Select Committee on Social Security Minutes of Evidence

Examination of Witness (Questions 80 - 87)



  80. I was going to ask you how you got over the argument about work disincentives, because my concern was that if somebody saw this money coming, in a few weeks' time, and they had a job offer, they would say, `Well, I'm not going to take the job offer because I'm going to end up losing X hundred pounds from the DSS, if I take the offer. I'm going to wait until I've got the money and then perhaps start looking for a job'?
  (Professor Craig) With respect, I think people make rather more subtle calculations. We have heard already, both from myself and from the previous speaker, and indeed from members of the Committee, that people on low incomes make heroic efforts to budget on extraordinarily low incomes. Now I think people make judgements about what is in their medium and long-term interests as much as in their short-term interests. I think, if somebody is going to be offered a job, at a reasonable income, they will do some sums and think, `Well, actually, is one measly six-month payment from the Social Fund going to outweigh the financial benefits from a decent-paid job?' I think I know what my answer would be.

  81. I certainly agree that people do make those calculations, and that is the better-off calculations that people do make, but often they turn out to be relatively marginal, and what I am concerned about is that your idea would push people, if those calculations were utterly marginal, to take the decision not to take the job, rather than the other way round?
  (Professor Craig) I think there are questions of carts and horses here. A lot of social security policy in this country has been driven by this notion that there are millions of people out there who would much rather be on benefit than be in work; all the research evidence actually points in the opposite direction. A large majority of people in this country would much prefer the dignity, the security, the pride of working, rather than scrabbling around on a parsimonious income. And I am afraid that if five people out of a hundred fraudulently claim social security and we construct a social security policy for the other 95 people on that basis, I think that is a disaster.


  82. I want to ask you a final question, which is what you think we should concentrate on in the course of this inquiry, which has just started this morning, but, as a penultimate question, you suggested to me that you had kind of given up, 1992 was a high year for you—
  (Professor Craig) Adjourned, I think.

  83. And then nobody paid a blind bit of attention, so you went away. One would think, and this is straying into the politics of the thing, that a new Government that came into power and arguably did a lot, in terms of encouraging work incentives, but, as part of their strategy, also had security for those who could not work, that they would be knocking on people's doors, professional researchers, like you, and asking how the support for those who cannot work could be better provided. You seem to think that research work on the Social Fund was just out of fashion, and therefore people were losing interest. Is that a sense that you have? I think the Government certainly can argue a case that they have done a lot, whether you think it is right or not, to try to support people into work, but the other half of the equation, of supporting those who cannot, perhaps has had maybe less attention paid to it? Is that something that you would recognise, from a professional research point of view?
  (Professor Craig) I think there are a number of things. Clearly, as a researcher who depends very often on getting funding for research, there comes a point when research funders are no longer interested in funding research if there is very little else to say on the subject. And, I have to say, with the Social Fund, we had reached that point in 1992. There has been a very wide range of research, some of which I had contributed to, as you know, which pointed all in the same direction. The only person who disagreed with the research findings was Peter Lilley, who claimed that all the evidence showed that the Social Fund worked, whereas the evidence, in fact, was showing that the Social Fund was not working, even in terms of its own limited objectives. Now I am enormously heartened that there is some interest now in the Social Fund. I have been biding my time, and, you may have seen, I wrote an article in The Guardian three years ago,9 on the tenth anniversary of the Social Fund, as an attempt, as it were, to keep a candle burning in the window. But in the last year I know there have been mutterings from No.10 Policy Unit, I know the Cabinet Office is interested, your interest is extremely welcome, and I think I have spoken to four or five academic colleagues in other universities who have been working on this issue, as I have, on and off, over the last ten or 12 years, who have been saying, "Hooray, at last, and about time too." Because this really comes back to my original point, that without thinking about the adequacy of benefit one cannot think about the Social Fund, and without thinking about the Social Fund one cannot really think about the abolition of child poverty.

  84. Just finally then. Time may be limited on this inquiry because events may overtake us but, on a short inquiry, what would be the signposts that you would give us, obviously your evidence is very compelling and I find it very interesting and stimulating, but what kind of signposts would you point us to, in the course of this short inquiry?

  (Professor Craig) Signposts in terms of other evidence—

  85. Just what we should be looking at and what we should focus on, in terms of the next six weeks, or eight weeks, of the inquiry; what would be your priorities?
  (Professor Craig) I certainly think it would be important to look at the cost of administering the scheme, because these are one of the costs that kind

9  The Guardian, 5 April 1998. It won't be you.

of disappear without trace, in Government statements about the effectiveness of the scheme. And I think the administration and management has been an enormous headache; and if you were able to take evidence from Social Fund staff, as opposed to their managers, I think they would probably echo this point. Secondly, I think, the official statistics that are presented, I have a set, I must be a very sad character, of the annual reports on the Social Fund since 1988,—

  86. They may be worth money eventually, yes.
  (Professor Craig) And it is quite clear that the statistics are beginning to obscure more than they clarify, as it were. As criticisms begin to be made about the Social Fund, so the statistics on which those criticisms are made are beginning to disappear from public view. It is no longer possible to give you the sort of detailed, fine-grain analysis, in the last two or three years, that I was able to do in the first four years, so I would want to ask Social Fund managers why this is the case. I think the relationship between income and one-off grants, obviously, is important, in terms of their boundary. And I would certainly welcome, and I am very heartened again to hear it, some interrogation of the issue of ethnicity and race; because I think in all of the Department of Social Security's deliberation this is something which is totally overlooked.

  87. Indeed; we are finding that ourselves, in all these inquiries we are doing, but I do not think we will have much chance to address this much more in the course of this Parliament.
  (Professor Craig) If I may just say one additional sentence. I was somewhat appalled by the comment made by the Government Minister on the issue of pensioner poverty, that because there was no evidence on the relative poverty of pensioners from minority ethnic groups this, therefore, by definition, was not an issue to be explored. It seemed to me you should get the evidence and then explore it, and the same would apply to the Social Fund.

  Chairman: We are all agreed on that. Professor Craig, thank you very much; your evidence has been very helpful. Thank you very much for your appearance this morning.

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