News Reviews from 2012

Welfare State: are we too dependent?

The Welfare State: does it develop dependency?

by David Wenham

The road to hell they say is paved with good intentions. State welfare was introduced to help prevent starvation, disease and misery within the poor of the land. It has worked very well, but perhaps too well. We should be proud of the way we look after the vulnerable in this country. There are many cases where our fellow citizens would be in misery if we did not help them and I am very happy to help them through paying my taxes.


But we now have a situation where it is preferable for a significant minority to live on welfare than to work. Welfare has not just eased the lot of the poor and unfortunate but has created a welfare class who have characteristics detrimental to themselves and to society as a whole. Not only that, it has created a schism between those who give and those who receive.


Until the 1800’s there was no national state involvement in the welfare of the poor. This was mostly supplied by the local church, friendly societies and mutually owned organisations. Local provision to local recipients. Back even further, rules within a group afforded some welfare e.g. the brother of a dead man took on familial responsibilities. There were probably other mechanisms or expectations of behaviour within the group to give ‘welfare’ to unfortunates. This will have occurred within small groups, the beneficiaries being well known by the benefactors.

State welfare came in gradually during the 1900’s, but the 1942 Beveridge Report laid the groundwork for the acts that were passed shortly after the 2nd world war, in the 1940’s. It is these acts which set up the welfare state that we know today.


So, from a system where welfare support was gathered locally by taxes and charities and delivered locally by people within the local communities, it became a system where nationally appointed officials gave out welfare according to a formula determined by central government. This has lead to a change in attitude towards the welfare of the poor. The donor has become more detached from the recipient and a large impersonal state mechanism has been created.


What were the implicit goals within the original system? We can guess that they included provision of an environment where children could flourish, physically and mentally and to provide support to families on a temporary basis until they could be financially self sufficient. So how are we doing? In many ways the welfare system has been a big success, the physical welfare for the poor has greatly improved. But what of the mental welfare?


The church offering welfare adviceWhen the welfare system started, the work ethic in England was very strong, my father used to say he would never be “on the parish” – he still used that phrase even though it was state benefits. This is no longer the case, and this change in attitude can be seen in most countries that provide state welfare suport.


One young man was in a recent meeting with Frank Field, the labour MP and aficionado of welfare, when he was asked why he didn’t go and get a certain type of job (he had never worked), to which he said “you don’t expect me to work for immigrant wages do you?”. This typifies the change in attitudes.


To some extent the system of benefits discourages people from working. Interactions between benefits and Tax Credits makes the transition to work risky and uncertain; the financial incentives to enter work at less than 16 hours are relatively low and the rate at which benefits and Tax Credits are withdrawn, as earnings increase, means that some people see no more than a few pence for every extra £1 earned – resulting in the perception that work does not pay. So what have been and what are the likely consequences on our society of providing welfare?


Financially it’s bad - it’s expensive now and the cost is rising. The DPS publication, ‘21st Century Welfare’,  published in July 2010 provided the following figures. In the last decade, spending on working-age benefits and Tax Credits rose from £63 billion in 1997 to £87 billion in 2010 (an increase of 38%). Fraud costs us an estimated £5.2 billion a year. 12 million working-age households receive benefits and Tax Credits costing more than £85 billion a year. More than one in four working-age adults in the UK do not work and 2.6 million people have spent at least half of the last 10 years on some form of out-of-work benefit.


The economic rise of South America, India, China has put paid to the idea of full employment for all for the near future, we cannot afford the amount of welfare that we are paying. All governments are beginning to realise this and also that we can’t keep borrowing to finance the state in general to the amount we have been – reference the huge debts that most counties have.


The current benefits system gives little consideration to the behaviours it generates. Complexity and poor financial incentives to work are a key factor in trapping people in worklessness. This is strongly linked with poverty and reduced well-being, poorer physical and mental health and an increased likelihood of becoming involved in the Criminal Justice System. Where parents have multiple disadvantages (such as low income, poor health, no qualifications), their children are also likely to experience disadvantage themselves.


The attitude to welfare has, some say, become ridiculous. Recently there was outrage from some bishops and MP’s that a benefits cap of £26,000 should be imposed (that’s about £33,000 before tax). There are many families where parents both work hard to earn less than that. The resentment built up within the people who live amongst welfare benefit receivers is palpable. Many working families are only slightly better off than neighbours whose situation allows them to claim many main and fringe benefits.


The worst consequence of the welfare system on the individual is that it robs some folk of the experience and benefits of work. Work provides a cornucopia of good things; the pride of earning a wage and spending it, the fellowship of workmates, getting up in the morning, getting to work and doing your job gives individuals the self discipline needed to survive and thrive in society, a job can give you a sense of purpose - once out of the prison of the house you can dare to be ambitious and seek improvement, even in small ways.


The worst consequence of the welfare system on society is that it creates a barrier between the recipient and society. It generates a welfare mentality in which the state is the provider and owner of everything. The notion that the physical infrastructures; council housing, highways, refuse collection etc. as well as the social structures, the police, the hospitals, the fire service etc. belongs to us, has nearly disappeared. This manifests itself in various ways;  vandalism of public property and recently attacks on fire fighters are just two examples. Of course the welfare system is not solely responsible for these attitudes but it is a significant factor.

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