Why we really can’t afford the Welfare State

The nasty, cutting coalition of the left-liberal imagination is showing itself to be anything but. Why else would George Osborne’s announcement that he is to cut £12 billion from the welfare budget after the next election cause such cabinet unease? Nick Clegg isn’t best pleased; and the welfare and pensions secretary, Iain Duncan Smith, is apparently resisting anything other than the snail-pace reform that has so characterised the introduction of his much-maligned universal credit.

‘Sources’ contrast the Chancellor’s brutal-sounding ‘lopping off narrative’ with the slow and steady approach of Duncan Smith. But, in truth, the details we have so far suggest that the political elite as a whole lack the cojones to see it through. As commentators point out, cutting housing benefit for under-25s and targeting the relatively well-off who live in social housing isn’t going to make much difference. While the Lib Dems and Labour opposition are almost enthusiastic in their desire to deny old people of their pensioner benefits (winter fuel allowance, television licences, bus passes), the aged Tory heartland seems to have dissuaded even ogre Osborne from considering such an attack on the ‘vulnerable’ – an imaginary group that cuts-phobic left-liberals usually fall over each other to patronise.

On the other hand, while those urging the government to cut much more are right to worry that the measures taken so far, and those so far proposed, are not even nearly up to the task of balancing the books; they are wrong to think this is the biggest problem. Cutting welfare and other public spending is not going to make the economy grow; nor will it make the dependent any more independent. The point of ‘lopping off’ chunks from welfare spending should be to realign the workings of the benefits system with a new way of thinking about the relationship between the state and the individual. Instead of spending a quarter of public spending on entangling people in a long-term relationship of passive dependency, something that none of us can afford – financially or morally; we should be building a consensus around the popular view of welfare as nothing more than a safety net, a stop-gap, a contributory system of mutual social assistance.

The flip-side of the welfare coin is, of course, the world of work. So those critics who want to scrap a jobcentre ‘service’ that tries and fails to both administer out-of-work benefits and help people get off those self-same benefits have it right. The unemployed, as Demos argue, should be free to choose their preferred job broker or, dare I say it, should go it alone and find work themselves. And yet in their eagerness to squash the myth that claimants are defrauding the benefits system, Demos wrongly argue that many of those who should be claiming benefits aren’t. And therefore the state owes them something. They come up with a figure of £5 billion a year. This may or may not be technically speaking the case but I’m not sure it’s helpful. There are lots of people out there who don’t feel entitled even if Demos says they are. They don’t want to live off the state; they would rather support themselves and get by without the hassle and intrusion, all for a pittance. That’s no bad thing, and the sooner the political class stop fudging the issue the better.

800px-Jobcentre-plus-First published in Institute of Opinion

Picture by: J J Ellison