'Work for benefits' plan unveiled
Unemployed people will be forced to work for their benefits, as part of welfare reforms unveiled by Work and Pensions Secretary James Purnell.
He told MPs that from now on, the longer people claimed, the more the state would expect in return.
The Welfare Green Paper includes plans to scrap Incapacity Benefit and make those jobless for more than two years work full-time in the community.
The Tories back the plans, saying many of the ideas were theirs first.
This shake-up will apply to all 4.5 million people on out-of-work benefits, but is expected to impact most on those on Jobseekers Allowance.
Signed off sick
Mr Purnell told the Commons he aimed to reduce those on benefit by a million over the next seven years.
Claimants will have to carry out four weeks' community work once they have been unemployed for more than a year.
After two years, they will be ordered to work full-time in the community.
Incapacity Benefit claimants will all move to the new Employment Support Allowance by 2013, which ministers hope will be regarded, for all but the most disabled people, as a temporary benefit.
People who have been signed off sick will have a new medical check with someone who is not their own GP.
Drug addicts are also being targeted, with the government expecting them to declare their problem and to embark on treatment in return for benefits.
Mr Purnell said the plans would "transform lives" and help achieve the government's ambition of an 80% employment rate.
"Instead, the longer people claim, the more we will expect in return. At three months and six months, claimants will intensify their job search and have to comply with a back to work action plan," he said.
"Work works and it's only fair that we can ensure that a life on benefits is not an option."
For the first time all parents on benefits will be able to keep their maintenance payments, he said.
And he pledged to "simplify the bewildering complexity of the benefits system".
The Conservatives say they will support many of the proposals, effectively neutralising any Labour backbench opposition.
But shadow work and pensions secretary Chris Grayling claimed the plans were a "straight lift" of those previously put forward by his party.
"Since these are Conservative proposals we will certainly support them," he said.
"I know you will have some difficulties getting them through your own party. Can I assure you we will help you get them through this House even if you have a backbench rebellion to contend with."
The Liberal Democrats have welcomed some elements of the Green Paper, but are reserving their judgment on whether to support ministers.
But former welfare reform minister Frank Field told the BBC's Today programme he doubted the proposals would make any difference.
"The key fault in the old system is being brought into the new system, and that is if you can get through the employment capacity test... you'll get onto a higher rate of benefit," he said.
Mr Field said he had been arguing for 10 years that there should be a single rate of benefit for people of working age who were unable to work. They should be funded via the Disability Living Allowance, not benefits, he said.
"The whole emphasis here, naturally, will be for people not to get jobs but to get onto the higher rate of benefit," he added.
And Labour left-winger Jeremy Corbyn said he was "surprised and disappointed" that the government seemed to be "punishing people for being poor".
In February government welfare adviser David Freud suggested less than a third of the 2.7 million people claiming the benefit were doing so legitimately.
Lib Dem work and pensions spokeswoman Jenny Willott said the government's plans "ignore the disincentive to work that our complex benefit system has created".
"The fact that over half of children living in poverty are in working households is largely ignored," she said. "Reforms must ensure that work really pays or we will see poverty levels rising in Britain."
Jon Sparkes, chief executive of the disability charity Scope, said he had "deep concerns about the tone of these reforms and the target-led ethos underpinning them".
He added: "Disabled people face a myriad of barriers in finding employment, including negative attitudes from employers and inadequate social care support.
"Punitive measures against individual disabled claimants will do nothing to remove these barriers."
Benefit rules change in Britain
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Premier Says France Bankrupt
France is bankrupt because of chronic budget deficits, the country's prime minister said Friday, pledging to balance the budget before the end of his term.
"The truth is that I am the head of a state that is in a state of bankruptcy due to its financing plan," Prime Minister Francois Fillon said in the Corsican city of Calvi. Fillon answers to President Nicolas Sarkozy, but heads the French government.
"I am the head of a state that has been in chronic deficit for 15 years," the conservative Fillon remarked, adding, "I am the head of a state that hasn't voted a balanced budget in 25 years."
"This cannot last," he concluded, saying he is obliged to bring the budget into balance before 2012, when France next holds presidential elections.
Sarkozy said he would try to bring the budget deficit down to 2.4 percent this year and erase France's annual deficit by 2010 - a goal shared by the 13 nations that use the euro - but says he cannot guarantee it until 2012.
Sarkozy says he needs more time to implement sweeping reforms to France's labor system. Other European leaders have expressed frustration at the delay and called for more French austerity.
Japanese Govt Borrowing from Private Banks to Pay for Social Health Programs
Japan to Turn To Direct Loans From Its Banks By STEPHANIE STROM
In a striking demonstration of how precarious Japan's financial situation has become, the government plans to borrow money directly from banks to fulfill its obligations to local governments.
Governments normally borrow money by issuing bonds, which is cheaper than taking out bank loans. Japan's unorthodox approach to borrowing now and the size of the shortfall -- 8 trillion yen, or roughly $76 billion -- have stunned economists and other market watchers. With one small exception, this is the first time since the days after World War II that Japan has taken such a step.
The amount is equivalent to roughly 2 percent of Japan's gross domestic product, and exceeds the 7.7 trillion yen the government has injected into troubled banks.
''The funding mechanism is breaking down,'' said David Asher, a research fellow in the Japan Program at the Massachusetts Institute of Technology. ''The dam is showing more and more stress fractures, and they're trying to put plaster on them.''
Concern is rising that Japan is overextending itself. The government's debts now match the country's G.D.P., and Merrill Lynch is predicting a rise to 150 percent of G.D.P. in two years.
The skyrocketing debt, justified by politicians as a way to keep a faltering economic recovery on track, is increasingly a point of contention within the ruling Liberal Democratic Party. But by sidestepping the reliance on the bond market, the new borrowing has placed a stark new emphasis on this crushing problem.
''By not issuing bonds, by taking on an intermediary like a bank,'' said Jesper Koll, who is chief economist at Merrill Lynch Japan and is typically upbeat about Japan's prospects, ''you are basically saying one of two things: either you don't believe in the efficiency of the financial markets or you're admitting you have a credit problem.''
Now, Mr. Koll said, the government runs the risk of replicating, on a smaller scale, the trap that brought many Asian economies to their knees recently. ''There's a mismatch because they're planning to borrow one-year loans, but the municipal deficits are not going away in a year,'' he said.
There are signs, too, that the government may expand its borrowing from banks, which are healthier than they were two years ago. A Finance Ministry spokesman said there were plans to cover shortfalls in another, unnamed ''special account'' this way, though the amount in question is far smaller.
The banks, for their part, are likely to welcome the plan. Although the Finance Ministry spokesman stressed that terms had not been set, the Nihon Keizai Shimbun, Japan's leading financial daily, said the government planned to pay 2.1 percent interest -- a handsome premium to the 1.6 percent the banks could earn buying government bonds.
Andrew Smithers, a prominent fund manager, is one of the few experts who put a positive spin on the plan, saying it will get more money into circulation, which many economists have advocated as a way of curing the economy's ills.
Because loan demand is low, banks have too much money sitting idle. ''It's a good measure,'' he said, ''because it further eases monetary policy and relieves pressure on the bond market, which will help lower real long-term interest rates.''
Japan has been suffering from a classic ''liquidity trap'': while an exorbitant amount of money is available for lending, companies and individuals are not borrowing as they try to reorganize their activities. Thus, the money is bottled up in the banks, idle.
While most people see the move as a sign of government desperation, it may also help some banks facing shrinking loan demand.
Masaaki Kanno, senior economist at J. P. Morgan in Tokyo, is also unconcerned. ''Japanese commercial banks are the largest buyers of government bonds,'' he said, ''so there's really no change.''
The government is battling to keep its ballooning deficit in check in the face of continuing signs that the economy is addicted to stimulus measures that require more and more debt.
In a speech to Parliament today, Prime Minister Keizo Obuchi said getting the economy on its feet would take precedence over paring the national debt. ''Fiscal reform is important,'' he said, ''but we cannot commit the mistake of undertaking it while the economy is not firm and before it is on the path of full-fledged recovery.''
Yet highlighting the discord within the government, Finance Minister Kiichi Miyazawa bemoaned the fact that the proposed budget would push government debts to 645 trillion yen, or $6.15 trillion.
Economic prospects are not bright. The Japan Center for Research estimates that G.D.P. fell by 1.6 percent in the latest quarter, suggesting that the government will have trouble meeting its target for 0.6 percent growth this year.
Hiroyuki Inoue, the center's senior economist, said the figures demonstrated that when government public-works outlays end, the economy falls right back into the doldrums. ''After the effects of government spending programs faded last summer,'' he said, ''the economy slipped back to the level it hit in 1998.''
Someone should teach those kids to fish.
Posted 21 July 2008 - 04:22 PM
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Posted 21 July 2008 - 04:28 PM
ahh! that's my friend. my desk is behind his.
They had an office section for about a minute or so. Only focussed in on this guy (stu?) who was talking to someone. You may have been in the background but I hadn't read you post at that time. Ah well.
btw this new welfare programme is going to be a piece of shit.
Posted 21 July 2008 - 04:45 PM
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Posted 22 July 2008 - 08:36 AM
Are you in Glasgow East Zero? Announcing this before the by-election is another daft thing about this, The Labour party telling the people that typical vote for them they are going to shaft them to appease a few people who voted for Blair and have been wooed by dough faced Cameron.
I live in the West. My particular area has been a Labour stornhold since forever. Even with the SNP taking Scotland by storm, Labour won here.
Posted 22 July 2008 - 04:46 PM
the SOMB and my work are freakishly coming together...i nearly just wrote a post about what job searching options you have available based on what benefit you receive, etc. i need to stop.
I'm unemployed, but I don't claim benefits. If they'll find me a job though, I'll gladly sign on.
Posted 22 July 2008 - 07:09 PM
You're killing independant le chaton!the SOMB and my work are freakishly coming together...i nearly just wrote a post about what job searching options you have available based on what benefit you receive, etc. i need to stop.
I'm unemployed, but I don't claim benefits. If they'll find me a job though, I'll gladly sign on.