10 July 2007

Highlights From Breakthrough Britain

Iain Duncan SmithWriting in the overview to the Social Justice Policy Group's report, Breakthrough Britain, Iain Duncan Smith says, "Breakthrough Britain advocates a new approach to welfare in the 21st century. We believe that, in order to reverse social breakdown, we need to start reinforcing the Welfare Society. The Welfare Society is that which delivers welfare beyond the State." He identifies two specific areas why their approach is unique: "Firstly, we have recommended a range of policies which are designed to break the cycle of disadvantage in the early years of a child’s life. Secondly, we wish to strengthen families by removing the perverse disincentives in the fiscal system which are an obstacle to stable families."

It is understandable that media coverage has so far focused on the group's marriage and tax-related suggestions. After all, the Government has spent ten years creating a tax and benefits system that perversely penalises married couples, perpetuating poverty for the 76% of children who live in couple households. However, any attempt to heal our broken society will need to change more than just the tax system. Duncan Smith explains the significance of the five pathways to poverty identified by the Group:

"Our approach is based on the belief that people must take responsibility for their own choices but that government has a responsibility to help people make the right choices. Government must therefore value and support positive life choices. At the heart of this approach is support for the role of marriage and initiatives to help people to live free of debt and addiction. Government has to be committed to providing every child with the best possible education and giving the most vulnerable people the necessary support to enter active employment. The problems of family breakdown, drug and alcohol addiction, failed education, debt and worklessness and dependency affect us all, either directly or indirectly, as Breakdown Britain showed."
The Difference offers the following list of highlights from the report that it is hoped will receive due attention in the coming hours, days, and weeks:

Family Breakdown
  • Relationship education in schools
  • Creative ways for delivering more respite care
  • Targeted assistance for parents who currently struggle to nurture their children, rather than steering them towards local authority childcare
  • Removal of the bias towards state-provided childcare.
  • A review of family law conducted by a dedicated independent commission
  • Reinstatement of the use of ‘marital status’ in government forms and statements
Economic Dependency
  • Clear work expectations must be attached to the receipt of benefits for people who can work
  • Back-to-work services should be state determined but not state delivered
  • A serious and thorough review of the Housing Benefit system is needed
  • Parents should be given the opportunity to front-load child benefit
Educational Failure
  • £500 p.a. educational credits for disadvantaged children to fund supplementary educational services such as a year’s extra maths tuition, six months intensive literacy support and a year’s group music lessons
  • An end to bureaucratic overload
  • ‘Booster classes’ for pupils falling behind
  • More alternative provision to pupil referral units
  • An integrated addiction policy to replace the separate drugs and alcohol treatment
  • A devolved responsibility to local Addiction Action Centres
  • An expansion of third sector proven provision of ‘holistic’, value added, abstinence-based treatment
Serious Personal Debt
  • UK credit unions should be strengthened, supported and expanded
  • Local community based debt advice should be supported
  • The benefits system and Social Fund should be reviewed in detail
  • Education in personal finance should be improved
Third Sector
  • Gift Aid should be made easier to claim
  • Introduce Charitable Remainder Trusts as tax-efficient vehicles for planned giving
  • Launch a 'V Card' reward scheme to boost volunteering
  • Greater third sector delivery of public services
  • Less bureaucratic and prescriptive Government funding
  • Introduce voucher schemes to empower users of government-funded services
  • Enhance the third sector's voice in Cabinet and Parliament
  • Create a level playing field for faith based organisations
Yes, all this will come with a cost. But, as the report also notes, social breakdown presently costs the UK £102,000,000,000 per year, or around £3500 per taxpayer — that's a lot of money that could be better invested.


Tory Radio said...

An fascinating document (whose length will mean it will take me some time to digest). I shall watch with interest to see what policies the party adopts.

Donald Burling said...

THERE IS AN ARITHMETICAL ANOMALY at the heart of our economic system. All money is expected to earn interest; where does the money to pay the interest come from?

When banks make advances to borrowers, whatever the borrower does, the money finds its way back into the banking system where it is available for lending again. There is thus no limit to the total amount the banks can lend.

When the same money is lent out more than once, the amount of money in circulation is increased - but not the amount of value. This is the essential ingredient of inflation; the interest rate is of little relevance.

Banks can thus lend out what might be called imaginary money - money they have created. Borrowers on the other hand have to make their repayments in real money - what they have earned. Interest tranfers real money from the borrowers to the lenders - individually and in aggregate..

The lenders thus become rich, the borrowers poorer. Since the lenders have plenty to spend, those who trade with them can become rich. There is thus developed an economy based on the assumption that rich customers are the only ones that matter. Merrill Lynch has developed a "Cost of Living Extremely Well Index", which takes account of the price of Rolls-Royce cars and yachts. Meanwhile the limited spending power of those in debt may eventually make them hardly worth bothering with in the market-place.

Because housing is a necessity, many people are prepared to borrow beyond their means in order to obtain their first home. House prices have come to be fixed on the assumption that they will do so - never mind the mess they will find themselves in later. Many sensibly accept they cannot afford to get on the housing ladder.

Is there anything that can be done about all this? For a start, what about a swingeing tax on bank profits?