Politics v economics
- 21 Jul 08, 10:50 AM
Consider. Two stories. One day.
Story One - Government to propose "revolutionary" benefit changes.
Story Two - Unemployment could hit two million.
There is, we are told, a new political consensus on the need for tough love to get people off welfare and into work, and the need to spend now to save later. The economics, on the other hand, couldn't be less propitious for such a change - jobs will be closing, welfare rolls expanding and public spending squeezed.
What's more, Incapacity Benefit claims have remained stubbornly high despite a series of ministers - Tory and Labour - promising to bring them down. There are a series of perverse incentives which have made it hard for them to bring about change:
- Ministers and officials have often preferred a higher IB count to a higher unemployment count
- IB claimants who might be able to work (and I know many can't) sometimes prefer, quite naturally, to be on a higher level of benefit long-term to the indignity and insecurity of moving between low-paid jobs and lower benefit levels
- The administrators of any system find it very hard to distinguish the truly unable to work from the malingerer and can be inclined to give the benefit of the doubt to people in poor areas who are not exactly going to be made rich by being put on IB
