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Welfare reform is needed, but must go further and avoid attempts at headline grabbing.

November 30th 2010

For years, the welfare system has been identified as a barrier to people finding work. There has often been little financial incentive for somebody to take low paid, part time or infrequent work as the taper rate – (the rate at which benefits are withdrawn) and tax rate have often meant that in practice people have not been much better off through taking a job. But there are other barriers to employment too – lack of transport, affordable childcare, skills, and discrimination – and often these issues become neglected during discussions on welfare reform. Nonetheless, there is no use pretending that the sometimes illogical and bureaucratic nature of the welfare state has not been a major issue, and the system needs some overdue reform.

It is for this reason that the proposals for a universal single credit are a welcome step forward. Whilst they are not quite the revolutionary reforms claimed, they are nonetheless an overdue evolution of a system that had become too complex and illogical. Unfortunately the political temptation to insert headline grabbing authoritarian measures into the overall idea was not resisted, and so there are rightly serious concerns about one particular measure – the idea of forcing claimants to undertake periods of manual labour. There are also serious concerns about the way people with disability are currently being treated and wrongly assessed, and these concerns have not been addressed in the proposed changes.  Furthermore there are other concerns and unanswered questions, such as whether assessing households rather than individuals create the wrong incentives, and also how the new proposals will affect the housing market.

But by far the biggest question is actually whether the reforms go far enough. The reduction in the taper rate from over 90 per cent to 65 per cent is welcome, but surely cannot be regarded as creating a much bigger incentive to work than the status quo. After all, if somebody proposed to increase the top rate of income tax to 65 per cent, then we would be hearing endless tales of the laffer curve and how such a move would seriously reduce the incentive to work.  Furthermore, by focusing exclusively on taper rates, the other barriers to employment remain unaddressed – or made worse by patronising lectures on the need to get the bus.  It is thus crucial that public transport is invested in and made work friendly (i.e. timetables that reflect people sometimes work late, or shifts), universal childcare is funded (PWC cost this at less than £3 billion), adult education is invested in, and discrimination in the workplace is tackled.

There is sometimes a tendency for concerns and objections to proposed reforms of the welfare state to end up in a defence of the existing system. This is partly because previous attempts at reform have merely been exercises in cost cutting and reducing entitlements rather than meaningful structural reform. However the proposals for a new universal credit are not in this category, and represent serious efforts in tackling a long standing issue. Instead of automatically rejecting the proposals, we should welcome them as a start, and seek to build on them rather than defend an unacceptable status quo.

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One Response to “Welfare reform is needed, but must go further and avoid attempts at headline grabbing.”

  1. […] Written by James Radcliffe, on This is my truth, November 30th 2010.Translated by Laurent Delpit. See the original article in EnglishArticle also translated in: The British reaction following the dramatic austerity measures […]

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