When Incentives Equal Stupidity, They Are Not Incentives Anymore
July 13, 2015
by Martin Odoni
I have decided I should throw in a few quick observations about the latest cruel folly to emerge from the Government’s thinking – or what passes for thinking in the modern Conservative Party – on welfare. Iain Duncan-Smith, the man of jealous privilege who thinks he is entitled to have the public pay for his super-expensive breakfasts while not receiving enough money themselves just to stay alive, has been having ‘ideas’ again. Yes, taking cover probably is a good idea any time you read those words. Including this time.
The Work & Pensions Secretary’s latest gem of pointless vindictiveness towards people born poorer than he is to suggest replacing statutory sick pay with private bank accounts that workers would have to pay into from their wages to save up for periods when they are out-of-work or off sick. Now in fairness to the Prime Minister, David Cameron, he has certainly not made this official policy, at least not yet, but he has not dismissed the idea either. That is worrying enough, because it is difficult to believe a response to this preposterous idea is even necessary. There are two huge flaws in it, and as is so often the case with Tory policy, one is practical, the other is ethical.
The ethical flaw is also the really obvious one. Quite simply, the fund RTU (Returned To Unit) is asking for already exists. It is called National Insurance, and while it is not a private bank account, anybody who has been making regular contributions to it during their working life is morally entitled to sick pay when they fall ill. When people talk about ‘pulling a sickie because it’s paid for by the Government’, they quite overlook the reality that the money paid by the Government was put in by themselves to begin with. Yet again, a high-profile member of this inept Tory Government appears disturbingly unaware of something that really should be among the basics of their job. (N.I. is also, on a separate note, the reason why Jeremy Hunt’s attempts to privatise the NHS without explicit permission from a majority of the public are possibly illegal.)
The practical flaw is perhaps less obvious, but no less important. Quite simply, how can this be implemented when the Government is continually taking money away from the working poor? It keeps scrapping tax credits and in-work benefits for those on the bottom rung of the employment ladder, and opposes any genuine attempt to raise the Minimum Wage just to match the Living Wage. (The claim in last week’s ‘Emergency Budget‘ – such an emergency it was unveiled two months after it was announced – that the Living Wage was to be enforced by this Government, was a damp squib, as it will not apply to under-25’s, who are subject to illnesses as well, and will not even be in place for five years anyway.) When people are not even being paid a Living Wage and are not receiving tax credits to supplement their income, they will, by definition, have no money to spare from their pay packets to put into a sick-pay account. So from where is this cash that ITIAVI wants them to save up going to come? I doubt that the Gentleman Ranker has even paused to consider this drawback, as in his entire, vulgarly privileged life, he has never had to live on a poor man’s wage for even one month.
There is a broader practical problem regarding general economics that this touches upon; even if the poorest can find the extra money, with having to redirect funds to these accounts, they will be spending less in shops. When we consider how many millions of people that is going to apply to, it becomes obvious that the idea is certain to cause another economic slowdown due to lost private sector business. That is a serious hamstring-pull caused by Austerity policies in general, and if YANSM is still unable to grasp, after all this time, how the health of an economy is dependent on the majority having money to spend, he is in a job of which he should not be allowed within a hundred miles
But we already knew that about him anyway, right?
It is telling that, somehow, the Tories never seem able to relate to the poor in any way that does not involve ‘incentivising’ them, rather than, say, just talking to them. Talking to them from on-high, perhaps, but only so they can berate them to do more.
I suppose you can rationalise that idea when it comes purely to the principle of a fair day’s work. I do not agree with it, as I still find it to be massively over-simplified, but I can at least acknowledge there is some reasoning in the idea. But illness is another matter. Most of the Human Race long ago realised that it is silly to think about ‘incentivising’ people not to be ill. Even as I type, I am recovering from a bout of tonsillitis (yes, I did still go into work every day) and I can promise you that I have plenty of incentive not to be ill without people threatening to take money away from me for it. That incentive not to be ill is called ‘being ill’. It is already very unpleasant, and it is stupidity to make the times when people are well instead unpleasant too. Especially as, if people on low pay have to give up more money in the present to have sick pay in the future, that future will arrive quickly; many of them will have to give up the occasional meal to be able to cover the cost, and not eating is one of the surest paths to becoming ill in the first place.
And people say the Left are detached from reality…