Welfare Reform

Our proposals for Lifetime Accounts provide the basis for a long overdue reform in the way we deliver social welfare, healthcare and pensions. These three core services would be transformed by replacing failing state-run systems with much more efficient, people friendly services funded by flat rate insurance premiums which would also cover unemployment and other such benefits.

The basic package

The present complex system would be simplified and all benefits, other than those for disabled people, would revert to a standard allowance. For those on unemployment-related benefits, the aim would be to get them back into work as quickly as possible. Able-bodied people claiming benefit for more than six months would need to perform community-related work for part of each week. Welfare benefits would normally be pitched below the amount delivered by the minimum wage.

Single parents would have similar benefits as unemployed people and the insurance package would also provide assistance for those requiring training or childcare support to get back into work.

  • “The poor, not the rich, have been induced by the welfare state not to save, not to marry and to divorce and separate if they have been married. The poor have similarly been led to unemployment… The poorest tenth now often live in ghettos, leading lives without hope or dignity.” James Bartholomew, The Welfare State We’re In

Those moving from benefits to work would find it much easier due to the gradual withdrawal of benefits as they start to earn more money. This will make it easier for people to take up casual and temporary work without being unfairly penalised. We would also raise personal allowances to remove millions of people from the tax net altogether (see Low, Simple and Fair Taxation).

Disability benefits

We would maintain a separate benefit regime for profoundly disabled people with sensible measures to reduce fraud. Those in receipt of disability benefits for less serious conditions would be required to have periodic reviews, with an initial amnesty for those voluntarily coming off benefit. Disabled people unable to work would receive credits to their Lifetime Account.