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The Welfare covenant is broken and Universal Credit is not the answer when it already creates victims

October 12, 2018 Leave a comment

Basic Standard of Living Q

It is regrettably all too easy for some to overlook the realities of life for others when  everything is going well and there is no need to look to anyone else for help.

Sadly, this is not the case for many. At one time or another during our lifetimes, there is every chance that we will need a safety net in place for when plans don’t work out quite as we thought they might, and we find ourselves in need of money, food, clothing, transport, warmth and maybe even a home.

State provision of such a safety net within a civilised society is not only right. It is also necessary when government is convened, managed and operated with the greater good, benefits and consequences for all are firmly in mind.

However, our Welfare and Benefits system has and is being continually abused.

It is being misused by those seeking help. But it is also being mis-purposed by those who have been given the responsibility in Government for providing that help on behalf of us all.

The Welfare covenant between those helping and those seeking help has been broken. And for the benefits system to work beneficially again for all, there must now be a new way of thinking.

No form of Government provision can truly be beneficial to all if victims have been created of any kind.

Universal Credit has therefore proven itself flawed before it has even began operating fully.

With many struggling recipients identified already, we should all be asking questions about the many more who are yet to come and the consequences that will surely follow.

This doesn’t mean that the system we have had until now is good. That it is working. Or that we should just stay tied to the same old thing.

We shouldn’t, because the current DWP Benefits regime really isn’t working for anybody, and we are all in desperate need of a solution which really can be seen and experienced as a ‘win-win’.

Now before we get lost completely with how Politicians are getting Benefits and Welfare wrong, there must also be an acceptance on the part of us all of what it is fair to expect to receive, how we receive it, and under what circumstances that help will actually come from the State if we should ever find ourselves in the position where we genuinely need it.

As we look at what is really wrong with the system as it is, we must also understand and accept that if the Law allows certain types of behaviours to exist, it is inevitable that there will be people who will employ them.

It doesn’t make their behaviour right. Their actions are not inevitable. Everyone has free will and can choose how to behave, even when a rule covering that action or behaviour may appear to be absent.

If the system doesn’t accommodate for the misuse of Beneficiaries and those affected, it is the people who are responsible for its design and implementation who are equally responsible for identifying what is wrong, putting it right and ensuring that either good or bad, nobody who should be receiving help gets missed or is able to slip in between.

Why the benefits system isn’t working, isn’t simply about something structural, the technology used or the people who administer or receive Benefits of any kind.

Like most policy failures today, it is a combination of factors which are not being considered. Many of them overlooked for the cause of political expediency, or because their place and influences sit outside of the specific or central theme – in this case the Benefits regime.

The real cost of a Basic Standard of Living is not understood by Government

The greatest injustice visited upon the unemployed, is the Government and DWP assertion that in 2018, one person can live on a basic income of £73.10 per week.

They can’t.

And when the Government itself has set the Minimum Wage at £7.83 per hour, which at a 40 hour week would be the same as £313.20, who exactly do they think is going to step in and replace what for some will be the destitution-busting £240.10 per week which sits so ominously in between?

Yes, there are many other Benefits other than and beyond the scope of Jobseekers Allowance.

But Universal Credit is being sold as a method of simplification by rolling everything into one, when the true aim of saving money will not stop a similar way of allocating money to the very same things from then existing, just under the umbrella of being just one application.

Government must provide a Basic Standard of Living income to those who qualify and need it.

If it is too expensive to do so, those in Government would do well by beginning to ask themselves the question ‘why?’

Government has surrendered responsibility for setting the prices of goods and services essential to a Basic Standard of Living to the private sector

Sadly, little attention is paid to the elephant in the Benefits room. That being the escalating prices of goods and services which provide for everyone’s basic needs in life.

That’s food, clothing, accommodation, transport and utilities.

Not First Class or on the upper side of ‘Taste the Difference’.

Just the stuff that anyone would need to be kept fed, clothed, warm, able to get themselves to a job and home again, and knowing that at night they will have a roof over their head.

Control of all of these goods and services is now completely under the infuence of commercial interests which have money as their one and only god.

Free Marketeers and Neo-Liberals will tell you that the Markets will look after everything when they are completely free to do as they choose. They don’t, they won’t and they will continue to do everything to make profit from every opportunity, for as long as they are gifted with the freedom to choose by gutless Government. Government filled with Politicians who see ethical intervention in the Markets and Financial Sector as a problem because they believe that they have too much to lose by doing so.

No service which is essential to the public good should be placed in private hands or under the undue influence of any self-serving cause.

No food supply essential to basic, healthy survival should be subject to the whimsy of the Markets where multiple traders, agents and handlers are seeking to add one profit margin on top of another, just on one item supplied within any one producer-to-plate supply chain alone.

If the Government genuinely wants the Benefits system to work, it has to find an effective way of controlling these two essential areas of daily life so that once a system that does work has been identified and implemented, it is then not rendered useless by private interest, based on nothing but profit.

We are culturally conditioned to assume that all Benefits Claimants are in some way bad

Mud sticks, as anyone who spends any time on social media or reading the news will know.

But the phenomenon of people assuming the worst of others based on the first story they are told is nothing new. And when it comes to the unemployed, being work shy is basically the accepted view.

The truth is not as straightforward and anyone at any stage of their career can find themselves out of work and having to ‘sign on’ in order to get help.

The problem with the ‘accepted truth’, is that the system itself, both mechanically and culturally treats everyone who comes through the Jobcentre door as if they don’t want to work, cannot be trusted in any way and that they all fit into the same mould as each other.

This approach overlooks the fact that people find themselves knocking on the door of the Jobcentre and the administrative centres of the DWP for very different reasons.

Some are poorly educated. Others have grown up in conditions that reinforce a world view that this is all they are worth. But there are others too who have landed themselves with significant debt to gain degrees that have proven to be of no use. People suffering illness and mental health problems which restrict the work that they can do. And even highly experienced and very well-educated professionals who cannot provide anything like as simple an explanation for what life has put them through.

Sit in a Jobcentre for long enough and you will hear claimants complain about having to wait for the money they are entitled to. You will see others lose their rag because they have not conformed to the regulations that they are supposed to. You will also witness the presence of so many security guards, it clearly suggests that behaviour of this kind is not only possible, but actually the expected constantly and all of the time.

But not all Benefits Claimants are a burden. Many want to work. But they are branded as ‘no-hopers’, instead of gaining the help and support which reflects them individually.

It is little wonder that those outside of the expereince of having a ‘down period’ in their lives take what they have for granted. Then look on and see all these people as being worthless and occupants of society’s bin.

Taking this approach is little more than deliberately setting up Benefit Claimants to fail.

It is not the action of a Government which respects and fully fulfils its role as the representative body of a civilised society. Nor is it illustrative of a Civil Service which is fully considerate of its role.

We can hardly expect the general population to think differently when the system so demeans.

A significant element of Claimants consider themselves entitled to what they receive

Because the system has been so poorly thought through and has not evolved positively in a way that sees its role strategically and as a way to raise expectation from the ground level upwards, it encourages the belief that it can be used as a substitute for real life. For not taking part. For resenting the success of others and as such seeing Benefits as an entitlement or a worthy redistribution of wealth from others.

The Benefits system only works for those who surrender themselves completely to it, leaving no incentive to escape and provide us all with that so far mythical ‘win-win’

Because the Benefits system has been so poorly thought through and has not evolved positively in a way that sees its role strategically as a way to raise expectation from the ground level upwards, it encourages the belief that it can be used as a substitute for real life. For not taking part. For resenting the success of others and as such seeing Benefits as an entitlement or a worthy redistribution of wealth from others.

The Benefits system only works for those who surrender themselves completely to it. It  leaves no incentive for Beneficiaries to escape and benefit anyone but themselves.

With restrictions placed upon how many hours a Claimant can work without losing Benefits, and the process of reinstatement being long and arduous – even before Universal Credit begins, there is zero in terms of incentive for people to take on more hours and work towards self-sufficiency.

Because the 6 Benefits together are so very complicated for one person to qualify for already, the further any Claimant journeys into this portfolio of direct and indirect income streams the less and less likely they are then to leave.

We can only ask ourselves the question if we were to find ourselves in the very same position. When everything is taken care of already, what serious advantage is there to be gained by going out and working for a wage which might never come to anything near the total that becoming subservient to the system and therefore being a Benefits slave can achieve?

Again, we cannot blame people for responding this way when the system itself not only allows but facilitates behaviour of this kind.

Help should always be given to those that need it.

For those who currently choose to be beholden to the system, there must be a process of incentives which doesn’t leave them without all the basic essentials.

It must also encourage them and accept and appreciate that they have responsibility for themselves as well as the wider community. A community which is ready to help, but is itself entitled to see those who voluntarily choose a life on Benefits as a drain on resources that we desperately need focused to provide other Public Services and that they are as such disadvantaging others on little more than a whim.

As taxpayers, we are effectively subsidising the employers of low paid workers by providing the in work benefits which allow them to survive

I have already mentioned what it costs to live and the need for a basic standard of living above.

Yet the conversation and discussion needs to go even further than the power of commercial interests over the essential goods and services for life.

The debate and the action that follows also needs to recognise the role which our Government is playing in keeping wages low and propagating a system where profit margins for large companies are exploding, whilst the millions of people on low incomes are now being farmed for the debt they have to carry, just to survive.

The money that lower income workers receive is in many cases too much to allow them to be on additional Benefits, yet not enough to allow them to be self sufficient. It keeps them ‘functioning’ at the behest of others, somewhere within the ‘in between’.

If we could freeze the prices of goods and services right now, so that they no longer rise, and we could focus in on what it actually costs a normal person on their own to live, self sufficiently, to feed, clothe and take care of themselves, put something by, have a holiday, a realistic pension and have a life which reason would tell us would make a normal person happy, we can soon begin to see the disparity between where wages sit and where right now, in these ‘static’ circumstances they would need to be.

At £10.20 per hour in London and £8.75 per hour outside, without the help of Government with Housing Benefit and Tax Credits too, even the Living Wage Foundations advisory level for a basic income doesn’t come close to what self sufficiency – that’s what complete independence from Government support –  would actually require.

Such a reality where Government support for the growth of small business is concerned alone would probably make the whole thing more palatable.

But the real beneficiaries of this State-sponsored in-work poverty are the big Companies making significant levels of profit that would in reality only dip slightly if they were to pay wages to front-line staff which would allow those employees to function within the overpriced society which their Employers have helped to create.

That this situation has been allowed to exist is beyond questionable.

That successive Governments of all kinds have allowed a situation to exist where the Taxpayer is paying over the odds for products in services in their face value alone is simply wrong.

That customers are then paying again to subsidise the wages of the staff serving them would be funny, if its implications and the reality which surrounds it not so very serious indeed.

This whole process has only been possible because Government has either borrowed incredible amounts of money, or has cut other and arguably more essential Public Services in order to allow them to provide this massive giveaway. A free-for-all that has broken the Country financially and is one of the key reasons why unfettered immigration of low skilled workers from Europe has been possible. Itself an issue which is seen by many Remainers as key to the majority vote for the UK to leave the European Union and the one which they are still obsessively attempting to resolve.

There would be some sweet irony in this if this financial mismanagement had really been helping people and UK communities, rather than being overtly beneficial to commercial interests, private profit and yes, the EU all along.

But there hasn’t, and in terms of management of expectation, this and previous Governments would appear to have hamstrung any future Government which wants to take a stand and do the right thing.

Be that as it may. Doing the right thing, is the only way that all of this is going to end up working right for everyone involved.

The solution

Like almost everything that Government and Politics touches, the key to delivering change in the Benefits and Welfare system is thinking differently.

And it’s the thinking and ideas at the top of British Politics which needs to change first before it can change anywhere else.

The responsibility of Government

Before the Benefits problem can be fixed, the understanding of what the problem actually is, must be broadened to include the wide range of factors which feed and influence the issues which those claiming Benefits experience.

Right now, there is an obsession on the part of decision makers. One which leads them only to attempt to address the effects of any problem, rather than to tackle each and every one of the causes.

Until all of the causes of problems are addressed, the Benefits system will only ever work temporarily at best, until those factors which are outside of the scope of that consideration inevitably change and then exert their negative influence once again.

A Basic Standard of Living level or the real Living Wage will only be achieved and maintained when all contributing factors fall within the reasoned influence of non-idealistic Government that considers the consequences of policy making upon ALL.

Politicians simply do not understand the power they have to change things. They do not see the scope of their roles and they have no appreciation of the influence that they could really have if they were to put the interests of ALL the people who have elected them first, rather than themselves, their Political Parties and whatever ideas or interests sit around that self-serving mix.

It will not matter how simple or complicated existing of new systems like Universal Credit might be. If they fail to consider and be considered as part of the bigger picture, they will always fail – and our Politicians have both the ability and responsibility to ensure that this is no longer the case.

It is their choice to now decide and it is their choice which must come first.

The responsibility – and acceptance of Claimants and Beneficiaries

For any solution to gain traction, it is also vital that ‘being down in your luck’ is accepted as a normal part of life, rather than being a condition which renders any of us as being sub-standard to it – the position under which Benefit Claimants are often perceived.

Those claiming Benefits fall into two predominant groups. Those who are or should be  temporary claimants and are able and willing to work. And those who are longer-term or permanent claimants who are unable or unlikely to be able to consider working again because of disability, illness, or other genuine debilitating circumstances.

All of us as beneficiaries must accept that there is and never has been a magic money tree of any kind. That the support that is given can only be provided through the act of others contributing through taxation on earnings, whether they themselves earn little or some extraordinary figure that might blow our minds.

Whilst it may currently behave as if it is, and some Politicians continue to seek election on the basis of perpetuating this myth, Government and the Public Sector is not a separate and ‘benevolent’ entity which doles out cash to Welfare recipients on the basis of being kind.

Government exists to represent the best interests of ALL British people. Government is there to help us all to succeed in whatever way that might be possible for us as individuals. And on  behalf of us all, it is there to help and provide support to those of us who cannot do so, in such ways that we may never feel like an after thought or something that others have in some way been left behind.

Government is the formal community power which represents and is therefore ‘for all of us’.

Those of us receiving help should therefore be mindful that the help we receive comes from the people next door, up the street and across our Cities and Towns.

As recipients, we are not ‘entitled’ to anything. It is simply that looking after those in genuine need is the basis upon which our civilised society can be found.

 

 

 

 

 

The ‘rent’ economy is enslaving us all, creating money for nothing for the ‘asset rich’ and progressively extending poverty to all the ‘paying poor’

December 28, 2017 Leave a comment

download (10)Every day we are hearing and reading stories about wage stagnation, price escalation, homelessness of the kind where young people can’t afford their own place, spiralling personal debt and a whole range of stories which relate to the cost of living. Stories that are repeatedly telling us that maintaining a basic life in the UK is very quickly becoming a luxury that many of us simply cannot or will not be able to afford.

Alone, each tale told can and often is attributed to a range of causes which are nonetheless real, but also overlook a common theme throughout all of these issues. The commonality between them all is the economic concept of ‘rent’. The impact of third parties taking ownership of all or part of a product, the delivery of a service, or some other form of purchase at some point in the process from where it originated to where we use or in consume it in some way.

Rent is of course a term we use in daily life to describe paying to use something which belongs to someone else. The most common usage is that of renting of a house, where instead of there being a simple relationship between an owner occupier and their house or property, the occupant rents the property from the owner, essentially increasing a basic two part relationship into three.

In just this example alone, we can take it one stage further and add a bank or mortgage owner of a buy-to-let property (1) which is rented by the occupant (2) from the owner (3) who borrows the money and pays interest to the bank (4), which may itself have borrowed that money from another bank (5).

Whilst we would normally think of just the transaction between the occupier and the property owner as being ‘rent’, in economic terms, any additional party taking something from an overall transaction or supply chain between its origin and use who isn’t essential to the core process is receiving rent of some kind. They in turn may split their role between themselves and others, each adding their own profit as they do every time it happens. Ultimately each additional participant in the chain raises the price of whatever we as users or consumers will be expected to pay.

Sometimes, a number of stages appear necessary. For instance the food we eat might have to be grown by a farmer (1), which is bought by a manufacturer (2) who pays a haulier (3) to transport it to where they will process it. The manufacturer then sells the prepared food to a wholesaler(4) and pays another haulier (5) to deliver it to their warehouse. The wholesaler then sells it to a supermarket (6) and pays another haulier (7) to take it to their distribution centre. The supermarket then pays another haulier (8) to deliver the product to its store, where it sells the finished product to us (9). Do believe me when I say that the chains are usually much more convoluted than that!

Of course, we are all guilty of falling into the trap of forgetting how complex the process is which brings us our food and most of the items that we consume or the services we buy, because for us the process seems to be so very easy. But look closer and we will soon see that even a supply chain of this size may involve unnecessary parts and people taking ‘rent’.

So what does this all this talk of rent really have to do with the cost of living?

The real problem with the provision of goods and services is that the UK operates within what is called a ‘free market’ environment, which it has been since at least the time of the Thatcher Government (1979-90). Within this free market, reduced levels of regulation and influence from the government – who we expect to guard and protect our best interests – provides the opportunity for additional 3rd parties and in fact many more of them to involve or add themselves to the chain of many of our daily transactions. By doing so, they can make significant profits from what in some cases will be as simple for them as a click to buy and another to sell.

Whether it is food, clothing, fuel and oil, transport, communications, borrowing money, or just about anything we can imagine that we can buy, there are now speculators buying and selling products and services, sub contracting responsibilities to others, all of them taking additional profit by taking ‘rent’ which there is no practical reason for anyone needing to pay. They indirectly inflate the prices we pay for the end product, increasingly making those things which should really be quite affordable, simply too expensive for us to buy.

These speculators do this because they can. There are no real rules to stop them, and they are making as much money as they can without any consideration for the impact of their actions on the end users – that’s us. And they have little concern that they will have to stop doing so, because the banks simply continue to lend money to the people who have been forced by this process to borrow – if indeed possible – in order to survive.

Think about what really caused the 2007-08 Financial Crisis, which was the sale, resale and resale again of financial products or debts which became so complex, even the financiers themselves didn’t really know what they were buying and selling on.

Bankers were making massive amounts of money – all because nobody was monitoring exactly what they were doing, whilst their own ‘success’ blinded them to how value was being created by lending to people at one end of this elaborate chain who simply didn’t have the ability to pay back what they had been lent.

The Bankers didn’t care before it happened and they don’t care now. They are still not regulated in the way that they should be, and were actually saved from going under in 2008 by the Labour Government at the time by giving them Billions of Pounds of money in bailouts and rescue funds that the Government itself borrowed, and which we are still paying for through the accumulation of public debt.

These are people, banks and companies who are quite literally making money for nothing, and its all at our expense.

The ‘rent’ economy has been evolving as the reality in which we live for many years now. But it is only as more and more products and services have come under the control of those with the money and unrestricted influence to speculate, whether it has been through privatisation, the development of near monopolies or money simply being placed within unscrupulous hands, that the real impact of ‘farming everything for profit’ has began to become fully clear.

 

 

 

Rail fare hikes and tough talk on welfare waste: Today’s problems will not simply be solved by continually taking more from pockets when there is even less to replace it.

January 2, 2013 1 comment

With a 4.2% average rise in ticket prices hitting rail commuters today, just how long do politicians think that rises in the cost of essential services, utilities and products will remain ‘sustainable’?

Stories such as this one and also the attack on welfare payouts by Iain Duncan Smith in just the past two days alone demonstrate just how little emphasis there really is in dealing with the root causes of problems, which may be unpalatable to those in power, but are nonetheless very real indeed.

As a businessman with both conservative and capitalist principles, I have enthusiastically embraced the opportunity to be both enterprising and entrepreneurial throughout my career. However, I also learned very early on that there are basic laws at work within business, one of which is that costs will generally be fixed, but profit will always be variable.

Where this goes wrong in the economy is in situations where those in control of businesses are able to fix minimum profit margins and then seek the cost of investment and renewal through price hikes which usually only affect people and other businesses who themselves have no ability to raise their own incomes or margins to cover those very same costs.

Those reading this who have experience of the commercial sector in its broadest sense will know that the circumstances which generally allow this darker side of capitalism to thrive, only exist within monopolies or within industries which provide services or products which people must have; many of which were once in public hands.

The history which has given privately owned businesses the ability to dictate the ‘breadline’ or to become able to ‘profit in misery’ is a long one. Profligate spending by idealistic politicians who believe in the principle of something for nothing, simply created a situation which left others with a more realistic understanding of the way that an economy really works with little choice in the way they had to respond.

The age of privatisation was soon born and responsibility for its evolution cannot be levelled at the door of any one Conservative, Labour or Coalition Government, as all have played their part since the 1960’s.

What can equally be said is that no one person who can ask for the votes of many thousands of people, can reasonably expect to retain any sense of respect as an MP if they have accepted that responsibility and then failed both to recognise and then to act upon the damage and pain that such levels of power are causing in the wrong hands.

Yes we need travel fares that make a job worth travelling for. Yes we need reform of welfare, benefits and taxation so that there is an incentive for all to work and stay in this Country. Yes we need managed investment in just about every area of life and infrastructure that we could conceivably imagine.

But we also need Government which is responsible, confident in taking risks and ready to deliver reforms which may well include legislative restructuring of businesses offering essential services in order to limit what they actually make.

The failure of Government to ensure and safeguard basic costs for independent living is a root cause of many of today’s problems and will not simply be solved by continually taking more from pockets when there is even less to replace it.

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