Signposts to the end of our 'free stuff' culture

We speak a lot about ‘standing on your own two feet’ and ‘taking responsibility for your own life’ but too often treat this as if it applies to everyone else but us

It should have been an easy change to push through. A benefit where a quarter of recipients are millionaires, that gets sent to expats in Spain and Cyprus where it keeps the recipient in white wine for the winter. The Winter Fuel Allowance was the obvious starting point in the long haul of reforming Britain’s entitlement system, a universal benefit that represented a pleasant dollop of cash for recipients rather than the difference between eating and heating:

“Yesterday the government gave us £500 for nothing. Or rather to pay for heating during the cold months. Free stuff. And better than that the government is committed - has locked in - that we get an escalating amount of free stuff in years to come. Not because we are especially deserving but simply because we have reached a particular age. Nobody asks whether we need the money, nobody peers into our bank account or values our assets to determine if we need £500 for heating. The government just writes out a cheque.”

Over recent years (although the problem could be laid at the door of Attlee’s 1945 Labour government) we in Britain have become used to a steady supply of ‘free stuff’ from the government. A dispiriting proportion of our welfare state’s money goes on paying money to people who don’t need that money. Labour’’s decision to scrap the Winter Fuel Allowance for all but the poorest pensioners wasn’t just the right choice but was the lowest hanging fruit in the universal benefit orchard (once the Tories had forced the end of the free TV licence for pensioners). It turns out even this change is terrible, and will result in old people wrapped in frayed blankets warming their chapped hands with a cup of hot soup because they can’t afford to turn on the heating. Even sweary comedians have joined the attack on this uncaring government that prefers to help poor Africans and embattled Ukrainians.

Labour’s defence of the change (interestingly announced by the Chancellor not by the Departmental minister Liz Kendall) is essentially that pensioners are going to get a load more money anyway because of the triple lock so it doesn’t matter. But that triple lock is another ratchet for free stuff, another means whereby the cost of our welfare state rises inexorably regardless of our capacity to fund that welfare state. The reaction to the relatively insignificant change to Winter Fuel Allowances tells us that there is no chance at all of reforming our welfare system so it does the job it was set up to do. Instead we are left with what amounts to a slush fund helping middle income people afford a holiday and a slightly better car.

I’ve written before about how our insistence on an entitlement to low cost - even free - social care has resulted in the collapse of English local government. And while the Dilnot Report into the funding of social care isn’t very good (it would set most social care as a welfare entitlement without addressing how that is funded), it is telling that it has sat gathering dust on the shelves of government for over a decade. This is usually presented to us as a technical debate about personal spending caps, rising costs within the sector and the balance between residential and domiciliary care. In reality the barrier is sheer terror.

If the government is to get social care funding sustainable, it knows that this means telling people with substantial personal assets, usually housing, that they will need to use that to pay for their care. But when Theresa May included proposals to do just this in the 2017 Conservative manifesto, the resulting outcry - ‘dementia tax’ - was deafening and is a rare example of a policy announcement changing the direction of a general election. I don’t expect the new Labour government to make anything but marginal changes to how social care is supplied and funded because being honest with the electorate on welfare is always unpopular. We don’t want to hear how it is our, largely unwarranted, demands for free stuff that is wrecking other council and central government services and creating the crazy world where visible public services - from defending the country to sweeping the street - are stripped to the bone while taxes rise, national debt climbs and the Prime Minister speaks of tough times.

Fraser Nelson, writing in the Telegraph, points to another explosion in welfare entitlements, the doubling in numbers of people receiving disability benefits:

“A welfare system discombobulated by mental-health complaints is shovelling people on to disability benefit at the rate of 1,000 a day and is expected to keep doing so every day for the next five years. What impact will this have on the communities that will be worst affected? What hope for children, when so many adults don’t work.”

There hasn’t been any significant change to the way in which the disability benefits system works but, as the Institute for Fiscal Studies (IFS) reported, the “number of working-age people newly awarded disability benefits doubled between July 2021 and July 2022”. And, as Fraser Nelson also notes, the big reason for this is mental health:

“Around a third of the new claims are for mental or behavioural conditions, although among claimants under 25 that figure rises to 70%.”

We might have expected, during the pandemic, when the assessments were remote, to see an uplift in numbers (although this was offset by furlough and working from home) but the surge in mental health applications came after the end of the pandemic. The IFS point to deteriorating general health (“9.6% (4.0 million) now reporting that their health limits their daily activities “a lot”, up from 8.5% (3.5 million)”) and we might also suggest a hangover from the pandemic with so-called ‘long covid’ and other mental health issues consequential on lockdowns. But this doesn’t explain a doubling of applicant numbers in just a year.

Nelson cites the work commissioned by Barnsley Council on ‘worklessness’:

“...there are 42,300 people in Barnsley that aren’t in paid work, or looking for a job, due to their personal circumstances.

Our research shows that across South Yorkshire, 7 in 10 people in this position (excluding students) said they would take a job that aligned with their skills, interests and circumstances. 40% said that they would do so 'now' or 'in the near future'.”

Getting these people where they want to be - in a job they can do and where they are valued - should be a priority for the government but it isn't. Places like Barnsley will do what they can given limited powers and funding, but for real change we need to pay some attention to the benefits system itself and how it might disincentivise getting a job. The question is, as Nelson observes, whether a Labour government can confront a media-savvy and well-connected industry built around the welfare system:

“...she (Liz Kendall, the DWP Secretary-of-State) can expect to be sued by all kinds of campaign groups under human rights law, equalities law and more. She’d need to be fully prepared to war with angry backbenchers and disability charities.”

Given the likelihood of activist lawyers and media-hungry charities taking action over changes to Winter Fuel Payments and how close those groups are to the Labour Party, such a showdown seems unlikely.

As a result we will remain in a world where the demands for entitlements and better funding for those entitlements eats away at the traditional functions of government - protecting the citizen, defending the nation, stewarding the environment. Assuming that Labour doesn’t come over all ‘Rogernomics’ and run the hard yards over welfare, Conservatives need to start thinking about how we square the circle of growing demands for ‘free stuff’ and how this ‘free stuff’ culture contributes to our sclerotic, under-performing economy.

Part of the answer lies in what Sir Steve Houghton is arguing for in Barnsley, giving local councils a much bigger role in combating poverty and worklessness. This might include giving councils control of job centres and even, if we can escape our obsession with ‘postcode lotteries’, a Danish style of welfare system more attuned to localities. Such a plan might also require Conservatives to be less judgemental of the poor, less of the ‘scroungers’ rhetoric and more, for want of a better term, tough love.

Worklessness doesn’t just matter to the workless person, it affects their families, their friends and their neighbours. We speak often of a ‘culture of worklessness’ without thinking through what this really means. The ‘culture’ affects the life chances of children, contributes (in a depressing cycle given what we’ve said earlier in this article) to poor health, increases marital and relationship breakdowns and plays a role in our plague of petty crime and dishonesty. And if a person does badly at school, gets a criminal record and lacks strong role models then their chances of getting and keeping a job diminish. At present the state helps by giving them cash in exchange for a few easy to dodge commitments, maybe the state - and you can only do this at the level of the local community - needs instead to help them cross the bridge to a life where they’ll be happier, healthier and wealthier.

I recall working for a regeneration charity and seeing a kid who we’d sponsored as part of a programme onto a course at Leeds College of Building. This programme included work experience, once we’d got the lad his CSCS card, on working sites. The supervisor rang our worker because the lad was always late to work. After initial annoyance we found out that the boy was leaving his overalls and tools at a friend's house and climbing out the window at home so his father didn’t see him leave for work. The father, we were told, thought the lad working would affect his housing benefits, so told him to stop.

We could fix the young man’s problems (he and his friend were helped into a flat) because we had access to housing associations and were available to help. The benefits system, run according to a national formula, can’t - and won’t - do this. The message to claimants, even those on a ‘permanent’ benefit, should be to say ‘we would rather you weren’t dependent on the state and will spend time and money trying to help that happen’. We also need a culture change within the benefits ‘industry’ with less emphasis on maximising benefits income for clients and more stress on independent living, where being independent includes independence from the state.

For the better off, Conservatives need to challenge the ‘free stuff’ culture, to say our ambition is that you can afford your own childcare costs, can fund your own higher education, can run your home without state support and can provide for your own care in old age. We speak a lot about ‘standing on your own two feet’ and ‘taking responsibility for your own life’ but too often treat this as if it applies to everyone else but us. It is wrong to demand that others do this while insisting that we get an above inflation increase every year to our old age pension, have our kids looked after for free while we work, and demand subsidies to reduce our energy, transport and housing costs.

This ambition needs to run parallel with other ambitions - one of the reasons people demand support is because the rent’s too damned high and energy costs are eye-wateringly painful. If we want to fix benefits we have also to fix housing and energy with an ambition that anyone on average earnings can afford to buy their own home and that energy should be as abundant and cheap as possible. You can’t meet those ambitions in a few short years but we can say that our 2050 ambition isn’t ‘net zero’ but rather that we’ll have plenty of affordable homes to rent and buy, our energy supply from nuclear power meets 80% of needs at a low cost, and that fewer people - perhaps half as many - depend on the state for income, housing and care.