Purnell was nailed on Newsnight by I forget who.

His main thread was that many of those (read most) receiving benefits were seen by taxpayers (read white working class) as being undeserving because they had not contributed to the system that they were receiving from. But the whole ideal of a welfare system is that you don’t receive what you contribute, but what you need.

“I don’t really see why someone who earned £40,000 per year before losing their job should be allowed to borrow more than someone who earned £8,000″

Presumably the idea here is simply that past earnings are a (crude) indicator of future earnings, and hence of ability to repay? (Why is a self-employed person who earned £40,000 last year likely to be considered more creditworthy than one who earned £8,000 last year?)

“Free bus passes for pensioners are probably the most popular part of the welfare state.”

This is just about the most ludicrous piece of hyperbole I’ve ever heard. Free bus passes for pensioners, more popular than the NHS? More popular than universal free schooling? More popular than the state pension itself? Maybe they’re more popular that one or more of the following: the Pension Credit, the Winter Fuel Allowance, free prescriptions for pensioners, Child Benefit, Child Tax Credits, subsidised Higher Education… I don’t know. But someone claiming they’re a little thing that doesn’t mean much to people is no further from the truth than someone claiming they’re the most popular part of the welfare state.

Why do I get the feeling you don’t like Purnell?

(Actually he is a tosser).

The easiest, simplest manoeuvre to get more money to the sharp end of the welfare system would be for government to get out of the business of pretending to help people get jobs. As Steve Hilton proposed,this should include the closure of all Jobcentres, which are complete anachronisms.

Every two weeks millions of people are compelled, at the peril of losing their benefits, to waste their time going along to these places and avoid the gaze of some jobsworth clerk and tell them they have been looking for work, whether they have been or not.

What does this achieve?

Jobcentres are literally without function. Only the most unimaginative or bureaucratic employer would advertise a vacancy there, even though it’s free, and all the information jobseekers need is freely available on the internet.

So what are they for?

The only possible justification for them is as a job creation scheme for the staff involved and, if that’s the rationale, we’d all be better off if they worked from home!!!!

“This is just about the most ludicrous piece of hyperbole I’ve ever heard”

Apols – OP should have read “one of the most popular…” rather than “the most popular”.

Should also mention that ippr should also take a look at some of the good work being done by Liberal Youth – http://www.libdemvoice.org/opinion-political-reasons-for-people-to-back-the-esa-motion-24860.html

Matthew Parris wrote an excellent piece on this in the sadly paywalled Times yesterday. He lost his free bus pass (which he has admitted is absurd – he’s in full-time employment and earns a six figure salary) and found himself enraged by having to pay for travelcards while he waited for its replacement. Entitlements are hard things to take away.

But on the merits of it? My father qualifies for a free bus-pass. He’s a company chairman, and a serial non-executive director. He also qualifies for the Winter Fuel Allowance. Is this really a sane use of taxpayers’ money?

Hi pagar,

I think rethinking the role of the Jobcentre is actually an area where there might be some agreement. Here’s Jess Steele from Locality:

“500,000 vacancies are not concentrated in the areas where people really need jobs and that the 100s of 1000s of SME jobs don’t get advertised in job centres so you need good networks to access them (networks which welfare dependency tends to stifle); that JobCentre Plus needs to be rethought – perhaps as a mutual part-owned and managed by local community organisations. I pushed him on the Community Allowance as the community equivalent of the Work Programme providers ‘black box’ and was interested to hear his visceral fear about losing the ‘engagement’ with JC+. I argued that ‘mandatory engagement’ is an oxymoron – it’s not engagement at all, it’s claws in the claimant’s back. What JC+ do is fortnightly social control of the poor on behalf of ‘the rest of us’. Yesterday I was at Marsh Farm in Luton where they have a beautiful building paid for with NDC money and they would like to see an outpost of JC+ so North Luton people don’t have to get the bus into Luton centre for their bi-weekly (or weekly, thanks Labour!) grilling but can come to Futures House and access not just jobs advice but council, health, police, a load of private and social enterprises and, crucially, a fantastic children’s play facility. So a trip to the ‘job centre’ would actually be fun (imagine!) and would be rooted in the networking that really can get people into jobs. I don’t think Marsh Farm have thought about running a local job centre directly but I bet they’d be willing to give it a go given half a chance and a contract to do so.”

http://jesssteele.wordpress.com/2011/06/15/demob-happy-fragments/

“But on the merits of it? My father qualifies for a free bus-pass. He’s a company chairman, and a serial non-executive director. He also qualifies for the Winter Fuel Allowance. Is this really a sane use of taxpayers’ money?”

I definitely think free bus passes are a good use of taxpayers’ money and the aggro involved in means testing them isn’t worth the pretty minimal saving. Not so sure about winter fuel allowance, though I think means testing that or scrapping it and rolling the money into a higher pension might be more trouble than it’s worth.

In political terms, specifically, if you’ve got a project which is about having a few flagship universal services that people value as a way of building support for the welfare state, then free bus passes should be something to celebrate, not take away.

Don:

don’t really see why someone who earned £40,000 per year before losing their job should be allowed to borrow more than someone who earned £8,000

Likely ability to repay is one reason mentioned above – statistically it’s surely more likely that someone who loses a job paying £40k will get another job paying around that, than it is that someone earning £8k will lose that job but get lucky and find one paying five times as much. The others are ‘buy-in’ – the person earning 40k will have paid a lot more in, and short-term need – they’re likely to have a more expensive lifestyle, so the extra loan on top of normal benefits enables them to have a cushion while they adjust.

Gastro George @1

But the whole ideal of a welfare system is that you don’t receive what you contribute, but what you need.

No it isn’t. That’s one aspect of most welfare states. It’s not the only one; we pay pensions to people whether they need them or not. We pay higher pensions to people who have contributed more, whether they need them or not. We pay contributory-strand JSA to people who are unemployed even if they’re fantastically right. We have, until now, paid child benefit to everyone at a flat rate.

The evidence from the academic research is that the more a welfare state is based solely on need, the less popular, less efficient, and less redistributive, it becomes.

[7] Well, would Purnell advocate cutting the Old Age Pension by £20/week? No, thought not.

I definitely think free bus passes are a good use of taxpayers’ money and the aggro involved in means testing them isn’t worth the pretty minimal saving. Not so sure about winter fuel allowance, though I think means testing that or scrapping it and rolling the money into a higher pension might be more trouble than it’s worth.

I agree with this I think. It’s certainly true that the savings you’d get from means-testing either allowance would be swallowed up (and more probably) buy the costs of the testing itself.

There’s an argument though, surely, that these additional mini-payments would be better served by being replaced by an augmented basic pension? Cheaper to administer, and in most cases it’s better to allow people to choose what to spend their money on.

s/right/rich

On bus passes, I think this shows up a lack of logic in the Purnell argument, it seems to be that we should make the welfare state more meaningful to the people who pay for most of it, but then says we should fund those changes by taking away benefits from, er, the same people. I don’t see how that is coherent.

However, as a matter of credibility, we might start offering a choice of a cash alternative again (as many local councils did before the national scheme), given that a) the state is getting roundly ripped off by bus companies on the whole deal, and b) large parts of the country don’t have a meaningful bus service, and it’s about to get worse, so giving them a free pass for the non-existent buses isn’t much more than a cruel joke.

gastro george:

“the whole ideal of a welfare system is that you don’t receive what you contribute, but what you need.”

This is one of the Tories’ most seductive, most dangerous ideas: the welfare state as a ‘safety net’ for the poor. But as the architects of the welfare state knew very well, “services for the poor will always be poor services”. Hence the pillars of the welfare state were always universal services and benefits: free schooling for all, not just those who can’t afford private schooling; a state pension for all, not just those who can’t afford an adequate private pension; free healthcare for all, not just those who can’t afford private healthcare.

Nye Bevan intended social housing to replicate “the lovely feature of the English and Welsh village, where the doctor, the grocer, the butcher and farm labourer all lived on the same street”. Instead access to social housing became restricted to the poor. Compare the position of social housing today to the position of the NHS, where “the doctor, the grocer, the butcher and farm labourer” are all still treated on the same ward.

The fact is, a welfare system based on need is a Tory wet dream. You’d end up with the poor relying on underfunded, ‘safety-net’ public services while the rich relied on private provision. And of course, the rich would resent paying into a system that gave them nothing back – meaning relentless downward pressure on taxes and spending.

Alas, this is one of those issues on which the Tories can realistically hope to persuade turkeys to vote for Christmas.

@oldpolitics – good points all round on both the cash alternative to bus passes and the rationale for letting people borrow more if they are on a higher salary. On the latter point, though, one big reason why people cycle in and out of low paid work is debt, so expanding interest free loans for people on low incomes might end up reducing the number of people who drop out of work because of the high cost of debt which they incur.

@TimJ – “There’s an argument though, surely, that these additional mini-payments would be better served by being replaced by an augmented basic pension?”

Possibly. If I were a pensioner, though, I might well be suspicious of a politician who promised me a higher pension in exchange for taking my bus pass off me, and feel that the most likely outcome would be that the higher pension doesn’t materalise and that I end up down one bus pass.

There are also some advantages to giving people a bus pass rather than cash (I think) in terms of encouraging people to use public transport rather than either being sat at home or using the car.

Why is James Purnell still a member of the Labour Party?

@12 GO

Yes, I understand exactly what you’re saying. And it reinforces the fact that we need to be very careful to be clear about what we are talking about. As you rightly imply, if benefits were based on “need”, then there are different political interpretations of what “need” is.

But my argument was meant to clarify the idiocy in Purnell’s argument that you should only get benefits if you have made a contribution. Universal services, as you state, are the most important pillars of the welfare state. Sorry for the lack of clarity.

@8 oldpolitics
As has been noted in other posts, universal benefits are much less costly to administer – means testing is expensive and leads to ever-deepening poverty traps. I see no problem in the rich receiving universal benefits – just tax them properly to recoup the money.

“Jobcentres are literally without function. Only the most unimaginative or bureaucratic employer would advertise a vacancy there.”

In my experience, employers don’t tend to be “imaginative” when they’re hiring people.

I’ve worked for the DWP in the past. Obviously there’s the control and surveillance thing, but one of the main functions of the Jobcentres is to provide a free recruitment service to businesses. Recruitment agencies are very expensive and largely pointless if you’re hiring, say, retail staff. Tesco recruited via the Jobcentre for years (http://www.onrec.com/news/tesco_recruits_over_2_000_long-term_unem) – Asda still do (http://www.asda.jobs/faqs/index.html).

If you want to scrap Jobcentres, I’d imagine your strongest allies will be the likes of Adecco and Blue Arrow.

Good article.

@ Pasha

one of the main functions of the Jobcentres is to provide a free recruitment service to businesses.

Ah.

So the Jobcentres are not about helping the unemployed find work, or merely a jobcreation scheme for the staff employed, they are intended as a state subsidy to multi-national supermarkets!!!!!

We’d better keep them then……………

Yes we had better keep jobcentres – they do place thousands and thousands of people in jobs which makes them a service – both to the employer and the employee. And if you go all Steve Hilton and close the jobcentres, the private agencies will clean up – and I think some of the abuses associated with agencies would consequently increase.

Oh dear. Just because a few rich pensioners get bus passes (and don’t use them) people want to deprive all pensioners (many of whom use and value their passes) of the privilege. What an upside down view of the world. Only what the rich minority think matters.

I can see the merit of free bus passes every day as my bus is used by people with walking difficulties to go the one or two stops between their home and the nearest shops. For elderly people who are less mobile than they used to be, not having to think about whether or not they can afford to take a bus trip is something which adds considerably to their quality of life, for relatively little cost to the state and probably a net gain when the savings this results in for the health and social care budgets are factored in. There’s also a benefit in the fact that people who might otherwise get behind the wheel of a car with impaired faculties have an incentive to take public transport instead.

But since retirement ages are going up all over the place, why shouldn’t the age for a bus pass go up to say 65 as well? The gleeful jumping on free bus passes of the prosperous well-pensioned middle classes is really quite nauseating.

It has long been a puzzle to me that some benefits are taxed and others are tax free. I am an OAP, my pension is taxed, but I also receive winter fuel allowance – that is tax free. I have a bus pass, as a benefit in kind probably harder to tax, but even so it has a clear money value to me. Similarly free TV licence. The removal of child benefit from families with one earner above £40k has caused no end of problems both political and in equity, whereas making all child benefit taxable would have obviate a trap at the £40k threshold and would have been seen to be more equitable. I should state that I have a private pension and pay tax. I would not object to paying tax on the fuel allowance, nor on a notional value for a bus pass.

@21
Some of my friends are bus travel addicts. They use their free pass to travel all over the place – to no specific purpose other than the travel itself. On some routes I have been told that there are so many pass travellers that paying passengers have faced difficulties.

@ Solomon

Yes we had better keep jobcentres – they do place thousands and thousands of people in jobs which makes them a service – both to the employer and the employee.

OK I’ll compromise with you.

We keep the free state funded Jobcentre website (that is the bit that does the work in getting people jobs) and we get rid of all the builidings and staff.

Deal?

Hi Pagar, no , I think that’s a terrible idea. Firstly, on just regular job broking, there are plenty of people who get jobs through job centres in person, not by the website. (And of course, those people who are less likely to use a website are more likely to be less well off – migrating all public services to the web leaves some people behind – especially when you match it up with closing down libraries) – this is particularly the case when , say , a supermarket does a big recruitment campaign via the JobCentre.

And as for job broking for disadvantaged groups , the evidence shows that Jobcentres are better at finding work for ‘disadvantaged’ groups like the long term unemployed and disabled – see for example

http://research.dwp.gov.uk/asd/asd5/rports2005-2006/rrep328.pdf

or the recent NAO report on Pathways to Work. As it happens, you’ve kind of got your wish on the latter, as Iain Duncan Smith’s “Work Programme” will be all “delivered” (or not) by the private contractors like A4E and Avanta rather than the Jobcentre network

Laura @21: “probably a net gain when the savings this results in for the health and social care budgets”

Quite possibly, yes. The bus pass can keep the elderly in touch with friends and family, reducing loneliness and increasing support, which in turn presumably reduces demand on social services etc.

I seem to recall some research on this in South Yorkshire – done about 20 years ago. Anyone know anything about it or similar research since then?

@ 23 Merrymaker

“Some of my friends are bus travel addicts. They use their free pass to travel all over the place – to no specific purpose other than the travel itself. On some routes I have been told that there are so many pass travellers that paying passengers have faced difficulties.”

So what? Unless these addicts of yours are making up a major percentage of people on each bus – which I doubt – that just means that the passes are being put to good use. “Paying passengers face difficulties” is only a big deal if you accept that paying passengers are more important than people with free passes, which I don’t.

If there isn’t enough room on the bus, they need more buses.

I don’t know who would want to hear anything coming from that odious man.

After designing the most devastating set of welfare “reforms” of the past century while in government, if I was him I would want to slink away quietly and keep a very low profile indeed!

Being disabled I have been through a nighmare looking for work, looking for that special help they stated was put in place.

Purnell is a chap better suited at a think tank or is that stink tank, after seeing his flat on TV looking like a pig stye.

The fact is they believe doing this to the people at the bottom will some how get the middle class vote back, I suspect this will leave Newer Labour without the five million votes they lost

@29 Robert

The fact is they believe doing this to the people at the bottom will some how get the middle class vote back, I suspect this will leave Newer Labour without the five million votes they lost

I think it says far more about the moral bankruptcy and vacuity of certain sections of the Labour Party that they think that kicking the most vunerable in society will somehow bring voters flocking back to Labour!

May I suggest that the said moral bankruptcy is the very reason why people are turning away from politics in droves!?

“free bus passes for pensioners”

Of course, removing these will also remove the subsidy for many bus companies (particularly in rural areas) which will affect far more people than pensioners. REALLY poor thinking from IPPR.

In fact, I would do the opposite, what about free bus passes for the unemployed and those on low wages? If you want to encourage people to get jobs then they must be able to get *to* the jobs. A free bus pass would do that.

Come on IPPR start thinking, will you?

I have no words for how much I loathe Purnell. More than any Tory. A slimey, untalented jobsworth who realised long ago he could never begin to endear himself to normal human beings (voters) and so manages to convince softheaded politicians like Gordon Brown and Ed Miliband that his nasty, malicious ideas somehow have a place in the Labour Party.

His Welfare Reform bill was a hate crime. Everything he says and does is poison.

#5. Tim J

But on the merits of it? My father qualifies for a free bus-pass. He’s a company chairman, and a serial non-executive director. He also qualifies for the Winter Fuel Allowance. Is this really a sane use of taxpayers’ money?

Yes, because the bus pass does not literally hand you money. It is a subsidy to local bus companies. If your father does not get the bus pass, the bus company will still need the subsidy, so apart from the cost of the physical pass itself, you’ve not saved anything.

As to Winter Fuel allowance, well, that’s a tough one: perhaps it should be rolled into state pension (ie a higher rate during the winter) and then tax pension incomes accordingly so that benefit to the well off is neutral.

I get £14,000 a year, which is, as far as I’m concerned, big, big money. I use my free bus pass, but don’t quite understand why I should get it as a mere stripling of 64.

Just think your self lucky you get it, and then when it comes to vote at the next election remember Purnell.

Actually, with retirement age history, benefits like free bus passes and not paying NI should be tied to retirement, not a fixed age. This isn’t, note, means testing per-se- it’s keeping these benefits for people no longer earning a wage.

It also takes some pressure off the retirement age itself, since passing it no longer automatically has a cost to the taxpayer for things like NI and bus passes! AND the rich people who are still working as directors and so on don’t qualify for these benefits.

@3 – Quite. Have people register they’re still around on the net or phone, with a list of the jobs they’ve applied for, and have less frequent meetings with *actual* job advisers, not the robots at the jobcenters (they’re often quite biting about their own roles as well, IME, I’d add – but yes, it’s a job…oh wait, costs!).

30. Graham

Sadly with Labour being very much Like the Tories the battle between these two parties to keep the voters they have , will be interesting.

I suspect Labour is not looking to get the basic working class vote back, Brown gave up on us because he thought we would all go over to the BNP, poor chap as we know now the kick he had in the head playing Rugby did more then damage his eye it damaged his view on the working class.

In my bit of rural Sussex the idea of free bus passes is academic as bus service cuts take their toll. When bus companies start having to pay full duty on their fuel it will become even worse.

Just for the record Stagecoach one of the biggest operators has installed a bus pass reader on many of its buses so it can collect the money! Curiously TfL still relies on drivers”pressing the button’ as the stripe is not compatible with Oyster. Yes it is a cost less subsidy for bus companies for the most part and a bit of fact checking about the myth OAP’ needing forcing bus co to put on more buses would be in order. It has undoubtedly contributed also to the increased frequency of services except in rural areas. It’s up to the Big Society to do something about this after all except in Norfolk they all vote Tory.