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Demos (UNUM) report on welfare policies.

Messages
13,774
Funny stuff. They barely bother to hide the fact that they're producing a puff piece for private insurance companies. Demos is also where James Purnell went, the Labour minister who kicked off the biopsychosocial reforms to welfare that UNUM wanted.

Surely those who work for Demos should be ashamed of themselves.

I wanted to pick out quotes to highlight, but just found the whole thing hilarious. I did add a couple of comments in bold.

Max Wind-Cowie (the writer) seems to be a bit of a twat generally, and the sort of person who should fit right in with the London establishment.

http://ask.unum.co.uk/wp-content/uploads/2011/06/Demos-Report1.pdf

Executive summary

Incapacity welfare is a much misunderstood, and much
maligned, area of huge government spend. Successive efforts to
reform the way in which incapacity benefits are assessed and
paid in the UK have played on a suspicion that many who claim
them are ‘scroungers’ and ‘benefit cheats’ to justify increased
conditionality and more stringent testing. But the truth is that
incapacity benefits in the UK are not only low but also
insufficient for most people’s financial needs. They may be
hugely expensive overall, but they are relatively ungenerous at
the individual and household level. This is particularly problematic
for those who find themselves unable to work having
previously earned at or above the average UK wage. This group
will experience a significant financial shock, long-term hardship
and steep reduction in living standards if they fall victim to a
severe illness or disability that leaves them unable to work. The
relentless emphasis on managing the existing benefits system to
ensure that cheats do not receive benefits fails to address the
inadequacy of our incapacity benefit system in dealing with the
UK’s ‘squeezed middle’.

This report sets out to address two interlinked deficiencies
in public policy: the inadequacy of welfare coverage in
protecting the squeezed middle when they are unable to work,
and the huge cost to the taxpayer of disability benefits. It might
appear that solving the former implies worsening the latter – that
better standards of living for those unable to work necessarily
means a more expensive benefits system. This report
demonstrates that this is not the case. By encouraging individual
responsibility and engaging with the insurance industry the UK
can simultaneously lift the level of financial protection available
to the squeezed middle while reducing the cost on the state. The
key is income protection.

In order to understand how our incapacity benefits system
works, how it is perceived and how it compares with other
countries we have engaged in a two-stage research process. We
have spoken to the squeezed middle – those earning between
£16,000 and £50,000 – through focus groups to understand what
they know about welfare in the UK and how they feel about it.1
At the same time we have developed an Index of Financial
Protection, which compares the UK with peer countries in
Europe, North America and Australasia – comparing the
coverage from state benefits and the coverage from private
insurance (including income protection, pecuniary loss and
related health benefits), while controlling for factors such as
different healthcare markets.

Taken together, this research tells a compelling story about
UK incapacity benefits. They are neither adequate for the
financial needs of the squeezed middle nor particularly generous
when compared with other countries. Our overwhelming reliance
on the state in the UK may, in fact, be a contributing factor to
our relatively ungenerous state offer. The UK’s tiny market
density for income protection – just 11 per cent of the labour
force are covered by an income protection policy – leaves people
overwhelmingly dependent on the state if they are unable to
work.2 What is more, the squeezed middle understand and resent
their vulnerabilities. They believe the benefits system is unfair
because it lacks reciprocity and that it fails them because it does
not take their financial commitments and needs into account.
They know they would be unable to sustain their standard of
living – or indeed their home if they are mortgage payers – in the
event of being left unable to work by accident or sickness. While
they are keen to engage with alternatives, and to be better
protected, they believe that this would mean ‘paying twice’ and
are angry that government does not recognise personal
responsibility in this area.

Government should engage in ‘supply side’ reform of
incapacity welfare structures and expectations. Only by better
protecting the squeezed middle from risk can it hope to
maintain their support for welfare more broadly – average
earners are particularly concerned about their financial
vulnerability and want government to help them better protect
themselves against the risks of disability and severe illness. But
reform is not simply necessary to ensure welfare’s continued
appeal to average earners – it is a source of huge potential
savings for the Exchequer too.

Cost benefit analysis of the recommendations in this report
show that by reforming the way in which statutory sick pay is
managed and providing incentives to those who opt to protect
themselves, government could save £2.24 billion of taxpayers’
money a year. These savings emerge without any additional
reform to the welfare system – they are recouped simply through
the existing means testing framework. The potential savings will
increase further as government normalises means testing across
other benefits such as DLA.

Reform to encourage individual responsibility and income
protection is genuinely of mutual benefit. Individuals, households
and families would be more secure, less vulnerable to
financial shocks and able to maintain their standard of living in
the face of personal tragedies. The Exchequer would save
billions of pounds in benefits expenditure and free up resources
that could be used to target help and interventions much more
effectively.

The approach laid out in this report builds on the theory
and practice of ‘libertarian paternalism’ or ‘nudge’. Nudge is not
a panacea for policy makers and it cannot replace existing levers
of influence at the disposal of government. However, there is a
clear use for its methods in the area of personal finance and
welfare. First, it has a precedent in this area – the ‘opt out’
reforms to pensions are a classically libertarian paternalist
intervention aimed at encouraging pension take-up while
allowing people independence and choice over their personal
finances. The UK has taken an approach which dictates that
where there are existing compulsory demands on employers –
such as in statutory sick pay – it is fair and reasonable to
maintain the settlement and continue to regulate, but where
there are no existing provisions incentives and ‘nudge’
interventions would be used rather than create a burdensome
new layer of bureaucracy at this difficult time for employers.

Welfare provision in the UK has been perceived as being
solely the province of the state –a norm this paper explores and
seeks to refute. It outlines recommendations that suggest
‘nudge’-type interventions may allow policymakers to change
this norm without dictating change to citizens.

Recommendations

Reform statutory sick pay
Statutory Sick Pay (SSP) is the basic living allowance paid to
those who are too unwell to continue in their job but who have
not yet become unemployed. It is paid by the employer and
serves to ensure that those who face a new disability, sickness or
health problem are not left without an income as they discover
whether it is possible for them to return to their job. But SSP is
dead money. It does nothing other than provide a bridge
between employment and benefits. We urge the government to
change the requirements placed on employers – to compel
employers to insure their employees against sickness, ill heath
and accidents so that an insurance company, rather than
employers themselves, will be responsible for paying SSP. The
reason for this is straightforward – by insuring employees, rather
than paying out a flat cost whenever an employee becomes too
unwell to work, employers will benefit from the extensive
rehabilitation and return to work schemes that insurers offer.
And insurers, driven by a financial incentive as well as broad
experience in successful return-to-work programmes, will be
incentivised to intervene early and effectively. This brings a net
benefit to the employer – currently employee absence costs
employers an average of £517 per employee per year in lost
production, SSP and extra overtime costs.3

But it would also bring a substantial benefit to the
government. Research has demonstrated that the types of
intervention offered by insurers to assist people who return to
work are 43 per cent more effective than non-intervention (which
is the status quo).4 Considering that 644,000 people flow onto
Employment and Support Allowance (ESA) every year (of whom
around 300,000 are estimated to flow from SSP) there are
substantial opportunities for intervention before people ever
encounter the benefits system.5 That is where the interventions
offered by insurance schemes have a place – a reduction by 43
per cent of the flow through from SSP to ESA would save the
state £139 million a year.

The workplace is the right environment to promote income
protection. It is the place where employees are most prepared to
discuss their finances, and it provides the right space for
discussions of financial protection. When employers contribute
to schemes on behalf of, or in conjunction with, employees it
lessens the overall cost and the cost to the individual
significantly.

Reciprocate responsibility

In the qualitative work that we conducted with the squeezed
middle a recurring theme was their sense that the welfare system
lacks reciprocity and, therefore, fairness. Their concern for the
fact that they would be unable to survive financially on
incapacity benefits was not enough, alone, to motivate them to
protect themselves. They thought it essential that there should be
some form of incentive to encourage them to address the issue of
income protection and to seek coverage. We recommend that
government recognises the personal responsibility – and savings
to the Exchequer – that underpins income protection. A
suggested incentive of £100 per policy – paid from National
Insurance to those individuals who purchased an income
protection plan – could save the state as much as £2.24 billion a
year in unemployment benefits.

Build the market

Income protection is not a norm in the UK. In countries where
there is greater density of financial protection – and of income
protection specifically – the labour force is better protected
against the risk of disability, sickness or ill health, and these
countries tend to have more generous state cover as well.
Government should look to build the market overall so that UK
workers benefit from the more robust, generous and secure levels
of overall protection prevalent in countries with a greater density
of financial protection coverage. We recommend it does this by
offering subsidised income protection policies to public sector
employees and sharing the National Insurance rebate available
with employers who choose to subsidise coverage for their
workforce. These measures could be introduced over time and
would serve to encourage the development of market capacity
and the establishment of a new norm for employers and
employees alike.

Reform the £16,000 savings means test

[Actually, this bit isn't so bad. I don't think their solution is that good, but there is a problem here. I think it would be better to just make the means testing of benefits much more gradual]
The £16,000 savings means test forces those who become
unemployed to spend any savings above £16,000 before
receiving state assistance. This policy is counterproductive as it
penalises responsible, future-orientated behaviour and
exacerbates the financial shock of unemployment for the
squeezed middle. Analysis of the government’s proposed welfare
reforms has shown that families will be strongly incentivised by
the new structures to keep savings below £16,000. This was a
cause of deep resentment and anger in our focus groups and
undermines efforts to encourage more responsible financial
behaviour.

We recommend that government turns this policy on its
head, so that savings are left untouched by the state for the first
six months of unemployment and can only be brought into the
means testing framework after that time. In implementing this
reform government can not only encourage saving and send a
clear signal that it supports financially responsible behaviour,
but also directly incentivise those who have savings to return to
work. Rather than depleting their savings from the moment they
become unemployed, the deadline of six months would provide a
clear financial incentive for these people to return to work as
swiftly as possible.

The welfare landscape

Welfare is the single biggest area of government expenditure.
When we add up the cost to the taxpayer of unemployment
benefits, tax credits, pension benefits and other entitlements, the
huge cost that welfare places on the Exchequer is clear. The
public spends £135.7 billion a year on welfare – an unsustainable
amount in periods of wealth, and an unaffordable bill in an age
of austerity.6

Reform to welfare is a priority for this government – as it
was for the previous administration – and solving the complex
and interrelated social problems associated with unemployment
will take time and systemic change to the benefits system. The
focus of this report is deliberately restricted to examining how
people who lose their jobs as a result of accident, disability or a
long-term health problem fare under our current welfare system,
how that compares with international comparators and how we
can both improve their financial health and reduce the cost to
the state.

This area of welfare policy is, in itself, complex. People who
are unable to work as a result of accident or ill health face huge
challenges recovering from or managing their condition. They
are unable to return to the workforce swiftly, if ever. Their
financial situation is often precarious – particularly if they have
limited savings or personal assets – and, currently, they are overwhelmingly
dependent on the state for income. There are only
3.6 million active income protection policies in the UK; the rest
of the workforce is covered for accident or serious ill health only
by the state and whatever personal savings they might have.7

It is often imagined that those claiming benefits due to
disability are mainly either suffering from congenital problems
that have always prevented them from working or are older
people who have become less able to work over time.8 In fact,
the largest category of new claimants for ESA – those moving
from the workplace and onto benefits because they are unable to
work – are those aged between 35 and 54.9

Figure 1 shows that 32 per cent of ESA claimants are aged
16–34 years compared with 15 per cent of Incapacity Benefit (IB)
or Severe Disablement Allowance (SDA) claimants in this age
group. The reverse can be seen in the older age group: 18 per
cent of ESA claimants are 55 years old and over; 33 per cent of
IB/SDA claimants fall into this age group. This tells us that
those transferring to ESA because they are unable, for the time
being, to work because of accidents or ill health – and those who
are claiming IB because they are severely disabled – are
predominantly adults aged between 16 and 54. These are the
individuals most likely still to be paying mortgages, and have
dependent children and high fixed outgoings. This category is
also further away from pensionable age, therefore facing a
potentially longer period of dependency on state benefits.

ESA payments are between £51 and £65 a week –
depending on whether you are over 25 and have dependants –
for the first 16 weeks, followed by payments of an average of
around £70 per week. You may receive assistance towards
housing costs – full rent or a contribution towards your
mortgage – but this assistance depends on a labyrinthine set of
means-testing rules governing your savings and assets. It is little
wonder that as many as 60 per cent of people with disabilities or
long-term debilitating health needs live in poverty in the UK.10
Research has also shown that 61 per cent of working adults
would be unable to cope financially if they were unable to work
as a result of sickness or disability.11

For individuals, the hardship of disability and ill health is
often exacerbated by poor financial protection. For the state,
taken as a whole, claimants of incapability benefits are an
enormous net cost on an already struggling welfare infrastructure.
There are around 2.61 million recipients of state
incapability benefits with around 684,000 new claims every
year.12 The total cost to the taxpayer, of providing incomes to
those unable to work, excluding housing and carer costs, is
around £16.9 billion a year.13 That figure represents an enormous
cost for the taxpayer – it is, annually, a fifth of the five-year
spending reduction target of this government.

The UK’s income support for individuals who are unable
to work suffers a double fault. It is too expensive for the taxpayer
while, simultaneously, being ungenerous to the individual. [This sums up the report really - what we need is the magic money that appears when private insurance companies get involved! We definitely shouldn't use the tax system to raise revenue in order to allow the sick and disabled to have access to funds which they can use to improve their quality of life - that traps them in dependency, and allows even those scum who started to suffer from health problems/disability before they started to earn a good salary to have access to support. Only when much of the money goes to insurance companies share-holders can we know that we have a truly efficient system]
This observation is borne out by both the qualitative findings of
our focus groups with average earners and by our Index of
Financial Protection; these are explored in the following
chapters. The truth is that our welfare state does not score well
compared with those of peer nations in its generosity to average
earners who find themselves unable to work, and our system is
also hugely expensive to the taxpayer. There are other factors
that should be considered when considering whether reform is
necessary to our system for looking after those who cannot work,
for example, the dependency created by our welfare system and
the lack of perceived fairness and reciprocity in the system. But
whatever one’s political or moral beliefs about welfare there is a
simple and stark fact that should drive us to examine how reform
might be achieved: our disability benefits system is too expensive
and burdensome for the taxpayer while failing even adequately
to support those who find themselves unable to work. [Is this a fact? They've not done much to show it is, other than repeatedly stating it.] It is
neither cost-effective nor generous.

Income protection can be a tool for individuals and the
state in meeting these challenges. That is not to say that there are
significant challenges in using the insurance market to meet the
needs of those who find themselves unable to work. The UK
public has a poor understanding of what income protection
actually is – they associate these products very strongly with
payment protection products (which have received a great deal
of negative publicity) and are nervous about involving the
private sector in welfare.14 But personal income protection –
properly regulated and sold responsibly – can increase the
income of those who find themselves out of work, reduce the
burden on the state to pay for the needs of those who are
unemployed through accident or ill health, and all in a fully costed
and self-sustaining way. [So the problem is that the public don't want Unum involved, but UNUM are paying for the 'expert' policy analysis, so deserve a return on their investment?]

What is income protection?

It is worth establishing what income protection is and how it
differs from other products, such as payment protection and
critical injury protection. Like any insurance product, beneficiaries
of income protection pay a premium to cover themselves
against the risk of disability or serious ill health and are then
covered if that risk (which affects us all) becomes a reality for
them. Income protection is cheaper for individuals when it is
bought through their employer – known as ‘group cover’. Where
employers offer group cover many also choose to contribute
towards protection on behalf of their employees.

Income protection is designed to give people an income if
they find themselves unable to work as a result of an accident,
sickness or ill health. In that sense it works a little like state
benefits – claimants receive an income if they are incapacitated
and unable to work. But there are significant differences. Income
protection relates the income received by an individual to the
income that they have lost – paying out at between 50 and 75 per
cent of their previous salary. This means that for those who are
covered by an income protection scheme the financial shock of
losing work following impairment is significantly reduced.
Income protection, in effect, functions as a safety net to
prevent people slipping into poverty in the event of being
unable to work. Because it is related to prior income the sum of
money received is relevant to an individual’s outgoings and
current standard of living, which makes those covered less likely
to suffer additional financial problems such as potential loss of
their home or being suddenly unable to pay bills. But it also
functions as a parallel support mechanism to help people return
to the workplace if and when able, and to return to relative
health. Most income protection plans include rehabilitation
services to help people recover and re-enter the workplace.
These interventions are hugely successful – in fact they lie
at the centre of government’s efforts to shift claimants out of
ESA and onto Jobseeker’s Allowance (JSA) so they can return
to work. [That has been hugely successful!]

Income protection policies – therefore – can serve to
answer the concerns about the relatively ungenerous nature of
incapacity and employment support benefits. What is more,
these products do so without greater expenditure from the state.
Why then are income protection products relatively unpopular in
the UK? There are only 3.6 million income protection policies
active in the UK at the moment – from a labour force of almost
32 million people.

Later in this report we will analyse more closely what can
be done to encourage greater awareness and take-up of income
protection products – and outline the potential savings to the
state – but it is abundantly clear that beneficiaries of income
protection products are themselves better off and better
supported than those who do not have this coverage. That fact
alone should encourage us to look at how the income protection
market can be bolstered and encouraged in order to better
protect more and more people from the financial consequences
of disability and sickness.

Reform of pensions

We should not forget that welfare in the UK shares a
governmental home with pensions. And it is from new policy
initiatives in the area of pension reform that this report draws
some of its lessons and insights for unemployment and accident
and sickness provision. From 2012, unless employers are already
operating a pension scheme that meets the required criteria (or
set one up), employers will have to enrol each eligible employee
into the NEST pension scheme.

The NEST scheme (formerly known as the Personal
Accounts scheme) becomes compulsory for employers in 2012. It
is designed to ensure that those who work, who do the right
thing day-in, day-out, are provided for at an acceptable level
when they come to retirement, and that employers and
employees are aware of their responsibility to plan ahead.

NEST is simpler than an individual company pension
scheme and it pushes employers and employees into doing the
right thing. But it is not draconian. Employers and employees do
not have to take the option provided by the Government and are
encouraged to shop around. It is surely only possible to
introduce this model of pension provision because of the steps
towards inducement and incentivisation that were taken
previously – encouraging personal responsibility for pensions
and creating a positive norm whereby most employers offer
private protection as a matter of course. We start in welfare a
long way behind the position on pensions, but a start can be
made. The long-term aim of this report is not necessarily a
NEST equivalent for employees’ income protection, but it is to
reproduce the norms and expectations around pensions in how
we regard accident and sickness coverage.

Reform to our welfare system to embed and reward
personal responsibility would help to alleviate some of the very
real, and justified, concerns about the fairness of UK welfare.
By expanding and supporting the private insurance market –
to encourage personal responsibility and reward personal
agency – government can diminish the trap of dependency
while also leveraging some of the risks and costs of accident,
sickness and disability away from the state. This means
encouraging awareness and take-up of income protection, as
well as creating new markets to allow the insurance industry to
play a role in the rehabilitation and support of those who are
unable to work.

Making personal welfare work

This pamphlet explains why personalised welfare systems are
important – on the practical grounds of what individuals receive,
the moral grounds of personal agency and resilience, and the
economic and political grounds of a reduced cost to the
Exchequer. In making the case for personal welfare we look at
examples from around the world – exploring what works where,
what we can learn from international examples and why some
solutions simply aren’t applicable in the UK. We make a series of
policy recommendations that are designed to encourage people
to protect their incomes against accident and ill health –
protecting their standard of living, alleviating the potential to
fall into poverty, and reducing the cost to the taxpayer.
In seeking to develop our recommendations for personalised
welfare, we have premised our work on three principles,
along whose lines welfare policy should be developed in order to
reduce dependency, increase trust and win public support.

First, reform must encourage future-orientated behaviour
so that people understand and act on their personal responsibility
for their financial futures. There is strong evidence that
encouraging future-orientated behaviour in one area promotes it
in others; this should be a key aspiration of welfare reform.15

Second and third, reform should also focus on two
interlinked concepts that were overwhelmingly important to our
focus group participants – fairness and reciprocity. We have
uncovered a growing sense among average earners that the
welfare system fails the so-called squeezed middle because it does
not compensate them adequately and does not recognise their
contribution. Fairness and reciprocity must be at the heart of
attempts to change the way the UK ‘does’ welfare and they
underpin our recommendations in this report.

These principles are reflected in the analysis and
recommendations of this report. They are fundamentally
conservative ideals with progressive underpinnings. We apply
them to the current welfare settlement, finding that it is neither
perceived as, nor in fact, ‘fair’ for low to middle earners and that
many pay more into it than they would ever hope to receive,
while also being actively discouraged from future-orientated,
responsible financial behaviour. We apply these principles, as
tests, to international case studies too – to demonstrate that it is
possible to construct a more future-orientated, fair and reciprocal
welfare system. Finally, we apply these tests to the
recommendations we make for reform, so that people who invest
against the risk of accident and ill health can be confident in the
fairness and viability of the insurance products they buy.

[That's the summary, so only 25 pages of a 100 page report.]
 

currer

Senior Member
Messages
1,409
Interesting report esther thanks for putting it up. I havent time to read it properly now Ill try to later. Bump.
 
Messages
13,774
Interesting report esther thanks for putting it up. I havent time to read it properly now Ill try to later. Bump.

Ugh... I was planning to go through the rest of it, but forgot. Curse your BUMP! I might try to sit outside instead today. It did seem terrifyingly bad. When reports like this are mentioned on the news, they give the impression that they're more impressive than one guy coming up with excusers for writing what his sponsors want. It was just so shamelessly driven by UNUM's interests that I'd have thought it would be counter--productive - everyone would dismiss it out of hand.
 

SilverbladeTE

Senior Member
Messages
3,043
Location
Somewhere near Glasgow, Scotland
the Uk government bastards recently have been thinking about removing disability payment linkage to inflation...think about it.

insurance companies for health, are PARASITES and some are guilty of mass murderer by encouraging methods to prevent legit claimaints from getting their pay outs thus not able ot get health care and thus...death.

Welfare cheats at the bottom are vaslty less coslty than the cheats higher up, but nice targets for the tabloids who in times/nations prior would have had such folk butchered.
Fed up with all of it.

Sooner the filthy Westminster government is destroyed, the better (not by bombs but by massive protest/voting).
break it up, far more accountable smaller national/regional governments, and then hunt down a crap load of ex-MPs and ex-ministers in particular, put them through the police wringer and shake them until the money falls out.
many of them you will find working for companies they had financial dealings with while in government, and come up with pathetic excuses to explain away their £250,000+ pay packets, usuaully with several companies at same time. All those SOBs should be jailed.
Not gonna happen so best we cna hope for is Scottish independance to save lives/cultural moral integrity up here.
Suggest North England and Wales do same, pronto. Sigh :(
 

currer

Senior Member
Messages
1,409
I'm all for Scottish independence. Who would want to be linked to the current British government?
 

SilverbladeTE

Senior Member
Messages
3,043
Location
Somewhere near Glasgow, Scotland
I'm all for Scottish independence. Who would want to be linked to the current British government?

sorry mate :/
as said, not anti-English, I'm anti Westminster/entire british "system" of megabullshit, sigh :(

Look at the great things we can/have done together, like the Jodrell bank Radio telescope :)
but as always they had to fight tooth and nail against the Whitehall "mandarins" and clueless politicians.
now it's jsut a sick mess.

and this is going to KILL people on welfare.

http://www.bbc.co.uk/news/uk-politics-19629997
Government eyes end to benefits and inflation link


Comments (1153)

_50807801_receiptandchange.jpg
In September 2011 inflation came in at an unusually high 5.2%

Related Stories


The government is considering ending the automatic annual increase in benefits in line with inflation, sources have told BBC Newsnight.

If implemented, the move would see many benefits frozen for two years, then rising only in line with average pay.

In recent years inflation has risen at a far higher rate than average earnings - Whitehall officials say a switch since 2008/9 would have saved £14bn.

The government needs to find £10bn of extra savings in the welfare budget.

Sources stressed the detail of how to make these cuts had not yet been discussed. They would not be drawn on which policies were being looked at.

Newsnight understands that the new £14bn figure is entering into fractious government debate over how to make a further cut to the welfare budget - something occupying minds at the top of government.
Liberal Democrat resistance
The move, under which millions of claimants' benefits would eventually inch up at the same pace as average earnings, would affect a wide range of working-age benefits including jobseeker's allowance and housing benefit.

Chancellor George Osborne has told the Department for Work and Pensions (DWP) it must come up with the extra £10bn reduction to allow cuts to other government departments, due to begin in 2015, to stay at the level they are now, rather than go deeper.

Mr Osborne tried to refashion the link between benefits and inflation last September when inflation came in at an unusually high level - 5.2% - but he was beaten back by an alliance of the Liberal Democrats and the Work and Pensions Secretary Iain Duncan Smith.

Though he was unsuccessful then, the idea has resurfaced. One Whitehall source close to the process said: "A freeze [to benefits] for a couple of years would help us get to the £10bn."

_62951270_reuosborne.jpg
Chancellor George Osborne has demanded a further £10bn welfare saving

Tory strategists believe they have polling evidence which would put significant numbers in support of an end to so-called benefits uprating.

But the possibility of freezing benefits will anger Liberal Democrat activists as they prepare to gather in Brighton this weekend for their annual conference.

Many in the party believe the coalition should find the further £10bn of cuts through tax rises such as wealth taxes and there should be no further cuts to welfare.

An increasing number believe the welfare budget is already straining to bring in its current £18bn of cuts.

Historically benefits have often risen by less than wages, with inflation not typically as high as in recent years, and it is already falling this year.

Despite this, coalition sources say it is not clear wage growth will recover to its former health for a while, which will require the examination of the relative increase in benefits versus that for wages.
Benefits freeze
One option now being weighed up inside government is the freezing of 90% of benefits - which officials estimate would make savings of £7bn in one year.

“Start Quote

We are aware that there is the effect on poverty to be considered but we believe that benefits have risen by so much over the last few years that a freeze for a couple of years would help people deal with the transfer. When you see the savings possible, it is simply mind boggling”​
End Quote Whitehall source

However, coalition sources suggest this is likely to be discounted as too harsh, since it would include disability benefits.

Instead, other options are being discussed which coalition sources believe would be "fairer".

Senior figures are proposing a two-step change to the payment of benefits. At first there would be a freeze to a wide range of working-age benefits to last for two years. After that a new link would be introduced between benefit payments and increases in wages.

Officials said they did not want a huge increase in benefits should wages start to climb very sharply, so work was being done on the exact linking mechanism.

The IPPR think tank has estimated that had benefits been linked to earnings, not inflation, over the last few years, jobseeker's allowance would be a weekly £66.81 rather than £71.

Sources said they were mindful of the risk of pushing benefit claimants into poverty, but that there was potential for massive savings.

"Benefits are rising faster than earnings; this does not encourage people to go to work. Benefits were never meant to be a salary replacement," one told the BBC.

"We are aware that there is the effect on poverty to be considered but we believe that benefits have risen by so much over the last few years that a freeze for a couple of years would help people deal with the transfer. When you see the savings possible, it is simply mind-boggling," the informant added.

Sources believe the change would not be implemented quickly, but could be in place by 2014, suggesting it is being eyed as pre-election challenge to Labour and the Lib Dems.

One benefit which will not be affected is the state pension. Pensions are now protected by a "triple lock" which means they will go up annually by either inflation, earnings, or 2.5%, whichever is higher.

Having introduced this measure, the coalition will not touch it. But all other benefits are not protected in this way.

ditch that gawd awful useless Trident missile system, save £25 billion for USEFUL stuff, like our USEFUL military and welfare systems
fat chance though, they have ot appeal to the Daily mail voters, sigh
 

Tito

Senior Member
Messages
300
There is something I never understood:
What don't they make a list with the most expensives illnesses in terms of incapacity benefits (such as ME, schizophrenia, and any diseases affecting people long term during their productive years) and invest massively into research for a cure or effective treatment allowing people to earn a decent earning again?
 

SilverbladeTE

Senior Member
Messages
3,043
Location
Somewhere near Glasgow, Scotland
tito
as Alex and I have spoken of, each bunch of assholes only sees/cares for their OWN agenda/little piece of the pie

if Minion #1 tells his boss that this woll require research money, oh no that's bad!! becaue short term profit/loss and having ot move their asses is ALL they "see" and care about. they don't give a damn about long term issues.
pass the buck to the next guy...

similar lunacy has caused major accidents and disasters like Chernobyl, because it's a common Human failing

the Boss always wants ot be in charge, doesn't want bothered, is often grossly unsuited for their role

the Bosses direct minions (1st teir) are often brown nosing asshole bastards, or harrassed folk just waiting for retirement to get away from the maddness.
It's quite ocmmon over time for such set ups to drive off the diligent people, who get fed up with the sychophants and crooks, and the sychophants and crooks go out of their way to backstab the decent minions who threaten to expose the fact the sychophants/crooks are indeed useless assholes!

often problems are caused by the "direct minions" trying to do things to keep the boss happy or ignorant/asleep/quiet, even if the thing they are doing has not been sanctioned by the boss

so, the Boss thinks ME/CFS is indeed, all about "malingering narccist wastes of time assholes", so screw them, he thinks
because that's what his minions have told him! He genuinely doesn't know better
you'd be surprised how often leaders end up seperated from the realities by such crap
 

alex3619

Senior Member
Messages
13,810
Location
Logan, Queensland, Australia
There is something I never understood:
What don't they make a list with the most expensives illnesses in terms of incapacity benefits (such as ME, schizophrenia, and any diseases affecting people long term during their productive years) and invest massively into research for a cure or effective treatment allowing people to earn a decent earning again?

Hi Tito, I have previously suggested that minimum (not maximum) spending on medical research for each disease should be 0.1% of what it costs a country. That would be $25,000,000 for the USA for CFS alone, or about four times current budget ... as a minimum. When research is under that, you have to ask why. However I think a more realistic figure for ME and CFS research would be on the order of a hundred million. Bye, Alex