Right-whinger skinflints are perverting the contract between citizen and state

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abuse, benefit, cancer, citizen, Conservative, contract, contributory principle, deal, entitlement, Glynis Millward, Labour, Mike Sivier, mikesivier, National Health Service, NHS, people, Pete Woodcock, Peter Lilley, politics, social, social security, something-for-nothing, state, Tony Blair, Tories, Tory, Vox Political, welfare, welfare state, William Beveridge

The architect of the contributory principle: Would William Beveridge approve of what has been said about the system he designed?

Vox Political supporter (and McKenzie friend at the recent Freedom of Information tribunal on benefit claimant mortality) Glynis Millward has provided an interesting follow-up on the article about cancer sufferer Pete Woodcock.

Some commenters on the original newspaper story claimed that Mr Woodcock, whose benefits had been cut, should be grateful for the “free” treatment he would receive from the NHS. The comment is despicable, as it misrepresents the contributory principle of ‘benefits in return for contribution’ (as framed by William Beveridge, who designed the Welfare State) to become “free allowances from the State”.

Glynis has sent us the following report, explaining why this is wrong. Unfortunately she has not said where she found it, so I cannot give it the proper attribution.

“Any discussion of Beveridge today needs to recognise that along with the erosion of the link between contributions and entitlements, the contributory principle has also been the victim of an extraordinary impoverishment of meaning.

“When Beveridge contrasted ‘benefits in return for contribution’ with ‘free allowances from the State’, his aim was to break with previous paternalist models of social protection: the new model turned on workers having an entitlement to the benefits for which they had paid.

“This did not mean that benefits were unconditional (Beveridge was clear that both unemployment and sickness benefits were conditional on making preparations to return to work except where this was ruled out by disability) but it meant that they were part of a deal between citizens and government: a social contract extending across the lifecycle and across generations.

“In contrast, when ‘the contributory principle’ is invoked these days it is often in terms of the policing of the benefit system, referring to little more than the idea that people who have not worked or fail to meet worksearch conditions should not be able to access benefits.

“This attenuation of the idea of contribution is an important development in the political language of welfare in the UK. It arises in part from the way the language of reciprocity came to be turned against the welfare state in earlier decades.

“The political fortunes of the phrase ‘something for nothing’ over the last twenty years are instructive. ‘The something for nothing society’ was introduced into the political discourse of welfare by Peter Lilley at the Conservative party conference in 1993; it was adapted by Tony Blair as ‘the something for nothing culture’ to frame New Labour’s welfare reform agenda in the late 1990’s. Variations on the phrase continue to frame policy statements on social security on both Labour and Conservative sides, reinforcing the message that the main problem faced by social security is one of non-reciprocity, of people taking out who have failed to put in.

“And policy under both the current and previous government has often seemed to have more to do with reinforcing the sense of a system subject to massive abuse than any genuine policy objective. It is hard to imagine Beveridge welcoming ‘lie-detector’ tests for benefit claimants, or proposals to cut benefits for the families of convicted rioters, or the existence of a benefit fraud hotline where people can denounce their neighbours under cloak of anonymity, with only 1.3 per cent of calls leading to the detection of any fraud.

“In the report we subject the ‘something for nothing’ perspective to a reality check and find it severely wanting. Perhaps the most heretical statement that could be made about the UK social security system is that it overwhelmingly does what the public want it to do: however, this would seem to be the case.

“Most people who claim benefits have ‘put in’ in the past and will do so in the future; most benefit claims are short-term; most long-term claims are for disabled people or carers.

“As for the social archetypes that haunt the contemporary welfare discourse – the families in which no-one has worked for generations, the areas where ‘nobody works around here’ – these bear virtually no relation to any identifiable social reality. To see ‘scrounging’ or benefit fraud as the main issues facing social security is about as realistic as seeing the theft of prescription medicines as the main issue facing the NHS.

“If the contributory principle is to play a serious role in future thinking about social security, we need to move away from the ‘something for nothing’ framing and address the ‘nothing for something’ problem of a system in which the great majority of people contribute but see little visible return for their contribution. In doing this, we should be alive to the full meaning of the principle that Beveridge set out when he talked of ‘benefits in return for contributions’.

“Although there were important limitations to Beveridge’s system which were to dog social security policy for decades – especially with regard to gender and disability – his contributory principle was nonetheless intended as a principle of inclusion. To use it to draw new lines of exclusion, as often seems to happen today, would be a poor tribute to his achievement.”

Possibly the most useful part of the above is the comparison with the NHS. Clearly the theft of prescription medicines is not the most important issue facing the health service – it is the effect of the shift to a privately-run healthcare system, its consequent burden on funds and its effect on treatment. Take that information back to the benefit system and there is a strong argument that all this talk of a “something for nothing” culture is an attempt to indoctrinate the public into accepting that they should contribute towards their own unemployment benefits by taking out insurance against losing their jobs – even though they have already contributed towards such a system, simply by paying their taxes. And remember – we all pay taxes; the government gains more revenue from indirect taxation (including, for example, VAT on goods purchased) than from Income Tax.

Your opinions are invited.

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Gauke, Osborne and Goldman Sachs: The Treasury’s corrupt tax avoidance conspiracy

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Amyas Morse, Andrew Parks, blower, Customs, Dave Hartnett, David Gauke, deal, Enterprise and Regulatory Reform Bill, George, Gideon, Goldman Sachs, Guardian, High Court, hmrc, judge, Macfarlanes, Margaret Hodge, Mike Sivier, mikesivier, national audit office, Osborne, Osita Mba, Parliament, Revenue, smear, sweetheart, tax avoidance, Treasury, UK Uncut, Vox Political, whistle

Rumbled: David Gauke, the ugly face of Treasury-approved tax avoidance. This man is one reason the poor are being made to pay so heavily for the foolishness of the very rich.

You know something is wrong in the Treasury when the minister in charge of tax is revealed to have worked for a firm specialising in tax avoidance.

The wrongdoing goes off the scale when it is revealed that the same minister has been actively trying to gag a whistleblower who uncovered a “sweetheart” deal to write off a huge amount of tax owed to the UK by a private company.

That is precisely what we have learned today, thanks to The Guardian.

It seems that David Gauke, the exchequer secretary to the Treasury, green-lit a plan to discredit testimony from Osita Mba, a solicitor with HM Revenue and Customs, after he took the notorious Goldman Sachs “sweetheart” deal to the public.

For those who don’t know about this, the deal with Goldman Sachs was worth up to £20 million, and was part of a series of four such settlements, with large companies, that netted £4.5 billion for the Treasury. That might seem like a lot of money.

But it begs the question, asked by Margaret Hodge MP, who chairs Parliament’s public accounts committee: How much did we not get?

One person who might know the answer is Mr Mba, who told two parliamentary committees that the then-head of tax, Dave Hartnett, had agreed a deal allowing Goldman Sachs, a US bank, to escape £20 million in interest charges, payable to the UK. He claimed Mr Hartnett had done this without following proper procedures.

Disciplinary proceedings were launched against Mr Mba within HMRC, meaning he was suspended from work, and an emailed exchange between an HMRC press officer and Gauke’s private secretary strongly suggest that the minister wanted to discredit the whistleblower with a media smear campaign.

From here, matters get very dodgy indeed.

The National Audit Office was asked to investigate the Goldman Sachs case, along with four others, and although Judge Andrew Parks’ report was not publicly released, the head of the NAO, Amyas Morse, told MPs that the deals had been cleared. Morse’s role was later questioned after a leaked document showed that he had told Hartnett the inquiry would find “nothing of substance” – before it began.

And it was revealed last Thursday – again by The Guardian, which appears to be living up to its name – that the deal with Goldman Sachs had been arranged partly to save our part-time Chancellor of the Exchequer, Gideon 0sborne, from embarrassment.

It seems that the dispute with Goldman Sachs was settled hastily after the bank threatened to pull out of a new tax framework, a week after 0sborne had announced that the bank had signed up to it.

The revelation was made at the High Court last Wednesday, where UK Uncut was calling for a judgement to declare that the 2010 settlement between the bank and HMRC was unlawful. The court heard that Hartnett had personally overruled legal advice, the HMRC’s own guidelines and its internal review board over the issue (confirming Mr Mba’s claim).

So it was a cover-up, in order to allow a company to escape paying the UK a huge amount of money, with the blessing of ministers including 0sborne and Gauke.

In Gauke’s case, of course, this is unsurprising. It has long been known – as can be seen by this entry on the right-wing Guido Fawkes blog – that the minister has not only avoided paying tax himself but also worked for Macfarlanes, a top city law firm that specialises in helping the wealthy avoid paying tax.

The Enterprise and Regulatory Reform Bill, which has been passing through Parliament recently, includes a section intended to introduce greater protection for individuals from harassment when they blow the whistle at work.

In the light of the treatment of Mr Mba, by members of the government that has introduced this bill, it remains to be seen whether this measure was ever intended to succeed.