Populist posturing on benefits or a worthy crackdown on the undeserving?

A post today on something non-electoral reform related, just to prove I'm not a one trick pony!

We have the news that the Social Security department, led by Minister Senator Le Gresley, is contemplating tougher crackdowns on people who do not actively seek out work whilst claiming benefits.

I recently volunteered for a year at a Citizens Advice Bureau in a poor part of London where a large part of what I did was benefits casework. This meant helping people with their problems claiming benefits, appealing against decisions to cut their benefits and sometimes working on ways to get people off relying on the state. So I have some understanding of the sorts of issues that affect people on benefits, what they are like and how the system works (albeit the UK system, not the Jersey system).

Most will know that Senator Le Gresley made his name as the manager of the CAB in Jersey and so I would like to presume that he is someone with a good knowledge of the benefits system in Jersey, someone who has had lots of contact with the sorts of people that go on benefits and so he would be well placed to lead any reforms on the system whilst hopefully being compassionate and understanding. But being involved in an organisation that Senator Le Gresley was involved with, I do have some issues with what he is saying.

When I see articles like the one in the JEP with the rather ominous picture of the minister with a headline like "Benefits threat for jobless who don’t try to find work" I do worry about populist posturing and scapegoating. I want to be convinced that the minister is genuinely making sensible attempts to improve the islands welfare system, in line with the values of a modern social democratic society and not just trying to appease the more right-wing of his colleagues and try and score some cheap votes from the public.

Benefits are an easy target. All you have to do is check any online message board to see the comments using words like "spongers", "lazy" and all sorts of misguided statements about foreigners claiming benefits (which, by the way they can't do until they have lived and worked here for 5 years). People get wound up (sometimes very understandably) when they see people who they believe have a cushy lifestyle that is paid for by their hard earned tax pounds.

But this is exactly why it is so important for people to be well informed and understand the realities and the implications. As a socialist, I just don't like the idea of kicking someone that is already down. I believe in siding with the oppressed, and if you are unemployed you are oppressed.

The problem with attacking unemployed people is that for the vast majority of them it is not their fault.

If every job vacancy in Jersey were filled tomorrow by local unemployed people, there would still be hundreds left on the dole queues, because there just aren't enough jobs and the economy is not doing well. The idea that people should be penalised for not having jobs that don't exist just seems perverse to me. Cutting unemployment benefits (which the minister isn't suggesting yet) will not incentivise people into work, because lack of incentive is not the problem. The problem is the lack of opportunities.

I've been lucky as a student to not experience unemployment (by definition, it's impossible for me to be unemployed) but I have a lot of friends that I have witnessed really struggle both financially and emotionally with unemployment. I saw close friends be made redundant several times in the space of a few months, some spent months unemployed even though they were up every day applying for whatever job they could find (many minimum waged unskilled jobs) yet still got turned away. These were not lazy people who were abusing an overly generous system. These were people who were desperate to find jobs but just couldn't do it.

These people went on benefits during that time because without the money they would have lost their livelihood. They would have become social recluses, lost further motivation and that would have done nobody any favours. So making conditions worse for the unemployed will not help us.

But I'm not actually sure exactly what the minister is planning to do to crack down on this. As it stands, each person on unemployment benefits is given a little log book which they have to fill out every time they apply for a job and have it verified otherwise they don't get their benefits. What more could they do to ensure they aren't giving money to those that aren't seeking work? If anything, some people who have failed time and time again to secure work should be encouraged maybe to give it a bit of a rest and instead focus on volunteering for a worthy organisation, just to keep them in the swing of a work based routine and involved with society.

But don't mistake my sympathy for the unemployed as in anyway condoning people who deliberately play the system. I believe in being a good community that looks after those less well off and those that have run into trouble, but the other side to that is that people must be willing to engage with that community and not exploit that generosity. I say to everyone, if you are aware of people that are cheating the system, instead of going online to moan about it, pick up your telephone and call the police. Cheating the system is a crime and those that commit it should be prosecuted and demanded to pay the money back. Whilst I don't want changes in the system to hurt unemployed people, I equally don't want to reward genuinely lazy people.

The overall point I am making here is that the solutions to these problems do not lie in a rearrangement of our welfare system. The solutions lie in fixing our deeper economic problems.

I've often been accused (unfairly in my unbiased opinion) of focusing too much on things like electoral reform which do not directly impact on peoples living standards and that I'd be better off spending my time talking about the issues that really matter.

So here is the Sam Mézec 5 point plan to get us out of this mess -

1. The government should invest in projects that will encourage economic growth in the sectors likely to create employment opportunities suitable for local unemployed people.
   
   
2. At the same time as investing in worthwhile projects, the government should cease unnecessary and wasteful spending on projects that are not value for money and do not help government finances (e.g. fee paying schools subsidies should be halved). The money should be reallocated to better schemes.
   
   
3. A temporary GST "holiday" by reducing the rate to 0% will let shops lower their prices and boost consumption in the island which will stimulate some economic activity. At the same time, a way must be found to stop non-local businesses charging VAT to islanders. We are not a part of the UK and it is harmful to our economy to have prices artificially increased by UK companies not taking off VAT.
   
   
4. The government should introduce serious incentives for businesses to employ locally based people, and train those that are already employed here rather than importing people from outside the island to do jobs that local people could do, or could be trained to do.
   
   
5. Lastly, and perhaps most vaguely, Jersey has become too reliant on one industry that a vast amount of Jersey people are just not suitable to work in and so we need diversification. 

Now, some will criticise that as something Jersey can't afford. But I say Jersey can't afford not to do it. Yesterday was the BBC2 documentary on John Maynard Keynes, perhaps one of the top 3 most influential economists of all time (along with my heroes Adam Smith and Karl Marx). Keynes broke the consensus that existed up until the great depression that the "invisible hand" in economics would guide everything to it's natural equilibrium and economic crises would solve themselves, but instead what was important in tough economic times was for the state to actively intervene to fix the crisis.

The neoliberal understanding of economics (which for some inexplicable reason still persists as a large part of mainstream politics in the 21st century) was that in a recession, the free market would naturally adjust itself to the conditions and, crucially, prices would inevitably come down because of a lack of consumption and that would solve everything. But the problem was very simple, it just didn't happen. Governments didn't understand economics well enough in those days to realise, like Keynes later pointed out, that the state is the only thing that can put the economy back on track, by doing what the free market wasn't naturally doing and kick starting growth. This mistake led to the great depression which saw mass unemployment, inflation and the rise of the Nazis.

It is worrying today to see how governments have not learnt the lesson from history. In the UK we have a government blinded by an out of date and out of touch ideology based on economics textbooks from the 1920s and has consequently made a bad situation even worse. The people of France have already rejected that view and Jersey does not have to follow what our counterparts in the UK are doing.

Our attitude to economics needs to change and the post Thatcher/ Reagen consensus needs to be smashed.


Thanks folks,
Sam



P.S.

Slightly off topic, but those that care about democracy and the freedom of journalists to work unharassed by the authorities would do well to sign Deputy Pitmans petition to allow Leah McGrath Goodman back into the UK and Jersey.

http://www.change.org/en-GB/petitions/ukhomeoffice-restore-the-tier-1-uk-visa-of-journalist-leah-mcgrath-goodman-freejersey