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U.K. welfare plan: Saves money, but morally bankrupt

Like the poor, the workshy are always with us. We think of welfare scroungers, cheats, the professionally unemployed, but you don't need to search the housing projects and sink estates to find the workshy. Look round your office and spot the skivers, the avoiders, those who chatter brilliantly but never seem to complete the job.

Some of the idle become managers, but in Britain, the government has decided to clamp down only on those whose career indolence taxes the public purse. This week, Iain Duncan Smith, the Secretary of State for Work and Pensions, will present the government's plans to cut welfare payments and restore the work ethic to a generation reared at the teat of the welfare state.

The idea is to ensure that a wage will always be worth more than welfare. Henceforth, the long-term unemployed will be forced to pick up litter or do odd jobs for the elderly if they fail to turn up for work placements. If they refuse to complete 30 hours of unpaid labour, they will lose the £65 per week jobseeker's allowance. Predictably, opposition Labour MPs shrieked that the unemployed were being punished. On Monday, the Archbishop of Canterbury, Rowan Williams, said the measure would push vulnerable people into a "downward spiral of uncertainty, even despair."

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Outside Westminster (and Lambeth Palace), reaction to the idea of working for welfare ruffles few feathers. Invented in America by the Clinton administration, "workfare" was for years on Labour's policy agenda but was never made law. Most people seem to accept the premise behind these reforms, that the nation's work ethic has been eroded by the welfare state. If we can only wean people off welfare, they will bounce back as useful productive workers, having been re-energized by six daily hours of toil.

There is some U.S. evidence that workfare boosts incomes and reduces welfare dependency among single mothers, but what troubles me is the moral myth. If there is a policy principle that supports this (other than the need to reduce government debt) it is that work is morally good - more than about acquiring food, clothes, shelter and the satisfaction of various cravings.

People in affluent countries work for many reasons - to acquire status, to buy more stuff or to get rich and to show off to our friends and neighbours. We work more than we need and we do that to amuse and entertain ourselves for eight or more daylight hours that we might otherwise struggle to fill. In Britain and Canada, no one perishes without work; after an awful recession, the nation can still keep millions alive without their efforts. To encourage people to be productive, we have erected a dubious notion - people should work, not because it is useful, fun or necessary, but because working is morally good or ethical.

We don't know how many cheat the welfare system. I suspect the real cheats (rather than those who are chronically idle) are few in number but extremely clever. The British government reforms will not catch the big cheats who will delight in finding ways to continue claiming multiple benefits without picking up litter. Instead, it will employ contractors at large expense to drag up and down the street squads of depressed, irritable and resentful people clad in ill-fitting overalls.

Will "scroungers" acquire a work ethic picking up litter? They will acquire an urgent need to avoid loss of income but that is different to an ethic. Governments in Europe worry about a diminishing spirit of enterprise among the young. They think they see a work ethic in China but we know that many Chinese have family memories of gut-wrenching hardship. If Chinese work harder than British or Canadians, it is out of fear and the acquisitiveness of those desperate for a way out of poverty. The Chinese are not better people; they are just more desperate. If you don't think that is true, ask yourself whether the employees who committed suicide at Foxconn's Chinese factory lacked a work ethic or had just lost hope that their lives would get better.

We cannot change people's attitudes to work by taking away benefits. A tougher regime that might turn us all into a "Chinese" work force is politically impossible. All we can do is tip the balance of fear and greed temporarily in favour of turning up for a day with the dust cart. If that saves taxpayers a few dollars, so much the better, but don't kid yourself that it's ethical.

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About the Author

Carl Mortished is a Canadian financial journalist and freelance consultant based in the U.K. With a career spanning investment banking, journalism and consulting for global companies, he was for many years a financial writer and columnist for The Times of London. More

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