Managing expectations of the welfare state

By Bernadette Meaden
December 17, 2015

It was very heartening to see Conservative MP Jeremy Lefroy speaking out against the proposed cut to Employment and Support Allowance (ESA) in the Spectator magazine.

With an understanding and empathy that is sadly absent from the government's approach, Mr. Lefroy wrote, "At the moment, ill people who might gradually return to work receive the Work Related Activity Group (WRAG) payment of £102.15. This is a little bit higher than the standard Job Seekers’ Allowance (JSA): the extra money pays for the additional costs which hit people with long-term illnesses – higher energy bills, for instance."

He continued, "The extra WRAG money is there for a reason. Being confronted with a potentially life-changing illness is difficult enough; the damage it can cause to family finances is often totally unexpected. By stopping altogether the supplement for those coming into the WRAG from April 2017, I argue that it may well become harder for them to get back to work."

He concluded that, "the proposed removal of the entire supplement for those receiving ESA WRAG needs to be looked at again. It may well have the opposite effect of what the Government intends. It will certainly increase the burden on people who are already coping with serious illness or disability."

To hear this from a Conservative MP will be music to the ears of all who are campaigning against the cut. It is in stark contrast to the Chancellor's insulting assertion that the extra money received by people unfit to work acted as "a perverse incentive" which deterred them from getting a job. Mr Lefroy is to be congratulated for putting sick and disabled people's welfare first, and going against his party's line.

Sadly however, there is a 'but'. Mr. Lefroy also speaks of the future of the welfare state in terms that are worrying. He writes, "I believe we also need to make much clearer to citizens what they can and cannot expect from the welfare state. Many constituents tell me they cannot understand why there is so little support for them in their illness when ‘I have been paying National Insurance all my life'. Alongside education and transparency about benefits, it makes sense to encourage people to make additional provision for difficult times.

Income protection insurance can be good value when taken out young. We could also consider a tax-free Lifetime Savings Account, which could only be drawn down in the case of a major crisis, such as serious illness or unemployment. On retirement, any balance could become part of your pension pot."

This is consistent with the whole thrust of Conservative policy, which is to go against the collective pooling of risk of the entire population, which we get with National Insurance and a comprehensive welfare state, towards much more personal responsibility and individual provision. This is attractive to the healthy and the prosperous, but could be very bad news for those who are poor, disabled, or disadvantaged in any way.

We know that many families are struggling to feed their children and are in serious debt. The idea of them being able to save is simply unrealistic. If we continue to chip away at the welfare state and expect people to provide private insurance, how many people will face the choice of heating, eating, or missing a premium?

We also know that some insurance companies will, wherever they can, find a reason not to pay out. In the United States, where people are forced to rely more heavily on such insurance, one notorious company was accused of running 'disability denial factories' as it failed to pay out on so many genuine claims. And of course there are profits to be made and shareholders to reward, which will surely make private insurance less cost effective than National Insurance.

Perhaps Mr Lefroy, obviously a compassionate man, has been taken in by his own government's rhetoric, which said spending on  disability benefits is booming and unsustainable. If so, he really needs to read the IFS report which shows that as a share of our national income, such spending has halved since it reached its peak in the 1990's.

We're told by Mr Osborne and his colleagues that we're one of the biggest and most successful economies in the world. We have our mojo back, apparently. Are we now being told that we can't afford to support our sick and disabled people? Or is the government simply making a political choice not to support them?

The welfare state (like the NHS) is much-maligned and in need of protection. When we are told it is unsustainable and encouraged to lower our expectations of what we can expect from it, we should check what assumptions these views are based on. We can choose what proportion of our national wealth goes on public spending. This government is deliberately reducing it, as a political choice. We don't have to accept that. When attractive-sounding alternatives are proposed, we need to consider all the ramifications, and establish whose interests would really be served if we continue down this path.    

 

 © Bernadette Meaden has written about political, religious and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is an Ekklesia associate and regular contributor. You can follow her on Twitter: @BernaMeaden

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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