Pitting one set of benefit claimants against another is a dangerous game. What’s needed is a welfare system that is fairer all round
Frank Field commented yesterday that our welfare system was broken and required radical reform based more strongly on the contribution principle – so that benefits are paid according to contribution, not need.
Critics have made remarks such as Frank being a ‘Tory in all but name’, as if helping those ‘in need’ is somehow antithetical to Conservative values and that paying according to ‘need’ or ‘contribution’ are mutually exclusive.
I don’t think we can boil down such a complex issue to blunt party politics. Nor do I think an emotive argument about the deserving and undeserving poor helps clarify the issue. The fact is, unemployment benefit has always been contributory, since its inception in 1911. But as we have become wealthier and more civilised as a nation, so we have also sought to look after those who haven’t contributed.
Unpicking whether a non-contributor ‘could have’ contributed but didn’t, or was genuinely ‘unable’ to contribute, leads to an endless splitting of hairs about willingness and ability to work, the state of the labour market and regional job vacancies.
It is somewhat of a red herring, because our problem is not that non-contributors are getting too much – rather, it is that those who have not contributed are getting too little. These are the facts. If you are unemployed and have not contributed sufficient national insurance (perhaps because you have never worked), you receive income-based JSA.
This isn’t the headline £71 you read about – it is means tested, so your savings and other sources of income are taken into account, and your weekly benefit is reduced accordingly (perhaps to a few pounds a week). Also, your partner’s employment status is taken into account – if he or she works more than 24 hours a week, regardless of income, you receive no JSA. Not a penny.
Conversely, if you are a contributor with a long working history, and years of national insurance contributions under your belt, you will get £71 per week. For six months. After that time, you get thrown into the pot with the non-contributors, where the same means testing rules apply – for example if your partner is working, the assumption is they will support you and you will get no JSA whatsoever.
I can’t see how anyone, including Frank Field, would consider the above scenario excessively generous to non-contributors – at most, a fully paid non-contributor would be getting just under £3700 a year in JSA. But it seems obvious to me that the current rules are deeply unfair to contributors, who receive just 6 months of JSA in return for what might be a lifetime of national insurance payments.
And herein lies the reason why attitudes are hardening towards people claiming benefits. Non-contributory benefits are scarcely enough to live on – but is it any wonder that the taxpayer (or more correctly, the national insurance contributor) resents even this paltry amount, when they are receiving exactly the same in return for a lifetime’s work?
Calls to ensure the welfare system ‘recognises contribution’ should not and must not be used as a cover to justify the stripping away of non-contributory benefits. This won’t ‘reward contribution’ – it will simply make contributors feel better about the poor deal they are currently getting by punishing others.
Reward for contribution must mean just that – an increase in the length of time people can claim contributory benefits, or increasing the amount they can claim. This goes for JSA and ESA, (which has also recently been time limited to one year).
I believe if contribution were properly rewarded in this way, then there would be less resentment of and misplaced ill-feeling towards non-contributors – in this economic climate, many are young people leaving college and entering a job market where openings for those with no experience are scarce. Increases in benefits to these groups, in line with the cost of living, wouldn’t seem ‘unfair’ to contributors being fairly rewarded for what they have put in.
Helping those in need and rewarding those who have contributed are not two mutually exclusive outcomes. Indeed the latter is how you ensure public support for the former.
Of course, it is understandable why the government has opted for the cheaper option, of bringing in an ever-less generous settlement for contributors and non-contributors alike. But where the DWP saves, the NHS, local authorities and charitable sector spends by picking up the pieces of destitution and homeless. Costs tend to be shunted rather than reduced.
And it is these arguments the Labour Party should bear in mind when it considers a counter-position to the government on welfare issues, arguing strongly for greater rewards for contributors and greater help for those in need. Frank Field seems to be on the right track, but the idea needs to be far better articulated if it is not to be swept up in this highly politicised and increasingly vitriolic policy space.