Is growth essential? ..... and the impact of the bankers...

Zoe williams in the Guardian has an article arguing for a Plan C that isn't dependent on the fantasy of economic growth. Well done, Zoe. An excellent and ,clearly, provocative article. I have never understood the emphasis on growth. The UK has to be in a phase of decline, having gone from Empire to nation and from the manufacturer for the world to barely a manufacturer at all.

Her comments about the quality , insight and ability (of all) our politicians are well deserved. They all seem to want to strut Europe and the world as global leaders and all talk about 'punching above our weight'. The reason they all love the finance sector is that it makes them feel that they have something big to brag about to their peers. And the existence of that finance sector is what has allowed them to indulge themselves in the fantasy economics of the last 20 years.

It looks as though the finance sector could now fade away and UK politicians will surely then have to grapple with the problems they have avoided for over a generation: making our modest way in the world, living within our means, establishing solid opportunities for our people.

Tony Nicklinson, the right to die and the Liverpool pathway

I have looked after someone with no speech and little movement who needed to be artificially fed so I do know something of what this family is going through.

The thing that always amazes me is that the right to die discussion takes place completely separately from the deaths facilitated by doctors. I saw one GP last week estimate that 130,000 patients a year had their deaths facilitated by doctors in the UK. This normally goes under the cover of pain control. I have seen many circumstances where the morphine dose is increased until death is inevitable. I know that family members are sometimes given responsibility for a morphine driver and can just let their family member drift away.

But there have always been more explicit methods. In Victorian times you would just take your extra laudanum like a good (dying) patient....and if you weren't dying before, you are now. And I remember hospitals having something called a Brompton Cocktail that was designed to see you off in a haze of morphine, cocaine and booze.

And now we have the Liverpool pathway. I know that its origins were well intentioned and it is probably still used really carefully, and caringly, in hospices, but the more widespread use is getting worrying. People who are not terminally ill, people who want to live, people whose prognosis has not been discussed......they can all find their way onto the Liverpool pathway. And unlike morphine drivers or Brompton cocktails, it can be a painful way to go, denied medication and also denied food or water. I said I had looked after someone who needed to be artificially fed. Before their naso-gastric tube was fitted the biggest problem was thirst, a far worse sensation than hunger. And the worry is that the Liverpool pathway inexpertly applied without compassion or sensitivity is just allowing people to die in the agony of thirst. Withdrawal of fluids is apparently a common component of torture. When we have a torture technique masquerading as a medical intervention, then we really are in trouble.

I can never understand how we come to have all of the legal debate about a very few individual cases where people want to have the right to die, and nothing about the apparently thousands of cases where cruel treatment is quite deliberately causing patient deaths. How can these things co-exist?

I think I know the answer. The families who pursue their right to die cases are challenging the classic British fudge that has always been the way things are done. Here's a little dose of morphine, now be a good chap......That's the way it gets done. But if the patient says - I want to know my rights, I want to know how the law will treat this, I want to know how my family will be regarded after my death - then that causes problems.

What is wrong is that this never gets dealt with as the whole system problem that it is. Instead it gets left to families like this one to pursue their individual case and to be forced to let the rest of us engage in the most painful aspects of their lives.

DESTROYING DEMOCRACY THROUGH PROPORTIONAL REPRESENTATION

Next week I am expected to vote in the Scottish elections for local authority councillors. Why should I? It's my public duty. It's my democratic right. It's a social responsibility. Yes, I know all that. But what if my vote can't make any difference? What's the point in voting then?


For years we were told that the first past the post system wasted votes. If you lived in a strongly Labour or strongly Tory constituency then voting against didn't matter. The dominant party would win and other votes wouldn't count. I am fed up being told by pundits at general elections that most constituencies don't count since the winning party there always stays the same. So the choice of government is made by those where there is the possibility of a change. One commentator suggested that it was the floating voters in those areas that determined the outcome, so the choice of UK government was made by around 100,000 floating voters in marginal constituencies. Democracy. 


The solution to this, we have always been told, is PR where our votes will really count. Well in Scotland we have PR. And several varieties of PR. I think the system for the Scottish Parliament, while not perfect, works O.K. You get a constituency MSP and this group is added to by the list MSP's on a regional level to provide more accurate representation based on all votes, not just those for the winning candidate for constituencies. This system has produced Green MSP's and was instrumental in the very small Scottish Socialist Party having great success, until they imploded. 


There are drawbacks to the Scottish Parliament voting system. It favours parties over independents. The list MSP's seem to have less to do than their constituency colleagues. And my particular bug is that if a list MSP gives up their seat, their party just sends the next name on their list to the Parliament. I don't think anyone should be a member of Parliament without being elected. It's just wrong.


But the basically OK system for the Scottish Parliament is not what we have for Councils. The system for Scottish Council elections was the price forced by the LibDems to form a coalition with Labour in the Scottish Parliament in 1999.


This was a deal done in smoke filled rooms. The public wasn't consulted. It was just an arrangement that suited the politicians. If we had been asked, what would have happened? Judging by the AV referendum, a mixture of mostly apathy and the rest rejection. But, whether we wanted it or not, it's what we've got.


So the historic arrangement of wards in each Council area, with each ward electing its own local councillor, was just thrown away. Now the wards are four times larger, which seems a bit contrary to the LibDem principle of localism, and the voters rank the candidates 1,2,3 etc.The top four represent the enlarged ward/constituency.Together. 


So, this will bring about fair representation? Not if the parties can stop it. When it was the historic wards each party would generally contest each ward. Where I live, that would have meant a Tory candidate, an SNP candidate, a Labour candidate, maybe a LibDem, maybe others.Our MP is Labour and our constituency MSP is Tory. The council has been Tory/SNP,Tory and,before that, Labour. So you would think they all had something to play for. 


But, instead of this giant new ward having four Tory, four SNP, four Labour candidates etc., this is what we have:


2 Tory
2 SNP
1 Labour
1 Lib Dem
1Independent


This is the pattern replicated, with slight variations, across the whole local authority. There are only 44 candidates for 30 seats. In 1995 there were 75 candidates. Voter choice is being squeezed.  So, that means that no party can achieve an overall majority. Good, you might say, we should move towards a more inclusive European model where the parties get together after the election to assess who should form a coalition. Except that, the outcome isn't being determined AFTER the election. It has already been decided by the political parties. Labour and the LibDems aren't even fighting for control in my Council. They don't even have enough CANDIDATES to be the major partner in a coalition. A deal has been done. The Tories and SNP will jointly form the next Council administration. The only question is, who will be the major party? Now that doesn't feel like democracy. It feels like party political manipulation of a system that they put in place without asking the public. The politicians have already determined the outcome. So, back to my original question, why should I vote? 


And one more issue. Given the way that the political parties have have connived to fix the system to their own advantage, I did briefly wonder about what an independent candidate might offer. I had been reading that the independent candidate in the London mayoral elections was having some impact (though we'll see if she gets a place at the table on Question Time). So I contacted the independent candidate and asked where he was speaking and where there was a candidate debate. You will know how this goes. There is nothing. I don't understand how candidates can seek your vote without presenting themselves and their policies to you. So, why should I vote?  

Remploy : U-turn required

We have to hope that enough MPs have the guts to challenge the Government's decision on this. The coalition needs to re-think. Once again this Government demonstrates its deaf ear to public opinion. Do they no longer have sensible civil servants saying  'That would be very brave, Minister',  or are they just ignoring them? 


The argument seems to be that the Government should no longer subsidise Remploy at up to £25k per place. On the same day that the Remploy announcement was made, I heard Government Ministers defending the U.K.'s aid spend of £7,800,000,000. This is a categorically different level of expenditure compared to the £68,000,000 invested in at least 2000 jobs at Remploy. It's not so much the money, it's the priorities that the spending decisions expose that is the real issue. The coalition just doesn't get people with disabilities just as they don't get those communities that were devastated by the de-industrialisation of the 1980's. They have to understand that they will have to take the country with them if we are not to be any further divided,have any further inequality.


The solution to the Remploy position is simple. Treat the existing workforce, the people, as the first priority and put arrangements in place for them. Some of the Remploy factories could be turned around by more innovative management.  Some settings would benefit from a partnership with other companies. Some individuals could be supported in more open employment. The task would be to get every existing member of staff into an appropriate setting. The transition would take a lot longer but everyone would recognise that the Government is putting people first. Just as it puts its overseas aid commitments first.


If the Government doesn't u-turn on this then we have another issue, like the NHS bill, that will lose them the next election.

Mansion Tax

The LibDem idea of a mansion tax is the craziest coalition policy since the NHS bill. There are two main objections.


1. As with the old rates system you can have someone who appears property rich who is income poor who will then struggle to pay. I wouldn't want to see someone who has lived in the same house for 80/90 years being evicted because they can't pay the tax. 


2. The rich will simply avoid paying this tax. They already avoid paying stamp duty when they buy these £1M+ homes. What on earth makes Vince Cable think they are going to fail to find an avoidance mechanism for a mansion tax.


I think I can now be officially categorised as cynical. I think the LibDems know that and it's just cover for agreeing the removal of the 50% tax rate. Or at least flying a kite to see if the public go for it. 


Pathetic!

Unemployment heads for 3 million.

It's not exactly a surprise that things have got this bad. In fact, it's completely predictable. From the start the coalition has talked strongly about public sector cuts and the mantra of austerity. (Interesting to note, though, that austerity doesn't extend to their own public spending with £400,000 wasted on renting fig trees for Portcullis House.) But the public sector cuts were to be offset by private sector growth. The trouble has always been that there has never been a strategy for creating those jobs. What kinds of jobs? In what sectors? In what locations? How supported? If the public sector redundancies really are about cutting out waste, then those jobs won't be replaced in the private sector. And there are many functions carried out at present by the public sector that just couldn't generate a profit. at least not without dropping down wages and conditions, or increasing public purchasing budgets. Probably both.


The absence of any kind of growth strategy is really disturbing. It's fantasy economics and fantasy politics. I wrote in this blog back in October 2010 that government 'will also have to deal with the unfinished business from the 1980's of how to restore exporting industry, and what to do about  all those communities that have lost the reason for their existence'. In contrast, their policy seems to be to cross their fingers and hope for the best.


This is a little PS. This morning I saw three young men emerge from the building that houses the local probation service and NHS addiction service. I don't know which they had been visiting, possibly both. All three were pasty, emaciated  figures stumbling along in their matching Burberry baseball caps. (How Burberry must hate that : its a sort of anti-marketing to have your stuff adopted by your least welcome demographic.) One had crutches. Quite a common site around this building. It's because they damage their ability to walk by injecting in their groin. 


Anyway, it got me thinking on what it would take to get that three into work. They have probably never worked. They are drug users. They probably have a criminal record. Who will ever employ them? The most worrying thing is that, if not already then soon they will have kids. Kids they will ignore but kids who will, in 20 years time, also look like these three : permanently unemployable. And what is the strategy for breaking that cycle? I suspect that, once again, it's cross your fingers and hope for the best.

NHS REFORM

I'm so glad to be living in Scotland and out the way of these unnecessary and wrong NHS reforms. It has, incidentally, been a very long time since there was, as Labour likes to say, one NATIONAL health service. Things have been very different in Scotland and England for a long time. In fact some of the resentment that fuelled the rise of the SNP derives from the last time the Conservatives were in power when unacceptable policies were imposed : poll tax, de-industrialisation, introduction of markets into the NHS. That's why the Tories still have only one seat in Scotland.


The current NHS reforms are hard to understand. Why are they doing it? David Cameron said that the NHS would be safe in their hands and that there would be no 'top-down re-organisation'.  While we are used to politicians telling lies, this is a breathtaking example of promising one thing to electors and then, once elected, of doing the opposite. Whatever else it is a gift to Labour. You can be sure that much will be made of it in the next general election campaign. And its the most important issue for many voters. I saw the NHS described as the closest we have in the UK to a state religion. For a PR professional the Prime Minister has a very uncertain touch.


So, why are they doing it? I think its in their DNA and its unfinished business. When the Thatcher government came to power in 1979, they did have a mandate to privatise and got busy on coal, steel, rail etc. They were then keen to extend this approach to the NHS but found that it was such a shambolic organisation in business information that there was no basis for either separating out elements of service (because everything was so integrated - generally regarded as a good thing) and because nothing was properly costed. No one, famously, could tell Ministers how much a hip replacement cost.


All of the re-organisations that have taken place in the intervening years have been attempts to resolve these structural  problems. The NHS is now divided up into business units. And everything is costed. But these changes have largely been to the detriment of the NHS. The rot set in early. When they found that they couldn't privatise in 1979 the then government started to prepare the NHS for a future privatisation. They commissioned Roy Griffiths, then the Chairman of Sainsburys, to report. He found an organisation without adequate information and cost systems and recommended the introduction on general management.  


I think Griffiths was probably correct and I don't agree with those who think his approach was to turn the NHS into a supermarket. The NHS in those days did need to modernise systems and management but the scale of the changes has gone far beyond anything Griffiths could have imagined. Part of the problem is that so many NHS managers are not really managers, they are at best administrators,  and the sub-divisions of NHS business units are so unwieldy that integration, once in the bloodflow of the NHS, is now a full-time demand on those administrators. Another problem is that anytime anything becomes an issue civil servants advise Ministers to introduce another role to determine policy, monitor implementation and interpret results i.e. someone just like them. That's why there are so many civil servant type roles in the modern NHS.


So, Conservatives always want to privatise. It's the Conservative way. And they are completing the work they were frustrated in back in 1979. They are completing Keith Joseph's dream.


Whatever you think of it, it will lose them the next General Election.

BONUS vs. PUBLIC MOOD

Observing the backlash against those on top pay having to pay attention to the public mood by refusing bonuses. One top analyst says that big pay and bonuses are necessary to provide motivation, which will lead to success for the country. 

I was thinking about all those who manage to do a good job without such additional financial motivation : bus drivers responsible for the safety of their passengers, nurses, home helps, teachers, technicians..........complete you own list.

And those who do need to be 'motivated' : investment bankers, financial traders, management consultants, hedge fund managers.........

No wonder Adam Smith backed off his original perception that 'greed is good' and concluded that social responsibility was important.

We are all in it together!

THE POSSIBILITY OF REDEMPTION

Redemption? What does that have to do with welfare reform? Patience. Patience. One side of welfare reform is spending. The other side is Government income. All will be revealed.


While many have relished the downfall of Fred Goodwin, other, more careful, voices have taken a more considered line. Alistair Darling, always someone to listen to, asks : What about the others? Many top bankers and other speculative investors received honours. Many are now known to have taken outrageous risks with other people's money. 


And Darling and others have warned against the too easy emotional spasm of vindictiveness against the demonised individual. It feels too much like mob mentality. And too much like a neat piece of political manipulation : it wasn't us guv, honest, it was them bankers over there. And Fred has fallen into being the scapegoat for the whole financial crisis.


Individuals can and do make mistakes. If they remain a danger to the public they get locked up. Sometimes forever. But that's not Fred and the other bankers. John Profumo famously made amends for his indiscretions (sufficiently serious at the time to bring down a government) by doing voluntary work in the East End. All prisoners are, at least theoretically, regarded as having the potential to be rehabilitated. I remember helping a friend, who had completed a long prison sentence for violent crime,  to complete a job application. I told him (and I know that many would disagree with this advice) to declare every crime, every conviction, every sentence, including those regarded as spent in terms of the Rehabilitation of Offenders Act. The rationale was that he accepted what he had done, that it was now behind him, but that he was making a fresh start. The employer, a responsible national charity, took the measure of the man and took him on. Some years later I had the great privilege of completing his "fit person" reference to enable him to take charge of a home for people with disabilities. He deserved it. He had paid the price for his mistakes. He was now rehabilitated. Redeemed.


Fred Goodwin is 53. What is he going to do now? I have a suggestion. Why not offer the possibility of redemption? Why not get Fred, and the other errant bankers, to volunteer their services to the revenue. They know all the scams. Set them to be poachers turned gamekeepers. They could retrieve billions from top tax evaders and avoiders. Let them chase down tax havens, loopholes, 'products'.


It can't be a reward deal. The knighthoods can't be restored. The obituaries are always going to major on their part in the financial crisis. But, like Profumo, they could have their equivalent to 'voluntary work in the East End'. They could use their considerable skills and experience for the good of the country.


If I were Fred, I would be offering myself now. For the good of the country. And so should all the others. They know who they are.

UNFAIR! Part 1 in an indeterminate (but probably quite lengthy) series

It is reported that George Osborne has decided not to pursue Vodafone for a tax bill of £6billion. That's £6,000,000,000 when we are told that every £ counts. The BBC reported that Boots now declares its profits in low tax Switzerland despite making its income predominantly in the U.K. How much is that lost to the U.K. economy? Apparently around £90,000,000 a year. And we can be sure that other big companies are similarly failing to believe that "we are all in it together" by doing the same.

Just as there are those skilled at avoiding/evading tax, there are those skilled in the manipulation of the benefits system. I have just come across the first story I have seen of adaptation to the Government's new approach. One mother is complaining that she will have to return to work when her child reaches seven. Her friend tells her she just needs to get pregnant every sixth year and then she will always have a child under seven and thereby retain her benefit entitlement for the foreseeable future.

The unfairness will fall most heavily, and probably most quickly, on those who have paid their taxes and have expectations that services will be available when they need them. Those who are long term sick or disabled, and I mean genuinely so, will soon be experiencing a very hard time. Many will lose basic benefits because the systems put in place will have difficulty in making the correct distinction between those who cannot work and those who choose not to work. Local authorities will have to cut back hard on their social care budgets and will be removing services from many needy individuals. One London borough has already told one service user that she will have to wear incontinence pads rather than have the assistance with toileting that she has been receiving.

Over the past twenty years, when faced with potential spending constraints, local authorities have tended to raise charges rather than cut services. Social care has been particularly affected by this approach. I always tried to find scope for reasonable increases in charges, rather than cut back on services, when I was advising Councils. But the justification for social care charges was the additional income that service users were receiving from disability benefits. Reflecting changed circumstances and reducing charging systems for services is unlikely to figure very high in local government budget discussions now taking place.

So, many of those who are sick or disabled will experience a TRIPLE WHAMMY:

1. Loss or reduction of benefits income
2. Loss or reduction of services
3. Continuing high charges not reflecting these losses or reductions

So, big business will be O.K. 

Benefits manipulators will be O.K. 

But those who are sick and disabled will bear the impact of the cuts. They are the real squeezed middle.

Jobs for benefit leavers : SIMPLE!

The most popular pre-order book at present is the autobiography of Aleksander, the cartoon meerkat from those comparison site ads. His catchphrase is : SIMPLE!

This is probably too simple a thought but there does seem, with the news that the UK's contribution to the EU is to INCREASE while everything else is being cut, to be a more widespread questioning of the usefulness of EU membership. Undoubtedly, further revelations of the profligacy of the EU's bloated bureaucracy will follow and further shift public opinion against continuing UK membership of the EU.

In terms of welfare reform, the rhetoric is to 'make work pay'. So far, the coalition has been weak on specifics. They avoid specifying detail but that seems to be because they have not thought it through themselves. They have also failed to think through the implementation issues arising from their broad policy objectives. Will work be made to pay by increasing the minimum wage? That would be a no. Will benefit levels fall below minimum wage levels? Yes.  Will benefits be time-limited? Yes. Will benefits be means-tested? Almost certainly, yes. But will any of these measures create the jobs for people to move to as they come off benefits? That is a different category of question. It's not about pushing people out of one system [the benefits system]; it's about providing places for them within a different system [employment].

How that will be achieved is, at best, vague. Ian Duncan Smith seems to presume that the private sector will fill the jobs gap. I am not even going to touch on the massive task of preparing the long-term benefit-dependent for useful work. That is yet another enormous challenge. I am just considering the potential for job creation during this parliament. What IDS has set out is how people will be moved out of benefits. Will there be employment destinations for them?

So, what has any of this got to do with Europe? Do you remember all those jobs Gordon Brown was so proud of having created? That was until it was established that 98.5% of them had gone to migrant labour. IDS and his colleagues talk about the global economy in terms of international trade. What they seem to have ignored is the European context for the job market. IDS can do all he likes to bring benefit levels and minimum wage into the 'appropriate' balance. That is a UK specific matter. A fruit farmer in Kent said that it was now more than 20 years since her apples were picked by English workers. Now the pickers are from Romania, Poland, Spain. One Polish worker in the UK told me that she could never foresee any economic future where it was to her financial advantage to return home. Are all of these migrant workers about to walk away from jobs they have uprooted themselves to get? They will stay as long as Britain's EU membership entitles them to stay.

In the international politico-economic forum it appears that the EU is preoccupied with the health of the Euro, a currency unrelated to Britain's economic recovery. If the EU is too expensive, not focussed on UK needs, destructive to UK industries [particularly fishing], and adversely influencing the UK job market, then maybe the radical option is to withdraw from membership. 'Think the unthinkable', they say.

If we withdraw from the EU, we would save £ 6.5bn every year in contributions and release the jobs needed for those moving on from benefits. As Aleksandr might say, SIMPLE!

SICK AND DISABLED TO BEAR BRUNT OF WELFARE CUTS

As the details of the spending review become available, it is clear that much of the Government’s plan to reform welfare is to be financed by attacking the sick and disabled. Their benefits are to be time-limited and means-tested. In addition, local authority care services are to be reduced to only the extremely vulnerable. How will extreme vulnerability be defined? How will local authorities rationalise the current massive inequities in levels of service provision? And what impact will such radical changes have in the lives of the sick, disabled and, where they exist, their carers?

I am always amused to hear those who say that they know no-one who chooses to be on benefits. They need to get out more. I know plenty. And they are people have accessed benefits by the manipulation of the system to their own advantage. They are agents of their own success, not passive recipients caught in a trap. I don’t blame them. They have simply made the rational choice to conform to the requirements of the financial incentives available to them. More like tax avoidance than tax evasion.  But just as the rich will always find ways to avoid the tax that the rest of us have to pay, the benefits culture will adjust to meet whatever requirements are placed on it to ensure the continuation of state funding. It is hard to imagine the civil servants designing a system smart enough to end practices that have been perfected in some families over three and more generations.

And that leaves the real sick and disabled that these sickness and disability benefits were designed to help. They are the ones who will be vulnerable to being pushed out of benefits. They are also likely to be losing their local authority services. They already have to pay high charges for service in many local authorities. One Occupational Therapist told me that her authority was charging disabled people 80% of the cost of their stair-lift, an item that can cost £5000, and making the user responsible for funding a maintenance contract. These charges will inevitably rise further.

That same local authority already charges disabled people £20 for providing a disabled parking badge. That cost will no doubt rise, and the great irony is that it has to rise so that wealthy 60 year olds can continue to receive their winter fuel and their free bus pass. The sick and disabled will pay a high price for the maintenance of the universal principle in benefits.  

WELFARE REFORM : (some of) THE CHALLENGES

The events of the past few weeks have demonstrated both the ambitions and the weaknesses of the coalition Government as it attempts to cut the welfare bill. Most of the concerns expressed so far have been about the proposal to withdraw child benefit from high earners. While the Chancellor's suggested changes were clearly a mess - a poor policy [that attempted to conflate the largely individual-based tax system with the largely household-based benefits system] and poorly handled [announced at the Tory conference without cover of the Lib-Dems; sitting outwith the comprehensive spending programme; and attacking directly those in the hall ], a bigger mess is yet to come as it becomes clear that the government is engaged in a major exercise in social engineering through the levers of policy available to it. The Chancellor wants to set a cap on total benefits that would force families from high cost housing areas such as London, the South East and some other cities such as Edinburgh. The Culture Secretary has suggested that government will not fund parents to make the choice for large families.

The Conservatives have tried this kind social engineering before. The roots of Britain's present troubles can be argued to be as much a consequence of the Conservative approaches to industry, community and benefits in the 1980's as of the economic mismanagement and over-reliance on the financial sector of the last Labour Government. I am no expert on macro-economic issues in international trade, but I note other comments on the absence of an industrial infrastucture in the U.K. and the low level of British ownership of U.K. based companies [in contrast to the position in Germany, Japan, U.S.A. and others]. Rebuilding British capacity to export high value goods seems to be an absolute requirement of the Government's financial strategy. How can they possibly achieve that in five years?

What I did observe directly in the 1980's was the impact of the government's industrial policy. Shipbuilding towns became former shipbuilding towns. Steel towns became former steel towns. Pit villages became former pit villages. No work replaced the heavy industry that had been destroyed. But what about the workers let go from shipbuilding, coal and steel? They just increased the already high unemployment level that was a major political issue in those years. Government policy incentivised for both benefits staff and benefits recipients a shift from unemployment benefit to long-term sickness and invalidity benefits. The incentives worked and a post-industrial cohort moved from employment to unemployment to long-term sickness benefits dependency, sometimes in less than a year. And now they, their families and their neighbours are established in a culture as well as a process of benefits dependency. I was involved in a survey in one former mining village where we found a level of worklessness of 93%. What had been the solution to the problem of high unemployment levels quickly became a major problem in itself of benefits dependency, and the reluctance of the Labour government to even engage with that [as exemplified by the sacking of Frank Field for actually doing what he was asked to do and "thinking the unthinkable"] simply allowed the problem to become entrenched.

The big problem for George Osborne and Ian Duncan Smith is that the culture of dependency is now firmly established and has knowledge, skills and expertise beyond anything imagined by most policy makers. Some within that culture will relish the challenge as the government attempts to act against their interests. I recall one man who had been on invalidity for years with a 'bad back'. He explained that they were beginning to send claimants for tests that would determine whether they did indeed have a disabling condition. He outlined his plan. 'I am going to my GP to cry', he explained, 'I will tell him that I can't cope and don't want to go on. You see, they don't have any test for depression.' Similarly, those who receive benefits because of drug and alcohol dependency feel that they are safe. The government can shift eligibility thresholds and simplify benefits administration but I have little doubt that the research capacity and creativity of the dependency culture is smarter and more effective than almost anything the government can do to contain it. In this they are the precise equivalent of the financial sector. British governments try to control banks and other major financial institutions and the banks run rings around their plans. Similarly, the benefits culture will simply shift as required to continue to be eligible to receive public support. Worrying about what behaviours will become incentivised because of the changes in benefits eligibility is something that should be keeping politicians awake at night.

The government will have to be a lot more sophisticated and strategic in its approach to its change programme than we have seen in the inept announcement on child benefit. But it will also have to deal with the unfinished business from the 1980's of how to restore exporting industry, and what to do about  all those communities that have lost the reason for their existence.