paid. Certainly not the people paying the bill, John Q. Taxpayer, who thanks to the system face a sullen and resentful underclass, some of whom spend their non-working lives looking for ways to relieve you of your easily saleable property in order to buy sufficient narcotics to break the tedium for a few hours.

The main benefit of the benefits system accrues to those employed on secure graduate salaries to administer the system. These people are the farmers of the poor. This is not just the civil servants and local government employees who administer the system, but also the charity employees who don’t see the homeless and destitute (they outsource this to unpaid volunteers). It’s the police who are part of the state-crushing of the spirit of the young who find themselves trapped in this hell. The that the poor exist at all causes fear in the hearts of the affluent, and justifies the need for a police force. The Bureaucracy is an excellent provider of jobs. Which is why none of the solutions suggested by the Left of the political spectrum would ever reduce bureaucacy or police numbers, or the benefits bill. For that would involve firing sub-paying members of Unite or the PCS, and Unite is by far the biggest funder of the Labour party.

The Conservatives, Iain Duncan-Smith especially, are aware of the above. They were just unprepared for the sheer effectiveness of the poor-farmers at defending their state-financed do-gooding jobs. The Tories tried to cut the number of benefits, simplifying the system. They have tried to work on the incentives by reducing withdrawal rates. And they have tried to limit benefits. No-one should be richer out of work than in.

The problem is the Conservatives blamed the poor for responding to incentives quite reasonably. The Left have a nice handy boogey-man to scare their charges into continuing to voting for a machine which is actually enslaving them. The poor are still trapped. Some policies that might have worked are only half-implemented. And life goes on. Unite the Union gets bigger, the bureaucracy gets more opaque.

So now I’m going to sing the praises of another surprising character: Nye Bevan the architect of the welfare state, who saw precisely the outcomes described above. Which he saw benefits as being low and universal, where possible, and contributory where not. Basically, everyone got a bit, and if you needed more, you had to have paid into the system at some point. Worklessness for life was simply not an option, so it didn’t really happen. Bevan would have been horrified at what his system has become.

People need to advocate for the poor. What do they actually need? Options. And what does the system remove from them? Options. They cannot choose where they live, whether they prioritise transport or housing, food or clothing. They are given a house. Their housing benefit bill, incidentally distorts the housing market for everyone else too. They are made a pawn in someone elses game which involves stats and targets and certainly not the aspriartions of a human being at the bottom of the pyramid.

The only way we can ensure a decent standard of living for everyone is to provide a basic income below which it has been decided that no-one can fall, in perpetuity, for life. No work done will see that basic income withdrawn. So there’s no disincentive to find what work is available. In return, we scrap the minimum wage, which prevents the poor and low-skilled having any means to improve their lot through effort. We stop taxing income and profits altogether reducing the costs of hiring people. We replace income tax, NI, council tax and corporation tax with a proper land value tax and a few pigou taxes. This means the poor will be able to escape taxation almost entirely, if they wish to live far away. And we stop demanding the poor account for their choices to people who want to help, but actually trap them in a bureaucratic hell.

The losers from this policy: The tens of thousands of civil servants who administer the thousands of pages of tax-rules. The hundreds of thousands of civil servants and local government employees who administer the benefits system (some of whom will be needed to administer a LVT). The winners are the poor, who will have real options once again and won’t have to submit to the whim of the bureaucrat or fill in endless forms. This will also give options to the rest of us, and hopefully make the country a much, much better place to live.

The poor have the same Hierarchy of needs as the affluent. Would a system which didn’t seek to crush their self-actualisation and didn’t put barriers in the way of the social and human contact be better, not just for the recipients, but all the rest of us too? The problem is the system serves best those employed by it. It gives them a secure, well-paid job, and power over fellow humans. The poor deserve better. With options, you can bet few would choose the trap they’re currently in. By freeing human talents from the trap, we’re all wealthier. Give the poor what they need. And then leave them alone.

More redistribution. Less Government.

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An Example of What’s Wrong with the Welfare State.

In around 2004, or 2005, I found myself between jobs. This is what the welfare state is for. I applied for Job Seekers’ Allowance and Housing Benefit, which I claimed for around 3 or 4 months, until I found another job.

If you believe the left, I’d be ‘hypocritical‘ for ever subsequently arguing in favour of welfare reform, after using it, as Iain Duncan-Smith once did. I’m not. I support a welfare state, just not one as currently structured. A welfare state is vital. Decent out of work benefits reduce the risk of temporary unemployment, and therefore increase an assortiveness labour market. It reduce the power of bosses to hold down wages or make unreasonable demands. It reduces the risk of quitting a job for a new, better one, and thereby lose protections for time served. A functioning welfare state is vital to reduce the risk of entrepreneurial activity.  A welfare state is vital therefore to a liquid, flexible labour market, which has been one of the successful things about the UK economy for the last 30 years.

Beveridge, the system’s designer however saw that there must be an eye on the incentives, to ensure the evil of idleness be combated as well as the evil of want. The welfare state’s cheerleaders in the Labour party appear to have forgotten this. Either that or they benefit from a large, permanent caste of welfare recipients who will never escape the trap. No-one wants to live on JSA. But no-one ever does. The problem is once you’re on Incapacity benefit, income support, Housing Benefit and so forth, you’ll never have to survive on JSA alone. This doesn’t stop Left-wing apologists for the current welfare state arguing that it isn’t over-generous, by citing the paltry amount of the most temporary of benefits.

Had I remained out of work for 6 months, I would have qualified for 6 month’s “run on benefits” worth at the time, several thousand pounds. I was actually advised to delay starting a job for weeks, in order to qualify. I told the Advisor in robust Anglo-Saxon to go forth and multiply. But the trap, the temptation to take the easy money must be great, especially for those for whom employment does not represent significantly more money than the welfare payments they’re turning down.

If you house people at public expense, in properties they could never afford by working, you trap them on benefits forever. Furthermore, housing benefit distorts behaviour in its recipients, who never have to plan to pay the rent. Landlords too, find themselves dealing with a stupid customer in the state, and make sure rents are the maximum the state will pay. This distorts the market all the way up from there, raising the cost of housing for all.

It is for this reason I find the Labour campaign about the “bedroom tax” abhorrent. Housing benefit needs reform. So too does every other benefit.

The hyperbole surrounding incapacity benefits from labour is likewise grotesque. Chris Mullins, Labour MP reported “scams” of people who are perfectly fit yet claiming disability benefits. John Hutton, another Labour MP, apparently told him of

“an ameteur football team, currently topping a local league, in which eight of the 11 players recently fielded were on Incapacity Benefit”. 

Yet when Iain Duncan Smith or anyone else broadly identified as “on the right”, who has made extensive research into the subject, makes the same point, the left make an appalling din about the demonsisation of the poor.

The fact is, it is quite possible to claim extensive benefits, which ensure your bills are paid, and keep a roof over your head, and work cash-in-hand thereby enjoying an acceptable lifestyle in perpetuity. Everyone knows of someone like this. Go down your local pub, and you will find one. But the left seem wilfully blind to the phenomenon. For this reason, few countries allow long-term benefits. From the vicious Americans to the cuddly Swedes, almost everywhere has found if you aggressively time-limit benefits, people suddenly become more resourceful as minds get concentrated. Long-term unemployment falls.

IDS’s plans revolve around simplifying and limiting benefits, to ensure no-one receives more than the median wage from the welfare state. This means some people in reciept of generous beneftits will get paid less. It means “the poorest” will suddenly find they have to move to a grottier part of town. You won’t find much sympathy from the tax-payers who already live there. It means Housing Benefit will be paid to the tenant, not the landlord. This means some people with chaotic lives may find themselves evicted if they cannot manage their budget. You will find little sympathy amongst tax-payers living on value spaghetti and ketchup when the money runs out at the end of the month. It means disabled people have to prove they are disabled in order to continue to receive benefits. Some people will be judged fit to work, when they’d got used to the idea they’d got it made on the “sick”. There will be little sympathy for shirkers who’re found out. The coalition’s plans would still leave the UK with one of the world’s most generous welfare states, and which asks the fewest questions of its clients. Ideological and evil it is not.

The Labour party in parliament has been parading the sob-stories of the halt and lame, some of whom are genuine victims of bureaucratic bungling by ATOS or others. All bureaucracies make mistakes, and there will be teething troubles with any new system. But many of whom are simply people who’ve become entitled to a big house provided at public expense, even though they no longer need it, and who are complaining to a Labour MP, who finds their complaint politically appealing. Labour don’t see, despite clear polling evidence, how the working public feel about their neighbours whom they’re supporting. The left needs to stop shroud waving. Labour had 13 years in power, yet sidelined the one man, Frank Field, who seemed to want to get to grips with the thicket of benefits. The conclusion that the client state it created was simply too useful is difficult to ignore. IDS’s plans aren’t demonising the poor. Some people (not all, or even most but SOME) benefits recipients are “shirkers”, which is in any case a word rarely if ever used by him.

It’s too easy for the Labour to malign the intentions of their opponents. It has the effect, psychologically of preventing them examining their record in office. I, like IDS used the welfare state for its intended purpose. A bit of support between jobs. He’s not a hypocrite, nor a monster. And nor am I.

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Minimum Unit Pricing for Alcohol

Cameron seems to think a minimum unit price for alcohol is a good idea. It isn’t of course, it’s the worst type of New Labour nanny-state idiocy. You know that, I know that. What’s important is who the enemies of liberty are, and how they use their positions in a conspiracy against the public.

The medical political complex has become dominated by a kind of purse-lipped puritan, who sees the maintenance of life as its sole aim. To these people, the poor especially must be bullied, for that is what it amounts to, into “healthy lifestyles”. To this end, government must see to it that the poor especially must be prevented from doing harm to themselves. Especially by smoking, drinking and taking drugs.

The war on smoking is going well. The habit has been de-normalised in much of middle-class society, remaining widespread only in the working class. The ban on smoking in pubs has caused tens of thousands of pubs to shut down. Not, of course the nice gastro-pub in which the members of the medical/political complex might take their 21 units a week (a number for which, of course there is NO evidence), but the kind of local boozer in which a builder might enjoy a pint after work. Builders, who are more likely to smoke than public health professionals, have responded to the incentive provided by the smoking ban by going to the supermarket for lager, and watching the television at home, where they are (still, just) allowed to smoke, instead of socialising with their friends and work colleagues.

The public health professional is not now satisfied with the steady decline in smoking. They are now going after booze, in a big way. And they are fundamentally dishonest. The UK has relatively low consumption of alcohol. Consumption of alcohol is falling. Young people are drinking less than ever. Of course some people go out and get squiffy on a Friday night, but THEY ALWAYS HAVE and much of the vomit and blood on the street is down to insane licencing laws that see local pubs shut (no “entertainment” you see) and vertical drinking barns with bull-necked bouncers who delight in giving random kickings, stay open late. People are herded into noisy “venues” only to have all of them shut simultaneously, leading to fights in kebab queues and taxi ranks. Stressed, drunk people whose jackets are probably still in the cloakroom of the club they’ve been kicked out of, and by whose bouncers they’ve had kickings, are herded around by increasingly officious and aggressive people wearing high-viz, until the police arrive and add one more person to the crime & disorder statistics.

A free market in the night-time economy wouldn’t look like that.

Sheffield university’s Professor Petra Meier’s MODEL-BASED APPRAISAL OF ALCOHOL MINIMUM PRICING is being widely touted as evidence that minimum pricing works. It’s nothing of the sort, of course. It’s a model. If you assume a policy works, and put those numbers into a spreadsheet, you can estimate by how much consumption will fall at different unit prices. All you need is a title – in this case two PhDs and a Professor – to be believed when you say “but the model shows that consumption by problem drinkers falls the most”. But it is by no means evidence that the policy will work. It’s a tarted-up guess. It’s policy-based evidence making, and hoping no-one challenges you on the data.

In a word they’re lying to you. But by repetition the lies become the accepted truth.

But it’s not about whether an intervention into minimum pricing would work. To make the argument about that risks the medical/political complex actually finding it does work, within their parameters, and being encouraged to ban bacon. Is a drop in alcohol consumption a good thing? Why? We probably want to cut the blood and vomit on the street on a Friday night, but that isn’t about booze, it’s culture, law and licensing. Why fight on ground of the puritan’s choosing?

The question should whether it’s the state’s role to intervene in pricing. Because once that rubicon’s been crossed, you can bet we’re back to fighting the cold war again as price-planners flood through the economy, and every decision gets scrutinised by your GP. We will see restrictions on fatty foods. And before long, no-doubt the nation will be forced (for the good of the NHS) to do their press-ups and sit-ups every morning, in the road, where you can be inspected. Minimum pricing therefore is about whether the state has a right to tell you and me what we do with our bodies.

I like a glass of wine now and again. Once in a while, and less often than I used to, I like to get squiffy with my friends. This is absolutely none of the government’s business. And it’s the poor who suffer most. Pubs in poor areas were  already marginal businesses, and they’ve gone. So the low-waged have seen their social forum shut, increasing atomisation and alienation. And all because the temperance lobby don’t like the sight of men with cigarettes and a pint. The poor have been driven to a WORSE health outcome by the smoking ban. And because their lives are a bit less social, the harmful drinkers may well drink more. Of course, if this is the case, there’s no evidence, because there’s no-one looking. The temperance lobby got their policy, and they’ve moved on.

This isn’t about health. It’s about a certain type of curtain-twitching middle-class puritan, drawn to careers in public health who see the poor not as people, but a problem to be tidied up. This is true of slum clearances which destroyed communities in the name of public health, and it’s true of the modern-day temperance crusade.

My prediction: This policy will be declared illegal under European law as the Scottish experiment is shot down. Cameron will use that as a pretext to drop a policy in which he’s invested, but on which the rest of the Cabinet is less less keen. He will use it, like the votes for prisoners, as something on which he will “stand up to Europe”. We will still hear the confident assertions medical/political complex go unchallenged on the Today program.

Further reading on the subject: Heresy Corner’s post is very good and Christopher Snowdon’s blog is excellent on the litany of lies by public health professionals and the temperance industry. You should read it.

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Government as a Tool.

Government is not inherently evil. Indeed it is necessary – anarchy is not a happy state of affairs. This is the difference between Anarchism, and Libertarianism: Somalia is not a standing retort to the principles of the latter. Nor are things like progressive taxes, welfare states or redistribution necessarily bad.

Even (or even especially) in meritocratic societies, much of one’s station in life is overwhelmingly predicted by what your parents do. If they’re smack-addled self-arguers, you’re unlikely to become Prime-Minister. So, redistribution fulfils a fairness function – mitigating the gross dice-roll of fate which decided which womb bore you. Redistribution also reduces the risk of starting businesses – if you fail, you’re not going to starve, so  as a minimum standard of living can be guaranteed, people can on take more entrepreneurial risks. And as much business success is down to luck, this too is fair. There is an economic function to welfare. Welfare can also be seen as an insurance policy, preventing the rich ending up on a gibbet when the revolution comes.

The trick is to help the needy and unlucky while not damaging the incentive to work. Unfortunately, the British welfare state, with its vast bureaucracy of 72 separate benefits is a massive disincentive to work. Simplifying the benefits system, and aligning it with the tax system and make it simpler to claim, reducing the risk of lost benefits, when taking on short-term work. The Government’s plans for a universal Credit are a step in the right direction.

Government has a role in infrastructure. It is naive to imagine a comprehensive network of Metalled roads would be provided by the private sector. Paths form naturally, but for them to be in decent condition, this is best provided collectively. A road on its own is worth less than the same road in a network.

The realm must be defended. Most countries don’t have a handy English Channel, and whilst Britain Eschewed a standing army long after the rest of Europe had started conscripting, she did always have a big Navy and almost no states do without some form of military, even tiny Lichtenstein has paramilitary police. No-one would argue that private armies are a good idea. This is what made Medieval England so hard to Govern.

Defence morphs into law enforcement. A strong, central state through British history has tended to act as a protector of the peasants against their local potentates. The Royal Boroughs became wealthy for example because their liberties were guaranteed by the crown against the often rapacious demands of local barons. Where monarchies became defenders of the people against the barons in this manner – The UK, Scandinavia and much of Northern Europe, they tended to survive. It’s clear therefore enforcing rules, especially on behalf of the weak against the powerful is a key role of the state.

A strong, effective state therefore is good for all except the most powerful. Economically, the benefits of a state listed above are demonstrated in the concept of the Rahn curve. If the state doesn’t exist, you don’t get much economy, let alone economic growth. But just as libertarians are wont to abuse the Laffer Curve to suggest that tax-cuts always bring more revenue, leftists are currently pretending more state spending will always generate growth. It doesn’t, and here’s why.

An efficient package of tools

Having got some measure of control of the state, and having used it to deliver a more equitable society, the temptation arises in democracies especially to use this powerful tool called the state to solve problems to which it is not suited. Politicians get called “complacent” if they say “not my problem”. A limited state, focused on what it does well is wealth enhancing. Take the state into areas to which it is not suited, the result is a state which takes too much, and as a result gets captured by vested interests in public-sector unions, who agitate for more spending on their priorities (mainly wages for their members) forgetting that this must be paid for out of everyone else’s surplus production. The result is a state providing Health, Education and social services, over which the people who are supposed to use them, have no control. You take what you’re given and like it. You get substandard services, delivered by people who know they’re going to get paid, whatever you think.

It also means the costs lead to over taxation. The rich are mobile, and while they might enjoy London or Paris’ cultural riches, there comes a point when they will bugger off, as Francois Hollande is likely to find out soon. It is tempting to blame ‘the rich’ because they are few in number and democracy can become the tyranny of the majority. If the rich “avoid” taxes, a problem existing mostly in the fevered minds of left-wing activists, it’s because a ridiculously complicated tax-code allows them to. Simple, fair, progressive taxation is rarely avoided. Gordon Brown tried to use the Tax system as a control on the economy. He failed.

Trying to do too much

The problem causing the ratchet upwards in the cost of government is the costs of state inaction are easy to picture – you’ve pissed off individuals making noise. But the costs of state over-action are spread equally amongst millions, but it takes a crisis to make people aware of it.

The answer is to use the state as an enabling tool, funding rather than providing. And this is the key to the success of the Nordic states, despite their high (eye-wateringly so) tax rates. I’ve no problem with state funded services. I’ve no problem with progressive taxation, and a welfare safety net. But these have limits. And we’re at or beyond them now. The tool of the state has become unwieldy and inefficient because it tries to do too much.

Few would have a problem paying high taxes if the services delivered were up to scratch. And if they are not up to scratch, if there’s a choice between competing providers, you still don’t mind paying. You just take your tax-funded business elsewhere. This is why Sweden’s state schools are so much better than ours – they aren’t run by the state, and so don’t have the bureaucracy to stifle good ideas, and are not completely captured by the producer interest.

Ultimately the standard of living, that we’re trying to improve for as many as possible, equates to a measure of free income after tax, non-tax health and education costs, and transport. All of which government can influence. The USA may have low headline federal taxes, and variable state taxes but its citizens are expected to pay out the majority of the difference into a bloated private health system (the US health industry is as obscene as it is in part of ridiculous laws like those banning the sale of insurance across state lines, but that’s another subject, for another day). So despite their low taxes, Americans are not greatly better off than western Europeans. It’s not just about money.

It’s impossible to live cheek-by-jowl without some collective decision making. So long as this is under democratic control, and uncorrupt, State action can mitigate certain behaviours which only become individually optimal in the absence of a collective alternative. For example, America rejected public transport almost entirely, in favour of the car facilitating (along with a large, underpopulated land-mass) urban sprawl which means Americans spend longer commuting than almost anyone else on the planet, something at the top of the list of misery-making habits. So a rejection of state action in favour of rugged individualism has forced Americans into a sub-optimal status quo and sitting in queues of traffic on the freeway, but feeling like they have no choice.  Monopolies, like the near monopoly of car infrastructure in Los Angeles, are anywhere and always a problem.

So the idiot ‘Libertarian’ battle cry of “cut taxes now” is likely to mean people spend the savings from taxes on things that used to be provided by taxes and being forced into sub-optimal behaviour by the abandonment of some collective action. Inevitably taxes would also be spent on subsidising the poor’s access to goods and services, so few are really any better off despite lower headline tax rates.

The trick therefore is to maximise everyone’s utiltiy at minimum cost, and to do so whilst increasing everyone’s freedom of action. And the best drivers of efficiency are markets. Free schools would create choice, whilst still being free at the point of delivery. There is no reason (apart from producer interest) to oppose privatised bits within the NHS. The internal market was abandoned, then resurrected by Labour, not for ideological reasons, but because it worked.

I’ve no problem with health care free (or free-ish) at the point of delivery funded from taxation because no-one has shown me any evidence that private insurance is more efficient. After-all insurance pools risk. Tax-funding pools risk better. However I do not believe the state, or any other monopoly to be any good at delivery. So break the NHS up, and let the patients choose where to be treated, whom to see as their GP, and let the funds follow those choices accordingly. All the regulator (NICE?) needs to do is say which treatments are available for free, and which need to be paid for out of your pocket, and then check they’re up to a standard. The market can do the rest.

Where the real cuts need to come is in the vast, expensive bureaucracies managing and regulating our lives. Big business lobbies for tight regulation because this protects incumbents. Look at banking – a ridiculously tightly regulated industry from which innovation has been frozen by a cartel of self-interested Giants. These Giants are egged on by a regulator which encourages scale in the belief that big is better, and who do business according to the regulators idea of risk. And look where that go us. Deregulation cannot be the reason for the crisis because it’s never been tried. A free market in banking (with a state guarantee for depositors, but not investors) would let a thousand flowers bloom. Bank failures need not be disruptive and would cause the banking industry to join the 21st century as crappy customer service would be punished by people moving. At present, I can’t e-mail my bank and they still take 3 days to clear a cheque.

If you want to cut costs in Government, don’t look at the transfer payments of the Education and NHS. The delivery of these is going to improve as markets penetrate industries which were once monopolies. If a state bureaucracy replaces an insurance bureaucracy, is that really worse? Look at the vast regulatory raj, with fingers in big business, local Government and cut that out. Focus remaining regulation on competition, not consumer outcomes (that’s what a market’s for…)- don’t let anyone get a monopoly anywhere. Bust cosy cartels. Enable choices, stop protecting us from ourselves, and leave the results alone.

Ultimately the state needs to stop doing quite a lot of things its got used to doing. Why is there a public bureaucracy around sport? What is the DTI for except a conduit to Government for big business? Why are there laws demanding I wear a helmet on a motorbike or a seat-belt in a car? Why is there a ‘War on Drugs’? Why can I not have a cigarette with a pint? Because our elected representatives decided to use an inappropriate tool to solve problems which are none of their business. The result is a state delivering shoddy services, yet which cost 50% of everyone’s income.

This has become unsustainable. Much as I want taxes cut, I still want good public services and we need a balanced budget. However instead of cutting the Army to 82,000, why not cut the bureaucracy of the MoD? Instead of pruning branches, why not cut down the whole tree of the DTI? How about Stopping giving money to “charity” on  our behalf? Why not Roll DfID back into the FCO? The list of unnecessary stuff the Government does is nearly endless. Slash the areas of the state whose sole purpose is to provide jobs for life for Unite members, and create markets in most of the rest. You may not see the tax burden go down much in the short-term, there are too many pensioners for that, but you may get more for your taxes and your children might be rich enough to be taxed less. In final analysis, Gordon Brown’s spending splurge wrecked the rest of your economic life. It might not wreck your children’s.

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The Welfare Reform Bill

The most acrimonious debates on Twitter are between myself, and a few like-minded libertarians, and a purple-twibbon army of disabled people, about the Welfare reform bill.

When asked what was his greatest political fear, Tony Blair once answered “the disabled”. Sure enough when his administration attempted a similar set of reforms to those proposed at the moment by the Coalition, a passive-aggressive disabled mob chained themselves to railings all over the place and the reforms were defeated. Labour ran scared from an issue at which the leadership was at variance with the activist base, for whom “benefits cuts” are an anathema. The problem is that the Welfare system has become too cumbersome, too bureaucratic and as a result too generous to many, replete with perverse incentives preventing a class of permanent benefits recipients ever getting work, with marginal withdrawal rates in some cases over 100%.

At present the system doesn’t do any of the things a decent benefits system should do. Any redistribution is effectively between the poor, as the low-waged are taxed to pay the benefits of their non-working neighbours. Their income is then topped up from the benefits system in a bizarre and bureaucratic abortion of tax-credits. This bureaucratic leviathan doesn’t protect incentives to work, the very complexity of the system creating a fear, preventing people taking the low-paid, insecure jobs which are a necessary first step on the employment ladder. The poorest are trapped in a bureaucratic nightmare, and those with jobs are forced to pay through the nose for it.

Surely no-one denies that the system needs reform?

I have seen two mutually contradictory positions. First that these are the wrong reforms because they won’t save the Government money. All reforms save less than they are supposed to. The other is that these are treasury-led reforms designed to take money from the neediest in society. Of course some people will lose out, most widely publicised being those Households of housing benefits recipients mainly in London who are in receipt of a total amount in excess of a benefits cap of £26,000. That’s the point.

These people should do what cash-constrained working people have to do and move to a grottier part of town. No-one has a right to a £1m pad in St. Johns wood. Exempt from this benefits cap are, of course, the disabled. So far, so reasonable.

Next up seems to be the demise of Disability Living Allowance, a payment designed to help the disabled with increased living expenses. A wheelchair user’s car is likely to be more expensive, everything else being equal. They may need a home expensively modified and so forth. The DWP estimated that this benefit is not subject to fraud, but this is questionable. Overpayment was equivalent to over 9% of expenditure, mainly because “customers'” conditions change over time. DLA’s replacement with Personal Independence Payments or PIPs mainly changes the frequency of assessments, so “customers'” who get better, lose benefits more promptly. Yes, people will lose benefits they’ve come to rely on, but working people lose jobs from time to time. Again. I struggle to see how the changes are throwing disabled people under a bus.

The problem is that being signed off sick has become for some an income in perpetuity, absolving a person of ever seeking any work. It shouldn’t always be. Some people who have become used to generous welfare payments may well have to do without. Again, that’s the point.

Finally the Universal Credit aims to replace Housing benefit, tax credits and various income related benefits. A simpler system is necessary to remove the obscene marginal withdrawal/tax rates faced by many people moving from benefits and into work. Many people will face lower benefits receipts, but as they will also face lower tax rates thanks to a higher personal allowance, this increases the incentive to work, which is the ONLY way out of “poverty”. (The scare “quotes” are to indicate relative measures of poverty, rather than absolute, which simply doesn’t exist in the UK, except by choice). Some form of universal credit represented one of the two main reasons for supporting the Tories (along with the education reforms) at the last election.

Of course a number of people are going to face cuts to income, and are going to have to make choices. But these choices are not materially different from those faced by working people on low wages, who faced (and still face) over a decade of tax-rises. They are not going to see people “on the street, starving” as many of the more hyperbolic purple twibbon army regularly claim. Given the broad thrust of the reforms strike me as being in the right direction, unless anyone can point to people suffering more than a few more assessments or losing a bit of money and facing hard choices, I will continue to confront the hyperbole.

Disagreement isn’t “bullying”. Just because someone’s in a wheelchair, doesn’t mean they occupy the moral high ground.

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Ground of Your Choosing: The Benefits Cap.

In battle, a successful commander will draw the enemy onto ground of his choosing. At this, Tony Blair was a master. By drawing the Tories to fight on ground, like Europe or the NHS, where they were weak, they were made to seem out of touch. The result was three election victories. Indeed New Labour’s vilest policy, the plan to lock innocent people in gaol for 42 days before telling them what they were supposed to have done, was merely an attempt to discomfit the Tories. Propose a policy so vile that the Tories would have to oppose it, and then say they’re “weak on terrorism”. Of course that was a policy so vile even the lobby-fodder of the Labour party couldn’t wear it and the Labour government went down to it’s first defeat.

Yesterday, Labour, Liberal and cross-bench peers inflicted another defeat on the Government, by supporting an amendment exempting child benefit from the proposed £26,000 benefits cap. Let’s not forget that a tax-free income of £26,000 is equivalent to you or me earning £34,000. You can support a family on a salary of £34,000 so I suspect the Government is delighted.

Who are we talking about? Mainly this benefits cap will hit people living in hugely expensive areas, mainly in London, who have large families. The elephant in the room is Housing benefit, paid directly to Landlords and inflating rents for the rest of us. Obviously people will have to move out of Hampstead, Chelsea and St. John’s Wood to somewhere grotty in zone 4.

So you’ve had to move? This is the world’s smallest violin & it’s playing just for you.

The other group of people are those with large families. I think lefties will be surprised at how people who’d love to have three or four children and who don’t because they simply couldn’t afford to have them, feel about people who’ve never worked, pumping out kids on the tax-payers’ expense. Most people feel we need to end the subsidy for people who’ve never worked to breed people who’ll never work. In any case, you can bring up plenty of kids on a salary of £34,000. You just might have to move to a cheaper part of the country. A family of eight children could potentially forgo income of £5933.20 a year, equivalent to £8725 pre-tax & NI. So in essence, the Labour & Lib-Dem Lords want to pay £42,000 a year to people who’ve decided to make you pay for something many working people have decided they couldn’t afford. Good luck selling that.

Working people on this kind of income, £34,000 a year, are called “middle class” often in a sneering way, and are not helped in any way by the benefits system. Indeed because I EARNED less than this in several previous tax-years, 6 of them, during which I held down 2 jobs while building a business, my Fiancee was denied any benefits at all when she lost her job. So what if people are forced to move to grottier areas of town? Working people have to do this all the time, when their income falls. So what if their kids have to move schools? My friends in the Army have the same problem. There are plenty of Private soldiers in the army dodging bullets in Afghanistan who have families subsisting on less. There are people starting businesses earning nothing who are nonetheless excluded from the benefits system. Do you think these people feel any sympathy for someone paid more than many people earn to do nothing?

The idea that an income equivalent to a salary of £34,000 “will thrust families into poverty” is absolutely abhorrent to the people who are forced, by the threat of expropriation and violence, to pay for it, people who are sneered at as “middle class”. I would not be surprised if the Government quietly persuaded enough of its supporters in the Lords to stay away from yesterday’s vote, to ensure a right royal battle on ground on which it is absolutely certain of the public’s support.

Good luck, lefties, trying to persuade anyone that an income equivalent £34,000 a year salary is going to thrust anyone into “poverty”. I suspect the Government is absolutely delighted to have this in the news for a few more weeks. “Labour wants to pay its voters more than you earn”.

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Youth Unemployment….

….Is an absolute disgrace.

Problem is Labour’s mantra that this is an economic problem is belied by the fact that this has been rising since they introduced the minimum wage about 2000. In Spain 40% youth unemployment is indicative that most young people have half a job, before they eventually join the ranks of the protected insiders.

In Britain however, 20% youth unemployment means many of those 20% of young people won’t get a job, now or ever. This is one of the broadest measure of Britains multi-generational welfare dependency. There’s the Workless households, in which one in six children grow up; without a role model of a parent going to work every day, the majority of which are headed by a lone parent. At the top of the heap are the “problem families” which blight every poor neighbourhood.

The problems are circular. Increasingly feminised schools have little relevance to working class boys in particular. They bunk off, find they can’t catch up if they ever have periods of motivation, get frustrated, bunk off some more, and leave school without any of the basic skills necessary to succeed, or any of the qualifications employers demand. These boys then go on to lead chaotic lives, without the hope of employment, fathering children they have little intention of bringing up. Who grow up in workless households, for whom school has no relevance…. and so on.

The problem isn’t a lack of jobs (the number of employed immigrants gives the lie to that), a lack of skills, or even discrimination against the working class, one ludicrous CiF article (I can’t find the link) suggested employers’ demands for punctual, hard-working, well-presented, literate people with clear diction was ‘discrimination’; instead it’s a moral poverty.

There are vast armies of state employees, some 43 agencies by one estimate, focused on solving these problems. Income transfers ensure that the multi-generational welfare families are not cash poor. There are plenty of low-paid people on wages lower than that which can be achieved by farming the benefits system’s (at one recent count) 73 different payments.

Chris Dillow will scoff at the idea that living on £51 per week unemployment benefit. But this number is a joke. Unemployment benefit: that’s just pin-money, when housing benefit ensures there’s a roof over your head, and income support & child benefit to ensure little Wayne, Lee and Kayleigh don’t starve. A multi-generational moral vacuum has been created, where there are no consequences to catastrophic life choices. Few single mothers get sent to gaol unless they’ve killed someone, and there are no punishments short of that hold any fear.

The Problem families don’t need another agency of troubleshooters to ensure they behave. They need a system of consequences. Beyond a certain point of catastrophic stupidity, petty criminality, and ignorance the state needs to cease its efforts to ‘help’. Perhaps above a certain number of ASBOs and convictions, all benefits should be stopped, all children taken into care and the family evicted from state housing. The adults would be free to find a living without the help they’ve spat out all their lives. Link
Consequences for actions. That is all that is required. It may even filter down through the levels of uselessness, without the hard-core of trouble families, their neighbours’ kids might find education in sink comprehensives improve. This might mean that the employers, who’ve been importing labour rather than employing illiterate British teenagers, might start making a dent in youth unemployment. If you build an incentive or two into the welfare state, in 20 years, Britain’s underclass might actually start to shrink.

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The Welfare State is a Cruel & Expensive Trap.

I don’t have a problem with the state helping out the less fortunate members of society. I also don’t have much of a problem with some measure of redistribution, given that so much of one’s success or otherwise in life is determined by where you’re born. Society, in one form or another does have an obligation to those who for whatever reason aren’t successful. A certain measure of redistribution is the price the rich pay to avoid ending up on a Gibbet. But the welfare state in the UK is not structured as a safety net for those who suffer misfortune. Nor is it structured as a ladder to success. Instead, the welfare state seems structured to keep its’ beneficiaries and their offspring down in the gutter in perpetuity.

There are two facets to this cruelty.

First there massive disincentive to work, save, form stable families or otherwise behave in a manner likely to lead to gainful membership of society. Claiming any of the (I think) 72 different handouts to which a household might be entitled is complicated and bureaucratic. Accepting the kind of low-paid, insecure work which can act as a stepping stone to something better, will result in lost benefits and the risk of real hardship. It’s much easier to stay on the dole than risk the change.

Should they ever get work, many of the poor face up to 95.5% marginal tax rates, when you take into account benefit withdrawal. The assessment of people as “households” rather than individuals has the perverse effect of driving people apart. A household of two gets fewer benefits than a pair of households with one. Thus there is a financial incentive to form separate households. Finally the assessment of access to social housing on need, although seems fair, in fact creates an incentive to catastrophically screw your life up, thereby bumping yourself up the queue. The incentive for young women to have children in order to get a flat, though claimed to be apocryphal, isn’t.

Secondly, by removing the habit of work, and herding the long-term benefits claimants into welfare ghettos of social housing much of which is of spectacular ghastliness, removes any psychological wherewith all to do or even seek a better life. This narrow, depressed world-view is passed onto children. Even if we could change the incentives, for many people it may be too late.

Thanks to the welfare ghettos, a large slice of the population – perhaps around 15-20% is perpetually and parasitically condemned to the fringes of society. Despite its large size, these people are hidden from view, “society’s” moral obligation to them met thanks to the enormous tax-bill needed to pay it and the rest of us go about our lives in ignorance of the estates and what goes on in them.

The issue is not money. These people are not “poor” because of their income. I know plenty of people with incomes from work lower than that of some people on benefits. It is possible to obtain quite a respectable income benefit-farming. The poverty is instead moral. As Theodore Darymple argues in “life at the bottom“, with all needs met, no fear of starvation or homelessness but no hope of anything to make life meaningful, life is lived in a perpetual present.

The enormous & wasteful industry helping those who can’t cope is larger than that necessary to help those who genuinely can’t due to genetic happenstance or misfortune and injury. Instead, large numbers of people are infantilised by a system which for example pays housing benefit direct to the Landlord, but where help will be abruptly removed six-months after starting work means the habits and skills needed to survive off the state’s teat atrophy. If Winston Smith is to be believed, the children who are brought up in this system are taught that no consequences of their actions are ever forthcoming. Changes to the welfare state aren’t a magic bullet – but they might start to change the culture.

With a simpler benefits system, fewer civil servants and local Government bureaucrats will be needed to administer it. This resource could be freed up for the tax-paying private sector. In work benefits could then become more generous, increasing the incentive to find and keep employment. Eventually the system could evolve into something nearer to a negative income tax. Meeting the financial obligations to society’s more unfortunate members, without depriving them of the means and skills of independent living.

Would it not be better, as the Coalition is attempting in the teeth of opposition, incompetence and obstruction in Whitehall, to pay all benefits direct to individuals and leave them to sort out rent? the standard leftist retort is telling: that people paid their benefits won’t sort out rent and food, unless so guided by an employee of the state. Instead they will drink or inject it, or otherwise squander the money before it reaches the landlord. The extent to which that reveals complete contempt for their clients is lost on the left. Of course some will do this at first. The difference under a universal credit or negative income tax system is that the individual will face consequences of his irresponsibility – eviction, which they do not face now. The idea that this will not improve behaviour over time, is absurd.

Instead of a population of infantilised automata, subject to the (left-wing, labour voting, hugely populous) bureaucracy, independent people could be being helped through hopefully temporary set-backs in their lives. Neither hope nor consequences would be denied to the people at the whim of the welfare state. Instead of the bureaucracy, people would be in control of their lives. As a result, the bill, both psychological for those at the bottom, and financial for those of us paying for it, which currently amounts to a quarter of Government managed expenditure, might even get smaller.

Unfortunately, the people who stand to lose out from this policy are not the poor, most of whom desire a life off benefits, but the bureaucrats, social workers and do-gooders who gain employment by controlling, monitoring, assessing and providing the “care and support”. These people will fifth tooth and nail to keep their jobs, and they will use their unfortunate clients as rhetorical ammunition to ensure the vast machine which eats the poor and keeps them that way, never shrinks. The only thing a bureaucracy servers, is itself.

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The ‘Big Society’ or big society?

Everyone, it seems, is cheering the demise of “the Big Society”, and even Cameron seems to be dropping the capitalisation. The left think the concept is ideological cover for “cuts” and the right just think the whole thing is amorphous bollocks. Libertarians deplore the whole thing as Blairite “third way” crap by which politicians attempt to manipulate the people.

They’re all right.

Over and above the cuts necessary to deal with the horrendous deficit bequeathed the nation by the previous Labour administration, it should surprise no-one that Tories think a smaller state is better, which means taxing, and spending less. Charities and the like will bleat about losing funds. How can you, they argue, demand that civil society achieve more, even as councils cut charity funding. Of course this is part of the point. A charity dependent on state or local Government funding isn’t charity any more than the police are: it’s an arm of the state. Meanwhile the right argue what’s the point of cutting spending, only to hand the same money to people outside the state who have their own agenda better to let the charities function in the market. However, for far to many politicians, “The Big Society” allows them to be seen to be doing something with tax-payers’ money – in this instance giving it to correctly branded organisations of varying merit – which doesn’t subsequently demand too much of politicians by way of oversight. Funnily enough, this was the approach of the Labour Government to the “third way” organisations which are now screaming about “cuts”. So, much of the Big Society’s failure is merely a continuation of the failure of the Labour project under a different brand.

It depends on what the big society means – and it is more likely to work if it is, indeed as the left suggest, a cover for cuts. The whole point of a big society is that the state should cease to be the first port of call for people in solving every problem. Once people lose the habit built up in 13 years of absurdly interventionist Government, of expecting every community group to be funded by the state, every campaign group’s expectation of an open ear to calls for new legislation, every branch of Government’s expectation of seeing its annual budget grow, people will seek alternative provision first, and in most cases, find it better than bureaucratically delivered, top-down services delivered by central or local Government.

Even areas which are to remain state-financed, such as health and education will help in this process: GP fundholding means the local GP rather than an distant bureaucracy ‘The NHS’ will be responsible for healthcare. Likewise Free schools will allow the local education bureaucracy to wither as more schools escape the miserable embrace of Government. Don’t think your school is working – open another. This means, in time, the direct umbilical chord of service provision direct from Government will be broken, leading people to think, and blame, locally for the success or otherwise of their services. If you’re buying your education with a voucher, you blame the school for poor performance and crucially have the option of going elsewhere, rather than simply blaming ‘the Government’ for crappy service provided which you’re expected to simply endure.Don’t rate the education your local school is providing? move your child to another. Don’t like how your GP operates? find a different one. Hopefully the expectation that “the council” should provide every service will likewise wither, and people will self-organise into community groups to achieve things without getting Government too deeply.

Not only will this eventually mean more responsive services, it will free government up for delivering roads without potholes and other things they’ve forgotten with the expansion of their role into providing “outreach” services.

The Big Society – Government encouragement of initiatives to persuade the people to take on roles for free previously paid for out of taxation – will fail. The if the ‘big society’ however is simply that which will grow into the space vacated by Government, then it will happen organically, naturally and without any input from government. Indeed government intervention will be resented. People just aren’t in the mood to help the state. Instead, rather than state-funded “charity” which should wither, to be replaced by genuine, independent charity and community organisation operating without the facilitation of the state. Cameron should stop talking about the big society for a year or two, until that process is underway and there are examples of local groups delivering services without much input from Government to demonstrate the people no longer expect the state to step in to solve every problem.

So. The ‘Big Society’ is dead. Long live the big society.

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Crime, Punishment & Rehabilitation.

…Or why the Blogosphere is better than newspapers – some of them are written by people with first-hand experience who know what they are doing.

There are too many people in prison who shouldn’t be there. At the same time, serious offences go underpunished. Rather than pay attention to Newspapers who suggest that ANY attempt to cut the numbers in prison will result in a Rapist under every bush, and that the only answer is ever longer, ever less flexible prison sentences for “drug offences”, “sexual offences” or “knife-crime” or whatever is the moral panic du jour, let’s admit that we know nothing of the criminal justice system and see what those who have first-hand experience reckon. The magistrate is scathing about New Labour’s attempts to shoehorn social pathology into the criminal justice system and dealing with the “populist crap” of the ASBO really ends up being just a means to put persistent offenders into prison for low-level crimes. Most of these people aren’t bad, but are instead profoundly inadequate. They need help, not punishment. Treatment and care, rather than prison.

I don’t know what the answer is to a dim and confused alcoholic who staggers around, swears at strangers, and calls the fire brigade for no reason. But I do know that the answer isn’t an ASBO, because ASBOs only deter those with the mental capacity to be deterred. At this point, I would implore any MOJ staffer who has access to Ken Clarke’s inbox and who happens to read this stuff – and I know there are a few of you – to tell him that what’s going to happen here is typical of the reason why prisons are cluttered up with inadequates.

He will be given an ASBO prohibiting various pain-in-the-arse activities. He will breach it within a few weeks. He will probably get a suspended 28 days or so. He will breach it again. He will go inside for, in reality, a few weeks. He will come out better fed and less smelly than he went in. Then he will breach again. JPs will get fed up with him and send him to the wigs for sentence. A Recorder with a busy list will glance at the guidelines and give him nine months. Guess what happens when he comes out? Go on; you know don’t you? Breach, prison, and so on to the crack of doom. And the underlying offences, of drunkenness, Section 5 POA and the rest are all low-level fine-only jobs.

Clear him and his like out of the prisons, Mr. Clarke, and you will be well on the way to your 3000 reduction in the prisoner headcount. But you will have to find something else to do with them.

The Magistrate doesn’t know what to do with them, but knows they’re cluttering up a criminal justice system which is not designed to cope with such profound problems. It’s expensive on the tax-payer and cruel on the unfortunates caught up in a society in which they can’t cope. Jim Brown, the man behind the On Probation blog, and he reckons it ain’t prison, it’s not criminal justice. It’s (for want of a better description) the workhouse which could deal with profoundly disturbed people with chaotic lives.

Over the years many such men have come my way professionally and undoubtedly they continue to pose society a problem. When I started out there were people called ‘tramps’, but the state at that time had a nationwide network of Reception and Resettlement Centres or ‘spikes’ that were open 24/7 and accepted men in any condition….

…The last such facility closed only around 1989, all victims of the growth in political correctness that labelled such places as demeaning and dehumanising, but in the process handily avoided the knotty question of how such people were to be dealt with in the brave new politically-correct world. The sad fact is that there was never adequate replacement provision in either quantity or scope. Some might be tempted to ask if they worked? My answer would be that even if they didn’t, wasn’t it a rather more humane way to try and deal with such people than the situation we have today? We simply don’t have the right facilities anymore and no agency claims any responsibility.

I don’t know whatthe answer is either but I feel more enlightened as to the problem by following these two blogs. If you actually care about society, rather than reading newspapers which simply pander to your prejudices, add them to your daily reading. I suspect this is an area where charity would be the best solution. Maybe there’s something in this “Big society” after all. But who gives to a charity dealing with tramps? After all, who needs that when we have a welfare state…

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