This article is from the May issue of Total Politics
In 2008, then-shadow chancellor George Osborne said his priority in government would be to tackle Britain’s “addiction to debt”. Few could grumble at that ambition, but it would have been just as accurate to say that Britain was ‘addicted to welfare’.
The year before Osborne’s announcement it was estimated that a colossal proportion of households, some 30 per cent, received at least half of their income from means-tested state benefits.
The dangers of allowing this to remain unchecked had been highlighted by Frank Field early on in the Blair administration, shortly after he was unceremoniously sacked as minister for welfare reform. Field described Labour’s then-policy as a “further drive into a means-tested morass”. Means tests, he said, were “powerful teaching agents against working, saving and being honest”.
In saying this, Field echoed Milton Friedman’s comment that “programmes that are labelled as being for the poor, for the needy, almost always have effects exactly the opposite of those which their well intentioned sponsors intend them to have”.
Politically speaking, any sort of welfare change is powerfully difficult, as well Field knows, yet the public does have a fierce appetite for cutting back the welfare bill. In a 2012 YouGov poll for Prospect magazine, 94 per cent of Tory voters and six in ten (59 per cent) of Labour voters agreed that “the government pays out too much in benefits; welfare levels overall should be reduced”.
The public’s hostility to the benefits bill is, in large part, due to the commonly-held view (articulated by Field) that it encourages scroungers: in the same poll, more than one in four respondents said they thought at least half of all welfare claimants were “scroungers who lie about their circumstances to obtain higher welfare benefits”.
These figures are wholly explicable, given how many people claim to have personal experience of benefit fraud. A recent ComRes/ITV News poll found one-third of people knew others in their neighbourhood “who claim benefits to which they are not entitled”. This rises to over four in ten in some regions of the country and is highest among lower-income groups.
There is also a view that the welfare system stretches too far into higher income groups. In this respect, the coalition government is on sure ground. Seven in ten (note: across all social groups) agree with the benefits cap.
The difficulty for legislators, therefore, is this: the public is generally tolerant of those in need, but wants the £180bn welfare bill reduced, not least because of the perceived practice of fraud on an industrial scale and the system’s excessive generosity to those not in need. However, once benefits have been introduced, it is nigh on politically impossible to wean people off them. Voters want benefits cut, but not if it makes them personally worse off.
This is illustrated starkly by the graph on the next page. Six in ten say that families with a higher-rate tax payer, earning more than £42,000 a year, should not be entitled to child benefits. A similar proportion (62 per cent) disagree that “every parent should have the right to claim child benefit regardless of their income”. Every middle-class parent knows what a complete farce it is that everyone – including investment bankers, dukes and premiership footballers – is entitled to receive child benefit paid for out of the taxed income of shop workers and nurses. It is depressing – if predictable – that resistance to means-testing child benefit is greatest among those who need it least. And that would mean seriously testing the patience of the Conservative Party’s core vote.
One answer is to reduce benefits and tax rates at the same time. The aforementioned ComRes/ITV News poll found widespread support for taking people on the lowest incomes out of tax altogether and funding it by levying more tax on those at higher incomes. In light of the sustained pressure to scrap the 50p income tax rate, such a move is unlikely to prove easy politically but, if the maths worked, it would be more popular to use the tax system to offset a reduction in benefits by taking people at lower income levels off the tax register.
What is dangerous politically for the coalition is to be seen as unduly harsh or uncaring. A significant proportion of people view even the cap on benefits as evidence that the government does not care about the vulnerable, and the epithet ‘the nasty party’ still has some resonance.
How, then, should Labour respond? With large numbers who think the system wasteful through misplaced generosity or fraud, the opposition risks looking irresponsible if it opposes welfare reforms too loudly.
It is obvious that all the major parties need to be seen to take a strong position against benefit fraud (so obvious that it featured in the first episode of The Thick of It), but the problem comes when telling people they are no longer entitled to a benefit because they don’t need it. Echoing round politicians’ heads is George Bernard Shaw’s observation: “A government that robs Peter to pay Paul can always depend on the support of Paul.”
Poll to watch
73 per cent of Britons say the war in Afghanistan is unwinnable (ComRes/ITV News March 2012), and 55 per cent would support the immediate withdrawal of British troops. This is remarkably similar to an ABC News/Washington Post poll, which found almost exactly the same proportion of Americans – 54 per cent – also support pulling troops out. Opposition to continuing military involvement has increased on both sides of the Atlantic, almost certainly to the point of no return, and most Americans believe that the Afghans themselves no longer want foreign troops there. Comparisons with Iraq are misleading: the Afghan conflict is more unpopular.
Behind the figure
62 per cent of people think “politicians lie all the time – you can’t trust a word they say”, according to YouGov (January 2012). Also worrying is that a third of Britons either think the country is not democratic or are unsure, a figure that’s eerily similar to a 1969 Gallup result. Since then, the percentage who think their local MP does a good job has declined from 38 per cent to 15 per cent. All of this reinforces the fact that the public tends to dislike those it elects and admire those it does not. Hereditary peerage, anyone?
Andrew Hawkins is chairman of ComRes