Adam Smith Institute

Inspired by the successful US welfare reforms of the 1990s, the proposals in Working Welfare would make work central to the benefits system. All working age people not meeting national disability criteria would face "immediate work requirements". This requirement would be backed with tough sanctions – "no work, no benefits" – and any absence from mandated work without good cause would trigger a pro rata reduction in benefit payments. The ASI proposals would also revolutionize the delivery of welfare. Responsibility for its provision and administration would be devolved to local agencies, which would be paid according to results. Agencies would be rewarded for getting people into work for a set period of time, ensuring an ongoing and personalised service for jobseekers. The report also advocates raising the personal income tax allowance to £12,000, to tackle high effective marginal tax rates for those trying to enter the workforce, and to make life easier for those with low incomes.

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Alistair Darling must confine the government to the relief of poverty and allow the private sector to take up the task of providing basic pensions an social security benefits. The welfare state has become riddled with compleities, inconsistancies and perverse incentives that it now positively discourages low-income families against savings and insuring themselves for future needs. Professor George Yarrow of Oxford University, who wrote the report, states that means testing is like a tax on personal saving and that the government must focus on improving the market. the true welfare elemnt needs to be rediscovered from the waste the nhs has become.

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Abolition of all benefit and contribution limits, except those on lump sums would produce a massive simplification of the non state pension sector. With little or no scope for abuse, given the recent erosion of pension tax privileges. But real simplification is possible only within the context of broader reforms of anomalies and complexities in the tax system, in how different pension schemes are treated, and in the relationship between pensions and the structure of social benefits. This report shows how.

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Synopsis: Radical changes to housing benefit are required in order to stem the £840 millon of tax payer's money lost annually to fraud and error, and to make the housing market fairer and more responsive to the needs of tenants. Housing benefit should be taken out of the hands of local authorities, and instead paid out by social security offices along with income support. Today's very complicated payment rates, which depend on the tenant's rent level, family circumtances,and the type of property occupied; would be replaced by a uniform benefit for all low paid people. The report's author, housing expert Dr Peter King of DeMontford university in Leicester, says that prehaps £350 million in adminastrative cost and payment errors could be saved by there simplifications alone.

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It's time to unbundle the welfare system and create a simplified situation which can be used by all. The briefing looks at the creation and the process of implementation of the fortune account. Why it's needed and what it could achieve.

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