Maybe, just maybe, Great Britain is finally getting serious about welfare reform.
The country has certainly been talking about welfare reform for years. But talk’s cheap; welfare isn’t.
A recently released government report, the largest of its kind ever done, has quantified the extent of the problem. According to the report, illness and disability claims cost Great Britain more than £100 billion a year.
Currently, some 2.6 million Brits are on “incapacity benefit,” those determined by a doctor to be unfit to work. According to David Freud, the government’s welfare reform advisor, 1.9 million of them have no business being there.
In the Welsh town of Merthyr, just outside of the capitol Cardiff, 20 percent of the working-age population is on incapacity benefit. That’s one out every five adults, unable to work.
Among the costs imposed by the U.K.’s current system:
- The government spends £10 billion paying benefits; and
- Lost production costs the country about £64 billion.
The biggest challenge is finding the political will to reform welfare. And to that end the Brits can learn from the massively successful U.S. welfare reform efforts more than a decade ago. Politicians have to be willing to tell those receiving welfare benefits: If you want a check, you have to work.
Once states implemented this non-compromise policy, an amazing thing happened. In Oregon, for example, case workers found that when they told inquirers that they would have to get a job, about a third said, “Well, if I have to go to work, I’ll go out and find my own job.”
Another third of them would need help, so Oregon helped them by using their welfare money to subsidize an employer who hired them.
And then about a third of them were facing serious problems such as drug and alcohol or spousal abuse. But because so many of the applicants left after the initial interview, unsuccessful in tapping into free government money, social workers had more time to help out the tough cases.
State and federal politicians who held the line on U.S. welfare reform took a lot of verbal abuse at the time. But they were right, and their reform efforts worked.
Now Great Britain has to follow in that path.