The Benefits Trap. Gauke’s Social Engineering at its Most Devious.
It is Sunday morning on the 17th December 2017 and the day starts with the Right Honourable David Gauke spending an hour delivering double talk and disingenuous platitudes as he tries to defend the indefensible – Government policy on benefits, employment and housing supply. Under pressure he was finally persuaded to admit the present regime had been in charge since 2010, albeit with their LibDem accomplices for the first part of that period.
The more he spoke the greater the sense of absurdity. Here was a Secretary of State defending the grouping together of entirely incompatible functions of public administration and denying, to himself, the harm that has done.
Separate Issues Confused!
Let me make it plain. Dealing with poverty and dealing with workless-ness are entirely separate and largely unconnected issues. The evidence is all around us. Millions of people, who are working, are living in poverty. They outnumber the unemployed by several hundred percent. We may argue about the definition of poverty but according to the accepted rule 16.8% of the population are poor. 7.3% of the population are in persistent poverty. Unemployment stands at around 4.2%. Not all who are unemployed are poor.
Housing is yet another entirely separate consideration with its own complexities but the problems with housing supply are related to the causes of workless-ness and poverty. Social scientists provide rafts of lengthy verbose reports and are fond of delivering paternalistic advice on how to deal with the issues and like the politicians they scramble those issues together and hence create a fog. The tools they use to assess what is going on are, frankly, not fit for purpose. They attempt to measure the unmeasurable.
The Real Question
A libertarian might question whether the paternalistic approach is the right one. Asking the question and not providing an alternative is reprehensible, however. Is there, therefore, an alternative to the perceived wisdom on dealing with social problems and should we deal with them?
At this point we enter the realm of personal choice and my choice is that society does have an obligation to remedy major inequalities within it. Apart from the moral issue it is a matter of fact that neglecting these sores will end up with them biting you in the ankle and potentially undermining the structure of society itself. Therefore it is not only morally right to try to remedy such gross disadvantage it also makes good business sense. The devil is in the detail. The methods chosen are the key to how successful the remedy will prove. Direct intervention has shown itself to be a complete and utter failure.
The Decline of Incomes and the Cause!
Over the last two decades the UK has seen dramatic falls in the real value of incomes. This has coincided with the import of millions and millions of people from less advanced countries in Eastern Europe and elsewhere. Those millions have been prepared to work for slave labour rates and have provided big business with the opportunity to exploit them and to undercut the prevailing wage rates of everyone else. In every year since 2001 more than half a million people have arrived here to live and perhaps work.
Ignore the “net” figures politicians bandy about. They are meaningless. There is no mechanism for counting emigrants and indeed emigration exacerbates the problem. This includes the flight of our best brains, to places where these massive changes are not occurring at the fastest rate in history. It includes the mass exodus of the doctors and nurses we have paid to train as they transplant themselves to Australia, New Zealand, Canada and the USA. In their place we have persons with dubious qualifications who may be unable to speak English sufficiently well to provide adequate care. Some come from countries where diploma mills sell “off the shelf” qualifications!
Until the 1990s nurses and doctors had to undertake an adaptation course, on student rates of pay, to prove their capability in English and their ability to understand the way the NHS works. EU regulations forced the removal of this essential protection. The result is people staffing our wards who have no concept of the principles that underpin this vital service. They think they are handing out charity. They are not. It is a service we pay for by stage payments, in advance, so that when we have need we are not burdened with major bills. Health tourism has, of course, driven a coach and horses through those principles.
The True Scale and Effect of Mass Immigration!
Since 2001 around 8.8 million people have arrived here prepared to undercut wage rates, expecting free healthcare, education for their many children and needing a house to live in. Their effect is to stress out our public services, to increase the cost of living by increasing demand for housing and to reduce prevailing wage rates by undercutting. This is nothing to do with who arrives here or whether we should like them or not. Indeed the migrants are the principle victims of this unscrupulous, organised exploitation by a conspiracy of politicians, public administrators and multi-national companies. Hidden among their number are people we should never have allowed ever to set foot in this country and we are paying the price in terms of the need for intensive security operations.
The feeble argument put forward in favour of such policies is that we would be short of labour if this criminal exploitation were not permitted. Such a shortage would be a very good thing. It would force the market to react. Wage rates would have to rise. Companies would face the harsh reality that to survive they need to invest in technology, training, research and development. Higher quality, less tedious, jobs with higher pay would be the end result. Meanwhile we would have sufficient houses for everyone. House prices would stabilise. The rate of price inflation would reduce. Interest rates could remain low for borrowers. Several birds are killed with a single stone and not a bureaucrat in sight!
(For those who are savers I would remind them there is no link between the rates paid to savers and the rates paid by borrowers. The way our banking system works, the same money is lent out over and over and over again. That is how the banks make their money. It is not a “mark up” on the rate paid to savers. This is what banking reform should have tackled with legislation to compel banks to maintain the real value of savings!)
The Residual Problem of Poverty
Having thus dealt with unemployment and housing shortages we remain with one vexing problem. There will still be a (much smaller) group who continue to experience poverty. Traditionally that will compose of the weakest in our community, people living with disabilities or mental ill-health, the elderly, children in broken homes etc. While the market has been shown to be the most efficient way to deal with most economic and social issues it is a blunt instrument. It has no conscience and delays between action and reaction can result in very real hardship. This is where the State does have a role and should provide a safety net.
The Truth Behind the Words
It is disingenuous for Mr. Gauke to suggest that taxing the poor for their “spare” bedroom will cause them to move to a (non-existent) smaller property. It simply puts them in debt and ultimately exacerbates existing hardship to the point where they become indebted, homeless and possibly a “rough sleeper” (numbers have increased by 127%). Indeed anyone who is single must necessarily have a “spare” bedroom to provide for circumstances where they become sick and dependent on a third party. The minimum for any house or flat should be two bedrooms.
The only conclusion that may be drawn from this Gauke’s platitudes is that Government policy is set on attacking the poor and driving them further into destitution and that he does not care. He does this while defending the policy of successive Governments, since the end of the Second World War, to use cheap imported labour to depress living standards while doing nothing to deal with the inevitable social problems that would arise. Government policy is nothing short of social engineering.
The Sleeping Beast Awakes.
The Chattering/Ruling Class had decided that the UK was a spent force and they needed a mechanism for removing their capital (the EEC/EU). Well the noble beast was far from dead. It is stirring now. It is breaking the shackles of foreign rule! All we need is politicians that are capable of facing reality and dealing with the very real problems this nation has. The first is to halt the import of undercutting labour. Next we need to remove tariffs from imported food and raw materials from our Commonwealth friends and the USA. Most of our problems will then resolve themselves.
The Libertarian Approach.
As usual the libertarian approach works best. You provide an environment where people can take charge of their destiny. You remove the artificial constraints that prevent them from making the most of their circumstances. The prime mover in a libertarian society is the individual and NOT the Government. This makes everything demand led. Paradoxically, though, it takes a very determined Government to create the environment that empowers the individual. Such a Government must not be afraid to legislate or to step in where the market falters or fails.
Remember that 40% of the nation’s GDP is in the hands of 1% of the population. That cannot be right! It is also the reason for disappointing productivity figures. Productivity is the ratio of output to input. If 40% of the input is in the hands of a tiny group it will contribute nothing to output.