Are the motives for taxation to blame for poverty?

Government needs revenue to do the things that governments do. And, without getting into the slightly loopy world of magic money tree beliefs, the only source for that money is the taxpayer. This, not the stuff about austerity or ridiculous arguments about 'punishing the poor', is why lower taxes are desirable. Only a relative few anarchistic folk actually believe that there shouldn't be any tax (or government for that matter) and this means we have to put up with politicians making decisions about who to tax and how much to tax them.

It's also true that in the UK's modern liberal democracy part of that taxation is intended to relieve poverty. And this is right and proper - the criticism of the very bad report by some law professor from New York wasn't that there's no poverty but rather that the chap seemed to think poverty was deliberately created by an evil government (I paraphrase his risible 20-odd page report). The report also ignored the self-evident fact that the reasons for poverty are not entirely external economic, fiscal or environmental forces acting on individuals. Simply using taxation for redistribution does not resolve the problem - P J O'Rourke, in 'All the Trouble in the World' pointed out that, when you add up the poverty (the gap between what people have and what we think they should have) and subtract from it the money spent by government on relieving that poverty, there is no poverty in the USA.

The same goes for the UK - we spend over £100 billion every year on projects and programmes intended to alleviate poverty and for some reason this has failed to get rid of that poverty. It could be that £100 billion isn't enough (I doubt this) but it is more likely that, as with a great deal of what government does, that money is badly spent - we give money to people who don't need it (wealthy pensioners, for example) and take money away from those who probably do (homeless young men maybe). We behave like the operators of Victorian workhouses towards some groups (those unemployed young men again) punishing them for minor mistakes, disorganisation and oversight whilst we lavish money without question on others (middle class mums perhaps).

It seems to me that the problem here isn't simply that government is bad at spending money efficiently (it probably is) but more that the motive of the people levying the taxes and managing the handouts is about punishing wrong behaviour or choices not the effective collection of the cash needed to provide the services and support people require. It's like this:

The avowed point of the taxes, according to Macron, is not just to subsidize environmental programs, but to force people to "change habits" by making fossil fuels more expensive.

Now you might be nodding and saying "absolutely, climate change y'know" but the reality is that this is the same mindset as that which asks the benefit system to withdraw cash from some 30 year old recovering drug addict who forgets an appointment. It's a short journey from nudge to freezing in a tatty sleeping bag in a Manchester shop doorway. Government really does believe that its purpose is to shape us into better people - thinner, less drunk, without nicotine-stained fingers, quietly employed. In the civil servant's (and too many politician's) mind we should be Mr Potter's 'thrifty working class' living in homes kindly rented from grand organisations, municipalities and supposed charities. Look at the great and good of local government as they get all excited at the prospect of building more council houses to cram the poor into - a new generation dependent on the state for the roof over their head. It may be better than Potterville's slums but it's not inclusive, optimistic or aspirational.

It makes me angry that conservatives don't say this, choosing instead to treat most of the poor as Mr Doolittle - the undeserving poor to be controlled or managed rather than people who, given better incentives, will stop being 'undeserving' and become the sort of aspirational citizens government keeps telling us they want ! The motives for taxation - changing bad habits as often as raising revenue - are the problem and government needs to focus its efforts on actual social outcomes rather than on vain attempts to create the perfect man through fiat, order and direction.

Poverty is a scourge but, given the money we (supposedly) put towards its relief, it should not persist. That it continues isn't a failure of capitalism or the market, it is entirely the failure of government - bad policy, misplaced priority and the inevitable buying of votes by promising free stuff to people - wealthy pensioners, middle class mums, public school kids heading to university - who really don't need it. The sad truth is there's no votes in eliminating poverty, no incentive to get rid (what would the growing poverty industry of think tanks, 'campaigning' charities and consultants do?) of its curse, and every incentive to carry on blaming the poor for being poor rather than government for putting its efforts into looking like it cares rather than seeing less poverty as a measurable, achievable outcome from over £100 billion in public spending.

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In which Professor Mazzucato discovers government is useless

Various people had a bit of a laugh about a tweet from economist Mariana Mazzucato moaning about the officious nature of the UK Home Office.



The humour came, of course, in that Professor Mazzucato is a popular advocate of the argument that it's the state that drives innovation with the private sector toddling along behind making profits from all those clever things government has done (I oversimplify but not by much). The Professor's entire opus is about how government is brilliant.

I am, however, a little more interested in what this Tweet tells us about government. Mostly it tells us that, when it comes to administrative functions, government is rubbish. This doesn't matter when all it represents is some inconvenience and annoyance to an economics professor but it does matter when the issue in question is whether a family has any money at all. The other day, I was told that a housing association was giving out food parcels to some of its tenants because of the delay between getting an assessment under the new universal credit (or indeed, on occasions, other benefits) and actually getting any money. This isn't because the benefit isn't enough but simply a case of government being unable to process simple administrative tasks efficiently (and yes I know the system is complicated but that's about getting the right boxes filled).

We encounter example after example of this administrative uselessness, most of it annoying and delaying rather than life threatening and all of it reminding us that huge bureaucracies operating without either adequate scrutiny or any competition are, in truth, the very antithesis of innovation. Government, the acme of monopolistic bureaucracy, has always operated this way - in 'The Castle', Franz Kafka summed how this governmental incompetence is married with arrogance and a lack of self-awareness to great the impenetrable barrier of bureaucracy:

“Surveyor, in your thoughts you may be reproaching Sordini for not having been prompted by my claim to make inquiries about the matter in other departments. But that would have been wrong, and I want this man cleared of all blame in your thoughts. One of the operating principles of authorities is that the possibility of error is simply not taken into account. This principle is justified by the excellence of the entire organization and is also necessary if matters are to be discharged with the utmost rapidity. So Sordini couldn’t inquire in other departments, besides those departments wouldn’t have answered, since they would have noticed right away that he was investigating the possibility of an error.”

What Professor Mazzucato, a highly regarded denizen of Britain's Castle and an advocate of its greatness, has discovered is that the system will do what the system does, will do that slowly and badly, and regardless of your job title will treat you with the same impersonal disdain you thought was reserved to common sorts on benefits. Your form will sit in a pile, will be processed in due course and will be returned if it is incorrect or incomplete. And there is no option to expedite matters by buying the mayor an expensive cup of coffee.

In the end government is useless. Then we revolt. And, as Kafka said about revolution:

"Every revolution evaporates and leaves behind only the slime of a new bureaucracy."

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Migrants on benefits, mosquitoes, arts funding and other links you'll like

Spooky Bradford

"I didn't even know I could get benefits" - a reality check on migrants and the benefits system

“And actually it doesn’t bother me, all this immigration debate. I’m too busy. I work full time; I have three kids. But nobody I know came here for benefits and I don’t think not getting them will stop anyone coming. Maybe one or two. There’s always someone. But I know many, many more British people who live on benefits than east Europeans.”

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Kill all the mosquitoes

"Mosquitoes spread Malaria, Chikungunya, Dengue Fever, Yellow Fever, a variety of forms of encephalitis (Eastern Equine Encephalitis, St. Louis Encephalitis, LaCrosse Encephalitis, Japanese encephalitis, Western Equine Encephalitis, and others), West Nile virus, Rift Valley Fever, Elephantiasis, Epidemic Polyarthritis, Ross River Fever, Bwamba fever, and dozens more."

So exterminate them - all of them

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So you don't do politics? Think again.

"Politics is omnipresent wherever humans negotiate over power and governance. We speak of “office politics” or “university politics,” and those phrases are not mere metaphors. Our negotiations with friends are a form of politics as well, as we figure out where to go out to eat or what show to see. Our romantic and familial relationships are full of similar negotiations about language, persuasion, power, and mutual consent. To say we “don’t do politics” is to have a narrow notion, in Ostrom’s view, of what constitutes being a citizen in a society where democracy is a feature of so many institutions."

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Virtue signalling as conspicuous consumption.

"Rather than trying to one-up one another by buying Bentleys, Rolexes and fur coats, the modern social climber is more likely to try and show their ‘authenticity’ with virtue signalling by having the correct opinions on music and politics and making sure their coffee is sourced ethically, the research says."

...interesting and challenging

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Nothing new about retailing as performance (ask any market trader) - and it's back...

One of the key themes emerging from the presentations was that creating face-to-face customer experiences is vital to retailers not only because of the value to audiences in-store but also because of the huge value of customers sharing their experience across social media platforms. Sophie Turton from eConsultancy, who spoke at one of the learning talks, noted that:

“Instead of creating content, retailers should be creating opportunities for content creation – instagrammable moments, inspiring experiences.”

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The Urbanophile on Charles Taylor's 'A Secular Age'

"The creation of the buffered self had consequences, however. By disconnecting us from the world, and draining the world of meanings, the buffered self creates a sense of improverished existence. That is to say, it produces the pervasive modern sense of malaise long commented on by Freud and others. But whereas Freud saw malaise as the inevitable byproduct of the sense of guilt necessary to make civilization possible, for Taylor it is rooted specifically in Western modernity’s sense of the buffered self."

Fabulous stuff.

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And how all the arts funding still goes to London:

The report also highlights that Arts Council England’s decision to move an extra 5% of Lottery funds outside London amounts only to an “improvement outside London of 25p per head”.

Its Rebalancing Our Cultural Capital report in 2013 also claimed that ACE was allocating more than five times as much spending per resident to London organisations as those outside the capital in 2012/13.

Enjoy!!

Policies that work - the benefits cap...

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We were promised destitution and other horrors but...

Between April 2013 and August 2014, 51,200 households had their housing benefit capped, according to a Department for Work and Pensions statistical release yesterday. This number had dropped to 27,200 households by August 2014. Forty per cent of those no longer subject to the cap – 9,600 households – are exempt with an open Working Tax Credit.

Unpiggle the language and this is telling us that we capped the benefits and, lo, the people having that cap imposed went and got jobs. Well I never!

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Food poverty is a failure of government. Capitalism is the solution.

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I'm a capitalist. A proud capitalist. I believe that, without capitalism, we'd be poorer, less healthy, shorter lived and less happy. The evidence of the past two hundred years tells me this is so.

The thing about capitalism, about those free markets, that neoliberalism is that it celebrates everything that is good about people. I know you've been told by your teachers and by the man on the telly that capitalism is all about greed and rapacious exploitation. But they are wrong - capitalism is about exchange, cooperation, creativity and, above all, foregoing something now in the anticipation of more tomorrow.

I am always curious when people seek affirmation of their mistaken belief about capitalism in what they term 'market failure'. By this, they don't mean that the market actually stopped working (markets just don't do this) but that the market didn't deliver the outcome they desire. So it is with food banks. We are told that these little local institutions are a consequence of capitalism's failure because it has failed to put food on the table of some families.

Except this isn't the case at all is it. Food banks are a consequence of the failure of government not the failure of capitalism or the market. Look at those figures from the Trussell Trust - over half of those arriving for support are doing so because the benefits system has failed them in some way. So the market (a generous, charitable market in this case) steps in to provide - for we should be clear about charity, it is a private matter driven by the energy of people who want to help not by the direction of the state.

The second important lesson in this is that people's generosity is made more effective by the success of capitalism. All those people can afford to forgo something in order to help others have dinner - if we'd not had that neoliberalism we would still help but the help would not be enough. Children really would go without rather than getting food.

We have still got poverty - and be clear that poverty is absolute material lack not some abstract measure of inequality. But we are able to respond to that poverty both by urging the government to act and also by doing something ourselves. Even if that something is as little as giving some tins of beans and a bag of pasta to the food bank. However, if we want to eliminate that poverty - not just through relief but forever - we need to support capitalism because that is the best, we could say the only effective, route from poverty to comfort.

In an inverted way the wealthy and powerful can afford to reject capitalism - they're already on top of the pile. For the poor, the market and its freedoms should represent the route out from not knowing where tomorrow's dinner will come from. Sadly, some of those wealthy and powerful protect their wealth and power by telling the poor their state is due to freedom and the market rather than the reverse. Yet every exchange in that free market adds value whether it's a gift freely given, a bartered exchange or a cash transaction. Those who try to stop this liberty are the true creators of poverty, people who have the good things using their power to prevent others using capitalism to getthose good thing.

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Scroungers?

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Such is the rhetoric I believe - we are asked to believe that either there are loads of people sitting on sofas, smoking, drinking cheap lager and eating sweets while defiantly refusing to work, or else that eager, smart and enthusiatic folk are valiently (and vainly) struggling to find work.

And every now and then we get a little insight:

Scrutinising the period from July 2012 to June 2013, the Labour Force survey found that 65 per cent of people across Bradford were in some form of employment, but 20 per cent, or a fifth of those questioned, were classed as “economically inactive” and “not wanting a job”.

This group chose not to disclose a reason why they did not want to work, ignoring options such as being on long-term sickness, looking after a family home or being a student. 

So this group - about 70,000 people - aren't looking for work, aren't raising a family and aren't ill. Are they our much debated 'scroungers' living off benefits, occasional cash-in-hand jobs and petty crime? Or is it even more complicated than we're told?

It could be that there are problems with the survey - although one hopes that the Office for National Statisitcs (ONS) knows a thing or two about this and is likely to get it right. Perhaps some of these people have literacy or comprehension problems making the findings unreliable. Or there really are a lot of people in Bradford who aren't working, aren't caring and aren't ill but aren't looking for work. Doubtless they are the drone-like scions of Bradford's millionaire class!

Even if only a proportion of this group are actually lounging around doing sod all on benefits it says a great deal - about the system, about education and about how tolerant we are as a society. I think of other people who're turning the heating down a notch this winter, cutting back on life's little pleasures, perhaps forgoing a holiday. In part so their taxes can pay for people who have no intention of getting any work.

There is, perhaps, a limit to tolerance?

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Why Jonathan Portes should shut up about migration - from someone who agrees with him...

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“These transitional places – arrival cities – are the places where the next great economic and cultural boom will be born, or where the next great explosion of violence will occur. The difference depends on our ability to notice and our willingness to engage” Doug Saunders

The problem with the discussion of migration is that the public debate is characterised by adherence to unquestioned and polemical positions – either migration is a bad thing that places undue pressures on jobs, culture and public institutions or else migration contributes to economic growth and underscores the idea of a free nation.

Now those who know me will know that I’m much closer to the second of these positions. Indeed, the idea that a nation is made up of people who want to be there (rather than who just happened to have been born there) is a far healthier idea than the sort of racially or culturally determined ideas of nationhood that are preferred by many opposed to immigration.

However, the comments from Jonathan Portes – a sort of “my carefully chosen facts are the only facts” commentary reveal a deep unpleasantness in the debate (an unpleasantness more usually associated with those who say we’re full up and call for ever more draconian restrictions on migration).

The real point here is that the presence of migrants in the UK – from wherever they come – must have an impact on the home communities. Portes presents statistics showing that immigrants are more likely to be working than is the case for the population as a whole but doesn’t recognise that this is only part of the picture. And then, without presenting any facts, Portes then makes this sweeping statement:

So, once again, we are left with the conclusion that in the absence of immigration the public finances would be in an even worse state – we'd be spending somewhat less, but we'd lose even more than that on tax, both in the short and the long run, as the OBR has pointed out.

So we move from a very specific assessment – of migration from EU accession nations – to a general observation about the economic benefits of migration. A benefit that reflects every sort of migrant – everyone from billionaire Russian oligarchs to penniless refugees from Burma. The problem is further confused by this:

But since the non-activity rate is lower in the EU migrant population as a whole (and remember many non-active EU migrants will be family members of those who are active) overall this simply confirms the conclusion found by other studies – EU migrants, like migrants in general, pay in more than they take out on average.

This simply doesn’t prove the point that Portes is making, certainly not in the short run and absolutely not in the case of migrants from Eastern Europe. Given that most of these recent immigrants are in low paid work, the amount paid in is less and many will be receiving in-work benefits (tax credits, housing benefit) and universal benefits (child benefits). So the fact of them working does not mean that they are net contributors to the system.

And beyond the discussion about the NHS, we have to provide education for children – including for many the £900 per child pupil premium - we have costs falling on social services and other exceptional costs. It is unhelpful and misleading for Portes to dismiss the short-term effect of migration on public services with what amounts to ‘pah’.

What Jonathan Portes needs to learn is that, if we are to make the case for migration as a benefit, we need to do so positively. Treating those who are concerned about migration as if they are a bunch of pseudo-racist nutcases does not help at all – rather it reinforces the view that migration benefits middle-class professionals like Portes and me, so who cares about the impact on working class communities or the worries about schools, hospitals and social services.

I headed this comment with a quote from Doug Saunders, from the preface to Arrival City, the story of how migration is transforming the world for the better. That is the message we need to get across rather than the grubby and snide use of selected facts to make what is, ultimately, a petty point.

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Thoughts on work, welfare and Bradford...

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So I'm sat at the breakfast table in a North Yorkshire B&B where, by happenstance, everyone present has a current or past connection with Bradford. The conversation chitters back and forth, what people do (or don't do), memories of Bradford and inevitably a discussion about Bradford's 'problems' such as they are.

What struck me however wasn't the shared concern about Bradford but the near universal view that, at the heart of the problems - 'grooming' of young girls, crime, city centre decline, the persistent failure of estates like Ravenscliffe, Holme Wood and Allerton - sits the benefits system. Not immigration, not the corruption of youth by radical clerics and not even the legacy of industrial decline. The benefits system.

The discussion touched on using pregnancy as a route to housing, on why Bradfordian's don't take jobs killing chickens despite the lack of work and how the Asian community now seems to have a more enterprising outlook that the white population. And we kept coming back to there being no - or insufficient - incentive for someone to take that chicken-killing job.

What my fellow politicians need to understand is that, if we proceed to ignore these views and listen to the welfare industry's special pleading, we reveal ourselves to be just as out-of-touch as that industry. Everyone but us seem to see a world filled with people living off benefits, cash earnings and petty crime - a world of smuggled booze and fags where social and family arrangements are determined by the best way to maximise income from benefits rather than by the desire to support a future generation to success.

Those people sat round that table may be wrong - for sure we aren't representative. But those voices remind me that the need for benefits reform isn't about saving money. It's not about cuts. And it's not about "demonising the poor" as so many advocates of welfarism claim. No.

We need benefits reform so as to give the people - and especially the young people - of Bradford's inner city and Bradford's estates the right chances and incentives to succeed, to get to a place where an Incommunities flat in Buttershaw isn't the only choice.

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Sorry Frank & Nick, stopping immigration won't end unemployment

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Frank Field and Nicholas Soames - in a sort of unfunny political version of Laurel and Hardy - have told us that the way to end unemployment is to stop immigration. Or rather, as is often the case with these observations, they've left the ordinary bloke to draw that conclusion from what they say:

“[An] area that needs to be considered is whether EU members should have powers, during periods of high unemployment, to restrict the free movement of labour, at present guaranteed in EU law,” the MPs say. 

Note the essential conceit here. We joined a union - a common market - that allowed for free movement. It means British workers can ply their trade in Rome and Berlin and that we can retire to the warmth and comfort of a Costa del Sol apartment. It also means that Italians and Spaniards, Slovaks and Romanians can come here. That's the deal.

And it's a deal that we benefit from - as Ms Raccoon reminds us:

They clean the toilets at Stanstead airport. They queue for mini-buses in the grim early morning British weather for the chance to pull carrots out of the East Anglian soil. They stand for hours gutting bloody chickens in Herefordshire warehouses. They collect together in windswept sidings in Swindon, anxious to be one of the chosen few given the chance to throw the occasional bucket of water at a British Rail train. Some of them stand at traffic lights, keen to earn a few bob by scraping the dead flies off your windscreen. They swab the floor after the Billingsgate fishmarket has finished for the day.

And this is entirely the point. Back in the 1950s and 1960s when there was a real labour shortage, when we had very little unemployment, immigrants came to do the jobs we wouldn't take - textile mill night shifts, cleaning hospitals, driving buses. The sad truth is that, despite high levels of youth unemployment, immigrants still come here to do the jobs we won't take - hard jobs that don't pay that well but that need doing.

And why is this? The answer is there plainly before our very eyes - emblazoned across the front page:

The Work and Pensions Secretary said that, unlike other European nations, the “reality is that this country is not cutting welfare”. He added that “all those on benefits will still see cash increases in every year of this Parliament”. 

That's the reason. Those immigrants aren't coming for the benefits, they're coming for the work that people on benefits in Britain won't do. And if we turf out the fruit-pickers and chicken killers, send them back to Eastern Europe, what will happen? Will those jobs get filled? Will out young folk step up to do them? Why on earth should they when a slightly poorer life (but less strenuous and demanding) is possible on benefits. A life filled with people rushing round campaigning on your behalf - campaigning for some proud fool who does take a low wage job to pay taxes to keep others in benefits.

Unemployment is our problem. Immigrants don't cause it and don't cure it. Perhaps we should stop trying to blame them?

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Well Bishops, if you're concerned about poverty, do something...

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...other than the trite - and frankly pathetic - option of writing a letter to the Sunday Telegraph.

The Bill will mean that for each of the next three years, most financial support for families will increase by no more than 1 per cent, regardless of how much prices rise.

This is a change that will have a deeply disproportionate impact on families with children, pushing 200,000 children into poverty. A third of all households will be affected by the Bill, but nearly nine out of 10 families with children will be hit. 

Now I appreciate that this letter has been put together by the organisation once know as the Church of England Central Society for Providing Homes for Waifs and Strays (and where I once worked). And that this charity, charged as it is with a mission of care for children, is bothered about the impact of government actions on those children.

However, if these 43 bishops really cared they would do something else. The bishops could give up part of their comfortable wages to the Children's Society, they could throw open the doors of their palaces to the poor and they could take food to these families who are struggling.

Having done this, the bishops could visit the rich and successful communicants in their diocese and urge acts of Christian charity upon them. They could write letters to be read out in parishes urging Anglicans to help look after these families.

But the bishops have done nothing of the sort. Instead, from their gilded pulpits they criticise, carp and wail. And then return to their fine homes and comfortable world. Maybe government should make a different decision, perhaps some few families will find it harder and the lobbying is justified. I've said before that caring is not something that can be sub-contracted to government - it has to be a personal act.

The bishop's letter would carry more weight is if started:

"Today, we have agreed to personally support families faced with poverty and we are asking others within the church to do likewise. Nevertheless, we would urge the government to amend the Benefits Uprating Bill so as to protect children..."

It didn't. So a pox on them.

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The poor can't be trusted with money, can they?

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Alec Massie is a pretty mild-mannered writer. So it is a shock to read this:

I  wonder how many poor people, far less people on welfare, Mr Shelbrooke encounters. Some, presumably. But, my, what a vile little authoritarian he is. It has evidently escaped his notice that the reason many poor people spend a disproportionate quantity of their meagre resources on gambling is that they have such limited resources in the first place. It may not be an advisable or profitable policy but it is at least an understandable one.

For that matter, cigarettes and alcohol are not necessarily luxuries. They might instead be considered small pleasures that make life a little less ghastly. Especially when you lack means.

I notice, mind you, that Mr Shelbrooke makes no comment on whether it is OK for middle-class mothers to spend their child benefit on gin.

It may well be that Mr Shelbrooke has some support in these proposals. They are just the sort of saloon bar policy – I can picture him, G+T in hand at some golf club do, holding court with ways to make the unemployed behave properly. And it is this image rather than the policy that causes the problem. It is the moralising, patronage of the ruling classes to those less fortunate. We kindly provide these indigents and unfortunates with the means to sustain themselves and they promptly toddle off and spend it on cheap lager and superkings.

I lose count of the times when I’ve described the circumstances of the poor and why this leads to – almost requires – the consumption of small pleasures: booze, fags, sex and TV are what sustains these folk in what is a crap life. But people like Mr Shelbrooke from their blazered comfort choose instead to try and order the choices of the poor since, in his view, they are unable to make such choices without his help and direction.

"When hard-working families up and down the country are forced to cut back on such non-essential, desirable, it is right that taxpayer benefits be only used for essential purposes."

This approach describes entirely the problem facing the Conservative Party. People support benefits reform – the objective of making working financially more attractive that a life on the dole is admirable and overdue. But this is not about condemning the lifestyles of the poor, it’s about the practicalities of allowing these people to live while they – hopefully – sort their lives out. Patronising and judgemental policies such as this “welfare card” idea (and other idiocies that include minimum pricing for booze) just get people’s backs up.

Put simply, it isn’t the government’s job to judge other people’s lifestyle. And when a wealthy MP does this, the ordinary person looks up, shakes his head and mutters obscenities under his breath. If people like Mr Shelbrooke want to get re-elected in their marginal Northern seats they’d do well to take heed of this and start talking instead about responsibility rather than about dictating the choices for people with the misfortune to need benefits.

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The BBC - making the case for benefits reform (without meaning to)!

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The words are the regular BBC, soft soap, tear-jerking, sob story:

The family receive a total of £30,284.80 a year in benefits - well over the £26,000 cap proposed by the government. But, says Raymond, "If these proposals go through we will take a massive hit to our finances - and it's not as if we could move into a smaller or cheaper premises.

"I see eight people here having to choose between eating or heating."

Oh dear, this is terrible - how can the wicked coalition government inflict such suffering on this poor family!

Look again - the BBC provide a handy guide to the families expenditure - which includes:

Sky TV subscription - £15 per week
Mobile phones (plural) - £32 per week

...and a weekly shopping bill including 24 cans of lager, 200 cigarettes and a large pouch of tobacco. That's nearly £100 a week on booze and fags alone! And I'm guessing these aren't essentials to life?

After the cap is introduced this family will lose £82.40 per week. Seems to me that just cutting down on booze and fags plus moving to freeview telly would go most of the way to closing that gap - no need to turn the heating off or starve the kids, is there!

Bring on the welfare reform - if this is typical (and the BBC suggests that it is) there's plenty of room for savings without kids going without food or grandma dying of cold.

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More on the need for benefits reform...

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Some readers may be familiar with Debbie Purdy the 'right-to-die' campaigner but she's been in the news again. This time the campaigning lady was in the Magistrates' Court for non-payment of Council Tax. And, while there she said this:

...benefits officials told her on five occasions that she would get more money if her musician husband Omar Puente stopped working.

“It is outrageous. The benefits system is supposed to be a safety net, not a hangman’s noose,” she said.

The couple’s benefits were recently reviewed and officials told them if her husband was unemployed they would get further benefits such as free council tax, free prescriptions and help with paying the interest on their mortgage. 

Tell me again about having a system that rewards working?

...

Thoughts on the Gospel According to St Frank

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So Frank Field, Poverty Tsar has pontificated. And I suppose that other wiser heads than me will look in detail at the words, consider their import and add the work to the huge collection of work on poverty, its alleviation and its causes that clutters our collective shelves.

Now Frank is two things - a serious and muscular christian and a social democrat. We need to bear these two factors in mind when considering the impact and importance of his words and his prescriptions for the treatment of poverty.

Some initial (informed) comment comes from Langtry Girl and Wat Tyler (one has to respect pseudonyms). Here's Langtry Girl expressing her concerns that Frank is getting away from the importance of money:

I think Frank Field is a good man. I also know, both from personal experience and from research that inter-generational poverty, is one of the toughest nuts to crack. However, given his remit, and given this Government's philosophy, this report misses the point - poverty is about money, and no amount of research can get us away from that.

Now, I worry that Langtry Girl let's her own specific experience get in the way of considering the aggregate but her observation that poverty does have something to do with money remains a sound observation. Which brings us to Wat:

Spot on Frank. We have long believed that dishing out yet more cash to poor families is missing the point. In general, even the lowest incomes today have moved far above what most of us mean by poverty.

So the problem isn't more money - and Wat is right in observing that the poorest British citizens today are better off than the average citizen was in 1960. By a substantial margin.

Sadly, neither Wat or Langtry Girl offer a strategic alternative to Frank's belief that it is the first five years of life that matter and that the state should concentrate it's efforts in some way on babies and toddlers. Frank's key conclusion that:

To drive this policy the Review proposes establishing the ‘Foundation Years’ covering the period from the womb to five. The Foundation Years should become the first pillar of a new tripartite education system: the Foundation Years leading to school years leading to further, higher and continuing education.

My worry here is that we are moving further towards baby farms - towards the East German model of childcare where babies are left in the care of the state from a very young age. I also worry about the teaching of "parenthood" - we will not get firm, strong parenting as a result of this but a mish-mash of 'non-judgmental', undirected psycho-babble laid on a plate before young people.

It seems to me that Frank Field is using the tragedy of poverty as an excuse to introduce a christian socialist, grandpa knows best approach to bringing up children where the state mandates the 'right approach' to parenting and applies sanctions and controls to any one - and especially working class anyones - who step outside this 'right approach'. I'm sure Frank means well. His diagnosis is sound - and very familiar. But prescribing more government seems to me as the wrong solution. The result of this will be more children taken into care, more unjustified 'childcare interventions' and a new industry of 'parenting' - nothing that seems to me as addressing the problem Frank Field was asked to address.

And please tell me that Frank Field didn't propose a "working-class Mumsnet"? That is the stupidest, most ignorant and most patronising thing I've heard in ages. Mumsnet - a truly awful institution in my view - exists because mums set it up and ran it. It succeeds because it has losts of mums using is. It isnt there because the Government mandated it should be there. If the world wanted a working-class mumsnet, there would be a working-class mumsnet.

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Benefit fraud: In defence of the bounty hunter!

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Fraud, error and administrative cock up are a real problem for our benefits system. Despite this we sink to the level of ‘debate by headline’ where the prejudices and preferences of different sides to the argument are paraded like a political version of a 1960s Brighton Bank Holiday.

What follows is an attempt to put a little perspective into the argument – to escape from silly ad hominem and straw man arguments and actually talk about the issue – fraud, error and administrative cock up in our benefit system. And let’s be clear this stuff is there – benefit fraud isn’t the invention of frothing right-wing pundits writing in the Daily Mail. Every Government in my memory has, at some point, announced a ‘crack down’ on benefit fraud (albeit mostly to get a headline or two).

So what’s the deal? How big an issue is fraud and what should we do about it? Well much has been said about it – anecdotally and statistically and the new Government is no exception:

“We are looking urgently at different options for reform. Tougher penalties for
fraud, more prosecutions, encouraging those who know fraud is taking place to come forward, and making greater efforts to reclaim money that's wrongly paid," the prime minister wrote. "We will look at all these things and more. Including, for example, using more information from third parties such as credit referencing agencies to identify circumstances which are incompatible with the benefit claim. I have asked Iain Duncan Smith [the work and pensions secretary] to draw up an uncompromising strategy for tackling fraud and error which we will publish in the autumn."

Cue frothing media debate and a stream of absolute nonsense from pundits and politicians on all sides – from scaremongering about the use of credit referencing data to hyperbole about ‘bounty hunters’. Plus, of course, the compulsory “it doesn’t really matter, it’s just a drop in the ocean of Government spending” and “why are we worrying about benefit fraud, what about tax dodging?”

So, from me, an attempt at a more balanced analysis!

Firstly, benefit fraud is a problem – somewhere between £1.1bn and £5.5bn worth of problem. And it is compounded by the additional problems of overpayment, underpayment and ‘claims in error’. Once we shake all this stuff down there’s something around £10bn of spending involved – which is a lot of people’s taxes however you want to slice them (I would net this off against under-claiming of benefits except the Government already does that in its projections on public spending so to do so would be double counting – just as is the case with estimates of tax revenue).

The problem is that ‘clamping down on fraud’ costs money – you need to employ armies of fraud investigators and I’m sure they don’t come cheap. So there must come a point where further clamping down on fraud – however morally justified – actually costs the taxpayer more money than allowing the fraud to continue. Unless, of course, you can find another way to ‘fight fraud’.

Well there are two important considerations here – what negative incentives can we build in to prevent fraud? The obvious one is to catch more fraudsters (this influences both the fraudster caught and the whole market since the more caught the less incentive to cheat). Except that we’ve already spotted how this doesn’t make fiscal sense. Unless we shift the Government’s risk (in employing fifty grand’s worth of investigator) into the private sector. This is called by some ‘bounty hunting’ but it might be more sensibly named speculative private investigation – you bring evidence that leads to a successful prosecution for benefits fraud we pay you an agreed amount. This amount would represent the median cost of a benefit fraudster to the public purse – the only risk the government faces is that the investigator behaves badly. And, as far as I know, we have other laws to deal with that!

The other approach is to make is less profitable for the fraudster to take the risk – either because of the increased chance of being caught or else because the balance of risk and reward isn’t good enough. In a less complex system based on less information, fraud would be less profitable (and error less likely – addressing a related problem). At present we have a complex system that is relatively easy to game which results in a great deal of abuse – some of which is openly fraudulent while the rest is what might be called ‘pushing the envelope’.

As it stands – and given the number of claimants and the amounts of money involved – there is no chance of any Government making much of an impact on fraud. And with what we might call “fiscal ullage” running at a maximum of 2% and probably less, it makes little sense (beyond headline moralising) to run such programmes and campaigns. Unless of course you take my advice and shift collection risk into the private sector – which means fraudsters will either get caught or else the problem will disperse because the risks are too high. Simple really!

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I've never voted Labour before...and JK Rowling has reminded me why.

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When I worked in advertising, we used to describe the kind of copywriting displayed by JK Rowling in The Times as “regurgitating the brief”. Rather than assembling any creativity, any spark of original thought, any personal research, the copywriter simply puts some words around the brief presented to them by the advertising planner (that’s me). I’d done the digging, dredged up a few choice facts and figures (maybe the odd focus group), done an outline of the brand positioning and suggested a way in which the writer might like to position the work. If all the writer did was lazily churn out a couple of hundred words telling me precisely what I’d told them, I would be less than pleased.

Maybe she did her own research but in this piece JK Rowling appears to have ignored entirely many actual facts about the numbers, nature and problems associated with being a lone parent – and most importantly chooses to ignore entirely the life chances of the children involved. Indeed, JK Rowling’s sob story is entirely focused on self – on her lonely struggle against the evil Tory government, on how her sheer endeavour dragged her from the depths of despair to heights of authorial success unparalleled in modern times despite the best efforts of Tory ministers to stop her (conveniently avoiding the two years freeze on lone parent benefit rates that Gordon Brown over saw in 1997 and 1998 by getting her book published).

J K Rowling made no reference to the Children’s Act – that piece of Thatcherite legislation that gave protection to single mums (or rather their offspring). Or for that matter the Family Law reform Act 1987 which abolished the legal concept of illegitimacy. Nor did our successful author mention those Tory changes to benefits that extended and enhanced the money given to women unfortunate enough to find themselves out of work and supporting a young child. And JK omitted to mention that no new benefits for lone parents have been introduced since 1997 (although some have been merged and made simpler).

However, what I found most sad about JK’s sorry tale is that the financial support for her and her child – the support that enabled her to qualify as a teacher, write one and a half novels and plan for a further five novels. That financial support came from a Tory Government and without it Ms Rowling would not have the life she enjoys today. Instead of recognising how such support can help mums achieve, JK lurches instead into a series of rather snide digs at David Cameron’s background, has a really rather sad sideswipe at Michael Ashcroft and grossly misrepresents Conservative proposals on welfare before finishing with a one-sided recollection of past times.

But worse still JK does all this while dismissing the contribution of voluntary organisations and charities to supporting people through unemployment, with the trials of single parenthood and with the challenging task of building up the confidence and motivation to live a truly independent life. Only Government is fitted to support these people says JK. Maybe she hasn’t noticed how loads of that support she talks of from Labour is now delivered by private businesses, by charities and by voluntary groups?

Perhaps, she’d like to come and talk to the people I work with – people giving support to teenage mums, people helping homeless kids get housed, people giving advice and support to those out of work for the longest time and people working to give communities the skills and confidence to take control. It seems JK would prefer supine, forelock tugging communities fit only to hold out a quavering hand to the goodness that is government.

...well I don't. I want strong people. Strong communities. Confident neighbourhoods. And more mum's with the chances JK had back in the 1990s.

It seems I won't get that from Labour.

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On worklessness....

I know of almost no-one who likes the term “worklessness”. Not only is the word clumsy but it conjures up an impression of being powerless, even incompetent, certainly unable to undertake that defining societal function – work.

Yet the term has crept into modern usage – not because it is a better word than “unemployment” but because – in the UK at least – that word has become almost useless are a means to describe those who are without work.

The official unemployment figure is currently (October 2009) 2.47 million – it’s highest level for some 15 years. That this many people are without a job is clearly a matter of considerable concern. But hold on…

…this “official figure” bears almost no resemblance to the numbers of people who are “of working age and not economically active.” And this is what the employment pundits mean by “worklessness” – everyone who is without work.

“The employment rate for people of working age was 72.6 per cent for the three months to August 2009.” (National Statistics Online)

That means that 27.4% of people in Britain of an age to work are not working – that is one-in-four folk not earning, not contributing to the economy, just consuming other people’s earnings. And remember the figures don’t include those in full time education – they are assumed to be unavailable for work (although there’s a load of part-time jobs swallowed up by our student population of course).

Some like the BBC’s Mark Easton don’t see part of this (“economically inactive – other”) as a problem – it’s stay-at-home mums isn’t it? Well yes but the largest proportion of those is single parents dependent on benefits (which is why the figure fell less in those Northern cities from 1991 to 2001).

I argued before that something changed in our society back in the 1970s and it might just have been our relationship with work – the break-up of traditional employers in the factories, mills and mines and the different relationship between the worker and the manager. But whatever it is, the change in male economic inactivity – in “worklessness” – since 1971 is enormous. And the significance of this change has been masked by a huge drop in the rate of female economic inactivity.

“Among men, the inactivity rate has grown from 4.9 per cent in 1971 to 16.3 per cent in 2008. In comparison, the female inactivity rate has declined from 40.6 per cent in 1971 to 25.8 per cent in 2008.” (Leaker, ONS)

As the generation who fell foul of the collapse of traditional industry in the 1970s and 1980s approach retirement there seems to be no let up in young men and women leaving school and doing nothing. As the OECD recently reported the 10.7% of UK school leavers “not in employment, education or training” was higher than in all but four of OECD member countries (Turkey, Israel, Spain & Brazil) – and four times the rate in France.

The term “worklessness” – the need for it to be invented – reflects the abject failure of our policy-makers, political leaders and pundits to see how not working is a problem. Not something that can be managed by raising taxes to pay more people, more benefits. Not something that will be solved simply by the rising of the economic tide. And not something that we can’t see because it’s “somebody else’s problem”.

This lack of work contributes to crime, to ill-health, to mental illness, to drunkenness…but worse it represents the desertion of so many people, condemning them to a redundant life sustained only by the drip feed of benefits. If we want those sunlit uplands we have to focus on the challenge of “worklessness” – on making that word redundant not the poor folk it describes.