It's still a curiosity why the 'Taxpayer's Alliance' organisation only ever seems to be looking out for the interests of certain sections of taxpayer; those who most closely align with the demographics who support the Conservative Party. The majority who do not fit into that bracket are often ignored if not outright targeted.
Today they have released a report authored by one Chris Philips, a London businessman and councillor. He has a 1st class degree in Physics from Oxford, but then David Cameron also has a 1st in History, Politics and Economics- so I'm adding this to report to the growing list of anti-adverts for Oxford. Really, the report is heavy on statistical misuse and Mr Philips education does not allow for this to be interpreted as incompetence. Unless my joking about Oxford is disappointingly true but it will be a while before I entertain that thought seriously.
I'm not simply slinging mud here and I'm keen to have this covered before FullFact.org gets to it, so on to the specifics.
In The Executive Summary
He wastes no time..
1. Over the past 50 years, welfare spending has relentlessly grown and now consumes 28 per cent of all government spending. 57 per cent of this goes on benefits for working age people.
In reality: He has made this judgement by looking at pensions spending and then assuming anything that is not pensions must be working-age expenditure. It's a sign that he began with his conclusion and then went looking for the evidence to support it, rather than searching for the whole expenditure and seeing what was spent on what. The latest DWP Benefit Expenditure Tables show what Philips has left out- all the non-state pension benefits that go to pension-age claimants. Most social security expenditure is on those of pension-age. The working-age group receives about £90 billion(£50 billion if we exclude HRMC-administered Tax Credits) compared with £110 billion for pension-age claimants.
2. 5.6 million working age people are currently not working and reliant on benefits, a number that has remained stubbornly high even when the economy has grown (it has been over 5 million for more than a decade).
In reality: This is from the DWP Statistical Summary, which is audited for quality by the National Statistics Authority, which unfortunately can't audit their misuse beyond that. The problem I have here is not with the figure but with Philips' assertion that the people he's talking about are 'not working'. They include carer's and lone parents on income support, people signed onto JSA who may not be receiving anything because they are doing declared paid work, people doing the mandatory work placements that Philips and the TPA think don't exist. Others are sick and disabled. I should note that the figure here is not static, it is merely a total- these are not the same people all the time. So why would Philips expect a growing economy to shrink this figure?
I want to note something really annoying at this point: Blogger has a feature in post writing to 'remove formatting' meaning something copy-pasted from a document can have all changes made to it by a word processor taken out. This leaves only user-specific inputs, done by a human. Whether Mr Philips typed the final document itself or someone from the TPA did; they don't seem to realise you don't have to manually press the Enter key at the end of each line. I'm having to reverse this every time I lift text from it because the remove-format button doesn't work on human changes.
3. Claimants typically each claim several benefits, and in many cases the value of these benefits taken together adds up to £15,000 to £25,000 per year –about the same as a low-skilled worker earns and often more than the minimum wage.
In reality: If he's still talking about the same 5.6 million out of work claimants, then he really should be supporting this with evidence. But he can't because when you factor in that most low wage workers also receive benefits, comparing like with like rarely produces a situation where more money is received when out of work. Use of Tax-Benefit models to show how much better someone is when in work have been used in Jobcentres and Citizens Advice Bureaux for decades now. You'll notice Philips fails to show any of his working out of this.
4. This costs our country money we can ill afford and is deeply socially corrosive. One in four children now grow up in a household where no one works.
In reality: Half-myth, half-weasel words. Do one in four children grow up in such a household or do one in four children live in a household where no one is currently in work? It's the latter: FullFact.org covered this a year ago and ONS data comes up with 15%, not 25. It's possible Philips has found figures for workless families rather than households, but that would expose the problem in his argument- that question of the ratio of children to workless households they are living in is significantly influence by demographics, not work ethic.
5. Some people argue that the jobs simply aren’t there, particularly with the difficult economic situation. However, the analysis in section 3 below shows that 3.5 million new jobs have been created since 1997, and that employment today stands at a higher level than at any time in UK history.
In reality: The employment level is irrelevant, it has always grown even during previous downturns in modern times. The number of people looking for work is also always growing. The curious thing here though is the second bit about '3.5 million new jobs' being created. I zoomed forward to section 3 and saw Philips' problem is that he's conflating jobs with vacancies. Create all the jobs you want, but if they're not vacancies, they won't be filled and Philips' still does not acknowledge that parents do not abandon their children nor carer's their sick and disabled relatives to go get a job just because it's there.
6. As 2.5 million jobs were created since 2000, out-of-work welfare claimant rolls stayed about the same. UK welfare claimants were not moving into work as jobs were created.
In reality: JSA claims fell to a historical low. Long-term JSA claims went from 50,000 to almost 4,000. Philips wants to gloss over why sick, disabled, lone parents and carers do not behave like JSA claimants and lump them together.
7. 68 per cent of the jobs created were taken by immigrants prepared to work hard rather than rely on benefits. Many of the UK population on out-of-work benefits evidently weren’t interested in the new jobs.
In reality: Demographics again. In the time it takes to birth, educate and grow an annual cohort of human beings ready to work, about 16 others will have finished the process- but they are less in number than the immigrants who are already grown up and finished school. There aren't actually any figures for immigrants taking jobs- this is non-UK born, which includes UK citizens, not people who have come here specifically to work in recent times.
8. The current Government is trying to remedy the situation, and their policies are moving in the right direction. From 2013, benefits will only go up by 1 per cent each year–hopefully lower than wage inflation–thereby tipping the balance back a little in favour of working. However, it will take some time to outweigh the regrettable 5.2 per cent blanket benefit increase put through in 2012.
In reality: All of the uprating changes implemented by the government, including the 1% cap, mostly affect benefit expenditure for those who are in work. Most benefit working-age benefit expenditure is directed at those in work. Also, the 5.2% uprating in 2012 is more than compensated by loss of value in benefits for the unemployed since 1979 when the uprating was changed from being pegged to average wage to being pegged to inflation- which was to save money.
The summary then goes on to propose a 'Work for Dole' scheme that is pretty much what Universal Credit is going to do anyway. Most people didn't bother reading the Welfare Reform Act or the final draft regulations, so I'm halfway believing that this is the TPA testing the water for an idea that the government wants some plausible deniability on. He relies on citing the US reforms pushed through in the Timely Assistance for Needy Families bill: the results of which no one actually knows because so many people just simply disappeared. It's apologists do what Philips does: point to the reduction in claims, because they don't have any figures for actual success. Other projects from Canada and the UK are references, I looked at the UK one(Project Work Pilot 1996-97), which was a change in proscribed regulations to the 1995 Jobseekers Act. The regulations for JSA have been made considerably tougher after that: in the period when Philips thinks people have been shirking work because benefits are apparently too generous.
"Welfare Spending Is High And Generous"
9. Over the past 50 years, total welfare spending in the UK has increased relentlessly. Having risen from 4 per cent of GDP in 1948 up to around 13 per cent of GDP today, welfare spending now consumes 28 per cent of all government spending.
In reality: He wants to say this is unsustainable. He has said this is unsustainable. But in order for him to make that connection he has to have some solid explanation for the growth in expenditure. He would prefer that we simply believed that claimant counts grew and this was because greedy scroungers come to take as much free money as they could get. Pensions and changes in social care provision explain most of the rise by GDP over that time; people are living much longer and also healthier- keeping their independence means they are less likely to be put in a care home. A reduction in one budget leads to an increase in social security but an overall net saving. Note that where he was at least attempting to specify working-age expenditure before, he now chooses not to when it doesn't serve his argument. Also he uses a graph that shows the flat-period of per GDP spending before the recession, where he wants to assert the myth that social security loose. So he comes out with this..
10. Despite fifteen years of continuous economic growth between 1993 and 2008, totalwelfare spending nonetheless continued to rise rapidly in real pound terms.
In reality: Given the chart he uses, you have to wonder if he's been reading FullFact.og's guide for 'how to make bad charts' because the Y axis starts at 120,000 and X at 1993/94. He's cherry-picked the period of 1993-2008 but doesn't want to draw attention to the bigger picture. As such it makes the rise very exaggerated. The start of the graph has been averaged in a way so that it stays below 130,000 until 1999, but again the Benefit Expenditure Tables for 2012 show it was over 130,000 in 1995. As to the rise in spending: real-terms(2013 prices) for DWP working-age benefit expenditure was £51 billion. In 1997 it was £52 billion. Then by 2005, DWP benefit spending on working-age claimants was £44 billion. Tax Credits had been rolled out by this time and did increase working-age expenditure to a total of £67 billion if we include the elements of it directed at children. For those out of work, working-age expenditure fell. So all of the rise where not driven by inflation, an ageing population and demographics was part of a strategy for reducing child poverty which would have cost much more in the long-term. By the time the recession started in 2008, DWP working-age spending was back at £47 billion.
11. Of total welfare spending of around £200 billion in the last fiscal year, 43per cent(or £85 billion) was spent on retired people. This is outside the scope of this paper.
In reality: Not when it suits Mr Philips to include it, whether it's to inflate the growth in spending or pretend that only the state pension is pension-age spending. He goes on to show a simplistic breakdown of spending on individual benefits, neatly including all of the pension-age claims and expenditure, whilst repeating his comparison of someone out of work on benefits to someone in low paid work apparently not receiving benefits. He does stumble on the fact that most claimants are in work but manages to ignore it.
12. For example..
I won't print the hypothetical example Philips uses in full: it's too long and I'm having to manually correct every single line abused by the Enter button. This is what it describes- he uses a government website to calculate what his hypothetical claimant would get, the claimant has two young children, a partner, no income, few savings and lives in rented accommodation. Ok so this is not about a single claimant but a household- yet Philips chooses to focus just on the claimant and tries to force a point out of the fact that changing between whether or not they are looking for work or not doesn't change the amount they get, just whether it is JSA or Income Support. Again though- this is a household, what about the partner? Only one of them can claim Income Support because of the young children, the other must look for work or they lose out. If that partner chooses to simply claim JSA but is not serious about work, they lose the more generous Working Tax Credit element. He continues with some ignorant tirade about the system supposed not demanding anything from claimants in return. Almost every previous claim is repeated in some form. One thing he can't demonstrate is that Britain's social security is unsustainable and has been growing for the reason he asserts.
I'll wait and see what others are writing about this before continuing.