Page last updated at 09:10 GMT, Tuesday, 15 February 2011

UK needs to adopt tough US stance on earning welfare

Challenging the notion that lone parents should be exempt from work

He provided the inspiration for a tough overhaul of US welfare under which unemployed people have to work for benefits. Now American academic Lawrence Mead gives his view on how the UK could benefit from a similar approach.

Recently, I travelled to Liverpool from New York to find out whether welfare reform can succeed in the UK.

Mostly, reform means moving people who live on benefit into jobs. For decades now, governments in Britain have favoured this approach, and the current coalition government does as well.

A leading scholar of politics and implementation of welfare reform
Ideas provided basis for tough overhaul of US welfare in 1990s
In 2010 invited to Number 10 to brief UK government
His books have also influenced reform in Europe, Australia, and New Zealand
Teaches American politics and public policy at New York University
Watch Lawrence Mead's film for Newsnight on Thursday 15 February 2011 at 10.30pm on BBC Two and then afterwards on the BBC iPlayer and Newsnight website.

But little progress has been made.

In Britain, the share of working-aged people who are out of work - over a quarter - is unusually high.

Close to six million people are living on benefits of one kind or another, a tenth of the whole population.

The recession may have caused the numbers of unemployed to grow, but 4.5 million people were living on out-of-work benefits even before the recession.

And the largest number of dependents, 2.6 million, claim to be disabled and are living on incapacity benefit.

Steps have been taken to move all of these groups, as well as lone parents, toward employment, yet dependency on benefits remains high.

In contrast, the US welfare reforms of the 1990s succeeded in cutting the number of people claiming welfare by over two-thirds, and in the state of Wisconsin we reduced the number by 80%.

It was tough love - if people did not work, they lost their benefits.

US welfare exodus

Claimants were told to look for work as soon as they went onto aid, or even applied for it.

Many left welfare for jobs quickly. Even larger numbers moved into work directly without going onto welfare at all.

And the programme affected lone mothers with children, a group which in Britain is seen as less employable and faces, as yet, no definite work requirement.

'Some people not willing to trade benefit in for a job'

Why has the British welfare reform not achieved anything like this?

In Liverpool, I met local people to explore this question.

On paper at least, Liverpool is one of the most depressed cities in Britain. Its old industrial economy has collapsed, and reliance on benefits runs unusually high, even for Britain.

One initial surprise was that the city did not appear down-at-heel. The city has a shiny centre with lots of new buildings - typical of many industrial cities which have lost their factories, but which have seen new development of other kinds.

Most of the people I met there did not suggest that jobs were literally unavailable to the jobless. So the labour market was less a reason for high dependency than I had previously thought.

Sense of entitlement

More important is the fact that many people still believe in entitlement - this is the idea that you have a right to get benefits if you qualify under the income rules, and you should not have to work for them.

I met some trades union staff who defended this attitude. They failed to see the irony - originally trade unions defended the rights of working people, but now they were defending people who lived without working, even for years at a time.

The expectation to work is not strong enough to motivate change

A further influence is that even claimants who accepted the idea of compulsory work found it difficult to imagine actually going to work.

I met a group of unemployment benefits recipients at a community centre in Anfield, one of the most depressed areas in Liverpool.

When I broached the idea of their having to work to get aid, they came up with all kinds of problems.

Some doubted that jobs were available, but more doubted they could get the child care or training that they needed.

Above all, several claimed that if they took a job they would lose more in benefits than they would gain in earnings, and thus would emerge worse off.

The government plans to reduce these disincentives. On US evidence, this will not cause many more claimants to seek work, but the belief in disincentives has become a huge obstacle to change.

Punitive action

The parents and children I encountered in Anfield seemed to me upbeat and well-organised.

The community did not manifest the deeper disarray that one often encounters in poor areas in America.

It was difficult to believe that these adults truly could not work. Indeed, employment was the only thing really lacking in their lives.

A further problem is how benefits are administered. We visited a local Job Centre Plus, where the staff claimed that they are applying the new work expectations.

But on close inspection, whether applicants qualify for aid is still decided on income grounds and separately from employment.

Claimants face pressure to work only after they have been claiming for some days or weeks, and work is then presented to them as a choice they could make, not as an obligation that they owe simply for being on aid.

The expectation to work is not strong enough to motivate change.

I came away with the realisation that reform takes more than changing policies to promote work, as the government is doing.

Political leaders must also clearly announce a new social contract where entitlement is ended and benefits are now seriously and immediately conditioned on work.

And the bureaucracy must change to communicate that message more clearly.

Watch Lawrence Mead's film for Newsnight in full on Tuesday 15 February 2011 at 10.30pm on BBC Two and then afterwards on the BBC iPlayer and Newsnight website.

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