The welfare system that benefits no-one

Something puzzles Tony Blair about Britain. The country is wealthier, healthier and more gainfully employed than ever before. So why is anti-social behaviour still so stubbornly high? Why are there hooded youths out there, terrorising neighbourhoods?
The riddle of the “hoodies” is one which stumps the British left. Money is being transferred from rich to poor at a faster rate than ever before, support for lone parents has seldom been so generous — so why the social disruption?
In Scotland, there is another mystery. We are a richer nation than ever before — so why is homelessness soaring to the extent that, last year, one in every 100 Scots applied for homeless status? Why has prosperity failed to produce social cohesion?
Last week, the Prime Minister concluded that bad parenting is to blame. He could hand out welfare, “but I can’t bring up someone’s children for them”. He seems to have genuinely not made the link between family breakdown and his welfare policies.

Almost 15 years ago, Bill Clinton was faced with the same problem — and came up with a startling answer: welfare was not solving the problem, welfare was the problem. It was bankrolling the very social failure it was designed to prevent.
So Clinton ended the 61-year American policy of guaranteeing cash to the poor. No one could claim benefits after five years. In 37 states, welfare payments were conditional on attending parenting classes.
Clinton then reoriented welfare on two explicit goals: marriage, and reducing births outside wedlock. To European observers, it seemed like a Christian fundamentalist coup.
To American critics, it was not much better. Clinton was told he would take “to his grave” a brutal decision “far more likely to hurt poor Americans than uplift them”. Instead, the president took a lesson to the world.

Within the first five years, the number of families on welfare collapsed from 4.3m to 2m — as welfare reverted to its original role: a temporary stop-gap as people were forced to looked for work — and found it. The effect on poverty reduction was incredible.
Child poverty among blacks plunged from 41% to 30% — the lowest rate in recorded history. The number of children officially deemed “hungry” halved. Poverty rates among single mothers dropped from 46% to 32% as half a million of them found work.
This “tough love” welfare reform is such a runaway success that left and right in America now agree on it. The old system had been fuelling poverty, for two reasons: when benefits compete with low wages, people rationally chose benefits. And when the family is undermined, poverty follows.
For a party modelled on Clinton’s New Democrats, New Labour shows no sign of understanding this lesson. In Britain Gordon Brown is fighting a war on inequality, not a war on poverty — and the distinction is crucial. Brown judges success by statistics showing how much cash has been taken from high earners to the poor via tax credits. Social cohesion does not enter into the equation: so family breakdown, ill-discipline and dependency has sunk in.

The result is to create an underclass — or, as Brown calls them, the “socially excluded” — dependent on welfare, living in Labour-run council estates with no choice but Labour-protected sink schools. With taxpayers’ billions, New Labour has built a new ghetto.
In it lie the 2.7m claiming incapacity benefit — guaranteed payouts for life, with a suite of benefits which can pay more than a year’s hard graft on the minimum wage. Children are raised with crime, drug abuse and government dependency all around them.
For all the hype about the New Deal, Brown’s economy has specialised in finding alternatives to work for young people. When Labour came to power, 23% of 18-24 years olds were not working: this has risen to now 25%.
And benefit dependency has risen from 6.01m when Labour came to power to 6.58m now. Family disintegration has continued apace: the proportion of births to lone parents is up from 21% in 1996 to 26% today.
Yet in Brown’s eyes, this doesn’t matter: more subsidy is going to the poorest, ergo “inequality” is statistically reduced, ergo things must be okay. Labour is blinded to the second part of Clinton’s equation: poverty is a social phenomenon. Family matters.

This is not moralistic. Research shows a child raised by a lone parent is seven times as likely to fall into poverty, four times as likely to be expelled from school, three times as likely to become dependant on welfare and twice as likely to go to prison.
These dynamics do not hold for upper income groups, where a single parent usually has the resources (and family support) to give a child a loving, stable background. It is among the poorest families that marriage makes the most difference.
Families simply provide a more stable background: a father as a role model provides a disciplinary force often lacking in single-mother families. And, try as it may, government can never replicate what the family offers.
Clinton accepted this, and ever since welfare and promotion of the family have been inextricably linked in the American political debate. To those serious about helping the poor, marriage was just too powerful a tool to be left unused.

Last weekend, Cherie Blair told an interviewer she considers marriage “the bedrock of society”. Even if her husband agrees, he daren’t say so in public: his government has loaded the dice against marriage as never before.
The Centre for Policy Studies has shown that an average family of four, with a mortgage and one earner on the average salary, would be £12,000 a year better-off by splitting up into two households under Brown’s tax and welfare system.
In low-income Britain, welfare has stripped the family of its economic function. It’s logical that breakup follows. How many middle-class marriages would survive if the wife was guaranteed the husband’s income without his presence?
The tragedy is that Blair is planning a Welfare Reform Bill, but one which continues the fundamental error of basing welfare on entitlement, rather than empowerment. Things will carry on as before.
So an alienated, welfare-dependent underclass will continue to exist in Britain, washed into conclaves of inner-city squalor by a sea of government subsidy. If it takes a village to raise a child, it takes Labour’s new ghettos to produce a ‘hoodie’.
Last week, Blair was asked that, if parenting is important, would he give tax breaks to encourage families? No, he said, instead there will be Sure Start nurseries to sort out these unruly kids. He’ll take another look at things “five or six years down the line”.

There is no mystery. The link between social breakdown and welfare is there, in America, for all to see — but this is one Clinton legacy Blair wilfully ignores. And it is the poor who will, more than anyone else, pay the price.

Frazer Nelson
15 May 2005

http://news.scotsman.com/columnists.cfm?id=527082005

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