Wednesday, 21 September 2011

Downton Abbey, insurance companies and welfare benefit reform

Did anyone take note of the story which ran throughout all the ad breaks in the first episode of the new Downtown Abbey series last Sunday?  It was a heart-warming tale from Aviva of the value of taking out insurance if you have an accident and can’t return to work.

And last Friday the Guardian ran a story about how “the Conservative party has had a long-standing financial relationship with insurance companies”. Their investigations revealed that “financial firms with insurance interests have given the Tories £5.4m in the last decade, £4.9m of that since David Cameron became leader in December 2005”. 

In the meantime, the Welfare Reform Bill has entered the House of Lords.  This Bill is part of the steady shift away from the principle, introduced by the Beveridge reforms, that cash payments in the event of unemployment or disability “will continue so long as the need lasts, without means test, and will be paid from a Social Insurance Fund built up by contributions from the insured persons, from their employers,if any, and from the State”.  The means-tested part of the post-war welfare state (called national assistance then, income support now) was intended to ‘wither away’ through a combination of contributory benefits and the state taking responsibility for maintaining full employment. Instead, contributory benefits have been steadily eroded, in terms of both the time-limits imposed and the conditions applied.  And the state now leaves the ‘market’ to determine levels of employment.

As with the NHS reforms, such developments open up opportunities for private providers.  The steady dismantling of the social insurance system will undoubtedly encourage more people to respond to insurance companies’ messages that we need to turn to them to look after us in times of need, rather than the welfare state.

The dominant narrative behind the reforms to out-of-work disability benefits – the replacement of Incapacity Benefit with Employment and Support Allowance – is that more and more people have been claiming it who have ‘trivial’ conditions and who are not really ‘disabled’.

There are two problems with this storyline.

The first is that, as Richard Berthoud’s analysis shows, “most of the growth in the prevalence of limiting long-standing illness … has affected people at the more severe, rather than the less severe, end of the spectrum ... This suggests that the underlying trend is a true one, not simply associated with people’s reports of, or responses to, trivial conditions”.

The second is that popular and political debate is often confused about what is meant by ‘disability’.  Disabled people have quite rightly asserted that to be ‘disabled’ does not necessarily mean being ‘sick’ and that they should be given the chance to work like anyone else.  This assertion goes together with a public image of a ‘disabled person’ as someone who uses a wheelchair or who is blind or perhaps deaf, or someone with a mild-moderate learning difficulty, the implicit assumption being that they do not experience any ill health associated with their impairment.

However, this description does not fit many people who are in receipt of out-of-work 'disability' benefits for which they qualified because of ill health. The problem is that this feeds into negative attitudes towards them, as they do not conform to the stereotype of a 'disabled person'.

Negative attitudes are also created because the state has applied a particular approach to disability and illness in the context of out-of-work benefits.

Underlying the application of the new Work Capability Assessment, and the increase in sanctions and conditions, is the assumption that it is individual motivations and attitudes which are the main obstacle to employment for many people on long-term out of work benefits.  In this scenario, it is the individual and their behaviour which needs to be ‘fixed’ rather than local job markets, employer discrimination, or inadequate healthcare services.  It is the individual who is to be blamed for being out of work because of long-term illness or impairment.

This is to ignore the factors, which are nothing to do with individuals, that have resulted in high numbers of people claiming long-term out of work benefits during the last 30–40 years or so. This is not because of an increase in the number of ‘malingerers’ but because the UK economy is integrally linked to the global economy. The availability of low-waged labour within emerging economies, together with the dramatic increase in the global supply of educated workers, affects the employment opportunities, pay levels and working conditions of most people in this country. However, globalisation particularly affects those who employers would not choose to employ unless there is a shortage of labour supply - people with long-term conditions who are out of work are disproportionately concentrated in parts of the country which have experienced deindustrialisation and have yet to recover .

It is shortage of labour which increases employment opportunities amongst those who require adjustments and flexibility from employers if they are to work – as happened in the period of full employment after the Second World War.  Where there is no shortage of labour, people with long-term conditions or impairments will always be at a disadvantage because of employer behaviour, not because of their own motivations and attitudes.

What we need therefore is a welfare benefit system which does not see us and our behaviour as the problem but where out-of-work benefits and employment support are seen as ‘reasonable adjustments’, on the one hand compensating for loss of income while at the same time tackling disabling barriers to employment. 

[Welfare reform is one issue explored in my critique of disability policy, to be published by the Joseph Rowntree Foundation in November.]

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