Claim (2) - 'The Labour Legacy' "Small wonder then that Labour left us a growing army of those who don’t work.
- 5 million people on out of work benefits after the recession"
These are the claims made by IDS in his attempt to shift the blame for a culture of welfare dependency on to the Labour government. There's very little substance to his claims which are just more of the same in the 'blame game' his government participates in. If you can't fix it blame it on Labour appears to be the Conservative mantra.
But who broke it in the first place?
I think this is worthy of explanation because far too many people seem to attach a sense of 'responsibility' to the Tories when it comes to getting tough on welfare. My own view is that their track record shows them to be reckless. Part of the problem is that wealthy front benchers simply struggle to understand the benefits system; after all it's not as though they'll have had first hand hand experience of it (although there are some exception which we'll leave be for now).
So lets start with a few basic reminders as to what 'out of work' benefits are and then run through the figures to see if they really have escalated to the five million figure quoted by a man on a mission to move what he sees as a 'growing' army of people who don't work off 'welfare and into work'.
We will also look at how the 'growing army' of welfare dependants came about by using facts and figures going back to 1979 when the Conservatives came to power in their 18 year reign before Tony Blair took over.
We will clarify the key 'out of work' benefits used in the calculation of the predominant statistics used in previous years:
- Jobseeker's Allowance
- Incapacity Benefit & Employment & Support Allowance (ESA from 2008)
The reason we consider these is because by and large you can only claim Jobseeker's Allowance if you are out of work (although you can still work part-time up to 16 hours a week) and Incapacity Benefit claims are related to being incapable of work. It's not always quite as straightforward because Incapacity Benefit claimants can do some work under what are known as the 'permitted work' rules. It should also be remembered that a jobseeker or incapacitated claimant could quite legitimately claim as a couple with their partner still working. This depends on the amount of wages and whether or not the claimant is in receipt of their benefits on the basis of their national insurance contributions. Claims made on the grounds of Disability should be expressly excluded from the figures because they are not an an 'out of work benefit' statistic. Disability is distinct from Incapacity - IDS is well aware of this.
Here are the figures for both of these benefits from 1999 to 2009 in the first two tables and then the combined figures appear in the third table:
Jobseeker's Allowance Claims
(thousands) - Aug-99 - 1,181.86
- Aug-00 - 1,015.83
- Aug-01 - 907.68
- Aug-02 - 890.54
- Aug-03 - 851.37
- Aug-04 - 769.25
- Aug-05 - 825.11
- Aug-06 - 900.92
- Aug-07 - 788.45
- Aug-08 - 868.73
- Aug-09 - 1,485.32
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The above (JSA) table shows that during the period 1999 to 2009, claims fell to a low of 769,250 in 2004 but unsurprisingly increased to 1,485,320 (1.4 million) in 2009 following the economic crash. You would expect to see the number of jobseeker's increase in any recession period. We will later look at how the unemployed figures were very high under a Tory government. You should note that the 2009 JSA figure is only 303,460 higher than the second highest figure in 1999 - 2 years after the 1997 general election when the Labour government came to power. In other words under Labour a higher Jobseeker figure was inherited from the previous Conservative government. Labour reduced it but it then increased again but only by a figure of 303,460 over the 11 year illustration. The figures are taken from an Office of National Statistic data source.
Now lets looks at Incapacity over the same 11 year period....
Incapacity Benefit Claims
(thousands) - Aug-99 - 2,655.38
- Aug-00 - 2,714.85
- Aug-01 - 2,763.62
- Aug-02 - 2,769.36
- Aug-03 - 2,777.06
- Aug-04 - 2,774.93
- Aug-05 - 2,725.47
- Aug-06 - 2,683.00
- Aug-07 - 2,641.11
- Aug-08 - 2,590.61
- Aug-09 - 2,632.74
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The Incapacity figures are interesting because they show that rather than increase, the figures actually fell by 22,640 from what they were in 1999 when compared with how they ended up in 2009. This is a key statistic in refuting what IDS claims over Labour creating an increase - you can't argue with figures which show a decrease over the course of 11 years. I'd recommend you reserve judgement until you've read on and compared the Incapacity figures with those during a Conservative government.
On the whole there's very little variation in the Incapacity figures with the highest figure being recorded in 2003 (2,777.06) and the lowest in 2008 (2,590.61). The figures show that variation remains comparatively stable.
Employment & Support Allowance replaced new claims for Incapacity Benefit in October 2008 but will have had little impact in 2008 although it would start to factor from the year 2009. We'll go on in due course and look at how little Employment and Support Allowance has achieved despite the tough re-assessment regime started by Labour but more rigorously 'stewarded' by the Coalition government with up to 11,000 reviews a week being carried out by the DWP to get people off the previous Incapacity Benefit.
In the next table we'll take a look at the combined totals of Incapacity Benefit and Jobseeker's Allowance the same period.
Incapacity Benefit + Jobseeker's Allowance Claims
(thousands) - Aug-99 - 3,837.24
- Aug-00 - 3,730.68
- Aug-01 - 3,671.30
- Aug-02 - 3,659.90
- Aug-03 - 3,628.43
- Aug-04 - 3,544.18
- Aug-05 - 3,550.58
- Aug-06 - 3,583.92
- Aug-07 - 3,429.56
- Aug-08 - 3,459.34
- Aug-09 - 4,118.06
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The combined figures simply do not show the increase indicated by IDS in his recent speech. In August 2009 they are around 900,000 short of his 'five million' headline figure.
The reason IDS can quote a figure of 5 million is because he's manipulated the figures by adding in additional cohorts of 'economically inactive' claimants who haven't been used in previous sets of figures. It's a bit of an underhand trick because it's not a 'like for like' comparison; its a manipulation of the numbers used to alarm the voters he wants to get on his side. He will have added in other groups such as single parents with very young children, it's the only way he could boost the figures by not far short of an additional million.
These figures are taken from an ONS data set which do not include the period from May 1997 to August 1999 or for the period from August 2009 to the May 2010 general election when the coalition government came to power.
However they represent enough of a window to provide a a very strong indicator that 'out of work' benefits have not systemically spiralled in the way IDS suggests. The increase in the combined claimant count has increased by only 280,820 in 2009 when compared with 1999 (just over two years after Labour came to power in 1997). I wouldn't call an increase of just over a quarter of a million too alarming over an 11 year period would you?
So what about the Tories track record
prior to 1997?
As is so often the case the answer to a question is dependent on the source of the information. A right wing 'think tank' will unsurprisingly say that up until Labour came to power in 1997 welfare was magically controlled by the Conservatives. Likewise left leaning reports will report it the other way round. The ONS figures used to compile the above tables for the period from 1999 are I would suggest neutral and reliable; I can't see any reason why they wouldn't be. We will go on to see how the Conservatives were nothing short of reckless when it came to welfare when they were in power - unfortunately its a concept people seem reluctant to grasp because when it comes to welfare the media continually tells us 'its all Labour's fault' - actually it's anything but.
For those of you who want to read a bit in to the history side of how welfare changed the following paragraphs tell you all you need to know.
An interesting report can be found in a report 'The Evolution of Disability Benefits in the UK - Re-weighting the basket' it's a good read and helps to explain the concept of benefits having a value in compensating disabled claimants for a reduction in their earnings capacity - the Coalition government just doesn't get the principle of subsidising reduced earnings for the disabled which is a bit ironic given the way they themselves radically changed benefits in the 1990's.
The report by the Centre for Analysis of Social Exclusion (1999) seeks to clarify the significance of New Labour reforms by setting them in the context of the development of disability benefits since the early 1970s. It's a paper IDS may want to cast his eye over before making the kind of claims he made at the recent Conservative Party conference. IDS relies on a captive audience of people who positively loathe people on benefits - a fair number of them will be too young to remember the impact industrial reforms had in the Thatcher era - they were important times which sparked massive unemployment. No single government has really ever got to grips with it ever since then.
People need to take a long hard look at the Tories and their track record on welfare before believing the claims made by IDS, the more objective evidence is that the 'wickedness of welfare' is something which simply cannot be attributed to a Labour legacy. I'm giving you the fact rather than the fiction, the reality rather than the rhetoric.
It was after all the Conservatives who introduced many of the benefits they now condemn principally Incapacity Benefit in 1995 and Disability Living Allowance in 1992. It was actually Labour who put Incapacity Benefit high on their ‘hit list’ of benefits for reform – in 1997 having recognised that it cost nearly four times as much in real terms as its predecessor did in 1974. It was Labour who overhauled the testing of Incapacity assessments from the 'All Work Test' introduced by the Tories to the 'Personal Capability Assessment' introduced by Labour.
Incidentally there is evidence which supported a contention that Incapacity Benefit was subject to the 'best assessment in the world' (I'll dig out the link) for gauging a claimant's ability to participate in work.
The evidence suggests that IDS is making sloppy claims when it comes to welfare. It's a shame really given that he actually started off quite well in his vision for better welfare by researching his subject and trying to understand the barriers people faced in transitioning from welfare to work. What crippled the IDS 'vision' was George Osborne's Comprehensive Spending Review in October 2010 and David Cameron's over promotion of a media that wrongly claimed 75% of those on Incapacity Benefit were 'faking it'. A combination of having to work within the parameters of playing up to alarmist headlines and within a squeezed budget makes the IDS plan unworkable - he knows it and that's why he has to use untruths to promote it.
The truth is you can't do welfare reform on the cheap - IDS hasn't been given enough cash by Osborne to make his vision a reality, he needs billions more than the Osborne departmental expenditure limit will allow - the further £10 billion cuts announced at the recent Tory conference makes the IDS vision impossible, it cannot work - you wait and see.
I just do not get why Labour has gone all 'apologetic' on welfare. I can see their plight, they are beaten in to a corner with the sensationalist headlines peddled by the Tory press - the problem is that people have been brainwashed in to believing benefit claimants = scroungers. Frankly it doesn't matter one iota as to why you end up on benefits you are tarred with the Tory brush, what's more the Liberals are holding the hot bubbling cauldron full of the black stuff as Cameron et all slap it all over anyone who has the cheek to say 'I'm too ill to work'. Labour need to be a lot bolder, they are good on social justice but weak on welfare protection.
Labour should shout out the facts, they need to educate the uneducated, they need to apply a reverse argument which clearly cites the Tories as reckless on welfare. It was Labour who inherited a problematic system of claiming incapacity related benefits from the Tories. Labour didn't do much to reverse it but they certainly didn't make it any worse. It was a mess created by the Tories which no single party has ever got to grips with. In truth there are no clear winners or losers when it comes to welfare, unless there is some honesty on policy what we will see is more disastrous welfare wrecking by the Tories.
We cannot deal with the numbers of 'fit' people claiming unemployed benefits - how on earth can we cope with tackling a further 2.6 million who are incapacitated? - pretending they are fit is no answer and the statistics show the re-branding is achieving nothing - absolutely nothing.
The irrefutable evidence produced here shows there to be no hugely significant increase in the two major 'out of work' benefits from 1999 to 2009.
IDS needs to come clean over the benefit statistics being 're-branded' to reflect the numbers who are 'economically inactive' - it's not the same as a like for like comparison of the out of work benefit figures reflected in the ONS figures I have replicated here. He's made a rod for his own back because in telling us 5 million are out of work he's now got to show us how he's going to get them back to work.
Please don't tell me he's going to rely on his government's track record - to do so would be an unmitigated disaster.
Now this is where it gets interesting...
I'm drawn to some further statistical evidence which comes from a Parliamentary standard note (SN01420) dated the 13th July 2012 prepared by Roderick McInnes of the Social & General Statistical section. It's a reliable source of data which sets out the current position:
The note presents a summary of statistics on ESA and its predecessors. “In November 2011, there were around 2.7 million working-age claimants of ESA or other incapacity benefits in the UK – this represents 6.7% of the population aged 16 to 64.”
I think there is a need to be cautionary about the classification of the ‘predecessor’ definition. I say this because the note includes a reference to at paragraph (1.2) Incapacity Benefit and at (1.3) Income Support paid on the grounds of illness or disability.
I say this because of the confusion which can surrounds claims for Income Support which are made on the grounds of ‘illness or disability’.
The note goes on to clarify:
“(Note – Disability Living Allowance (DLA) is not within the scope of this note. DLA is payable on the basis of care or mobility need rather than inability to work per se, and is therefore not classed as an out-of-work benefit.)”
So lets be clear - Disability Living Allowance is not an 'out of work' statistic. I would ask IDS & co to remember this because it's often the source of misrepresentation in the media.
It gets confusing:
What can happen in these data sets is that a person can claim Income Support on the grounds of both disability and incapacity. This may happen where a claimant is in receipt of additional Disability Premiums which are paid because they are in receipt of Disability Living Allowance (which is non-means tested) but which also has the effect of increasing their government set amount (known as the ‘applicable amount’) to an amount which is excess of any Incapacity Benefit they may receive. In such cases the Income Support is paid to make up the difference between their Incapacity Benefit and their Income Support. So to be clear a claimant can receive benefit on the basis of not only Incapacity but disability as well.
I strongly suspect the confusion will mean we are seeing some claims being counted as both Disability and Incapacity when in fact they can quite easily relate to the same claimant. If a claimant claims on the grounds of disability they should not be double counted as an incapacitated claimant - it would grossly distort the figures.
However if we plug on and accept the figures as being correctly representative, then we can follow them on from the ONS data set tables (shown above) which put incapacity related claims at 2,630,740 in August 2009 which when compared with the November 2011 total incapacity figure of ‘around 2.7 million’ represents an increase of 337,260.
I am not so sure we should start using figures which are loosely termed as being ‘around 2.7 million’.
In looking further into the Parliamentary note we can see the figures more clearly laid out in a data table which provides a breakdown of the exact figures for November 2011:
Nov 2011 Total Incapacity related claims
- ESA - 857,890
- IB - 1,535,380
- SDA – 219,250
Total all claims - 2, 612,520
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Interestingly the November 2011 figures include those claiming from abroad, it's not a huge number but suddenly we see it being included to plump up the figures.
The figures shown in the table are 88,000 lower than the headline figure of 2.7 million if we want to cite them with some degree of precision, although I continue to harbour my reservation over how the overall figures are arrived at in terms of the inclusion of economically inactive & disability cohorts, as well as those from abroad and claimants on Severe Disablement Allowance (SDA).
Here's where it gets interesting..
Wind the clock back to when Labour came to power in May 1997, the data table (in the Parliamentary note) isn't really much help us as it only relates to the figures from November 2000. Although it does provide us with an opportunity to cross check the 2000 figure in the Parliamentary note against the ONS figures I have quoted in the three tables used so far. They are comparable because the Parliamentary figure is 2,764,140 against the ONS data set figure for August 2000 showing 2,714,850. So there is alignment in the data sets.
But lets go back further...
The absence of the figures in the data table shown in the Parliamentary note isn't a huge obstacle in getting at the pre-1997 figures, for in the same Parliamentary note there is a graphical chart and it's one which makes very interesting viewing, it's on page 5 and you can download the note in the following post if you login to the forum. It's the nice one coloured in dark green which shows the peaks and troughs on Incapacity related claims and it goes all the way back to 1979 which is mighty handy because it marks when the Tories came to power in the late 70's.
You need to login and check out the chart because it makes fascinating viewing, it would probably cause IDS to go all red around the ears if someone were to replicate it and put it on a poster as big as those we see with David Cameron all over them grinning as he tells us 'how the Conservatives are going to get Britain working' - something they've not managed very well in the past!
From the graph (unfortunately I can’t replicate it on the forum) we can look at the way the incapacity figures have escalated over the years. What's interesting is when they escalated.
The graph reveals something IDS must surely already know:
The total number of Incapacity claims rockets from 1.5 million in 1988/1989 to close to 2.6 million in 1996/97 when Labour came to power! In case you have not realized the significance of this evidence, let me spell it out to you....
In 13 years of a Labour government Incapacity Benefit claims increased by around 100,000 from 2.6 million to 2.7 million.
In 8 years during a Conservative government Incapacity Benefit claims leapt up by around 1.1 million from 1.5 million in 1988/89 to 2.6 million in 1996/97.
See what I mean by the way the Tories positively increased incapacity claims?
Summary
Having created the problem what are they doing to fix it?Iain Duncan Smith and the Coalition government has constantly pointed the finger at an 'endemic cycle of worklessness' as causative of a bloated and broken welfare state. The facts show that of out 693,000 benefit claimants
only 10,600 Incapacity Benefit claimants have been attached to their costly multi - billion pound Work Programme.
And lets not forget attaching a derisory 1.5% of incapacity related claimants to the programme is a million miles from providing us with any objective evidence that any of them have been helped back in to work; the system is showing all the signs of a catastrophic failure in tackling what has been promoted to be the problem: the public have been duped into believing 75% of those on Incapacity Benefit are 'faking it'. Having made the claim IDS needs to come clean as to why if what he says is true such a paltry number have been helped. Could it be that that the DWP and Work providers simply can't place claimants who are clearly limited in their incapacity - thus such a low number of attachments?
We will go on to look at where these claimants end up in a system which is broken before it starts - so read on.
The Labour legacy claim is untrueIain Duncan Smith's claims that the creation of welfare dependency is down to a Labour legacy are shown to be just the reverse. The facts are that when the Conservatives came to power in 1979 the number of incapacitated claimants (it was at the time 'Invalidity Benefit') stood at around 1.2 million, the figure gradually increased to 1.5 million up until 1988/89 when it then escalated to the 2.6 million figure inherited by Labour in 1997.
The fact is incapacity escalated under the Tories on an unprecedented scale, they cannot blame it on Labour - any such claim is sheer nonsense.
But why the escalation?
An analysis would not be complete without a look at those who were unemployed (as opposed to Incapacitated) back in the 80's. Consider the following extracts from a
simplified economic study:
"It was in the manufacturing recession of 1981 when unemployment rose to unprecedented levels. Not only did unemployment reach 3 million, but, it remained stubbornly high until 1986 well into the economic recovery."
"Unemployment remained high throughout the 1980s. Even at the peak of the boom in 1989, 1.6 million people were unemployed." You can see what has occurred by analysing the above statements in conjunction with what happened to Incapacity Benefits. Unemployment hit 'unprecedented levels' from 1981 to 1986 after which it started to fall. The Tories deliberately encouraged people on to incapacity related benefits to get the unemployment figures down - it's revealed in the figures.
It is no coincidence that the fall in unemployment occurred simultaneously with a rise in incapacity claims.
The Tories have an appalling record on welfare, they merely created a whole tranche of unemployed claimants who were 'converted' into incapacity claims as a direct result of the changes imposed upon labour markets as our manufacturing bases changed in the 80's. It was just a political convenience to build up a welfare wilderness which peaked at around 2.6 million individuals claiming incapacity benefits who have remained isolated in their ability to contribute to society ever since - a price the Tories considered worth paying to hide the 'true' unemployment figures which remained embarrassingly high until they started to re-badge the claimant count. The tranche isn't of course the same claimants because some will have just moved on to retirement benefits but they will have been replaced by newer incapacity claims - it continues to this day as the figures go on to show.
We have to accept some will never be able to work and that is perhaps where the Support Group in Employment & Support Allowance has to a limited degree started to work but there's a long long way to go.
By far the greatest problem is in fitting claimants with limitations into the 'Work Related Activity Group'. Personally I do not think it will ever work and nor should IDS make claim to belong to a government which is out to help people back into work. If that was the intention we wouldn't be left with these telling statistics:
August-2008 - 2,590,610 Incapacitated Claimants
3 years on
November - 2011 - 2,700,000 Incapacitated Claimants
All the grief caused by Employment & Support Allowance and the grueling Atos incapacity assessments has not achieved a single thing.
And lastly as a certain lieutenant might say..There's just one more thing.. It's about appeals....Let us just take one more look at all the Employment & Support Allowance claims which existed in November 2011.
889,450 ESA claimants in the UK (2.2% of the population)
• 401,100 (45%) were in the assessment phase;
• 279,240 (31%) were in the Work-Related Activity Group;
• 155,780 (18%) were in the Support Group.
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I'm glad I've found them! For quite some time I'be been a bit baffled as to where they had got to and now I know. Not that long ago we were hearing about how the number of 'ESA appeals was coming down'. Really I thought? I always thought it was a bit of an odd claim to make when all I hear and see is a never ending queue of ESA enquiries coming though the doors of advice agencies which have been buckling under the strain of so many appeal cases.
We've heard the DWP telling us waiting lists are coming down to around 13 weeks before an appeal is heard and yet I look at the mountain of blue folders all around my office. Lots of them tell me that these cases have been waiting up to a year for their appeals. My confusion is now satisfied, we know the 401,100 assessment cases (all appeals involve the claimant being in the 'assessment' phase) can't possibly be with the Tribunals Service because the Ministry of Justice has been telling us how 'numbers have fallen'.
Spinning statistics W now know there are simply thousands of ESA cases stacking up all around the country in DWP decision-making offices as they go flat out to review 11,000 Incapacity Benefit to ESA 'conversion' cases in addition to the number of NEW ESA cases which claimants are making each month.
What we need is some degree of honesty over how many new and conversion decisions are being made and how many claimants in their 60's are being shipped on to Pension Credit claims (another way of decreasing the numbers).
So there's our explanation, except it leaves us with one final problem...
The problem is this: none of the thousands of Incapacity Benefit cases being 'converted' to Employment & Support Allowance actually have an 'assessment phase' because it's not built in to the transitional regulations (which is another little problems which I'm slightly pre-occupied with but that's another story for a Tribunal Judge) but they are flagged up when disallowed by the DWP as an 'Employment & Support Allowance' appeal.
The problem is the Tribunal has no means of identifying them as such so my educated guess is we've got a good few thousand languishing around the land of statistics as 'unaccounted for' - I'd call that a bit of a saving grace for IDS until some MP catches him out in a call for a thorough audit trail of all Incapacity Benefit & Employment & Allowance cases which are with the DWP and Her Majesty's Courts & Tribunals Service or somewhere 'in between'.
And lets not be accepting the stock answer:
"The information cannot be made available as it could only be obtained at disproportionate cost."
In the following post you can download the Parliamentary Standard note and see the figures for yourself. After that I'll take a look at IDS's claim on 'Universal' benefits....
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