The TaxPayer’s Alliance (TPA) released a report this month, entitled ‘Work For The Dole.’ The pressure group believe that this is the next step for welfare reform – it seems that no one told them that their proposal was already here, in the shape of workfare. However, the TPA defend their proposal, as they believe they have added enough rules to make the failing workfare system work.
I was told by a TPA member to read the report. So I did, and by looking closer at both the report and the TPA, there are a few points which should be contested. I narrowed them down to 10.
1) Workfare already exists and it does not work
The government have been running workfare schemes for around three years, and they have been embroiled in failure and deceit – ultimately not helping move people into employment. Read our facts post on the current workfare schemes here.
Some companies have abused the policy by using ‘free’ staff in place of what would otherwise be paid jobs – meaning the policy actually harms the value of work for EVERYONE.
Also, the government have been complicit in the abuse of the workfare scheme, by refusing to reveal the names of the companies who use it (despite a court ordering them to release this information) and by retroactively changing the law over two years, meaning that after the government were found guilty of implementing an unjust scheme, they avoided refunding claimants who were unfairly sanctioned by changing the law so that they weren’t guilty. Clearly, there are ethical problems and abuses by both government and companies that do not make them trustworthy at present to implement such a scheme.
The ‘Work For The Dole’ report does mention the Mandatory Work Activity scheme currently in place, but none of the others, despite there being around 8 in practice. The report also takes a rose-tinted look at the scheme in other countries such as Canada and the US.
The US has abandoned large parts of the workfare scheme, although, this is not mentioned in the ‘Work For The Dole’ report either. The DWP actually commissioned a research review in 2008, into the same places and the conclusions were a far cry from the TPA’s:
“There is little evidence that workfare increases the likelihood of finding work. It can even reduce employment chances by limiting the time available for job search and by failing to provide the skills and experience valued by employers. Subsidised (‘transitional’) job schemes that pay a wage can be more effective in raising employment levels than ‘work for benefit’ programmes. Workfare is least effective in getting people into jobs in weak labour markets where unemployment is high.”
2) Who is behind the TaxPayer’s Alliance?
The TaxPayer’s Alliance describes itself as “Britain’s independent grassroots campaign for lower taxes.” Their name suggests that the group is made and run by ordinary taxpayers, however, looking at the policies that they have produced and their previous benefactors, the group have a heavy lean towards Conservative ideals. Many policies such as public sector pay freezes, cuts in spending and cuts in benefits have been adopted by the Conservatives after the TPA has suggested them.
The TPA refuses to reveal who funds them, but an investigation by the Guardian in 2009 revealed some close links with Tory Party donors:
“A Guardian investigation has established that a large part of its funds come from wealthy donors, many of whom are prominent supporters of the Conservative party. Sixty per cent of donations come from individuals or groups giving more than £5,000. The Midlands Industrial Council, which has donated £1.5m to the Conservatives since 2003, said it has given around £80,000 on behalf of 32 owners of private companies….
“A spokesman for Sir Anthony Bamford, the JCB tycoon, whose family and company have donated more than £1m to the Conservatives, said he has helped fund the TPA, as has the construction magnate Malcolm McAlpine.
“David Alberto, co-owner of serviced office company Avanta, has donated Elliott and his 14 staff a suite in Westminster worth £100,000 a year because he opposes the level of tax on businesses. Alberto has an offshore family trust but said 90% of his wealth is in the UK, where he pays tax.”
The TPA maintain that they are not linked to the Conservative party.
Still, with the TPA demanding secrecy over its benefactors, we are unable to say which taxpayers are being fought for, and there is quite a difference between the wants of an ordinary taxpayer and a billionaire.
3) Worklessness figures
The ‘Work For The Dole’ report claims; “One in four children now grow up in a household where no one works.”
This is not true. Recent figures from the Office for National Statistics revealed that one in seven children now grow up in a house where no one works. The proportion of ‘workless’ families in Britain has dropped from 17.9% to 17.1% in the last year. This is the lowest it has been since records began in 1996.
This misleading statistic seems to be an attempt to massage the ‘worklessness’ rhetoric voiced by the likes of Iain Duncan Smith and Dame Carol Black, but this myth has been disproven. Considering the state of the jobs market, economy and lengthy recession, it has been hard to find work for many. Particularly when added to the increase of temporary contracts, part time posts and zero hour contracts.
4) Benefit claimant figures
The ‘Work For The Dole’ report claims; “5.6 million working age people are currently not working and reliant on benefits – a number that has remained stubbornly high even when the economy has grown (it has been over 5 million for more than a decade).”
Nothing has happened over 10 years, clearly. Oh, wait, population growth – 3.7million more people in the UK in the decade up to 2011. The TPA report neglects to add context to some of its statistics and seems to over-simplify figures.
5) Job creation figures from 1997
“However, the analysis in section 3 below shows that 3.5 million new jobs have been created since 1997, and that employment today stands at a higher level than at any time in UK history. As 2.5 million jobs were created since 2000, out-of-work welfare claimant rolls stayed about the same. UK welfare claimants were not moving into work as jobs were created. 68 per cent of the jobs created were taken by immigrants prepared to work hard rather than rely on benefits. Many of the UK population on out-of-work benefits evidently weren’t interested in the new jobs.”
1997!? 1997!!!? A little lenient, perhaps? These are figures from when John Major was in power and before the biggest boom ever. What are the figures for the number of jobs lost?
According to the Institute for Public Policy Research (IPPR), a report in 2011 said that the UK has lost 2m jobs in the recession. What effect has the recession had on the TPA’s figures?
6) Spending has gone up, but the TPA report seems to blame this on the jobless alone
The ‘Work For The Dole’ report uses a graph to show how social security spending has gone up over the years. It certainly has gone up, but there are several reasons for this, not simply equating to the amount spent on the jobless alone.
Firstly, as we said earlier, the population has grown, so naturally social security spending has gone up. The amount spent on pensions for a growing and ageing population will increase, and also the addition of working tax credits – which wouldn’t need to be paid if pressure was put on big employers to pay employees a living wage.
And housing? Since the government have stopped building housing, people have been forced into the over-priced private sector which has doubled the amount spent on housing benefit in the last few years to over £24bn.
In simple terms, this graph shows us little about what is spent on the jobless. In fact, around 2-3% of welfare spending is on Job Seeker’s Allowance currently.
7) ‘Work For The Dole’ seems to focus on heavily on punishment
There seems to be real focus on punishing people throughout the ‘Work For The Dole’ report, as it suggests that the current sanctions are not enough:
“Sanctions (i.e. suspension of benefits payments) for non-compliance with requirements set by Jobcentre Plus advisers are currently time limited, only applied to Jobseeker’s Allowance and ESA and are applied at the discretion of those advisers. They are used only used sporadically and so are not currently especially effective.”
In fact, sanctions can be applied for up to three years – a pretty broad time limit, and as of June this year 2.25m had been applied on job-seekers since the coalition came to power arising concerns over the vigour with which they are used.
But the TPA believe this is not enough – their report calls for harsher sanctions extending to all benefits under Universal Credit. The report said:
“The results of the Work Programme to date also suggest that the hardest-to-help cases may need some form of stronger sanction, as well as assistance, to get off benefits and back to work.”
8) Culture of corporate abuse
As mentioned earlier, there have been many cases of abuse of those on workfare schemes, by government and by companies. Whilst the TPA have applied some extra rules, including demanding that work-based placements must have some element of “training” underneath it, this is far too broad and easily exploited.
What constitutes training? Will it be serving behind a counter? Stacking shelves? Managing a team for 3 months? The current system purports to “train” people to be ready for work, and this can be easily undermined and the term can be manipulated to mean many things. The likelihood of this being exploited is demonstrated by the way it is already exploited in current workfare schemes.
The culture of corporate abuse on these schemes is something that needs to be dealt with, before eroding the value of a day’s work any further.
Also, the government, through their many different schemes with different names have tried to shed the ‘workfare’ name, for its negative connotations. The ‘Work For The Dole’ policy seems a timely gift to re-brand the already failing schemes.
9) Benefit spending on jobless
“However, 57 per cent of welfare spending went to people of working age. This comprises £115 billion of annual expenditure or around 16 per cent of all government spending.“
Welfare spending for working age people includes (from Left Foot Forward):
- housing benefit
- child tax credit
- disability living allowance
- child benefit
- income support
- working tax credit
- job seekers allowance
- employment support allowance
Job seekers allowance makes up around 2-3% of welfare spending, so we can see how the figure of 57% and 16% skew the reality.
10) TPA director paid no tax
In 2009, it was revealed that a TPA director paid no British tax. With the continued secrecy over TPA funders and members, could this say it all for the so-called “guardian of taxpayers’ money, the voice of taxpayers in the media and their representative at Westminster?” How much does the ordinary taxpayer have in common with Alexander Heath?:
“The Tory-linked “campaign group” TaxPayers’ Alliance has been forced to admit that one of its directors hasn’t paid a penny of UK tax in years. Alexander Heath – who, strangely enough, is not listed on the TPA website – lives in a farmhouse in the French Loire. Heath returns to the UK “for about a fortnight each year and owns no property in Britain”.