The Hardest Hit: More Than Market Failure

Mark Littlewood appeared on You & Yours today, discussing the impact of spending cuts on disabled people and whether disabled people are the hardest hit. It seemed odd that the Director of the Institute of Economic Affairs, the UK’s original free market thinktank, should appear on this show, given the topic. The level of ignorance that this man showed was astounding, until you remember that it was a free-market, light-touch regulation approach to banking which caused the financial crisis. One of the suggestions he made on the show for a flexible, low-cost welfare system was devolving responsibility to local authorities. Such a move would probably cost more as each locality duplicated its own system, and it seems odd that an economist would make such a ludicrous suggestion. That is until you remember that the Director of the Institute of Economic Affairs isn’t even an economist.

He expressed his horror that 10% of the working age population of the UK is deemed incapable of work. This is misdirection – lying – pure and simple. The actual figure is a couple of hundred thousand claimants fewer than he suggested. Some research shows that the figure is in line with other developed countries, however “preposterous” Mark may think it is. In developing countries impairments that are routinely treated by the NHS are quite deadly and often completely undiagnosed, so comparing the UK’s rate of incapacity with the world’s in general is spurious. Claiming that this is “surely, far too high” as Mark did, and asking “what sort of plague has hit the UK?”, is unhelpful and plumbs the depths of ignorance.

He then roundly patronized those severely disabled by “terrible afflictions” who are, apparently, “desperate and deserving”, but suggested that unless disabled people were complete and physical mental wrecks “it is their responsibility to overcome it”. Mark suggested that people must take responsibility for themselves by taking out insurance policies. This overlooks the fact that millions of people claim Disability Living Allowance (DLA) and other disability benefits right now. Many, if not most, of those people won’t be able to apply for insurance anymore. Private insurance may be an option for the future, although there are question marks regarding affordability for the lower deciles of the income distribution, but the discussion was concerning the disabled people of today and suggesting responsibility and insurance was an empty, straw man argument.

The conversation reached its nadir when Mark attempted to bluster his way through the interview by repeating that “there is no money left” and, as such, that disability benefits were unaffordable. There are many possible answers. First, this is an argument made by the Director of the IEA in the full knowledge that a spokesperson for the Disability Benefits Consortium would have no reply. Secondly, there is still money being spent – and the question is about why disability has been downgraded as a priority.

Thirdly, there is a lot of money left. The UK is one of the richest nations in the OECD, and the financial crisis has not changed that – it is only that the super-rich, including Mark with his six-figure salary, have moved this money where it does not benefit the nation at large. Fourthly, even if there were no money left, we should borrow sensibly – cutting public expenditure dramatically at this time will serve only to reverse economic growth, widening the fiscal deficit. Finally, Mark vehemently denied that disabled people were hardest hit by the cuts, The Centre for Welfare Reform has shown comprehensively that 25% of the cuts fall on the 3% of the population who are most severely disabled. £9bn of the total £89bn deficit cutting programme affects disabled people directly. Mark’s argument was so pathetic that it deserves no airing.

Mark was worried on air that he was coming across as “hard-hearted”. Have no fear Mark, you did nothing of the sort. You just came across as an idiot...