Thursday 24 October 2013

MPs' pay - a benefit expert's point of view...

You might think I would have good reason for objecting to the proposal to increase MPs’ pay by a cool 11%, to around £74,000 a year. 

But I don’t. The arguments for increasing MPs’ salaries are fairly compelling. Comparable jobs in the private sector, and indeed in the public sector, are better remunerated: if we want to attract high calibre people to represent us we need to pay more. Additionally, and crucially, a number of current MPs are supported by reliance on private wealth or business interests: it would be regrettable if potential candidates without independent means were deterred from becoming Members of Parliament.

What does rankle with me, though, is the thought of paying that increase to those members who do have income from elsewhere. At a time when normal people are seeing their real-terms income decrease, when public services are being cut-back, and foodbanks are struggling to cope with demand, the thought of paying thousands of pounds more to the already wealthy sticks in my craw.

However, as an expert in social security law, I have identified a solution to this conundrum. In the benefits world, we are well accustomed to adjusting payments when claimants have additional income: we call it means-testing.

We could use the approach applied to income support, and other similar means-tested benefits. For every pound an MP earns, a pound would be deducted from his or her salary. But there is some good news for them: not all their earnings would be taken into account. Under benefit rules, £5 per week is normally disregarded if the claimant is single, or £10 per week if they have a partner.

Our representatives may now come to regret not having uprated these disregards (at all) since the relevant benefits were introduced in 1988: if they had been increased in line with the RPI the figures would now be about £12.50 and £25.00 per week respectively.

Under my proposals, and assuming that a backbench MP’s pay is increased £80,000, a single, childless, MP earning a relatively modest £30,000 from outside interests would see their annual salary reduced by £29,740 to £44,260.

But I foresee an objection: it might be argued that we should be keeping up to date, and that it would be fairer to apply the principles of the shiny new benefit kid on the block, Universal Credit. It’s a bit harder to explain how this new and, er, simpler benefit works, but suffice it to say that our specimen MP will see their annual salary reduced by 65% of the difference between his earned income and a fixed work allowance of £1332 per year (other work allowance figures are available). I estimate that this would reduce their pay by about £18,634 to £55,366.

At a stroke, the dilemmas about MP’s wages are solved. Members with no other income, and who devote their working lives to the House, and to their constituents, get a pay rise that fairly reflects the responsibilities of the job. Those who treat their parliamentary duties as a sideline to making money elsewhere will have a nasty shock.

And we, the voters, can be reassured that they are in it with us. 

Monday 7 October 2013

Bedroom Tax - further update, and story so far...

There has been two more interesting first tier tribunal decisions on the Bedroom Tax. Both are supportive of the tenants in question, although I have some problems with one of the cases.

Case 1

Again it's in Scotland, and again the claimant has been helped by Govan Law Centre.

In this case[1] the claimant has multiple sclerosis, and needs a specially adapted bed and bedside equipment. The judge accepted the argument that her husband needed a separate bedroom because of this, and ruled that the bedroom tax should not be applied in this case.

Judge Lyndy Boyd made this decision on human rights grounds. She found that applying the bedroom tax to the claimant and her husband would violate their right to peaceful enjoyment of possessions and the right not to be deprived of them (Article 1 of the First Protocol) in the context of the prohibition of discrimination (Article 14).

Again, this, as a first tier tribunal decision, does not set a legal precedent, but it is still likely to be taken into account when other judges decide similar cases.

It is very important here to appreciate that the cases considered thus far fall into two categories:

  1. Cases where what matters is whether a room is a bedroom or not for the purposes of the bedroom tax (is it too small, is it being used for other purposes, etc?)
  2. Cases where it is argued that applying the bedroom tax would be in breach of someone's human rights.
This recent case is important because it is the first one in which the Human Rights Act has been successfully applied to an adult.

Case 2

In this case[2][3] the claimant lives in Redcar with her partner. Because of her disability she and her husband sleep in separate rooms, and store various disability related equipment in a third room. Because of this they were hit with a 25% cut in their maximum Housing Benefit on the basis that they only needed one room but actually had three.

The judge allowed the appeal in part, reducing the cut from 25% to 14%, ruling that the couple 'reasonably require one bedroom each': the cut was not reduced to zero because the judge did not agree that the third room needed to be use to store equipment as it could be kept elsewhere.

In the decision  notice the judge states that 'the local authority have not taken into consideration her disability and her reasonable sleep in a bedroom on her own.'

I have real problems with this decision. Although it is clearly a good decision morally, the judge's reasoning is, in my opinion, flawed. There is no scope in the Housing Benefit (Amendment) Regulations 2012[4] for a local authority to exercise any discretion with regard to reasonableness, or indeed to anything else. The rules require that a the decision maker 'must determine a limited rent' [italics mine] in accordance with the formula specified, which in turn specifies that a couple are only entitled to one bedroom. The only scope for employing 'reasonableness', in fact, is a paragraph which allows the local authority to reduce the rent to a lower figure than the limited rent imposed by the bedroom tax if the authority thinks it reasonable.

I think that the judge would have been wiser to allow the appeal explicitly on the human rights argument as per Case 1.

I would be happy to be proved wrong if anyone disagrees with me!

The story so far...

Let's recap:
  • May 2012 - Court of Appeal rules against the government with respect to disabled children (human rights)
  • July 2013 -
    •  High Court ruled against disabled adult claimants (human rights)
    • High Court rules in favour of disabled child claimants, and criticised the government for not acting on previous Court of Appeal decision.
  • Early September 2013 - 1st Tier Tribunal (Scotland) ruled in favour of a number of claimants (definition of bedroom)
  • Late September 2013 - 1st Tier Tribunal (England) ruled in favour of claimant (definition of bedroom)
  • Early October 2013 
    • 1st Tier Tribunal (Scotland) ruled in favour of adult disabled claimant (human rights)
    • 1st Tier Tribunal (England) ruled in favour of adult disabled claimant (reasonableness).
(As the Bedroom Tax applies equally to England/Wales and Scotland decisions made in one jurisdiction are equally applicable in the other.)

As I've said previously, as the parties that have lost appeals to claimants are local authorities, not central government, and it's not particularly in their interests to challenge the recent decisions, they are unlikely to get tested in higher courts, which is good news for the particular claimants involved but annoying for everyone else because we would like to see formal precedent out of all this. In particular, if (admittedly it's a big 'if') the Higher Court or above were to rule in favour of a claimant because of the human rights argument, the judge would have the power to make a 'declaration of incompatibility' to say that the law was in breach of the Human Rights Act. This would put the government in a very uncomfortable position.

But then the Conservative Party wants the UK to withdraw from the European Convention of Human Rights...



Wednesday 2 October 2013

Conservative Party Conference

The annual Conservative party conference makes its presence felt by pronouncements about benefit claimants, and this year has been no exception.

We've heard from George Osbourne, Chancellor [1], Iain Duncan Smith, Secretary of State for Social Security, and David Cameron (briefly). The first two focused mainly on jobseekers (i.e. claimants on Jobseeker's Allowance and, in some cases, Universal Credit). 

Osbourne and 'Help to Work'

Osbourne's full comments on this are as follows [2]:

"But what about the long term unemployed? Let us pledge here: We will not abandon them, as previous governments did. Today I can tell you about a new approach we’re calling Help to Work. For the first time, all long term unemployed people who are capable of work will be required to do something in return for their benefits, and to help them find work. They will do useful work putting something back into their community. Making meals for the elderly, clearing up litter, working for a local charity. Others will be made to attend the job centre every working day. And for those with underlying problems, like drug addiction and illiteracy, there will be an intensive regime of support. No one will be ignored or left without help. But no one will get something for nothing. Help to work – and in return work for the dole. Because a fair welfare system is fair to those who need it and fair to those who pay for it too."
Before we go any further, I'd better contexualise the proposal amongst all the other schemes that currently exist. It's quite confusing...

At the moment, jobseekers are (normally) placed in the 'Work Programme'[3], in which contractors are required to provide a range of measures to help them find work. This programme lasts a maximum of two years. If a claimant does not comply with the requirements of the programme (for example, fails to apply for a job) they can be sanctioned, but they cannot be required to work for nothing. On the other hand claimants can be required to work for nothing as a 'Mandatory Work Activity'[4] for four week placements of up to 30 hours per week: they are 'expected to complete placements which are of benefit to the community, including helping charities or environmental projects'. Finally, in some areas there is also currently something called the 'Community Action Programme' which is in effect, a pilot for what  Osbourne is now talking about, and is also a sort of development of the Mandatory Work Activity but requires 26 week involvement. If you remember the case where a geology graduate was required to work at Poundland it might be helpful to know that she was on the Community Action Programme[5].

Having got that out of the way, we can also note that this isn't actually as new as it's being presented. In  July 2012 the Guardian reported[6] that Chris Grayling, Employment Minister, announced to extend the Community Action Programme across the country, calling it - then -  'support for the very long-term unemployed'.

Leaving aside the value judgements and self-praising included in the speech, what can be said about these proposals?

Jonathan Portes, director of the (left-leaning) National Institute of Economic and Social Research was interviewed on 30th September by Jeremy Vine for his Radio 2 show. His concern was that there was no strong evidential base that could justify the proposal (The scheme is likely to affect about 200,000 jobseekers and will cost £300 million). He noted that the DWP's own research review concluded that there was little evidence that 'workfare' schemes increased the chances of finding work. he also said that the information gained from the Community Action Programme was not supportive. Although some people did move off benefits while on the scheme, after the trial was over they were generally found to be back on benefits, and, indeed, some were now on sickness benefits. He was guardedly positive about the concept of intensive support for people with drug, alcohol, and literacy problems, but noted that any programme of this nature was certain to be expensive and that it was therefore unwise to roll it out without piloting it first. He emphasised that it would only be any use if it improved long-term prospects.

I would largely echo these comments. I also raise the following questions:
  • How will clearing up litter, for instance, improve a claimant's chances of finding work?
  • How will claimants be able to afford to attend a jobcentre every day, especially in rural areas?
  • Which low-paid workers will lose their jobs so that jobseekers can carry out their roles for nothing?
Iain Duncan Smith - Mandatory Attendance Centres

The relevant part of Duncan Smith's speech is as follows [7]

"But today I want to tell you about those who are already showing early signs of not being able to commit to their obligation to work. Prior to the Work Programme we are going to pilot a Mandatory Attendance Centre where selected individuals will receive expert support and supervision while they search and apply for jobs – that is 9 o’clock  to 5 o’clock – 35 hours a week – for up to six months, simulating the working day. These pilots will be targeted at claimants who will benefit from the intensive support - one pilot before the Work  Programme and one for after the Work Programme."

His comments have been accompanied by a DWP press release:

Note that what is being proposed is a pilot, though no doubt it will be eventually rolled out across the country irrespective of whether it turns out to be helpful or not.

Note also that claimants will be required to attend 5 full days a week for up to six months: again, how will claimants afford the accompanying transport costs?

Duncan Smith was asked about the transport cost issue on Radio 4's the World at One on 01/10/2013. His response was that, firstly, claimants could seek help from the flexible support fund (the FSF)(although they couldn't guarantee that they would all be helped), and that, secondly, the Attendance Centres would be close to where claimants lived. There doesn't seem to be much information available about the FSF, including how big it is, as a Parliamentary Briefing note plaintively observes [8], but I'll be very surprised if the majority of claimants who incur travel costs get them met. And we don't have any details on how close is 'close'.

Actually I have some sympathy with the concept here. It is based on the understanding that jobseekers are not all the same. Some have no experience of the world of work: of coming in at the same time, day after day, of being subject to authority, of not being able to call your time your own. And without this experience, forcing them to take jobs is likely to be futile. And I accept that there are difficult questions about failure to engage, and about whether and how compulsion is appropriate. But in order for this kind of scheme to work, and not simply to be a way to remove people from benefit, the balance between support and compulsion would have to be vastly different from what it is almost certain to be.

David Cameron - young people

These comments[9] were brief, in a long speech, and are not linked to any proposals: but they suggest some worrying (though not totally surprising) changes are on the horizon. 

"There are still over a million young people not in education, employment, or training. Today it is still possible to leave school, sign on, find a flat, start claiming housing benefit and opt for a life on benefits.
It’s time for bold action here. We should ask, as we write our next manifesto, if that option should really exist at all. Instead we should give young people a clear, positive choice: Go to school. Go to college. Do an apprenticeship. Get a job. But just choose the dole? We’ve got to offer them something better than that. And let no one paint ideas like this as callous. Think about it: with your children, would you dream of just leaving them to their own devices, not getting a job, not training, nothing?  
No – you’d nag and push and guide and do anything to get them on their way… and so must we. 
So this is what we want to see: everyone under 25 – earning or learning."

A few years ago young people and their advocates learned that Housing Benefit was to be restricted for people under 25. It looks like soon we'll be thinking of that as the good old days, as it appears that the government's intention is to remove all benefit entitlement to young people who are not in employment, education, or training.

A briefing to journalists after the speech made it clear that removal of Housing Benefit will be in the next Tory manifesto, and removal of other benefits may be in the manifesto.

I think no-one would disagree that an aspiration for all young people to be in work or learning is a positive one. The problem here is reality: what if there are no jobs; no suitable training? What if a young person has behavioural or attitudinal problems as a result of their upbringing?

I also don't accept Cameron's analogy: yes, a good parent would 'nag and push and guide', but if it didn't work out would a good parent throw their child out the door, without money, food, clothes?

Concluding thoughts

This isn't an original observation, but under all the data, proposals, and schemes what really disturbs me is the underlying world view. It is one in which there is a clear distinction between those who take from the community and those who contribute to it; between 'those who need it' and 'those who pay for it';  between the deserving and undeserving poor.

What about the bloke who has done the same kind of manual work for decades but is made redundant when the company closes down, and has none of the skills needed for the jobs available? Is he a shirker?

What about the young woman who spent her childhood caring for her disabled mother?  Perhaps her mother is in a home now, or dead. Is she just a freeloader?

And what about the young single mother with a one-year-old baby?

The bottom line, of course, is that although the rhetoric is about helping people and improving society, the reality is about balancing the government's books by targeting the most vulnerable rather than sharing the burden more fairly. And caricaturing claimants as people who want something for nothing sets them up against everyone else.

Tomorrow the benefit claimant could be me. Or you. Although, probably not Osbourne, Duncan Smith, or Cameron