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Roula Khalaf, FT editor, chooses his favorite stories in this week bulletin.
If you are a new government, you desperately seek money, then there can be a little more calling goals than the British welfare system. Only history in the UK is the benefit of the greater than the years of economic difficulties – after recession, or even, to be called “generous”, or even, to be called “generous”.
Rather for reform then? It may not be proved quite simply to reduce – nor to find sustainable savings.
The purpose of the good welfare system is to protect people from poverty and help them in some form of employment, education or training. But the decade and half of the reform attempts managed to deliver something that was largely the substrate compared to 2007. in terms of fulfilling these goals – while cost more as a share of GDP.
Not before the economic circumstances of Great Britain deteriorated or remote Donald from NATO required an increase in defense consumption, Liz Kendall, the British Secretary of the UK, warned of the Cabinet with the Starmer. Without major changes, the consumption of its department “eats” budgets of their colleagues. There are actual opportunities to spend less money and improve better results, but only if it avoids mistakes of your predecessors in the role.
Part of the story about how and why the UK’s well-being system has become expensive failure is that consecutive governments are priority insurance coverage in expenditures due to the change in which it operates. One aspect of this continuous failure is least discussed and the individual largest line item in the social system – the state pension.
The triple lock that protects pensioners increases and grows in average earnings (from the floor of 2.5 percent per year) is the cheapest solution for the state pension in the UK, and the death of defined pension programs means a state-based state-based poverty.
Through this mechanism for gradual increase in pension values over time, ministers in the last government avoided any individual, forced, significant increase. But now the mechanism risks to become increasing responsibility, while becoming politically harder and harder to date.
The amount that someone receives if they lose their jobs in the UK is incredibly low – most often someone claims to ask for a job allowance is 4,700 pounds per year. Compared to 2010 or 2015. year, number that claims not to climb significantly. “The Applicant’s Number” is higher because the universal loan counts individuals, not households as well as under the old system.
Increasing the requirement fee is initiated instead of growing numbers of people who claim that health benefits are many of them young. And it is a product in the part simple fact: that the upper limit that someone receives on health associated benefits can be even far from generous, but much more than the unemployment benefit.
Incentives and consequences are obvious. As Kendall noticed herself, obsession using a stick (firmer suitability and better check) as the only way to deter overhrektive it succeeded. But the change of behavior understood people on the applicant list that they were much more likely to never leave.
It is true that some of the rises are people who claim that health associated benefits are the result of true needs. And the training of state pension age (which makes sense that most of us live and work longer) has created a new demand: and two or three years below the new state pension claiming due to physical diseases.
But there are few reasons to believe that the increase in employees now classified as a long-term health problem affects the UK (other developed economies, the level of health fee or other levels), not the product of a bad design system.
Here is an obvious sustainable future: Moving people in favor that allows them to search – or even to be in part-time work without loss, plus finding youth courses, not to them An increasing number of “Neet” under the 25th (Those who are not in education, employment or training). In the long run, this can reduce growing from large breeze of growing benefits.
An additional problem is that the fiscal guard, budgetary responsibility office, tends to believe Only in savings secured by cutting rights – although in practice that approach has been tested for destruction.
Current mess I am a product of desire for priority savings on the design of the design of a well-thought-out system fee. This has submitted a result.
The paper has an actual opportunity to build a cheaper and better system of benefits until the end of this decade. It is unlikely to reach that point if it ends in the box in the same hunt for illusory savings that characterized the recent past. But the better outcome also requires the Kendall and Treasury department to deal with awkward fact: this approach to one of the most popular problems in the UK did not work. Let’s not look more anymore.
