A celebration of the backward welfare state or a new crisis in it?


by David McDonagh

On Monday of this week, radio 4 had a special three-hour programme on the welfare state that was worth heeding. We were told that seventy years ago William Beveridge wrote a report that was to lay the foundations for the welfare state. He identified the Five Giants that society needed to slay: Want, Disease, Ignorance, Squalor and Idleness. Using archive from the time, Jane Garvey and Julian Worricker took us back to that extraordinary moment in wartime Britain that has proved so pivotal to the shape of the welfare state today.

They reported how well the system serves those who rely it on it now as well as how those who pay for it feel about it. Changing attitudes to those on benefits were reflected in a new BBC-commissioned poll and we heard three radical visions for how welfare should be provided in the future. The programme featured a debate on fairness, entitlement, rights and compassion with Frank Field, Labour MP, the philosopher Roger Scruton and social commentator, and state-lover, Polly Toynbee. The Secretary of State for Work and Pensions Iain Duncan Smith was challenged to outline the philosophy behind his decisions on reforming the welfare state. There was a later call-in, or phone-in, in the third hour, to let the listeners in the last third of the three hours devoted to the programme. Most of those people seemed to be utterly innocent of economics, maybe all of them but it was informative as to the sort of support that the welfare state has. It was a celebration but it might have been a special crisis programme.

As we might have expected, the programme was full of the Overclass welfare workers or social worker sinecure-holders, who worried about their jobs catering for the Underclass being held secure, they want to remain on this glorified dole as badly as those on the dole want to remain on it but there were also the likes of Kelvin McKenzie who suggested the scrapping of the welfare state. That would create genuine job seekers.

Quite a few thought that industry had vanished from the UK as a mere matter of the passing of time. It is a very common folly that times change such that life is completely different as we move into supposed different epochs. This particular superstition allows fools to feel that all sorts of things are out of date that never will be out of date & that time is marching to what they suppose is a “progressive programme” that ironically gives rise to the backward wasteful welfare state. Such people seem that they will soon be saying that eating by the mouth will become outdated. With this sort of outlook, one man said we could work in the past but now all the jobs have vanished! He did not seem to realise that the jobs have only seemingly vanished, as a big dole has been put up to ensure mass unemployment. It has institutionalised the asking of a wage that is well above the market clear up rate. This is on par with putting the price of a small loaf up to £5 then saying that no one wants bread those days.

Most who thought the welfare state was a good thing that is clearly doing a lot of good seemed to think in terms of unrealistic hyperbole such that if there were no dole then many would starve. The reality is that they would, then, all then simply get a job. The abundance of jobs of the 1960s that the earlier man thought that mere history had somehow abolished would reappear as soon as the price was right. The policy of ending the dole would soon put the price right and once the market was cleared the natural shortage of labour would soon bring back way more than ten jobs for every worker. Only cutting the dole will get ever full employment. As long as politicians talk of putting more money into the problem of unemployment then, as Iain Duncan Smith does, then they will continue thereby creating and maintaining the basic problem of mass unemployment rather than solving it. It needs less money not more money & if it gets no money at all then it will vanish. Smith said that we cannot turn the clock back, so he clearly shares this delusion of epoch with the earlier man, and he went on to say that Frank Field with his back to Beveridge idea that workers only get funds if workers contribute would cost more than his own unwittingly backward schemes. He feels the winter fuel benefit needs to go but Cameron did promise it so it remains for this parliament only for that reason. He prefers targeted benefits. But he fails to see himself and his rival politicians as the major cause of the problem.

Only the welfare state causes a lack of jobs as only high wage demands gets rid of jobs or rather leaves marginal labour as unaffordable. The number of jobs in any mass urban society is infinite. Illegal immigration from India has hinted at that fact since 1970s by many illegal immigrants from there finding jobs in the UK black economy that pay less than the dole encouraged the million out of work pretending to be jobseekers to demand. Polish workers rubbed that in by up to three million workers before 2007, so, clearly, the idea that that the million unemployed had to be jobless from 1970 onwards owing to a lack of UK jobs is a clear myth. There could have been full employment all that time. We only have the welfare state to thank for the million unemployed all that time. The welfare state mucks society up.

The idea that there are no longer any jobs for life today is another myth. Indeed, the idea that there is any natural rate of unemployment is a myth. Only taxation causes those problems so we can be grateful that some dodge paying their taxes; best that all should do that. Taxation is always a double whammy as it confiscates money to mess society up with.

Back in the 1940s, nine out of ten approved of the welfare state but in 2012 many aspects of it are very unpopular, especially state handouts of cash. All on the programme seemed to feel that the public do not like the wide range benefits of today, that the welfare state is now very unpopular and that the downturn since 2007 has not made it more popular, as was expected but even more unpopular. Kelvin McKenzie holds that all the satellite disks to be commonly seen on the council estates was never the aim of those who set up the welfare state, like Beveridge. Anne Widdecombe wanted it to be reformed but Shirley Williams felt it was still wonderful. The chief Rabbi, Jonathan Sacks, felt that it could not be done today as it was in the past, as society is not as uniform as it was back in the 1940s. As I said, the listener could be forgiven for taking the programme to be on a crisis rather than on a birthday celebration. It remains on the BBC radio iplayer till next

About these ads

14 responses to “A celebration of the backward welfare state or a new crisis in it?

  1. There are two factors here.

    The first is size – the various schemes have grown (and grown).

    What was once not a crushing burdern – now is one. Both in this land – and in other lands.

    But finance is not the only factor – there is also culture.

    I do not believe that cultural changes that have occured (and are occuring) destroying cultural insitutions such as the family have occurred without reference to the out of control Welfare State. I believe that it (the out of control Welfare State) has been driving these cultural changes.

    Not just in the United States, as such works as “Losing Ground” examine, but here in the United Kingdom also.

    “But what of corporate welfare?”

    The sums of money given to most companies are small (in total a couple of days of the Welfare State – if that), but there is one vast exception – the financial services sector.

    The money given in hidden subsidies to the financial services sector (in “cheap money” – low interest rate money created, from nothing, by the by the Bank of England) amounts to a very large sum.

    Ironically the credit bubble economy was supposed to generate tax revenue that would finance the out of control Welfare State – and it actually did, for some time.

    However, now the financial services sector is, if one takes into accout the Bank of England monetary expansion, actually a drain – not a support.

    It is actually making the entire system go bankrupt faster (not slower) than it otherwise would.

    “But how can it go bankrupt – the government can create money, via the Bank of England, lend it out to the financial services entities (the shadow banking sector and so on) and then borrow it back again, thus financing its spending”.

    It is this sort of thinking (the thinking of our academic, political and financial elite) that is part of the problem – not part of the solution.

    The malinvestments and the twisting of the economic structure have now reached an insane level.

    The end game will soon be upon us.

  2. REGARDING THE ARTICLES ON THE WEALFARE STATE, WHATS GONE WRONG! I THINK I MIGHT BE ABLE TO SHED SOME LIGHT, i
    AM ONE OF THE PEOPLE WHO WORKED FOR SIXTEEN YEARS PAID
    TAXES RAN A BUSINESS AND PAID TENS OF THOUSANDS OF POUNDS INTO THE SYTEM, I AM ALSO ONE OF THE PEOPLE SUBJECT
    TO ILLEGAL WITHOLDING OF MY BENEFITS AS ALLOWED IN LAW, I
    ONE OF THE NEW YOU SHOULD LIVE ON TOAST BRIGADE. AS A
    QUALIFIED JOURNALIST WITH ACCESS TO THE F.O.I. ACT, I FEEL
    I MAY ADD SOME RELIABLE INPUT TO THE TOPIC, THE FIRST POINT
    THE SYSTEM HAS BECOME A VICTIM OF CRIMINAL ABUSE, WITH
    WIDESPEAD FRAUD BEING COMMITTED BY THOSE IN GOVERNMENT,
    WE’RE NOW SEEING A ROBIN HOOD SITUATION IN REVERSE, NOW
    HOW ABOUT THIS SOME OTHER JOURNALISTS HAVE RECENTLY
    BROUGHT SOME CASES TO MY ATTENTION, WHERE FORMER
    GOVERNMENT WORKERS ARE CURRENTLY CLAMING OVER £300
    PER WEEK IN BENEFITS DESPITE HOLDING SAVINGS IN SOME CASES
    OF OVER A MILLION POUNDS, AND A FURTHER £300,000 IN ASSESTS
    IN THE FORM OFOWNED REAL ESTATE, THIS IS HARDLY WHAT THE
    WEALFARE STATE SHOULD BE ABOUT, CASE EXAMPLE, X POLICE
    OFFICER, RETIRED AT 50 GETS PENSION ON HEALTH GROUNDS
    WITH MASSIVE LUMP SUM PAYMENT, GETS ANOTHER JOP AT THE
    DWP CLAIMS TWO BENEFITS TO BOOT, SEE WHATS WRONG WITH THE SYSTEM, CASE 2, ARMY SOLDIER GETS TWO MILLION COMPENSATION, HOUSE CLAIMS £300 PER WEEK IN BENEFITS, CASE
    3 FIREMAN RETIRES ON HEALTH GROUNDS WITH PENSION LUMP
    SUM PAYMENT, GETS I.B. AND PENSION, GOES BACK TO WORK IN
    FIRE SERVICE SHORTLY AFTER AND CONTINUED TO GET FURTHER
    WAGE AND ANOTHER PENSION, I COULD GO ON AND ON, MY MAIN
    POINT IS THIS, WE SHOULD ALL NOW, THAT BENEFITS ARE A SAFETY
    NET FOR PEOPLE WHO ARE I DIRE FINANCIAL TROUBLE OR ARE
    GENUINELY UNABLE TO WORK, THEY ARE NOT DESIGNED TO CREATE LIFESTYLES FOR THOSE IN PUBLIC OFFICE ON A PAR TO
    LOTTERY WINNERS, THE SYSTEM AS THE MOMENT IS FULL OF ABUSE AND FRAUD BY THOSE IN PUBLIC OFFICE, WHERE PEOPLE
    LIKE ME WHO HAVE GENUINELY PAID TAXES ARE TOLD TO LIVE ON
    £40.00 PER WEEK. PERHAPS THE REAL PROLEMS WITH THE WEALFAE SYSTEM AT THE MOMENTS IS THE WAY IT’S BEING RUN,
    SHOULD IMMIGRANTS GET £25,000 YEAR IN HANDOUTS, MY OWN
    VIEW IS NO, IT’S SIMPLY NOT SUSTAINABLE, THE SYSTEM IS NOW
    BANKRUPT THROUG STATE BAD MANAGEMENT AND NEGLIGENCE,
    AND SERIOUS WIDESPEAD ABUSE BY THOSE IN GOVERNMENT
    WHO HAVE USED THE SYSTEM THROUGH GREED AND LEGALISED
    THEFT. WILL OF COURSE MAKE REPLY TO ANY OF MY COMMENTS.
    kARL FENN, REPLIES, SHOULD PEOPLE WITH A 2 MILLION POUND
    BANK BALANCE BE ALLOWED TO CLAIM BENEFITS IN THE FIRST
    PLACE. LOOK FORWARD TO HEARING.

  3. “Five Giants that society needed to slay: Want, Disease, Ignorance, Squalor and Idleness.”

    All of these limit freedom.

    Tony

  4. yes, you’re right tony. but you forgot two, obsessional greed, and criminals
    who pose as politians. These are the real evils of freedom.

  5. Only if you define “freedom” as “free stuff” Tony.

    A person accidentally ship wreaked on a desert island is a free person – even if they are dying of disease and have no food.

    And a pampered slave (not hungry, not ill, given a fine education and so on) – is still a slave.

    However, there is not really a choice between “positive freedom” (which has changed from meaning “one’s reason in control of the passions” to “lots of nice goods and services” – a rather radical change in the meaning of the term) and “negative freedom” – i.e. other people (whether criminals or the state) not aggressing against you.

    There is not really a choice – as the very schemes that are supposedly help the poor, in fact (over time) make poverty worse than it would have otherwise have been (see “Losing Ground” and many other works) and, in the end, lead to total bankruptcy and economic breakdown.

    Short version……..

    Your definition of “freedom” is fundementally wrong, and even if your defintion of freedom (as goods and services – lack of hunger, sickness and so on) was correct, your Welfare State policies would still be mistaken.

  6. Of course those who paid taxes over many years (thus giving them no resources to save for hard times) will now be cheated by the de facto bankruptcy of so many Western nations.

    It is tragic – utterly terrible.

    There were (for many years) plans for gradual reforms to avoid economic breakdown – and to protect those currently dependent on benefits. I suspect that it is too late for such plans now.

    And the people do not seem to want reform – after all even the, actually timid, Paul Ryan suggested reforms have (de facto) been voted down by the last Presidential elections in the United States.

    The American people have democratically voted – democratically voted for destruction.

    I wonder if people will die chanting “we want free stuff”.

    In Europe the “labour codes” of such countries as Greece, Italy, France and Spain might as well have been designed (actually designed) to create mass unemployment.

    The economic collapse has hardly started yet – and there is already mass unemployment (due to this net of “compassionate” regulations passed in the name of “social justice”).

  7. Well paul what you say is true, it is essential fact, the reason there are no
    votes for reform is the reliasation that you can’t take 2kg from a 1kg bucket
    of apples, the titanic has gone beyond the point of salvation, what we are
    seeing in th UK is the government starting with the weakest in society, while
    they devise schemes such as EX1 withing the transfer to ESA in order to
    keep their ill gotten gains, in such times of trouble, history tells us that
    all organised governments resort to abuse of the law and crime and dictator-
    ship in orderto preserve their life styles of lesser fortunates, economic
    colapse brings out the crinimal in many a man.

  8. The British government is doing two things.

    Engaging in a weird form of “PR” – directed to pretending it is cutting government spending, when government spending is not falling (some departments, such as defence, are getting cut – but overall government spending is not falling). This PR is supposed to make the government look tough and impress the bond markets (although even that is weird,as the government is actually, indirectly, the biggest buyer of its own bonds – yet is it buying its own debt, by the Bank of England creating money from nothing, lending it out, and then having the borrowers lend the money back again).

    The other thing?

    Basically just thrashing about.

    For example many of the welfare reforms will not (repeat not) save money – athough they may hit various people (yes – make them suffer). It is desperate reorganising of the deck chairs on the Titanic.

    Not to try and make rafts – but to simply organise the lines of deck chairs into a different shape……

    Mr Brown had a plan – finance the Welfare State via taxes on the City of London (which he viewed as some sort of magic goose that laid golden eggs).

    Of course the City was (and is) just a vast bubble – it can not really finance anything. But that was the paln.

    The present government plan?

    I have no idea what the plan is. I suspect there is no plan.

  9. Yes, I refer to the titanic, the situation for some people is far more dire
    than the government really wants people to know, comming from middle
    england I have had the fortune of being well connected to government
    sources, many of my former relatives work for the state authorities, I
    am now one of the infortunate people to have Chole Smith as an M.P.
    I see in the press she supports food banks and the soup kitchen mentality
    as a response for unfair cuts in wealfare, but just how good is a conservative held ward when it comes to plain economics. Well as
    you know, this good, how about criminalising people because they
    are unable to pay their rates, or moving people from a house which
    costs £125.00 per week into bed and breakfast that costs £250.00
    per week when they get evicted, seems like the mathmatics of madness
    to me, of course your bang on when you say the reforms won’t save
    money, there’s already a backlog of cases appeals are predicted to
    take between 40 and 70 weeks, and ths is just the start, there has been
    a very noted increase in burglaries, my own car broken into ust last
    week, running side by side with the cuts, which of course as expected
    will increase, well the plan for the city is, simply the current situation
    cannot go on, no banking system can sustain the hudge removal of
    capital we have witnessed without eventual collapse, this was a foregone
    conclusion, full stop. The more serious issues amount to the massive
    black hole in the government pensions, many are getting up to three
    pensions, when most are unable to secure one, many people don’t know
    this, but all state workers get the old age pension at 65 as well as any
    others they can grab on the way, there was one case in Norfolk where
    a former police officer had four pensions, was able to secure a further
    job on leaving the police and invested in yet another private pension
    scheme, this simply cannot go on at the expense of the tax payer, in
    simple terms it is not mathmatically viable, public servants amassing
    hudge fortunes normally attributed to lottery winners are, in this
    economic climate no longer a possibility, but the government does
    not want to wake up to social justice, but rather allow the situation
    to stay as it is, rasing money to pay for it from the poor and hard working
    families in the private sector, the plan has to be the right one, at the
    moment the poor are being subjected to disgusting abuse of their
    rights, and being criminalised for simply being genuinely bankrupt
    through no fault of their own. Thanks for listening Karl.

  10. Yes many people are getting a fortune from the government.

    And other people are getting very little – if anything (some of the people most in need get hit by the paperwork and so on – and so get nothing).

    That is what leads people to be Kevins

    “Why is that person getting vast sums of money from the government – and I am getting bugger all…..”

    And it happens in “charities” also.

    And in some business enterprises- managers ripping off owners (share owners) and ripping off everyone else as well. Then walking away as the company collapses behind them.

    Life is not fair and will never be fair. The best we can do is to prevent so much money going to government (so that empty heads like C. Smith have to go and work for a living – after all were MPs any worse before they started to be paid in 1911?) and make sure that any charity we give to is run by volunteers (not managers on large pay packets and expenses), and that business enterprises are returned to the control of owners (by getting rid of the regulations and taxes, such as Capital Gains Tax and Inheritance Tax, that have given institutions and hired managers control).

    And even if we do all that, life will still not be fair.

    Some good people will still suffer , and some wicked people will still prosper and be happy to the day they die.

  11. THE POOR DO NOT PROSPER UNDER TORIES. I had an interesting
    encounter today, bumped into an old associate, we just happened to get
    on this subject, he told me three weeks ago his son woke up to find the
    good old government had stopped his wealfare, reason, not looking hard
    enough for jobs that don’t exist, they have been generous and given hin an
    £18.00 hardship payment, protesting loudly to the staff who incidentally
    called police to remove him from his protest, he now finds himself in court
    on two charges relating to offences such as alarm and distress and the
    dreaded threatining behaviour, and a criminal record to boot. Having my
    own present dealings with the DWP and being a bit more of a legal minded
    person, the wealfare system appears to have turned into a “Stasi” out
    post, I can’t help noting how anyone who gives challange to this injustice
    is being treated like some sort of enemy of the state, after a visit to complain
    to the local tory MP, I was subjected to an organised witch hunt of deliberate
    intimidation, where documents were delberately lost and computor data
    deleted, I now find myself at the ITS fighting for the robbery of my rights by a
    Tory Government. Sorry Chloe Smith, we should all apologise for having
    heart attacks or getting cancer, we know if we complain we will be punished
    of course, but we have had a great insight into the way they operate in your
    false description of a democracy, and the way the poor are now being abused in a pathectic attempt to balance the books, I suddenly became
    enlightened, the policy on wealfare is an ecconomic disaster, the costs
    of appeals, prison for the victims, evictions just don’t add up, then suddenly
    I thought, the privatisation of the prisons has been mentioned, at £40,000
    per year keeping people locked up, could I be so stupid as to think those
    share holders have struck oil wit this one, in a decade as always people
    will look back and say god, why did we let this happen. For a time we
    let democracy slip through our fingers as the expense of the most vunerable in society. History has not changed it is the poor who always
    suffer they indeed always will. But let leave with this, if we can help a
    lesser fourtunate in life by exposing their pains and sufferings, let us do
    so by way of great bedate and let the changes follow through.

  12. The last government to cut Welfare State spending was acutally a Labour party government (James Callaghan after the IMF was called in 1976). However, that Labour government then left a lot of spending promises (made during the “Winter Of Discontent”) which the incomming Conservative party government in 1979 (in a judgement of almost insane folly) decided to honour.

    The incomming Conservative party government accepted all the wage increases and other government spending insanity (and they got savaged every day by the BBC for “cuts”), and also did nothing about, government granted, union power (at least till Norman Tebbett became Employment Sec – although even then the action was of an odd kind, adding more Statutes instead of repealing old ones).

    Virtually the only person in the public eye who told the truth (i.e. that the incomming Conservative government in 1979 accepted massive increases, yes increases, in government spending) and condemned the government’s judgement was Enoch Powell.

    As for the present government ……

    It will cut some benefits and increase others.

    On balance some people will suffer – yet government spending will not (not) down.

    The present government are even ear marking vast sums of money for IMF and World Bank bailouts around the world.

    This is action of such extreme folly that I can not find the words to fully express myself about it.

  13. I think it’s a good point you make, you’re right in saying spending will go
    up but not on those who need it, this govement are taking from the poor to
    give to the rich, unions these day’s are nothing but a bunch of bastards, especially the Police Federation, I like the way they Blackmail the british
    ;public into getting what they want, I wonder what the fat biggots in the
    police federation would do if they woke up to find police pensions stopped,
    mass “pleb” strike I’ll bet. The unions are no ggod for britain and no good
    for business, they have becaom a self styled mafia, who only protect those
    who pay up, unions are not interested in the poor anymore, only their fat
    cat salaries and unrational demands for pay like those in the police and
    health service, these people effectively control the state vai the use of
    blackmail to get what they want, do you remember the fuss under labour
    where if doctors were subjected to the same form of vetting with police
    records as everybody else they were going on strike, that’s they way they
    work, that’s why their getting the money and still getting the pay rises while
    everybody else is getting cuts, they make you laugh, when you hear two
    police officers husband and wife saying they can’t live on £850.00 per
    week net income, yes my heart bleeds for them, poor things, they are so
    hard up, should I get my violin out. I wonder if the could live on £20.00
    per week like many on benefits have to, I doubt it very much, certainly
    not with plod management skills, I often hope one day we might see those
    in public office with some real qualifications, at the moment they keep
    turning these out in house with a fancy inkjet printer, now I’ve got three
    of those can I have another pay rise. As I have said, the new unjust cuts
    are going to come back and bite britain in the arse, more arrests and con-
    victions mean more immigrants to fill jobs, have you seen just how many people are being sacked at the moment due to the CRB checks, I now four
    people who have been politely asked to leave in the last three months, yet
    again if I’m Mr Plod, I can kill someone and still keep my job with full pensions. Some say not an easy situation to put right, but when you
    look at the facts, not really, just a bit of social justice and it will all fall
    into place, as for Norman Tebbit, he of course is one of these people
    who tells everyboby else they don’t have the right to wealth, when he
    effectively helps himself to other peoples money, by the way was he the
    one who clashed with the IRA and got blown up in the 1980’s, he certainly
    upset the wrong people there, and many others as well so history tells us,
    lost his eat as well. These people make me angry, glad I find time to put
    it on paper.

  14. Norman Tebbit was indeed blown up by the IRA.

    And he is a man who has worked hard all his life. And certainly had not tried to prevent other people getting jobs and starting a business – quite the reverse.

    By the way, I once heard Norman Tebbit admit that the so called “deregulation” of the City of London was “the worst mistake we ever made” (and this was many years before 2008).

    The Stock Exchange was a private club (set up in 1801) and other City institutions were private also.

    Their rules were none of the government’s business.

    No law prevented the creation of a rival stock exchange – or prevented dealing in shares “off exchange”.

    The so called “deregulation” was actually the destruction of private (private) rules of good conduct.

    And it has led to orgy of bad practice – and endless volumes of government regulations.