0:00:04 > 0:00:05Seventy years ago,
0:00:05 > 0:00:08a document of monumental importance sparked a social revolution.
0:00:08 > 0:00:11It gave birth to the welfare state
0:00:11 > 0:00:14and to what has become a massive benefits bill.
0:00:14 > 0:00:18That bill's gone up in the last ten years by nearly £60 billion.
0:00:18 > 0:00:23Its critics say the welfare state is in crisis.
0:00:23 > 0:00:27Two and a half million people who are on incapacity benefits
0:00:27 > 0:00:30in the whole of the UK?
0:00:30 > 0:00:32Unbelievable.
0:00:32 > 0:00:35The politicians promise, or threaten, that change is coming.
0:00:35 > 0:00:39Today we launched the most ambitious, fundamental
0:00:39 > 0:00:43and radical changes to the welfare system since it began.
0:00:43 > 0:00:46For radical reforms read big savings.
0:00:46 > 0:00:49billions of pounds will have to be cut,
0:00:49 > 0:00:52millions of people will be affected.
0:00:55 > 0:00:59For this programme I've been talking to the people with the most to lose.
0:00:59 > 0:01:02Some people haven't worked in their life, they don't know what a job is.
0:01:02 > 0:01:04Would you work for the minimum wage?
0:01:04 > 0:01:08No, I wouldn't. I'd be working for nothing.
0:01:08 > 0:01:09People on incapacity benefit.
0:01:09 > 0:01:14You're just there for them to be able to tick a box.
0:01:14 > 0:01:18The long-term unemployed.
0:01:18 > 0:01:22I don't want to be going out to work for 40 hours and missing my kids.
0:01:24 > 0:01:26People on housing benefit.
0:01:26 > 0:01:27Lone parents.
0:01:27 > 0:01:31Are they prepared for the harsher future ahead?
0:01:31 > 0:01:35I can't get a job so I'm sitting in the house depressed.
0:01:35 > 0:01:39You don't realise the impact having a child in your life does to you.
0:01:41 > 0:01:44I want to find out if Britain really is ready
0:01:44 > 0:01:46for the future state of welfare.
0:01:58 > 0:02:02Here's one way the benefit system has changed in my lifetime.
0:02:04 > 0:02:07This is where I was brought up, Splott in Cardiff.
0:02:07 > 0:02:10Poor, working class district.
0:02:10 > 0:02:13Respectable poor, I suppose you'd say.
0:02:13 > 0:02:16This, incidentally, is the house where I was born,
0:02:16 > 0:02:20and in those days, a long time ago of course, in those days,
0:02:20 > 0:02:24everybody, if they could, was expected to work.
0:02:24 > 0:02:27And they did, we knew only one family
0:02:27 > 0:02:29where the father did not work,
0:02:29 > 0:02:32never had a job, and he was regarded as a pariah.
0:02:32 > 0:02:34It was a mark of shame.
0:02:36 > 0:02:38Like most other kids we were expected to help out.
0:02:38 > 0:02:42When my father had no work he sent me around streets
0:02:42 > 0:02:44posting leaflets through people's doors.
0:02:44 > 0:02:46It wasn't unusual.
0:02:46 > 0:02:50Today one in four of the working age people in this area
0:02:50 > 0:02:52is on some form of benefit.
0:02:52 > 0:02:54Hello.
0:02:54 > 0:02:57My sister was Mrs Neet who lived next door to you.
0:02:57 > 0:03:00Ah, well, yes, I remember her, of course!
0:03:00 > 0:03:03I think I'm the only one left here now.
0:03:03 > 0:03:05Will you remember I wonder...
0:03:05 > 0:03:09There was a chap who lived in that house over there,
0:03:09 > 0:03:12- and he never worked. - That's right.
0:03:12 > 0:03:15But the fact that he didn't work, we used to think,
0:03:15 > 0:03:18my parents thought was shocking!
0:03:18 > 0:03:21- Cos he never got a job.- That's right.- And that's changed hasn't it?
0:03:21 > 0:03:23Oh, yes, definitely it's changed.
0:03:23 > 0:03:27But do you think that pride in working has changed?
0:03:27 > 0:03:29It's gone, yeah.
0:03:29 > 0:03:32If they can get money without working, they will.
0:03:35 > 0:03:38I called on one family living just up the street where I was born,
0:03:38 > 0:03:40who live on benefits.
0:03:43 > 0:03:45Pat Dale is a single mother of seven children.
0:03:45 > 0:03:47She hasn't worked in 20 years.
0:03:51 > 0:03:55I spoke to her with one of her daughters, Chanel,
0:03:55 > 0:03:57also a mother living on benefits.
0:03:57 > 0:04:01And they say it doesn't pay them to work.
0:04:01 > 0:04:04Some people haven't worked in their life. They don't know what a job is.
0:04:04 > 0:04:07None of your family have worked, have they?
0:04:07 > 0:04:09And the reason why there's no jobs for us,
0:04:09 > 0:04:11is because £5.50, minimum wage,
0:04:11 > 0:04:15and this is what it is, that's why there's no job for us.
0:04:15 > 0:04:17Would you work for the minimum wage?
0:04:17 > 0:04:21No, I wouldn't, the reason why I wouldn't work for the minimum wage
0:04:21 > 0:04:24is if I did right, get £5.50, that means I would lose
0:04:24 > 0:04:29my rent benefits, do you know, I'd be working for nothing.
0:04:29 > 0:04:32And what other benefits do you get?
0:04:32 > 0:04:35Erm, child tax credit... All together...
0:04:35 > 0:04:37Child tax credit and child benefit you get.
0:04:37 > 0:04:41Yeah, first child £20, second child just £13.
0:04:41 > 0:04:46So, why's the first child 20 and him 13?
0:04:46 > 0:04:48They're still both the same age,
0:04:48 > 0:04:53one's 13, one's 14, so why?
0:04:53 > 0:04:55What do you say to politicians
0:04:55 > 0:05:00who say that the welfare state is too generous?
0:05:00 > 0:05:04Give us a bit more, erm, chance. Do you know what I mean?
0:05:04 > 0:05:08Would you work from eight till seven for £5 an hour?
0:05:08 > 0:05:10I think it's disgusting.
0:05:10 > 0:05:13Honestly, it's really, really disgusting.
0:05:20 > 0:05:23A lot of people will be shocked, appalled,
0:05:23 > 0:05:25by what Pat Dale has to say.
0:05:25 > 0:05:29Shocked in the same way my parents were shocked by our neighbour
0:05:29 > 0:05:31who never had a job.
0:05:31 > 0:05:37But, obviously she sees herself as a victim. And maybe she's right?
0:05:37 > 0:05:39A victim of the benefit system,
0:05:39 > 0:05:44the benefits culture that we have created over the decades.
0:05:49 > 0:05:52How else can you explain
0:05:52 > 0:05:55so many people in this neighbourhood out of work?
0:05:55 > 0:05:59Splott is not like the Welsh Valleys a few miles away which were ravaged
0:05:59 > 0:06:01when the mines disappeared.
0:06:01 > 0:06:03It's in the centre of the city of Cardiff.
0:06:03 > 0:06:07Are there really no jobs here, the capital city of Wales?
0:06:09 > 0:06:13I went to the nearest job centre to try to find out.
0:06:13 > 0:06:18So let's see what's on offer today in Cardiff.
0:06:18 > 0:06:23Cleaner, carers, meter reader, sales assistant, telesales agent,
0:06:23 > 0:06:27kitchen porter and so on and so on and so on.
0:06:27 > 0:06:31In fact, in September there were more than 1,600 jobs
0:06:31 > 0:06:34advertised in Cardiff.
0:06:34 > 0:06:38There will always be jobs that are more appealing than others,
0:06:38 > 0:06:41but what we try to do here is try to encourage people
0:06:41 > 0:06:44to see the benefit in any of the jobs.
0:06:44 > 0:06:46And that even working at a fairly low paid level,
0:06:46 > 0:06:48getting yourself back into work
0:06:48 > 0:06:50is very beneficial for you and the family.
0:06:50 > 0:06:53And it's often a stepping stone to something a lot better.
0:06:53 > 0:06:55Isn't the big difference now
0:06:55 > 0:06:58that if you didn't have a job it was a matter of shame?
0:06:58 > 0:07:02Has what used to be a stigma - a very, very clear stigma - gone?
0:07:02 > 0:07:04- The stigma of not working. - The stigma of not working?
0:07:04 > 0:07:06"He's on the dole - shock!"
0:07:06 > 0:07:07There is undoubtedly less of a stigma,
0:07:07 > 0:07:10I don't think anyone would argue with that.
0:07:10 > 0:07:14And let's face it, benefits became fairly easy to access...
0:07:14 > 0:07:15Too easy.
0:07:15 > 0:07:19In some cases, yes. People then found themselves on benefits
0:07:19 > 0:07:22and didn't see themselves getting back into work.
0:07:22 > 0:07:25And that's a situation that's built up over the years.
0:07:25 > 0:07:30We're not here to force you to into full-time work,
0:07:30 > 0:07:32whilst you're on employment support allowance.
0:07:32 > 0:07:36- Some positions are quite short-term, a week or two.- Absolutely.
0:07:36 > 0:07:40Owen Oakley is trying to get back to work after ten years of living on incapacity benefit.
0:07:40 > 0:07:44To build your confidence, get you back into the routine of work.
0:07:44 > 0:07:47Do you mind if I just have a quick chat with you Owen?
0:07:47 > 0:07:49Yeah, that's fine.
0:07:49 > 0:07:52How do people react to you being out of work? Do you think they think,
0:07:52 > 0:07:55"He's lazy, can't get out of bed in the morning".
0:07:55 > 0:07:58Not in my experience because a lot of my friends know I'm hardworking.
0:07:58 > 0:08:02I've got friends that have been on benefits all their lives.
0:08:02 > 0:08:05Some of them are just used to living like that.
0:08:05 > 0:08:08They want to go on and have made a career out of not having a career.
0:08:08 > 0:08:11I know families like that as well.
0:08:11 > 0:08:13Why do you think they do it then?
0:08:13 > 0:08:17I don't know. I suppose it's an easy lifestyle for some
0:08:17 > 0:08:18if you don't want to work.
0:08:18 > 0:08:21All right, well, thanks for coming in today.
0:08:23 > 0:08:28There are now more than 800,000 people in this country
0:08:28 > 0:08:30who have been out of work for more than a year.
0:08:30 > 0:08:33It's all a long way from the initial vision
0:08:33 > 0:08:36on which the benefit system was founded.
0:08:36 > 0:08:40Sir William Beveridge working in the quiet of University College,
0:08:40 > 0:08:44of which he is master, has produced a social document
0:08:44 > 0:08:46of revolutionary importance.
0:08:46 > 0:08:49So this is it, The Beveridge Report, or to give it its proper title,
0:08:49 > 0:08:52Social Insurance and Allied Services.
0:08:52 > 0:08:56A pretty mundane title for a report that Beveridge himself
0:08:56 > 0:08:59said would create a revolution, as indeed it did.
0:08:59 > 0:09:01You get an idea of the sense of priorities
0:09:01 > 0:09:02from the hand-written notes
0:09:02 > 0:09:05he made before the report came out. Here we are.
0:09:05 > 0:09:08Social insurance - that's the important word -
0:09:08 > 0:09:10is insurance against four contingencies
0:09:10 > 0:09:12and at the top of the list was unemployment,
0:09:12 > 0:09:15because of industrial accident,
0:09:15 > 0:09:18disease, whatever, old age, maternity and death.
0:09:18 > 0:09:20He wanted a form of insurance.
0:09:20 > 0:09:26So you paid something in and the State gave you something in return.
0:09:26 > 0:09:28It was a deal.
0:09:28 > 0:09:31It was a contract, and as a result of that contract
0:09:31 > 0:09:34you would slay the five evil giants of society.
0:09:34 > 0:09:38Want, disease, ignorance,
0:09:38 > 0:09:42squalor and idleness.
0:09:42 > 0:09:45NEWSREEL: 'There must be no mass unemployment.
0:09:45 > 0:09:48'The giant evil of only yesterday.'
0:09:50 > 0:09:54Ironic isn't it, that 70 years after the report was published
0:09:54 > 0:09:57the principle charge against the welfare state
0:09:57 > 0:10:00is that it helps to create idleness.
0:10:00 > 0:10:05Exactly the opposite, exactly the opposite of what Beveridge intended.
0:10:10 > 0:10:14But is that a charge that stands in an area like this,
0:10:14 > 0:10:16the North East of England?
0:10:16 > 0:10:17One in ten are out of work here,
0:10:17 > 0:10:19the highest unemployment rate in the country.
0:10:22 > 0:10:26You might think the reason for that is simple - no jobs.
0:10:26 > 0:10:28But talk to the Mayor of Middlesbrough, Ray Mallon,
0:10:28 > 0:10:31you get a very different explanation.
0:10:31 > 0:10:36When you look at Middlesbrough, out of the 88,000 working population,
0:10:36 > 0:10:3918,000 people are on some form of benefit.
0:10:39 > 0:10:4418,000 people out of an 88,000 working population on benefits,
0:10:44 > 0:10:45that's a big issue.
0:10:45 > 0:10:48At the moment you've got a large cohort of people
0:10:48 > 0:10:50not even applying for jobs.
0:10:50 > 0:10:51This just isn't on.
0:10:51 > 0:10:57It is almost a lack of hope, it's almost a lack of engagement,
0:10:57 > 0:11:00that the state have looked after us and they'll continue to do it.
0:11:03 > 0:11:05You have only to drive around an estate like this,
0:11:05 > 0:11:10just up the road from Middlesbrough, to see what he means.
0:11:11 > 0:11:17It's just after 2pm and there are an awful lot of young men
0:11:17 > 0:11:19wandering around the place, standing in their doorways.
0:11:19 > 0:11:25Obviously not at work. Obviously don't have jobs.
0:11:25 > 0:11:27I've tried to talk to many of them. We've knocked on doors
0:11:27 > 0:11:31to talk to them, and nobody wants to talk.
0:11:31 > 0:11:34I did eventually find a couple prepared to talk to me.
0:11:34 > 0:11:36Steve Brown and Paula Mort live with their three children
0:11:36 > 0:11:38entirely on benefits.
0:11:38 > 0:11:40If you include their rent,
0:11:40 > 0:11:44they collect more than £1,600 a month from the State.
0:11:46 > 0:11:48Do you think that a sort of attitude develops
0:11:50 > 0:11:54in an area, on an estate maybe, in a certain area,
0:11:54 > 0:12:01- that says, well... - There is no jobs so...
0:12:01 > 0:12:04- ..so living on benefits is an acceptable lifestyle?- Yeah, yeah.
0:12:04 > 0:12:05See, before I take a job,
0:12:05 > 0:12:08you have to sit down with them and work it out,
0:12:08 > 0:12:13whether it's acceptable to go to work or not.
0:12:13 > 0:12:16When you say acceptable, acceptable in what way?
0:12:16 > 0:12:18Whether it'll be worth your while.
0:12:18 > 0:12:21Whether it's worth your while to go to work.
0:12:21 > 0:12:23Right. Why might it not be then?
0:12:23 > 0:12:26Because I might go to work for 40 hours
0:12:26 > 0:12:28and then dumped with £30 or £20,
0:12:28 > 0:12:32after I've paid out all the bills.
0:12:32 > 0:12:36And what about you, Paula? Why are you not working at the moment?
0:12:36 > 0:12:41I've got a two-year-old little boy so I've been looking after him but...
0:12:41 > 0:12:43But you've got Steve, and your mother.
0:12:43 > 0:12:47- Yeah. The money's not good enough to go to work.- Well, that's it.
0:12:47 > 0:12:50That's the problem with me - I want to work
0:12:50 > 0:12:51but I can't afford minimum wage.
0:12:51 > 0:12:55You don't think working's better than not working,
0:12:55 > 0:12:57whatever the financial outcome?
0:12:57 > 0:13:01No, no, not at all, no. I just don't see...
0:13:01 > 0:13:05I mean, I don't want to be going out to work for 40 hours
0:13:05 > 0:13:07and missing my kids
0:13:07 > 0:13:13if I'm only going to receive a few quid extra for it.
0:13:13 > 0:13:16Do you understand? I'm missing my kids growing up.
0:13:16 > 0:13:20I can't see how the minimum wage is good enough.
0:13:20 > 0:13:22That's all. When..
0:13:22 > 0:13:25But a lot of people do work for the minimum wage.
0:13:25 > 0:13:28Well, the way it worked out for me, like I say,
0:13:28 > 0:13:30it was just not worth going to work for it.
0:13:34 > 0:13:37So what Steve Brown has done is make a straightforward calculation.
0:13:37 > 0:13:43Go out to work for very little extra or stay home and enjoy his children.
0:13:43 > 0:13:44He's chosen the later.
0:13:46 > 0:13:50And that presents politicians with a massive dilemma.
0:13:50 > 0:13:55The problem comes when the state tries to distinguish
0:13:55 > 0:14:00between those people who can't work and those who don't want to work.
0:14:00 > 0:14:05Between, what would have been referred to in Beveridge's time -
0:14:05 > 0:14:08highly controversial language these days,
0:14:08 > 0:14:11the deserving and undeserving poor.
0:14:11 > 0:14:13Here we are girls.
0:14:13 > 0:14:16Let's have a look and see what we've got.
0:14:16 > 0:14:17What's come up so far today.
0:14:17 > 0:14:20There's a domestic cleaner in Middlesbrough
0:14:20 > 0:14:24and must be reliable due to do general domestic cleaning.
0:14:24 > 0:14:26We can check that out for you.
0:14:26 > 0:14:29I went to a job club in Middlesbrough.
0:14:29 > 0:14:32- Hello.- Hello.- Hiya.
0:14:32 > 0:14:35So you are both looking for work.
0:14:35 > 0:14:38Definitely, carer, cleaner, anything you name it.
0:14:38 > 0:14:41- Minimum wage?- Yeah. 16 hours minimum.
0:14:41 > 0:14:44- 16 hours minimum.- Yeah. - And what you can't find anything?
0:14:44 > 0:14:46No. It's like, "Oh, yeah, I'll give you a number."
0:14:46 > 0:14:49But they never get in touch with me. They just blank me.
0:14:49 > 0:14:52So what about you? How old are you?
0:14:52 > 0:14:56- I'm 20.- Are you prepared to work in lower paid jobs?
0:14:56 > 0:14:58I am willing to work anywhere as long as it is a job
0:14:58 > 0:15:01and it gets me out the house.
0:15:01 > 0:15:04And how many of your friends are in this same situation?
0:15:04 > 0:15:06Oh, quite a few of them.
0:15:06 > 0:15:08I have done 60 applications in the space of a year
0:15:08 > 0:15:11and none of them have replied.
0:15:11 > 0:15:12They have not replied?
0:15:12 > 0:15:1560 in a year and nobody's bothered to reply to you.
0:15:15 > 0:15:18So the future is not looking terribly promising.
0:15:20 > 0:15:22It is just hard. Very hard.
0:15:22 > 0:15:26We will get there. We have to. We will just keep plodding on.
0:15:26 > 0:15:30Shop floor assistant. It's the national minimum wage.
0:15:30 > 0:15:34It is very hard not to feel sorry for people in that situation.
0:15:34 > 0:15:37They have been trying and in some cases trying for a very long time.
0:15:37 > 0:15:40Some of them have been out of work for a very long time.
0:15:40 > 0:15:42And it is tempting of course to say,
0:15:42 > 0:15:46"Well, try a bit harder, you will get something in the end."
0:15:46 > 0:15:48But the longer it goes on,
0:15:48 > 0:15:50the greater their sense of disillusionment
0:15:50 > 0:15:53and the greater their sense of failure.
0:15:57 > 0:15:58Numbers of workless households,
0:15:58 > 0:16:01where work has never been experienced in that house,
0:16:01 > 0:16:03has doubled since 1997.
0:16:04 > 0:16:08Gavin Poole runs the think tank The Centre For Social Justice,
0:16:08 > 0:16:11which was set up by the former Tory leader,
0:16:11 > 0:16:13now Welfare Secretary, Iain Duncan Smith,
0:16:13 > 0:16:17who asked it to suggest ways of reforming the benefit system.
0:16:20 > 0:16:23I think there's something wrong with a system
0:16:23 > 0:16:27that enables part of the population who could work to choose the option
0:16:27 > 0:16:29to live on benefits, and we think that's wrong.
0:16:29 > 0:16:32A lot of people are trapped on benefits,
0:16:32 > 0:16:33they're worse off by going into work,
0:16:33 > 0:16:36and that simply is not, that's not right.
0:16:36 > 0:16:39You're saying, therefore, cut benefits?
0:16:39 > 0:16:41All of the work that we looked at,
0:16:41 > 0:16:46we didn't make a call on whether the benefits were too high or low.
0:16:46 > 0:16:47But by definition they're too high
0:16:47 > 0:16:49if you're saying that work doesn't pay?
0:16:49 > 0:16:52No, by definition what we're saying is there's a complexity
0:16:52 > 0:16:54around what benefits are being paid.
0:16:54 > 0:16:56Why shouldn't you be saying,
0:16:56 > 0:16:58"Make 'em work because it's better for them?"
0:16:58 > 0:17:00An awful lot of people would agree.
0:17:00 > 0:17:02As soon as you start going down the road,
0:17:02 > 0:17:04"We'll force them, we'll make them,"
0:17:04 > 0:17:06- I think that's quite a strong, strong line.- Why? Why?
0:17:08 > 0:17:12I think the whole argument around enforced...
0:17:12 > 0:17:14OK, so what happens if they refuse to co-operate?
0:17:14 > 0:17:18We know there's sanctions, there's already sanctions in place,
0:17:18 > 0:17:20which is to encourage, that is to make.
0:17:20 > 0:17:23But it makes it sound like, "You are to work, you are to work."
0:17:23 > 0:17:26And actually what we say is you need to support...
0:17:26 > 0:17:27That's exactly the point I'm making.
0:17:27 > 0:17:30..you need to support, encourage, you need to mentor.
0:17:30 > 0:17:31And if that doesn't work?
0:17:31 > 0:17:33Then sanctions are applied. So I think...
0:17:33 > 0:17:37So sooner or later you get to the situation where you make them?
0:17:37 > 0:17:39You get to a point where that happens.
0:17:40 > 0:17:44More sanctions, eh? Is that where we're heading?
0:17:44 > 0:17:49Well, one way of making people work is to pay them so little in benefits
0:17:49 > 0:17:51they literally can't afford not to.
0:17:52 > 0:17:55Which is why some Eastern Europeans come here.
0:17:56 > 0:18:00Amongst them, a couple of Polish workers I met on the south coast.
0:18:02 > 0:18:04If you're out of work and on benefits in Poland,
0:18:04 > 0:18:07what do you get? What sort of income do you have?
0:18:07 > 0:18:09What you get is nothing, really,
0:18:09 > 0:18:11it's not enough to survive.
0:18:11 > 0:18:14You can just live for the one week, but not more.
0:18:14 > 0:18:18You cannot get the house benefit, er, house from the council.
0:18:18 > 0:18:19Nothing like that.
0:18:19 > 0:18:22If you get your month's benefits,
0:18:22 > 0:18:24- you can only live for one week on it?- About, yeah.
0:18:24 > 0:18:28It's definitely not enough to pay your rent.
0:18:28 > 0:18:30It's like getting £150 a month.
0:18:30 > 0:18:33Oh, really? Whereas here you might get £150 a week.
0:18:33 > 0:18:34Exactly.
0:18:34 > 0:18:38Why do you think it is that there are so many young men
0:18:38 > 0:18:43in this country who are living off benefits rather than in work?
0:18:43 > 0:18:47I think definitely the Government is...
0:18:47 > 0:18:52- Too generous.- ..too generous, compared to ours back in Poland.
0:18:55 > 0:18:57So there we are.
0:18:57 > 0:18:58A perfectly simple answer
0:18:58 > 0:19:02to the problem of how you get people off benefits and into work.
0:19:02 > 0:19:03You cut the benefits.
0:19:03 > 0:19:08You give them almost nothing to live on, as happens in Poland.
0:19:08 > 0:19:11But do we really want to do that sort of thing?
0:19:11 > 0:19:14Do we really want to force people into work
0:19:14 > 0:19:17by giving them absolutely no alternative?
0:19:22 > 0:19:24Well, many British politicians bent on welfare reform
0:19:24 > 0:19:26have looked for inspiration
0:19:26 > 0:19:29to one place where they did exactly that in the late '90s.
0:19:39 > 0:19:44Like us, the United States faced a rising welfare bill.
0:19:44 > 0:19:47Politicians feared that a sense of entitlement
0:19:47 > 0:19:52was producing a dependency culture, and public attitudes were hardening.
0:19:52 > 0:19:54So much so that Bill Clinton himself
0:19:54 > 0:19:57swore to "end welfare as we know it."
0:20:00 > 0:20:06And at the heart of the American proposition is one simple principal.
0:20:06 > 0:20:11If you want welfare benefits, you have to work for them.
0:20:12 > 0:20:16And so began what's been called America's welfare revolution.
0:20:16 > 0:20:21I went to see the man responsible for implementing these reforms,
0:20:21 > 0:20:24called Workfare, here in New York City,
0:20:24 > 0:20:26the welfare commissioner, Robert Doar.
0:20:28 > 0:20:31Commissioner, paint a picture if you would,
0:20:31 > 0:20:34of why it was necessary in this city
0:20:34 > 0:20:36to introduce some kind of Workfare scheme.
0:20:36 > 0:20:38What was going wrong?
0:20:38 > 0:20:41Well, I think our system had developed a sense of entitlement
0:20:41 > 0:20:44in people that came to the government seeking assistance,
0:20:44 > 0:20:47that they would do something without having to do anything,
0:20:47 > 0:20:51or do some cash benefit without them having to do anything in return.
0:20:51 > 0:20:55The benefits of receiving a benefit without working
0:20:55 > 0:20:57were greater than the benefits of going to work.
0:20:57 > 0:21:01So you've been saying to people, in essence,
0:21:01 > 0:21:05"Work, do your job, whatever the job may be,
0:21:05 > 0:21:07"or you lose your benefit, that's it."
0:21:07 > 0:21:10We said, "You need to go to work, we expect you to go to work.
0:21:10 > 0:21:14"If you don't go to work, we're going to talk to you about why you're not working.
0:21:14 > 0:21:18"We're always going to have something for you to do."
0:21:21 > 0:21:23So how's it working out?
0:21:23 > 0:21:26If you want benefits in New York City,
0:21:26 > 0:21:29you have to come to a place like this job centre.
0:21:29 > 0:21:31And you don't get the benefit
0:21:31 > 0:21:34unless you can prove that you've actually started job hunting.
0:21:34 > 0:21:37Yeah, how are you?
0:21:38 > 0:21:42Here I met one of the architects of the scheme, Professor Larry Mead.
0:21:42 > 0:21:44- Larry.- John, great to see you.
0:21:44 > 0:21:46- Good to see you.- Good to see you.
0:21:46 > 0:21:48Now this what we would call a job centre.
0:21:48 > 0:21:51- You'd call it a job centre, as well?- Correct. Yes, we do.
0:21:51 > 0:21:55But a rather different job centre from the sort that I'm used to.
0:21:55 > 0:21:58The most important thing is that a new applicant for aid
0:21:58 > 0:22:01would be faced very quickly with an expectation about looking for a job.
0:22:01 > 0:22:04So they don't... The very first, effectively, the very first thing
0:22:04 > 0:22:07they say to them is, "You've got to find a job"?
0:22:07 > 0:22:10Yes. Yes. You're expected to look for a job
0:22:10 > 0:22:13even while your application for aid is being considered,
0:22:13 > 0:22:14rather than later.
0:22:14 > 0:22:17So right up front, you face a work requirement.
0:22:17 > 0:22:19You have to work as a condition of aid.
0:22:19 > 0:22:21- It's a heck of a change, isn't it? - Yes, it is.
0:22:21 > 0:22:25- In a short space of time, it's been turned on its head.- Correct.
0:22:27 > 0:22:31Elaine Hewitt, the job centre manager, showed me around.
0:22:31 > 0:22:36Applicants come back here to talk about what their situation is.
0:22:36 > 0:22:38- Helping them to find a job?- Right.
0:22:38 > 0:22:42And that's what... The essence of this operation
0:22:42 > 0:22:44- is to help people find work. - Right.
0:22:44 > 0:22:48And what if people say, "I don't want that job." Flat out, "No"?
0:22:48 > 0:22:51Eventually, what happens to that person?
0:22:51 > 0:22:53Then they're failing to co-operate with our guidelines,
0:22:53 > 0:22:56and then that results in a denial.
0:22:56 > 0:22:58Meaning, in practical terms?
0:22:58 > 0:23:00Meaning no more assistance.
0:23:00 > 0:23:03- No more assistance? - Yeah, no more assistance.
0:23:03 > 0:23:05Do people often say, "Well, hold on a minute,
0:23:05 > 0:23:09"it is my right, my entitlement, to have this benefit"?
0:23:09 > 0:23:13Well, you know what, they used to say that, back in the days.
0:23:13 > 0:23:15Right now, I don't really hear that anymore.
0:23:15 > 0:23:18- Really?- Yeah.
0:23:18 > 0:23:22It may seem, indeed it is, a pretty tough approach.
0:23:22 > 0:23:24But one claimant I spoke to obviously had no resentment.
0:23:24 > 0:23:27- You'd been working... - Yes.- ..for a long time.
0:23:27 > 0:23:29- You'd paid your taxes.- That's right.
0:23:29 > 0:23:31- You're a good citizen. - I would think so.
0:23:31 > 0:23:34Then, through no fault of your own, you lost your job,
0:23:34 > 0:23:36because the firm was downsizing.
0:23:36 > 0:23:37That's right, that's right.
0:23:37 > 0:23:40Didn't you feel that you had an entitlement
0:23:40 > 0:23:44to benefit from the city, from the state?
0:23:44 > 0:23:47I didn't see it that way, I didn't feel that way.
0:23:47 > 0:23:50I felt that, I'm down now and the system's helping me,
0:23:50 > 0:23:54and with respect to getting out of the public assistance,
0:23:54 > 0:23:58if worst came to worst, if I had to take three, four jobs, I would do it.
0:23:59 > 0:24:03When these workfare reforms were introduced across the country,
0:24:03 > 0:24:05they had a dramatic effect.
0:24:05 > 0:24:10In one state, the number of people on welfare dropped by more than 80%.
0:24:10 > 0:24:15Here in New York, it was a more modest but still pretty hefty 26%.
0:24:16 > 0:24:20And the reforms caught the eye of some politicians back in Britain,
0:24:20 > 0:24:25earning Professor Mead an invitation to Downing Street last June,
0:24:25 > 0:24:27as the coalition Government
0:24:27 > 0:24:30began considering its own plans for welfare reform.
0:24:30 > 0:24:34To what extent are your fingerprints on the measures
0:24:34 > 0:24:36that are now being proposed in Britain?
0:24:36 > 0:24:41I think if they're on it, it's in connection with this basic idea
0:24:41 > 0:24:44that there should be a work obligation connected to aid,
0:24:44 > 0:24:46so we should not have entitlement.
0:24:46 > 0:24:49We should not give people money simply because they're low income.
0:24:49 > 0:24:52We should expect that they work in return for aid.
0:24:52 > 0:24:55I do think that's the idea which I claim ownership of,
0:24:55 > 0:24:58and I which I think has had some influence.
0:25:00 > 0:25:03But ultimately the American welfare revolution happened
0:25:03 > 0:25:06because the public were demanding change.
0:25:07 > 0:25:09The question for politicians in this country
0:25:09 > 0:25:13is whether the British public wants something similar to happen.
0:25:13 > 0:25:16We asked the polling organisation Ipsos Mori
0:25:16 > 0:25:18to conduct some research for us.
0:25:20 > 0:25:24'I talked to the chief executive Ben Page about the results.'
0:25:24 > 0:25:26Ben, what's the thing that most leaps out at you?
0:25:26 > 0:25:28What do they think of the welfare state?
0:25:28 > 0:25:32I think it shows that the British public's belief in the welfare state
0:25:32 > 0:25:35and the principals behind it is absolutely rock solid.
0:25:37 > 0:25:40We put a number of statements to a sample of British voters.
0:25:40 > 0:25:42This first:
0:25:42 > 0:25:44"It's important to have a benefits system
0:25:44 > 0:25:47"to provide a safety net for anyone that needs it."
0:25:48 > 0:25:52With that, a massive 92% were in agreement.
0:25:52 > 0:25:55Only 4% disagreed.
0:25:55 > 0:25:59Only four people in 100 would disagree with the idea
0:25:59 > 0:26:02that we need some sort of safety net and minimum standard.
0:26:02 > 0:26:04- You don't get bigger than that. - 92% agreement.
0:26:04 > 0:26:08There are very few things that more people would agree with
0:26:08 > 0:26:10in this country, so that's very clear.
0:26:11 > 0:26:15But dig a little deeper and you get a very different response.
0:26:15 > 0:26:18We put this statement to our sample:
0:26:18 > 0:26:22"The benefit system is working effectively at present in Britain."
0:26:22 > 0:26:26Well, only 23% of people agreed with that.
0:26:26 > 0:26:2963% thought that it wasn't working effectively.
0:26:32 > 0:26:35So how is the Government going to reform our system
0:26:35 > 0:26:37and cut the welfare budget?
0:26:37 > 0:26:40David Cameron says by £5.5 billion.
0:26:40 > 0:26:44Well, one of the first things they've done
0:26:44 > 0:26:46is target the long-term unemployed.
0:26:46 > 0:26:49And what they're doing under the new work programme,
0:26:49 > 0:26:50as they did in America,
0:26:50 > 0:26:53is to attach extra conditions to getting benefits.
0:26:55 > 0:26:59For many, in effect, that means going back to school.
0:26:59 > 0:27:03So up here you have these basic skills classrooms.
0:27:03 > 0:27:07And when you say classrooms, you're actually literally teaching people?
0:27:07 > 0:27:09- Yeah.- For how long would that go on?
0:27:09 > 0:27:13- It's 104 weeks.- Two years?- Yeah.
0:27:13 > 0:27:14You can have a look at these.
0:27:14 > 0:27:17Take these with you. This will give every single one of you
0:27:17 > 0:27:20an insight into barriers to employment opportunities.
0:27:20 > 0:27:23The Government hopes that using private companies
0:27:23 > 0:27:26to run centres like these and paying them by results
0:27:26 > 0:27:28will give them the best chance
0:27:28 > 0:27:31of cutting the number of long-term unemployed.
0:27:31 > 0:27:35OK, some people just don't want to work.
0:27:35 > 0:27:37Some people think they're better off on benefits.
0:27:37 > 0:27:41I can assure you, you're not better off on benefits.
0:27:41 > 0:27:44Some of you have motivational issues and confidence issues.
0:27:44 > 0:27:46What we try and do is to try and get you to see
0:27:46 > 0:27:48how working can benefit your life,
0:27:48 > 0:27:51how working can enhance your life at the same time.
0:27:51 > 0:27:54OK? It can. Trouble!
0:27:54 > 0:27:57It's one thing to prepare people for work,
0:27:57 > 0:28:00make them, help them want to work.
0:28:00 > 0:28:02But if the jobs aren't there?
0:28:02 > 0:28:04There are jobs out there.
0:28:04 > 0:28:08I think it was in April this year, there was nearly half a million jobs.
0:28:08 > 0:28:13I have never found it where we're struggling to actually get jobs.
0:28:13 > 0:28:17They won't always map exactly to the people that are looking for them.
0:28:17 > 0:28:18It's working with people,
0:28:18 > 0:28:21for them to be realistic with their expectations.
0:28:21 > 0:28:23Presumably, you're all looking for work?
0:28:23 > 0:28:24- ALL:- Yeah.
0:28:24 > 0:28:28I've been out of work for two years. I've got three children
0:28:28 > 0:28:31and a mortgage that I can't pay at the moment.
0:28:31 > 0:28:35It's got to the stage where you don't get rejection letters at all,
0:28:35 > 0:28:37it's just, "If you don't hear from us
0:28:37 > 0:28:41"within a couple of weeks, assume you haven't been selected."
0:28:41 > 0:28:45I'm no longer classed as unemployed, I'm on a training course,
0:28:45 > 0:28:49and it's the Government manipulating figures
0:28:49 > 0:28:53to make the unemployment figures look better than they are.
0:28:53 > 0:28:55Overcome barriers...
0:28:55 > 0:29:01Here, they have lessons in literacy, numeracy, even motivation.
0:29:01 > 0:29:02But you might raise an eyebrow
0:29:02 > 0:29:05at some of the other things they have to do.
0:29:05 > 0:29:08We got people to design a cupcake.
0:29:08 > 0:29:11We just got a lot of the little tiny fairy cakes
0:29:11 > 0:29:15and we got all the icing and the different decorating materials,
0:29:15 > 0:29:19little tiny icing balls and things, and then someone won.
0:29:19 > 0:29:22We got a little cup, a picture and a voucher.
0:29:22 > 0:29:25These are grown up men and women we're talking about here.
0:29:25 > 0:29:29- Yeah, yeah.- They've been through ten, 12 years of education.
0:29:29 > 0:29:33You're sure that what you're doing isn't treating them like children?
0:29:33 > 0:29:36No. It's about people feeling that they have a value,
0:29:36 > 0:29:38and that people care about what they do.
0:29:40 > 0:29:43The main problem we've got at the moment
0:29:43 > 0:29:48is that the system is treating everybody exactly the same,
0:29:48 > 0:29:54rather than taking into account individual circumstances.
0:29:54 > 0:29:58To class everyone from every background as needing that same...
0:29:58 > 0:30:03um, that same type of education.
0:30:03 > 0:30:05So you feel slightly patronised by it?
0:30:05 > 0:30:09- It's just crazy.- You have so many people coming in at one time.
0:30:09 > 0:30:13So that's why sometimes it feels like you're all being put into one category,
0:30:13 > 0:30:17because, really and truly, there's not enough hours in the day
0:30:17 > 0:30:20and there's not enough staff to deal with the whole situation.
0:30:21 > 0:30:25But behind all this, you see that simple idea.
0:30:25 > 0:30:28If someone is getting money from the State,
0:30:28 > 0:30:31there should be more conditions attached, or else.
0:30:32 > 0:30:34They don't have any choice,
0:30:34 > 0:30:36if they don't come to you, they'll lose benefits?
0:30:36 > 0:30:40Yeah, if they don't come to us for the 30 hours on the timesheets,
0:30:40 > 0:30:42and they don't participate and we dismiss them,
0:30:42 > 0:30:44they lose their benefits.
0:30:46 > 0:30:47So, back to our poll,
0:30:47 > 0:30:51and we put this statement to our cross-section of voters:
0:30:51 > 0:30:53"There are some groups of people who claim benefits
0:30:53 > 0:30:56"and who should have the benefits cut."
0:30:56 > 0:31:0176% agreed with that. Only 9% disagreed.
0:31:01 > 0:31:04So, who should have their benefits cut?
0:31:06 > 0:31:08Well, there were more than two million people claiming
0:31:08 > 0:31:10what was called incapacity benefit.
0:31:10 > 0:31:13But the Government reckons many, if not most of them,
0:31:13 > 0:31:15may not be entitled to it.
0:31:18 > 0:31:22In Tower Hamlets in London, I met Dr Sharon Fisher.
0:31:22 > 0:31:25Many of her patients have been claiming that benefit.
0:31:25 > 0:31:29When you look at the total figures of people on incapacity benefit...
0:31:29 > 0:31:31- Yes.- ..what do you think of that?
0:31:31 > 0:31:33Unbelievable.
0:31:33 > 0:31:36Two-and-a-half million people who are on incapacity benefits
0:31:36 > 0:31:38in the whole of the UK?
0:31:38 > 0:31:39Unbelievable.
0:31:39 > 0:31:43I do think there's exploitation of the benefits system,
0:31:43 > 0:31:44and I tell patients,
0:31:44 > 0:31:47I think it's not in your best interests to be off sick.
0:31:47 > 0:31:49And how do they react to that?
0:31:49 > 0:31:52Sometimes patients are adamant they need time off,
0:31:52 > 0:31:54that the previous doctor has signed them off,
0:31:54 > 0:31:57or that they've been off for a very long time
0:31:57 > 0:31:58and "What's different now?
0:31:58 > 0:32:00"Why aren't you giving me my time off?"
0:32:00 > 0:32:05As a clinician, I know that the longer the patient is off sick,
0:32:05 > 0:32:09the longer or the lower the chance of ever returning to work.
0:32:09 > 0:32:12So, you find that rather depressing?
0:32:12 > 0:32:16It's sad. Yes, it's very sad.
0:32:16 > 0:32:20Sad for the people involved and sad for society?
0:32:20 > 0:32:21Absolutely.
0:32:23 > 0:32:28So your local doctor no longer has the final say.
0:32:28 > 0:32:30More stringent tests have been brought in to flush out
0:32:30 > 0:32:34people claiming on health grounds when they shouldn't be.
0:32:37 > 0:32:41For some, that's just a correction of a previous political fudge
0:32:41 > 0:32:44that led to the incapacity bill rocketing up
0:32:44 > 0:32:47over the past couple of decades.
0:32:47 > 0:32:50What we started to do 20, 25 years ago
0:32:50 > 0:32:53is hide very large numbers of unemployed people
0:32:53 > 0:32:54on incapacity benefits.
0:32:54 > 0:32:57The Government at the time was happy for that to happen
0:32:57 > 0:33:01because it hid the scale of unemployment
0:33:01 > 0:33:04and the individuals were happy to go on incapacity benefit
0:33:04 > 0:33:06rather than jobseeker's allowance,
0:33:06 > 0:33:10because in most circumstances they were better off doing so.
0:33:10 > 0:33:11Better off by around 25%,
0:33:11 > 0:33:15and that's the money the Government's trying to cut.
0:33:15 > 0:33:18Figures show three quarters of new claimants who've been tested
0:33:18 > 0:33:22were deemed not to merit the benefit at all.
0:33:22 > 0:33:24Every week, 11,000 people
0:33:24 > 0:33:28attend centres similar to the one behind me here
0:33:28 > 0:33:30to go through that assessment.
0:33:30 > 0:33:32Makes common sense, you might think.
0:33:32 > 0:33:36Why should people get the benefit if they're not entitled to it?
0:33:36 > 0:33:37But it's political dynamite.
0:33:37 > 0:33:40You can imagine the headlines if it goes wrong.
0:33:42 > 0:33:46We made several requests to see this process in action,
0:33:46 > 0:33:49but all of them were denied.
0:33:49 > 0:33:51So I went off to West London
0:33:51 > 0:33:55to meet someone who's been through the system, Yvonne Power.
0:33:56 > 0:33:58Hello, pleased to meet you. How are you?
0:33:58 > 0:34:00- Hello, very nice to meet you. - Come in.
0:34:00 > 0:34:04She's far from happy with the treatment that she received.
0:34:04 > 0:34:08I was very, very ill. I had projectile vomiting,
0:34:08 > 0:34:11I couldn't eat, dizziness. I was just completely exhausted
0:34:11 > 0:34:15and I haven't been able to go back to work, obviously, since.
0:34:15 > 0:34:22I've recently had a diagnosis of chronic fatigue syndrome/ME.
0:34:22 > 0:34:27So, you went for an assessment. What happened then?
0:34:27 > 0:34:30I scored nil points. Nil points!
0:34:30 > 0:34:37- Out of a...?- 15, 15 is what you need to get, and I scored nil.
0:34:37 > 0:34:39Right. Were you surprised at that?
0:34:39 > 0:34:43I was extremely surprised, extremely shocked and surprised,
0:34:43 > 0:34:47and obviously very distressed, as well, because,
0:34:47 > 0:34:52um, how was I going to live, financially,
0:34:52 > 0:34:55when they were telling me that I wasn't actually entitled to it?
0:34:55 > 0:34:57So you launched an appeal?
0:34:57 > 0:35:02My appeal was successful. I didn't even have to attend the tribunal.
0:35:02 > 0:35:05So you have to be tested now, you have to be assessed,
0:35:05 > 0:35:09- every six months to see whether you can work?- Yeah.
0:35:09 > 0:35:10Why isn't that fair?
0:35:10 > 0:35:13Well, it isn't fair because my,
0:35:13 > 0:35:16my disability, hasn't changed in any way.
0:35:16 > 0:35:18But it might, I mean, you might wake up next week
0:35:18 > 0:35:20or next month and you know...
0:35:20 > 0:35:23I think that the system at the moment and the way that,
0:35:23 > 0:35:27um, you're dealt with is just very badly designed.
0:35:27 > 0:35:31You are just there for them to be able to tick a box.
0:35:31 > 0:35:36So back to our sample of voters. What do they think about this?
0:35:36 > 0:35:39Here is a statement we put to them:
0:35:39 > 0:35:41"We need stricter tests
0:35:41 > 0:35:43"to ensure people claiming incapacity benefit
0:35:43 > 0:35:47"because of sickness or disability are genuinely unable to work".
0:35:50 > 0:35:5584% of people agreed with that only 10% disagreed.
0:35:58 > 0:36:01But if the Government's worried about sickness benefits,
0:36:01 > 0:36:06it's more worried about another benefit costing three times as much.
0:36:09 > 0:36:11David Cameron says little has shocked him more
0:36:11 > 0:36:15since he came into office, than the bill for housing benefit.
0:36:16 > 0:36:20We inherited a system that cost £20 billion a year.
0:36:20 > 0:36:23We've been paying people to live in some of the most
0:36:23 > 0:36:25expensive areas in London, the UK, the world.
0:36:25 > 0:36:29And this is exactly the kind of place he's on about.
0:36:29 > 0:36:31Islington in London.
0:36:31 > 0:36:34Some of the priciest housing in the country.
0:36:37 > 0:36:40But there's not much social housing here,
0:36:40 > 0:36:42so the State pays huge amounts
0:36:42 > 0:36:45to private landlords to accommodate people on benefit.
0:36:46 > 0:36:49Which is why the Government's now capping it
0:36:49 > 0:36:51up to a maximum £1,600 a month.
0:36:53 > 0:36:56The councillor responsible for housing here says it's unreasonable.
0:36:56 > 0:36:57Because the caps
0:36:57 > 0:37:01the Government has imposed have been so draconian,
0:37:01 > 0:37:03somewhere like here they'll have a huge effect,
0:37:03 > 0:37:06creating a big gap between the rent people are expected to pay
0:37:06 > 0:37:09and the caps, which means a lot of families will have to move,
0:37:09 > 0:37:12and a lot will have to move out of Islington and even London.
0:37:12 > 0:37:15But looking at some of these houses which would cost
0:37:15 > 0:37:16at least £2 million.
0:37:16 > 0:37:19And many of them, not just in this square,
0:37:19 > 0:37:22but other squares in Islington, will be lived in by people,
0:37:22 > 0:37:25maybe in some cases, living entirely on benefits.
0:37:25 > 0:37:28You don't think there's any resentment from people,
0:37:28 > 0:37:30whether it's Islington or anywhere else,
0:37:30 > 0:37:34having to pay taxes to enable people on lower incomes than themselves,
0:37:34 > 0:37:38to live in houses that they themselves can't afford?
0:37:38 > 0:37:40Part of the problem in Islington is that if
0:37:40 > 0:37:43you are on a low income and you have a family,
0:37:43 > 0:37:45the only way you can properly afford to live here
0:37:45 > 0:37:48with stability, is through genuinely affordable housing.
0:37:48 > 0:37:51That comes back to, we should have more council housing,
0:37:51 > 0:37:53more social housing somewhere.
0:37:53 > 0:37:56When there isn't that social or council housing available,
0:37:56 > 0:37:59people do then get pushed into the private end of the sector,
0:37:59 > 0:38:02where some rent is covered by benefits.
0:38:02 > 0:38:04The benefits bill racks up.
0:38:06 > 0:38:08In this age of age of austerity should the taxpayer
0:38:08 > 0:38:11really have to pick up such a large bill
0:38:11 > 0:38:14to keep London supplied with low paid workers?
0:38:16 > 0:38:19We asked Islington Council to give us an example of the sort
0:38:19 > 0:38:22of people they fear will be driven from the borough.
0:38:22 > 0:38:25Ah, hello. There you all are.
0:38:26 > 0:38:28- My name is Eduardo. - Eduardo, hello.
0:38:28 > 0:38:31'Eduardo Celleri is originally from Ecuador.
0:38:31 > 0:38:34'Then he moved to Spain where he became a Spanish citizen.'
0:38:34 > 0:38:37- I'm Isaac.- And how old are you?- Nine.
0:38:37 > 0:38:40- You are nine? And do you like living here?- Yeah.
0:38:40 > 0:38:45'The family moved here 18 months ago and were eligible for UK benefits.'
0:38:45 > 0:38:46That's my family.
0:38:46 > 0:38:49This is your family? A very handsome family it is too.
0:38:49 > 0:38:50Family, yes.
0:38:50 > 0:38:54Now, you are a mechanical engineer,
0:38:54 > 0:38:57but you could not get work as a mechanical engineer here, could you?
0:39:06 > 0:39:08'But working as a cleaner means he's got a low income
0:39:08 > 0:39:12'and a four-bedroom flat in Islington doesn't come cheap.
0:39:12 > 0:39:18'So, the State pays out a large amount to subsidise this family.'
0:39:18 > 0:39:21How much is the rent on this apartment, on this flat?
0:39:21 > 0:39:22£2,300.
0:39:22 > 0:39:26This flat costs £2,300 a month? What do you get in benefit?
0:39:26 > 0:39:31Child Benefit and Working Tax Credit and housing.
0:39:31 > 0:39:35Right, most of the rent is covered by the Housing Benefit.
0:39:35 > 0:39:39How would you manage if the Housing Benefit were to be cut?
0:39:53 > 0:39:57There are some people who believe,
0:39:57 > 0:40:02including many politicians, of course,
0:40:02 > 0:40:07that because you are a foreigner, because you are not British,
0:40:07 > 0:40:11you should not receive benefits from the State.
0:40:29 > 0:40:33Have you ever thought of moving out of London to a cheaper town?
0:40:42 > 0:40:45You meet a family like that and it raises
0:40:45 > 0:40:47so many big important questions.
0:40:47 > 0:40:52Obviously a lovely family, you can't possibly not warm to them.
0:40:52 > 0:40:54Incredibly hard working,
0:40:54 > 0:40:57decent people doing the very best they can for their children.
0:40:57 > 0:41:01Their children ambitious too, working hard to learn English,
0:41:01 > 0:41:04doing all the things that you'd expect and hope that they would do.
0:41:04 > 0:41:06And one day, no doubt about it,
0:41:06 > 0:41:10if they stay, they'll be a great asset to this country.
0:41:10 > 0:41:13What country would not want to have them as its citizens?
0:41:13 > 0:41:19But at the moment, they are costing a lot in welfare benefits.
0:41:19 > 0:41:22Housing Benefit alone about £2,000 a month.
0:41:22 > 0:41:26And the big question you have to ask at the end of it all is,
0:41:26 > 0:41:30is this what the Welfare State is for?
0:41:33 > 0:41:38Here's another statement Ipsos Mori put to our cross section
0:41:38 > 0:41:40of the electorate in our poll.
0:41:51 > 0:41:55More than half agreed with that, 57%.
0:41:55 > 0:41:5629% disagreed.
0:41:59 > 0:42:02The last group the Government have targeted is one
0:42:02 > 0:42:04Sir William Beveridge would never have envisaged
0:42:04 > 0:42:10when he mapped out who should receive benefit all those years ago.
0:42:10 > 0:42:13In his day, single mothers were rare.
0:42:13 > 0:42:16Today, well, they're not.
0:42:16 > 0:42:20I spoke to Professor Paul Gregg at Bristol University.
0:42:20 > 0:42:23We are now in a situation where the support of a child
0:42:23 > 0:42:26in terms of the cash payments received
0:42:26 > 0:42:28is broadly equivalent to that for an adult.
0:42:28 > 0:42:32Whereas, roll-back 20 years, you would have got about
0:42:32 > 0:42:34one third that support for a child.
0:42:34 > 0:42:37Where we have increased generosity greatly is the support of children,
0:42:37 > 0:42:40and this was an attempt to reduce child poverty.
0:42:40 > 0:42:43The other side of this kind of argument, if you like,
0:42:43 > 0:42:48is that the very creation of that kind of safety net encourages people
0:42:48 > 0:42:52to perhaps exist on welfare payments longer than they otherwise would do.
0:42:55 > 0:42:58So, governments wanted to help poor children,
0:42:58 > 0:43:01they ended up giving their mothers an incentive not to work.
0:43:01 > 0:43:04Here in Knowsley, in Merseyside,
0:43:04 > 0:43:09the number of one-parent families is nearly twice the national average.
0:43:09 > 0:43:13This is a support group that helps young mothers who don't have a job.
0:43:13 > 0:43:17The government wants to get 300,000 more lone parents
0:43:17 > 0:43:20looking for work by making them find it earlier,
0:43:20 > 0:43:23not when your child's seven, but five.
0:43:23 > 0:43:25They leave school with no education
0:43:25 > 0:43:27and they've got no aspirations.
0:43:27 > 0:43:31Some young women may fall pregnant and think that's something,
0:43:31 > 0:43:33someone to love.
0:43:33 > 0:43:36- It's not "may", it's "do".- "Do", yeah.- A very large number do that.
0:43:36 > 0:43:39But the fact is, if they're not married,
0:43:39 > 0:43:43if they don't have somebody in the family who's earning an income,
0:43:43 > 0:43:48from the State's point of view, they can represent an enormous burden,
0:43:48 > 0:43:52if that's the right word, on the Welfare State, on the tax payer.
0:43:52 > 0:43:56Perhaps, for the rest of their lives, that's possible?
0:43:56 > 0:43:58- Because they... - It's really difficult.
0:43:58 > 0:44:00..they want to bring the children up.
0:44:00 > 0:44:03I think every woman is an individual.
0:44:03 > 0:44:06Every woman's got their own story, got their own background.
0:44:06 > 0:44:09I couldn't judge any woman for whatever decision
0:44:09 > 0:44:12that they decided to make on either going back to work
0:44:12 > 0:44:14or being a full-time mum.
0:44:14 > 0:44:17But these girls all want to get a job, they all want to,
0:44:17 > 0:44:19that's why they're here every day.
0:44:19 > 0:44:20So what we're going to do,
0:44:20 > 0:44:23we're going to start off talking about stress in our eyes.
0:44:23 > 0:44:25It's clear that for these mothers,
0:44:25 > 0:44:29the high rate of benefits is acting as a disincentive.
0:44:29 > 0:44:30My mum's worked all her life,
0:44:30 > 0:44:34she has to go and pay for tablets at the doctors and the dentist and that.
0:44:34 > 0:44:36Whereas, there's me, who gets me rent paid for,
0:44:36 > 0:44:38I don't pay for nothing in the doctors,
0:44:38 > 0:44:41I pay nothing in the dentist and sometimes it makes me angry.
0:44:41 > 0:44:44What is the point in working? If that's how it's going to be?
0:44:44 > 0:44:46But I do want to go and work.
0:44:46 > 0:44:49But this is what I'm saying, it's not that you don't want a job,
0:44:49 > 0:44:52it's the barriers that are in front of you getting that job.
0:44:52 > 0:44:53Like your child care.
0:44:53 > 0:44:59Even if I went to work, half my wages anyway would go on childcare.
0:44:59 > 0:45:01I'm not saying I don't want a job,
0:45:01 > 0:45:04but it wouldn't pay for my childcare and rent,
0:45:04 > 0:45:05and 'leccy and gas and shopping.
0:45:05 > 0:45:09You don't want to get your wages and go "Oh, it's gone".
0:45:09 > 0:45:11We get called for these interviews,
0:45:11 > 0:45:13they threaten to stop your benefits,
0:45:13 > 0:45:15and you go and there's nothing that works around you,
0:45:15 > 0:45:19you can't get your childcare paid, or you'll find a job where
0:45:19 > 0:45:22you have to be somewhere for eight o'clock, it takes an hour to get to.
0:45:22 > 0:45:25And there's no childcare places that can take your child
0:45:25 > 0:45:28at seven o'clock, do you know what I mean?
0:45:28 > 0:45:31It's not fair getting your child up at half five in the morning.
0:45:31 > 0:45:35Getting them out the house and stuff like that.
0:45:35 > 0:45:37And then you struggle and paying to go to work,
0:45:37 > 0:45:40having to pay towards your childcare and if the job
0:45:40 > 0:45:42doesn't pay good enough to support all that.
0:45:42 > 0:45:44It's like you go to work for nothing, isn't it?
0:45:44 > 0:45:49You feel like people are looking at you and judging you?
0:45:49 > 0:45:53Yeah, like I just bum everything off the social and I can't be bothered.
0:45:53 > 0:45:56It's one of them things, you say,
0:45:56 > 0:45:59"I would never get pregnant, I'd do this if I got pregnant",
0:45:59 > 0:46:03but it's not easy when you are there, in that situation, you know?
0:46:03 > 0:46:05To just say oh, I'd go and get rid of a baby.
0:46:05 > 0:46:07I was young, put it that way.
0:46:07 > 0:46:11Obviously you don't realise the impact of having
0:46:11 > 0:46:14a child in your life does to you.
0:46:14 > 0:46:17- You lack confidence when you've had a baby, don't you?- Yeah.
0:46:17 > 0:46:20Your body is not the same, you don't feel the same.
0:46:20 > 0:46:22So, you are not just going to go out...
0:46:22 > 0:46:24People who are critical of the Welfare State
0:46:24 > 0:46:27and there are plenty of them, will say actually
0:46:27 > 0:46:31what you should be doing is saying in effect "Pull yourself together!
0:46:31 > 0:46:33"Get out there and make something of yourself".
0:46:33 > 0:46:37But we do, but we don't say it like we are in the army.
0:46:37 > 0:46:39I would never say to one woman,
0:46:39 > 0:46:41"Right, it's time you got up and got a job and did this".
0:46:41 > 0:46:45Our young people who are born today are our future.
0:46:45 > 0:46:47And if they are going to grow up on benefits
0:46:47 > 0:46:50they still deserve the same rights as anybody else.
0:46:50 > 0:46:53It's not their fault that their parents are on benefits, is it?
0:46:53 > 0:46:56If we didn't have benefits what would happen to these children?
0:46:56 > 0:46:59That's the dilemma.
0:46:59 > 0:47:02Politicians want to cut the welfare bill.
0:47:02 > 0:47:05But how much pain are they prepared to inflict?
0:47:09 > 0:47:12They asked that question in the United States
0:47:12 > 0:47:14and the answer was, rather a lot.
0:47:19 > 0:47:22I spoke to deputy Commissioner Lisa Fitzpatrick.
0:47:22 > 0:47:24Here you are in New York City, saying,
0:47:24 > 0:47:26"You got to work, you got to get out there and work."
0:47:26 > 0:47:33Let's assume that a young woman applies for welfare.
0:47:33 > 0:47:38She's just had a baby, she has no job, she needs money,
0:47:38 > 0:47:40she says "I don't want to work.
0:47:40 > 0:47:45"I want to stay home and look after my baby". What then?
0:47:45 > 0:47:47She can keep claiming the benefits?
0:47:47 > 0:47:50No. In our process, during the application stage,
0:47:50 > 0:47:52if somebody refuses to work,
0:47:52 > 0:47:55then they could be rejected, the application could be rejected.
0:47:55 > 0:47:57The application for welfare?
0:47:57 > 0:47:58The application could be rejected
0:47:58 > 0:48:01if she is not otherwise exempt from the work requirements.
0:48:01 > 0:48:05- Then her application would be rejected.- What if she has no money?
0:48:05 > 0:48:07How does she... She has got to feed her child.
0:48:07 > 0:48:10She may be able to get food stamps and medical assistance,
0:48:10 > 0:48:12through a separate determination process,
0:48:12 > 0:48:15but for cash assistance, we have a work first motto
0:48:15 > 0:48:19and we expect everyone to use and accept work as a first opportunity.
0:48:19 > 0:48:20Right.
0:48:22 > 0:48:27And there are some really troubling aspects to this hard line approach.
0:48:29 > 0:48:32If Workfare really is working, as its supporters claim,
0:48:32 > 0:48:35then they have to be able to prove two things.
0:48:35 > 0:48:37One, that poverty is falling.
0:48:37 > 0:48:41And that's because people who were on benefits are now in jobs.
0:48:41 > 0:48:45They may not be massively better off but they are certainly no worse off.
0:48:45 > 0:48:50And the other thing they have to prove is that it's not a quick fix.
0:48:50 > 0:48:53And that it works not only when the economy is booming and there are
0:48:53 > 0:48:59jobs for all but when it's struggling as it is at the moment.
0:48:59 > 0:49:02And if that's the case, if it really is working,
0:49:02 > 0:49:04how do you explain the existence,
0:49:04 > 0:49:07in the middle of New York, of a place like this?
0:49:07 > 0:49:08And a queue like this?
0:49:12 > 0:49:16This soup kitchen and food pantry is a charity that doles out food
0:49:16 > 0:49:18to New Yorkers who've fallen on hard times.
0:49:21 > 0:49:23- Anything on here is two points.- OK.
0:49:23 > 0:49:27Financially, things have gotten dire and you have to make ends meet
0:49:27 > 0:49:32and thank God that, uh, we have places like this.
0:49:32 > 0:49:35And these are obviously much cheaper here than... these are free?
0:49:35 > 0:49:36Well, these are free.
0:49:36 > 0:49:39How cheap can you get, if not for free?
0:49:39 > 0:49:43Soup kitchens like these have become an integral part of the American
0:49:43 > 0:49:49welfare system according to Aine Duggan one of the directors here.
0:49:49 > 0:49:52We, in Britain, have unemployment. We don't have soup kitchens.
0:49:52 > 0:49:54You don't have soup kitchens,
0:49:54 > 0:49:59you also haven't encountered the atrocity of welfare reform yet.
0:49:59 > 0:50:00But you might.
0:50:00 > 0:50:02The atrocity of welfare reform?
0:50:02 > 0:50:05Welfare reform is one of those interesting debates in the US.
0:50:05 > 0:50:08I think the beauty for the rest of the Western World
0:50:08 > 0:50:11is that we are able to now look at the American System
0:50:11 > 0:50:15and see what actually happened and whether or not it was a success.
0:50:15 > 0:50:18And what we are seeing is that in the wake of this recession,
0:50:18 > 0:50:22that safety net has literally buckled and given way under the need
0:50:22 > 0:50:25among families, particularly families with children.
0:50:25 > 0:50:28But if you talk to, as I have just been doing,
0:50:28 > 0:50:30to City Hall here in New York,
0:50:30 > 0:50:33they say the system is working, poverty is falling.
0:50:33 > 0:50:37If you take a myopic approach to it, it was a very successful initiative.
0:50:37 > 0:50:40One of the things we did here in the United States was
0:50:40 > 0:50:44we just looked at the near term, um, successes.
0:50:44 > 0:50:47And so right after welfare reform was implemented,
0:50:47 > 0:50:49we were able to say things like
0:50:49 > 0:50:52"There's a higher number of, single mothers with children
0:50:52 > 0:50:55"earning because they're back at work".
0:50:55 > 0:50:58However, we have an unemployment rate that is practically double
0:50:58 > 0:51:01what it was at the beginning of the recession.
0:51:01 > 0:51:05In New York City, 1.5 million people living in poverty.
0:51:05 > 0:51:09So, in reality, what is happening is that we took welfare reform
0:51:09 > 0:51:13and we've used it as an excuse to cut and cut and cut.
0:51:13 > 0:51:16And to push more and more families out of the welfare system.
0:51:16 > 0:51:19This recession has certainly sent more and more families
0:51:19 > 0:51:21to soup kitchens and food pantries.
0:51:23 > 0:51:26It's also left people like Yvonne Fitzner and Sharon Tetrault,
0:51:26 > 0:51:31both middle aged professional women, wondering quite literally
0:51:31 > 0:51:34how they will survive now they have lost their jobs.
0:51:34 > 0:51:37When did your payments run out?
0:51:37 > 0:51:38March 2010.
0:51:38 > 0:51:42- So, more than a year now? - More than a year now. Right?
0:51:42 > 0:51:44How have you been coping?
0:51:44 > 0:51:46Um, doing whatever I can to survive.
0:51:46 > 0:51:49You wind up selling personal possessions,
0:51:49 > 0:51:51whether it's jewellery or furniture.
0:51:51 > 0:51:54My television was sold. I no longer have cable TV.
0:51:54 > 0:51:56My dining table and chairs are gone.
0:51:56 > 0:51:59I am sleeping on the floor of my kitchen.
0:52:00 > 0:52:05I can't imagine how I am going to pay my rent or my phone.
0:52:05 > 0:52:08Uh, I'm really, I'm scared. I'm just hoping for a miracle.
0:52:08 > 0:52:12You keep after yourself to keep your spirits up even though many times they drop.
0:52:12 > 0:52:15I go to, um, soup kitchens now.
0:52:15 > 0:52:18Seven days a week a different church offers dinner.
0:52:18 > 0:52:21- You don't know what to do? - I don't know what I'll do.
0:52:21 > 0:52:24There is no net, it's just full of holes.
0:52:24 > 0:52:26If you don't protect the safety net,
0:52:26 > 0:52:29you're next, you're next, you're next.
0:52:31 > 0:52:34There's no doubt people are suffering
0:52:34 > 0:52:37as a result of welfare cutbacks.
0:52:37 > 0:52:40One estimate says that 40% of recipients of the Workfare scheme
0:52:40 > 0:52:43have fallen through the safety net.
0:52:44 > 0:52:47How can Professor Mead possibly justify that?
0:52:48 > 0:52:50There is a problem here, isn't there, the hard facts.
0:52:50 > 0:52:52How many people stay in work?
0:52:52 > 0:52:56How many people go on to do better jobs?
0:52:56 > 0:52:59About 60% were employed, that is, they took jobs.
0:52:59 > 0:53:01The other 40% did not
0:53:01 > 0:53:04and there is debate about whether they are worse off or not.
0:53:04 > 0:53:06They are not working and not on welfare.
0:53:06 > 0:53:08But it's clear that overall,
0:53:08 > 0:53:11the economic effects of welfare reform are positive.
0:53:11 > 0:53:13- But are they? Are they?- Yes.
0:53:14 > 0:53:17The evidence seems not to be there.
0:53:17 > 0:53:21What you don't know is how many people go on to do better jobs.
0:53:21 > 0:53:24Well, we don't know over a long period of time.
0:53:24 > 0:53:27But we know over about 18 months after the initial reform.
0:53:27 > 0:53:32If you work, chances are, you get out of poverty within a couple of years.
0:53:32 > 0:53:35You don't know whether they continue to work after 18 months.
0:53:35 > 0:53:38No, and the reason they don't continue work is often
0:53:38 > 0:53:40the reason they went on welfare.
0:53:40 > 0:53:43Namely they are not organised enough to work consistently.
0:53:52 > 0:53:57So, if you're a British Politician bent on serious reform of
0:53:57 > 0:54:00the Welfare State and you've come here to America
0:54:00 > 0:54:02to see what they've done,
0:54:02 > 0:54:04what lessons do you take back with you?
0:54:04 > 0:54:09Well, what you learn very quickly indeed is that Workfare is not
0:54:09 > 0:54:14the magic bullet that so many people thought it was just a few years ago.
0:54:14 > 0:54:17But something has changed. Attitudes have changed.
0:54:17 > 0:54:23There is a growing realisation that if you want a welfare benefit,
0:54:23 > 0:54:28you have to work, one way or the other, in return for it.
0:54:39 > 0:54:42And it's that sort of attitude change that might be starting here.
0:54:45 > 0:54:48I came here to City Gateway in Tower Hamlets,
0:54:48 > 0:54:51a charity where they work with young people on benefits,
0:54:51 > 0:54:54who are trying to get into work or onto an apprenticeship.
0:54:54 > 0:54:58Anyone else who'd like to have a chat about what sort of career
0:54:58 > 0:55:02they are gearing themselves up towards? Cameron, do you want to?
0:55:02 > 0:55:05I want to start college and start work after that.
0:55:05 > 0:55:07Anybody else who is feeling brave?
0:55:07 > 0:55:10Be successful at my apprenticeship, keep the placement.
0:55:10 > 0:55:13- What about you? Are you ambitious? - I am, yeah.
0:55:13 > 0:55:15For six months I was at home,
0:55:15 > 0:55:18then I realised, no, this ain't the right way to life.
0:55:18 > 0:55:23So, I joined City Gateway and, yeah, this is what I want to do now.
0:55:23 > 0:55:27These young people volunteered to be here.
0:55:27 > 0:55:28What's driving many is
0:55:28 > 0:55:31they don't want to be like their parents. They want to work.
0:55:31 > 0:55:34Can I just ask about your parents?
0:55:34 > 0:55:36Because one of the problems with people being,
0:55:36 > 0:55:38younger people being out of work,
0:55:38 > 0:55:42is partly because their parents themselves are not in work.
0:55:42 > 0:55:45There isn't that sort of tradition of working in the family.
0:55:45 > 0:55:46How many of you people,
0:55:46 > 0:55:51how many of your parents are in work, in proper jobs at the moment?
0:55:53 > 0:55:54Oh, my God!
0:55:56 > 0:55:59So, mostly your parents are not in work? Yeah.
0:55:59 > 0:56:01My mum's on maternity leave at the moment.
0:56:01 > 0:56:03So she isn't actually working.
0:56:03 > 0:56:04And your father?
0:56:04 > 0:56:07- He don't work, he never has worked.- He never has worked?
0:56:07 > 0:56:09No, that's his life preference.
0:56:09 > 0:56:11If that's how he wants to live,
0:56:11 > 0:56:14let him live like that, but I am here to live my own life.
0:56:14 > 0:56:16They think training doesn't get you nowhere.
0:56:16 > 0:56:19Your parents think training doesn't get you anywhere?
0:56:19 > 0:56:21You didn't look at your parents and think,
0:56:21 > 0:56:23they don't work, so I guess I don't need to work?
0:56:23 > 0:56:27Nah, I want to do something with my life.
0:56:27 > 0:56:29I tell them, I want to change my life.
0:56:29 > 0:56:33- So you look at them and think I want to be different from them?- Yeah.
0:56:33 > 0:56:36Well, good luck to you.
0:56:36 > 0:56:38You, you don't want to?
0:56:38 > 0:56:41It's encouraging that these young people who had the worst possible
0:56:41 > 0:56:44start in life appear not to have the sense of entitlement
0:56:44 > 0:56:48that you might expect of people in their circumstances.
0:56:48 > 0:56:52But the hard reality is that they seem to be the exception.
0:56:52 > 0:56:56That sense of entitlement has grown and the public doesn't like it.
0:56:58 > 0:57:01And politicians respond to the public mood.
0:57:01 > 0:57:04In the many years I've been reporting on politics,
0:57:04 > 0:57:06one way or the other, in this country,
0:57:06 > 0:57:10I don't think I've ever seen quite such a strong consensus at
0:57:10 > 0:57:15the top of the political parties on both sides of the political divide.
0:57:15 > 0:57:19That something must be done to reform the benefit system.
0:57:20 > 0:57:23You know what your values are,
0:57:23 > 0:57:27but they are not the values being rewarded in our benefit system.
0:57:27 > 0:57:29Welfare began as a lifeline,
0:57:29 > 0:57:32but for too many it's become a way of life.
0:57:32 > 0:57:37We can never protect and renew it if people believe it's just not fair.
0:57:37 > 0:57:41Generation after generation in the cycle of dependency
0:57:41 > 0:57:43and we are determined to break it.
0:57:43 > 0:57:47So what is the future Welfare State for this country?
0:57:47 > 0:57:50Another Welfare revolution?
0:57:50 > 0:57:54Well, maybe, and this one if it does gather momentum,
0:57:54 > 0:58:00will edge us back towards the original Beveridge vision.
0:58:00 > 0:58:04And that would mean that the age of entitlement has ended.
0:58:12 > 0:58:15Subtitles by Red Bee Media Ltd
0:58:15 > 0:58:18E-mail subtitling@bbc.co.uk