Although I share the condemnation of George Osborne, in one respect he is right: the benefits system did need an overhaul. But using Philpott as an alibi for crucifying the poor is inexcusable. The grain of truth underlying the government’s benefits policy is that although the kind of behaviour complained of is not common, that is surprising because means testing has indeed been encouraging it for generations. If there were no better ideas, then Iain Duncan Smith would be quite right to get rid of means testing in some way. But there are vastly more innocent, desperate victims of these actual measures than abusers, so that the anger at their sheer cruelty is justified.
What I find most odd though is that none of those who are angry seem to have spotted the relevance – the central importance – of means testing. Exactly the same old debate on ‘Philpott’ was rehearsed on tonight’s BBC Any Questions. Will somebody please tell Michael Heseltine, Diane Abbott, Norman Lamb, and Peter Hitchens (tonight’s AQ Panel), the government, the gutter press and all their attackers to read:
Dynamic Benefits (2009)
Tell them that this Think Tank report was commissioned by IDS, and its main recommendation was a Universal Credit (UC). (I say ‘a’ rather than ‘the’, because the government scheme is more parsimonious than the Think Tank proposal). The report begins with a thorough chapter and verse description of means testing which could be cut and pasted under the heading “The Case for a Citizens’ Income’ (CI)
The UC is a severely emaciated version of a CI, deliberately inadequate along with the abolition of benefits, regardless of need or fairness. Of course removing the work disincentive of means testing has been tied to austerity cuts, and the Labour opposition has no ideas beyond allowing the government to choose the agenda. A Citizens’ Income – one dealing specifically with the scroungers … sorry, the poverty trap – is a separate issue. It can be cost neutral, by shifting the disguised tax equivalent of withdrawing benefits from small incomes on to a real tax on the better off. (The graph at the top of the page shows benefit withdrawal as a tax equivalent.)
Oddly enough, as I explain in my book (link on the homepage), there was a Conservative proposal in 1974 which suggested a ‘Monopoly Money’ type handout to everybody, but which did not take the cost of the scheme back in tax from the rich. This would not only replace the need for means tested benefits, it would at the same time stimulate economic activity! Pity, this line of thinking is at odds with current Tory thinking. (In passing, if someone can find Keith Joseph’s Tax Credit Scheme on the internet, that would be interesting. Forgive my suspicious mind, but I could find no trace of it.) So it wouldn’t save money initially, but there would be no need for either workfare or a minimum wage, but the latter is a discussion which must wait until we have won the workfare battle.