Benefits culture: taming Leviathan...............

‘We must roll back the frontiers of the State’ was the clarion-call from a precocious, pudgy, pudding-basin coiffed 16-year old William Hague at the Tory Party conference all those years ago. He has not done much about it since.

 

There is a strong feeling in the US and  UK (but not in dirigiste Europe) that the state ‘has grown, is growing, and ought to be diminished’. The feeling is a tad inchoate. There is not much idea on how to achieve it.  The Tea Party doesn’t concern it with such niceties. It simply wants to roll the clock back to the19th Century when the Federal State was so small it had not even introduced income tax and the good ol’ boys could get on with their lives without ever coming into contact with officialdom. They may not realise this but it makes them disciples of Karl Marx part of whose philosophy was that under communism the central state would largely wither away along with capitalism as the workers took control of their own destiny. So Sarah’s really a commie.

 

No use looking to the Land of the Free for solutions: it is an over-regulated swamp, over-governed with myriads of official bodies the purpose of which is, in many cases, totally opaque, plus vested interests such as agricultural subsidies designed for poor farmers during the Great Depression being grabbed by agribusiness, plus over-mighty public service unions that plunder the revenues.

 

To find a cure for over-government we must first find the cause.

 

And it’s not Them. It’s Us.

 

We constantly insist that government should do more –‘They should do something about it’ is the plaintiff cry in almost any situation. We want bigger, better and more services. We have become welfare junkies. The Welfare State was largely conceived by the Webbs way back in Edwardian times, but its real father, Beveridge, was the architect. His concept was a safety net. Welfare has since become a lifestyle choice. We have created a dependency culture that creates entire nuclear families in which nobody has done a tap of work since leaving school. We are now told that 56% of taxpayers take more money out of the system than they put in. Half the country is grub-staking the other half.

 

Iain Duncan Smith’s reforms are a start to putting things back in order, but they go nothing like far enough. The cut-off point for benefits is £24,000 a year. This is the average wage (not the minimum). Not much incentive to work there, then. A family nearby lives courtesy of welfare in a large expensive house currently on the market for around £800,000. There are 5 adults all living on benefits. If they are drawing at the ’cap’, that’s £120,000 going into the household. They each have a car.

 

Politicians of all stripes know that this is unsustainable and something must be done. The trouble is that they have yet to figure out how to get re-elected afterwards.

 

It does not have to be this way. Elsewhere they do things differently.

 

In parts of Asia social services are not delivered by Government  but by NGOs specifically set up for the purpose and which are subject to very stringent performance ratings. If they fail to meet them the funding is cut off and they lose their jobs.  In Singapore welfare is funded by a levy of 20% on wages and 15.5% on the employer. What you get out is what you put in.

 

In the Nordic countries, the smug socialism ran out of money. Reform moved from desirable to necessary or bankruptcy was certain to follow. A system in which income tax could exceed 100% had no alternative.

 

There has been a revolution in social welfare.

 

Pension funds have been put on a defined-contribution basis in place of defined-benefit. Most education is provided by in dependent schools with a voucher system for parents so that they have a choice. Much of health-care has been privatised, and there is a small charge for treatment. The retirement age has been raised to 67. Taxes have been slashed, productivity increased as people return to the work-force, and the Scandinavian economies are amongst the strongest in the world.

 

Like it or not, radical change must come to Britain. Leviathan can be cut down to size.

 

But we have to get our snouts out of the ‘eat all you can’ running buffet.

 

As Maggie was wont to say ‘there is no alternative!’