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Iain Duncan Smith Hints At Welfare Privatisation

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Iain Duncan Smith Hints At Welfare Privatisation

I don't have any bias yet but will it really happen? Savings certainly seem important in such a scheme as opposed to current situation where the indebted seem to be doing well.

Iain Duncan Smith has hinted that the future of Britain’s welfare system could rest in the arms of private insurance schemes.

Speaking to the Telegraph, the Work and Pensions Secretary says young people should be encouraged to save into flexible accounts, from which they can then draw out money at times of sickness or unemployment.

The model is very similar to unemployment insurance schemes in the United States, but would work more like systems that exist in the far East – such as ‘Fortune Accounts’ in Singapore.

Instead of a government-run pensions system, Singapore residents are required to save for their own retirement. “These savings can be used to buy life insurance and disability insurance, to make a down-payment on a home, or finance a child’s education”, says the Adam Smith Institute (pdf).

“Like a bank account, the Fortune Account (pdf) can be drawn upon when needed, with the crucial difference that it can only be accessed for specific and designated circumstances such as retirement, or temporary periods of unemployment, disability, or sickness, or to fund insurance for more expensive or longer-term contingencies.”

And instead of a government-run healthcare system, people in Singapore are required to save 6% of their annual income into medical savings accounts.

“We need to support the kind of products that allow people through their lives to dip in and out when they need the money for sickness or care or unemployment”, said Iain Duncan Smith.

He added: “We need to encourage people to save from day one, but they need to know that they can get some of the money out when their circumstances change.

Iain Duncan Smith said that although this is not yet official government policy, he is “keen to look at it, as a long-term way forward for the 21st century.”

He also told the Telegraph that businesses “have to change the sickness culture in the UK”.

“At the moment the system is all about you having to prove you are too sick to work when we should be saying can you do some work and how can we support you? We are the worst country at this.

“Businesses have to understand that if you let them go you will have to hire someone new and start all over again. There is no economic logic to this so how about investing a bit of money in them now and we will help and see if we can turn this person around.”

“There aren’t many good companies out there with good programmes to say I really care about your well-being because that costs me money. We are not good at that.

“This is to change a culture in business, just as the living wage is, to say value your workforce for God’s sake and invest in them.”

Edited by Fairyland

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he doesnt understand what welfare means.

he thinks its a "savings" account.

Total garbage but the sort of utter nonsense people like Cameron Johnson & Daily Mail readers will lap up like the good little pavlovian canines they are.

There seems to be a core of simpletons at the heart of the "One Nation" Tory party determined to take Britain back to the 19th century. Its quite pitiable.

Edited by R K

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he doesnt understand what welfare means.

he thinks its a "savings" account.

Total garbage but the sort of utter nonsense people like Cameron Johnson & Daily Mail readers will lap up like the good little pavlovian canines they are.

Daily Mail readers will love it, especially the retired ones who have of course "paid for their pension through NI". Might not be so popular with those in work.

Now if what he wants is a proper contributions based system (I suspect that might be his goal but he has to present something unpalatable first and then contrib. will be his compromise idea) then I say good luck to him, a contributions based system will help weed-out the work shy and benefits tourists.

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Sounds like the Tories have taken electoral support for welfare changes as removal of the safety net.

This is not what most conservative Britons want and is not even proper conservatism, the purpose of which is to prevent revolution while retaining stability.

The US system is crazy: a safety net for those that already can afford it.

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Great, so NI will be abolished as a first step I suppose.

Good one, funniest thing i've heard in a while :lol::lol::lol::lol:

These peolpe must thing we are all stupid.

They are trying to force us all to hand over everything we earn to the london financiers.

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Is it just me or have we just about had enough of Iain Dumb-phuck Smith

and his total hypocrisy when it comes to welfare?

Wish the "quiet man" would shut the **** up! Come the revolution...

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Sounds like the Tories have taken electoral support for welfare changes as removal of the safety net.

This is not what most conservative Britons want and is not even proper conservatism, the purpose of which is to prevent revolution while retaining stability.

The US system is crazy: a safety net for those that already can afford it.

Hard to see how most people on low incomes and those most vulnerable to being sacked will be able to save enough to act as a welfare safety net. They would probably need a change in employment law that if you are low paid you can't be sacked for 10 years whilst you struggle to build up enough savings to cover unemployment.

Note even with 10 years I doubt they would be able to save enough to cover unemployment.

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Shocking what power an x from 27% of the electorate gives you! They have played the anti-welfare card well; kept the pensioners onside.

For most people life is often a struggle and throws at you uncertainties.

The fact that property continues to be propped up at ludicrous levels means people will never be able to save enough.

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Thought that the lefties wouldn't like this one!

I save, I have done so since I was 8 years old when I stuck 50p away each week into the Hastings and Thanet BS. I don't want to be told how to save, or to have my savings ring fenced. I am happy to look after myself though.

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Don't think this is the direction the majority of UK voters want to go in. Put simply I would say people want a welfare system with the principles devised by Labour but the operational details implemented by the Conservatives - kind of where we are right now...

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If NI was good enough for the oldies, how come it is no longer fit for purpose for the young?

I have several years salary saved up which I could probably survive on for a decade if I had to. But I suspect I am a tiny minority. For most it is a struggle, and they'd be destitute without a safety net. Plus anyone can find themselves or their family in need of expensive medical care/unable to work for years on end. Almost anyone's financial buffer would be trashed by that.

I can seem some merit in an insurance system - perhaps we can call it national insurance, paid for by contributions from the working population and instead of the government of the day spunking it on winning votes, they would actually use it to provide insurance?

I do think they haven't really thought this through in other ways. A welfare system is precisely why so much of UK public are willing to load up with debt. They'd be a lot more risk averse if there was none.

Edited by StainlessSteelCat

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Thought that the lefties wouldn't like this one!

Do you mean left-wing tories?

I'm a tory, I think this is a terrible idea. And an unpopular one too. We don't want a US-style welfare state, and nor do we want a French one!

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That's fine if it means young productive people won't also be paying into a 'pot' for oldies to draw from. Which would hit the old far more than the young. There is no pot ffs. Either IDS has no idea how anything works or he doesn't understand that a (residual) social contract in our current system is probably the only thing that enables him and many others to '[sit] outside a café overlooking St James’s Park on a perfect summer’s day'.

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That's fine if it means young productive people won't also be paying into a 'pot' for oldies to draw from. Which would hit the old far more than the young. There is no pot ffs. Either IDS has no idea how anything works or he doesn't understand that a (residual) social contract in our current system is probably the only thing that enables him and many others to '[sit] outside a café overlooking St James’s Park on a perfect summer’s day'.

Probably that one. After Osborne's budget I'd suggest IDS should sit down with him and his civil servants and come-up with a plan.

How's universal credit roll-out going? Not well by the sound of it http://www.getreading.co.uk/news/local-news/universal-credit-roll-out-chaos-say-9633051

It ought to be remembered that IDS was ditched as party leader because the Tories considered him incapable of leading the party to victory.

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Another IDS brainwave, is this one going to be filed next to his one about giving a free house to former JSA claimants who hold down a job for a year?

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He should concentrate on making the present safety net work. In case he's forgotten we are already paying NI. My limited experience of claiming for family members is that the system is near collapse, overly complex and beaurocratic, arbitary, often unfair, and leaves the most vulnerable left to die.

Why hasn't he yet sorted out the delays and mistakes to payment of benefits (at least half the people at food banks are there because of this). How can it possibly take over a year to assess someone for disability ? There are over 3,000 claims in this category. Its a bit rich of him blaming businesses for not treating the sick well, when his own department are an absolute disgrace. Does it really save money to have non medical staff at ATOS assess people when around half the claims win at appeal ? How much money is this wasting ? Universal credit has wasted vast amounts of money on failed IT systems.

Iain Duncan Smith doesn't strike me as up to the job. His CV was a load of tosh so why am I not surprised its in such a mess. Instead of subsidising BTL with tax breaks, and middle income families with tax credits, we should be providing a REAL safety net that can be relied upon. OR we should scrap NI.

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I think you will find that IDS understands exactly the situation but is above it all as his family receive grants not benefits and there s a world of difference between the two .... grants are measured in hundreds of thousand of pounds and benefits are tens of pounds.

Probably that one. ..

Probably. Then the future would trend towards one of two broad scenarios:

1) Establishment/parasite figures and their entourage implicitly excluded from public interaction.

2) Everyone else explicitly excluded from public interaction where establishment/parasite figures and their entourage are present.

Not many winners in either scenario. Try finding the real population in downtown Kuala Lumpur or Bangkok or even Singapore that he heralds. And try finding the 'leaders' anywhere else, beyond the comfort of a gated community, stormtroopers or a bullet proof car.

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Have the Tories really thought this through, or just playing politics to make Labour look the party of welfare?

1. Budget surplus planned = aggregate demand removed from economy.

2. Now savings based welfare. Great idea.. but welfareless societies tend not to be high spending, consumer ones. As err everyone is saving like mad 'for a rainy day.'

3. Then there is all the 'savings as stored housing wealth' all the unearned economic rents captured by landlowners and homeowners, without them contributing a single bean towards it (only taking from what I can see).

Could be a great popcorn moment ahead or pitchforking ahead for the Tories.

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They've been wheeling out similar proposals for decades and nothing much has ever come of it usually suggesting some amazing model based on the US - forgetting that a lot of the basic ideas for the UK's current benefits/welfare under both Conservative and Labour are already based on ideas imported from the US (tax credits etc). One day a serious effort might be made to introduce something like he suggests of course.

In the meantime it seems the UK has still got fiddling around the edges and currently it's a bit off here and a bit off there and that's mostly dated into the future.

Edited by billybong

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They've been wheeling out similar proposals for decades and nothing much has ever come of it usually suggesting some amazing model based on the US - forgetting that a lot of the basic ideas for the UK's current benefits/welfare is already based on ideas imported from the US (tax credits etc). One day a serious effort might be made to introduce something like he suggests of course.

In the meantime it seems the UK has still got fiddling around the edges and currently it's a bit off here and a bit off there and that's mostly dated into the future.

Ah right. Yes it seems the ideas stem from the faux-liberal/libertarian Adam Smith Insitute & US Heritage Foundation.

http://www.adamsmith.org/research/reports/the-fortune-account/

http://www.heritage.org/research/reports/1997/08/bg1133

We could of course just have a normal contributory-based means tested system, but that would be too obvious.

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