A Very Hard Look at UK Welfare: Response to NEF Research – John Gelmini

English: Holy Family Church, Blackbird Leys.

English: Holy Family Church, Blackbird Leys. (Photo credit: Wikipedia)

Main Street, Gorbals, 1911

Main Street, Gorbals, 1911 (Photo credit: Wikipedia)

I thank Dr Alf for sharing the article entitled “Why the government’s welfare reform can’t work”, published by the New Economics Foundation (NEF).

The analysis by NEF assumes that the Government, and any incoming one, could simply leave matters as they are, which is, of course, a false assumption, in my view, and one which ignores incentive and human nature.

The NEF analysis is right about the effects of the current welfare reforms but not about what needs to be done, in my view. Let me take a very hard look at UK Welfare and offer an alternative strategy.

For this to work, the economy needs to be growing at 3% per year, so as to create full employment.

3% is the minimum required for this, and we are not talking about jobs on zero hours contracts or of 1 hour per week, but jobs which enable an ordinary C1/C2 to buy or rent a small house or flat without a Government subsidy and marry and then produce and support 2 children.

Since 1946, we have averaged 1.4% growth, and have allowed unfettered population growth, including illegal immigration to take our population to more than 70 million people.

At the same time, we have allowed productivity to fall to 16% below the average for the G7, and our State education system to drop to 44th in the world, whilst turning out youngsters who in many cases are simply unemployable.

Thus, we have been making our current and future workers, unattractive to indigenous employers and aspirant inward investors, whilst failing to create enough jobs in the first place.

There are now 47 people for every vacancy but in many cases the skills required to do those jobs are not possessed either by the officially unemployed (2.5 million people), or the 13.5 million people on top of that, who are incapacitated or in one of many different categories in the benefits computer, but are still not employed in any normal meaning of that word.

To make work pay, the following is required:

a) Stop all further immigration unless it is for scientists and people with unique skills we simply do not have

b) Increase exports by quadrupling the size of the export sales force and providing tax breaks and writing down allowances for the purchase of land, plant and machinery to expand productive capacity (ideally with a strong multiplier as proposed by Dr Alf)

c) Reducing Corporation taxes and having an amnesty so as to bring back onshore the Trillions hidden offshore, but conditional on the monies being re-invested into expansion and job creation for the indigenous population

d) Systems building of 11 million houses on concrete footprints to deal with the housing shortage.

The unemployed without qualifications would simply be assigned to construction firms, who would be required to employ them at full pay but would receive the benefits currently received by the benefit recipient which would then be taxed in full.

At 500,000 houses a year this would provide work for 22 years with the proviso that benefits would go to the employer for 2 years.

Unemployed single men and woman would be housed in converted shipping containers at a cost of £2,000 gbp each plus £1,500 gbp conversion costs but would no longer receive Housing Benefit.

As and when they came off benefits, they would relinquish these shipping containers and buy or rent a normal or systems built house.

e) Frack and frack now, so as to reduce energy costs, increase disposable income and create jobs for the indigenous unemployed.

Cuadrilla and fracking companies would be required, as a condition of enjoying drilling rights, to employ and train the unemployed in large numbers to be both security guards to protect drilling sites and workers engaged in actual drilling.

f) Create business boot camps, where school leavers who are not academically gifted can go to simulate and set up their own small businesses and craft based enterprises (on current form 50% of school leavers will never work unless this is done).

They would be mentored by greybeards employed by the LEPS, or by retired volunteers with enough money who decided not to charge for their services in exchange for better tax treatment on their savings and investments.

g) Issuing infrastructure bonds with an attractive coupon to encourage Sovereign Wealth Funds to build roads, airports, railways and essential infrastructure using British construction firms who would as part of the contract conditions be compelled to use indigenous labour drawn partially from the ranks of the long-term unemployed.

h) Insisting on unemployment benefits eligibility being contingent on work content contribution–ie no more benefit for doing nothing unless you were mentally or physically incapacitated.

People in unemployment black spots would be required to move to areas where more work existed and be assigned to Benefit Recycling initiatives as described previously

The NEF analysis talks about other hidden costs but does not talk about the corrosive effects on a person’s morale and moral outlook of not working.

IDS talks about these last 2 items but not about:

–Crime and petty fraud

–Increased drugtaking and the knock on effects to the NHS, the costs of policing, courts, the probation service and prisons

–The disincentives for overseas inward investors to invest in high crime areas


The Singapore Government in the 1960′s was faced with a Triad infested economy and lawlessness and New York, once had no go areas where muggers, rapists and criminals ran amok

In this country, we have no go areas in Toxteth, Hull, parts of London, the Blackbird Leys estate in Oxford, the Gorbals in Scotland and parts of the North East which are characterized by worklessness, illegitimacy, drug taking, knife crime and criminality.

Singapore and New York solved these problems with zero tolerance policing and pro-growth, pro business economic policies but we have neither.

Illegitimate children born into dysfunctional unemployed groups in turn become benefit recipients who in turn create more problems and then go on to breed again thus creating an expanding feral underclass who in turn require housing and more benefits.

Some form of National Service involving leaving home and being subjected to military discipline of about 2 years in length is necessary for school leavers and people from the feral underclass who have dropped out of school over the age of 14.

This would remove them from a dysfunctional environment and through re-education and the inculcation of discipline, teamwork a salable work skill, and a more enabling philosophy, toughen them up and make them self-sufficient, more useful members of society.

Those who thrived on military life, and had the right attributes, would be assigned to the Tri-Forces, thus resolving the military’s current and ongoing recruitment crisis in what is still a dangerous and uncertain world.

Again the NEF is right to say that welfare reforms will hit councils but they ignore the bigger problem of a public sector that is too large to be affordable and the fact that the UK needs just 15 large local authorities, police constabularies and fire commands rather than 43 of each for just England, plus hundreds of District and Borough Councils which serve no useful purpose whatsoever.

I say cut the public sector down to size, pension off all but 15,000 civil servants and the private sector will be able to grow, thus replacing all the jobs lost and removing people from the welfare rolls at a stroke.

In this way Councils, once eliminated, cannot be “hit” by welfare reforms and problems will eliminate themselves.

Any thoughts?

John Gelmini

English: Oxford: Balfour Road, Blackbird Leys ...

English: Oxford: Balfour Road, Blackbird Leys Neighbourhood shopping parade, that may contain the first shops to open on the Blackbird Leys estate around 1958. (Photo credit: Wikipedia)

Any thoughts?

Enhanced by Zemanta

My Top Twelve Blogs – Last Three Months

I thought that it would be interesting to share my top twelve blogs over the last three months ranked by number of hits:

Title Views
  More stats
The cult of home ownership is dangerous and damaging – Adam Posen – FT.com More stats 134
Malaysia travel: What to do in the Cameron Highlands | CNN Travel More stats 121
An in Depth Look at Deleveragings – Ray Dalio – Bridgewater More stats 106
The world’s next great leap forward: Towards the end of poverty | The Economist More stats 105
  More stats
What will happen to markets when QE ends? | FT – Gavyn Davies More stats 77
Universal Credit staff describe chaos behind scenes of flagship Tory reform | Politics | The Guardian More stats 70
A Hard Look at Psychology and the Financial Crisis – Ian Hughes More stats 58
We Were Middle-Class Once, And Young – Paul Krugman – NYT More stats 58
Obama and the crumbling of a liberal fantasy hero – FT.com More stats 55
A gaffe-prone Japan is a danger to peace in Asia – Gideon Rachman – FT.com More stats 53
Thousands dying because hospitals are understaffed – Telegraph More stats 53
Cadbury: The great tax fudge – FT.com More stats 52
Enhanced by Zemanta