Welfare system

Shadow Labour ministers argue that the party would withdraw benefit from the unemployed for six months if they refused a government-provided job guarantee. The proposal comes in a pamphlet by the Shadow Employment Minister Stephen Timms, backed by a speech by Shadow Work and Pensions Secretary Liam Byrne.

The proposal hardens the party’s position on welfare. Byrne said: ‘The right to work must carry with it a responsibility to work.’ He added, ‘We don’t think that if you can work, you should be allowed to live a life on benefits.’

In his pamphlet, Job Guarantee: A Right and Responsibility to Work, published by the left-of-centre think tank, The Smith Institute, Timms proposes that anyone coming to the end of their work programme attachment, and who had not been successfully placed into employment, would receive an offer – a job guarantee. There would be benefit sanctions if someone refused all the options offered.

The government’s highly controversial Welfare Reform Bill was finally passed by the House of Lords on 27 February 2012 after peers dropped their final resistance to the controversial measures. The Bill, hailed as ‘historic’ by the Prime Minister, aims to save £18 billion from the annual welfare bill and overhauls most of the benefit system.

Key measures include:

Welfare systems targeted on the poor are less effective at reducing poverty than more universal systems, finds the Fabian Society and the Webb Memorial Trust in their report, The Coalition and Universalism: Cuts, Targeting and the Future of Welfare. Using an analysis of international data, the report shows that increased targeting of welfare harms the poor families it is intended to help, and that reducing the extent of universal provision erodes public support for welfare spending, leading to a reduced help for those who need it most. The report notes that these findings are highly counter-intuitive:

The delivery of New Labour’s anti-poverty goals was hampered by an unwillingness to countenance a wider range of labour market interventions to reduce employers’ reliance on low pay, according to a report by the Smith Institute, From the Poor Law to Welfare to Work: What Have We Learned from a Century of Anti-poverty Policies? The authors, led by David Coats, examined a wide range of studies to determine the long-term effectiveness of strategies, both in the UK and internationally, to reduce poverty and inequality. The cornerstone of the report’s analysis is the contention that while redistribution of income through welfare is essential, it can be only one part of the solution to combating poverty:

The evidence from more than a century of reform is that lasting reductions in poverty and inequality also demand pre-distribution policies, notably in the labour market (through work and pay).