Tory ‘something-for-nothing’ culture: The real reason the economy has bombed

"Getting them off-benefit is what we're going to do," yelled Iain Duncan Smith on Question Time last year. But why bother, when they can be so profitable for companies taking part in Mandatory Work Activity schemes?

“Getting them off-benefit is what we’re going to do,” yelled Iain Duncan Smith on Question Time last year. But why bother, when they can be so profitable for companies taking part in Mandatory Work Activity schemes?

“We’re going to end the ‘something-for-nothing’ culture.”

Sometimes a phrase stands out from everything else that’s said around it, launches itself at your face and forces you to confront the enormity of the lie it encapsulates. You knew this was going to end badly, the moment Iain Duncan Smith (Vox Political’s Monster of the Year, 2012, let’s not forget) opened his face and uttered the words.

He was trying to say that people on Jobseekers’ Allowance (JSA) should not expect to get the benefit without putting something back into society – totally bypassing the fact that they have either already paid towards it, via taxes paid while they were in a previous job, or they will in the future, when they manage to get a job (if such a thing is still achievable in a Tory-led UK).

This was to justify the many ‘Mandatory Work Activity’ schemes onto which jobseekers are currently being put by the thousands, and for which they are being paid only in JSA.

It was only a matter of time before someone identified the flaw in the logic, as Alex Andreou did in the New Statesman when he, rightly, wrote: “Such schemes do not end the “something for nothing culture”. They simply elevate it to the corporate level.”

How many weeks was Cait Reilly supposed to spend stacking shelves at Poundland – was it four? Let’s say four. So assuming 30 hours a week, if she had been employed on the minimum wage, she would have earned £742.80.

Instead, she would have received JSA at, what, £56.25 per week? That’s £225. From the taxpayer, not Poundland.

So Poundland, which runs more than 390 stores and whose annual profit in 2010 was £21,500,000, would have had the benefit of nearly £750 worth of work, for nothing. But the gravy train doesn’t even stop there!

Employees of all profit-making companies are taken on because they add to the firm’s profits in some way. Therefore we can assume that, as a result of a person stacking shelves at Poundland, a shopper will come along, see something the stacker has stacked, and buy it – creating a profit for the company.

How many times would this happen during a jobseeker’s four-week tenure on ‘Mandatory Work Activity’? There’s no way of knowing. Let’s apply a conservative estimate based on the standard levels of a fiscal multiplier, at the low end, and say that adds a further 60p to the value of every pound that Ms Reilly would have earned.

Total: 1,188.48 profit for Poundland.

Now multiply that by the number of people going through ‘Mandatory Work Activity’ and you’ll see how much these companies are making, courtesy of the taxpayer – because, don’t forget, working people are paying for jobseekers to make money for these firms. We know 878,000 people were put on these schemes between June 2011 and July 2012 – that comes out as 752,571 in a year, on average.

Total profit for companies using people on ‘Mandatory Work Activity’ should therefore be: £894,416,090. Nearly £1 billion.

Loss to the taxpayer: £16,933,000.*

If that isn’t enough to get you hot under the collar, consider this: The profits created for companies by ‘Mandatory Work Activity’ go to company bosses and shareholders, all of whom may be expected to be rich already. They won’t be putting that money back into the economy; they’ll be banking it. Possibly offshore.

If they had employed those jobseekers and paid them at minimum wage, that would have put £559,010,060, per year, back into the economy. These workers would have spent the money in their communities, on commodities that they needed, thus providing a valuable boost to shops and businesses that have been deprived of this support by Coalition government policies.

And the companies concerned would still have made £335,406,030. More than a third of a billion pounds – not to be sniffed at!

It’s mathematical proof of the Conservative Party’s economic incompetence. Making the rich richer and the poor poorer will ruin the country.

*This article does not include payments to Work Placement Provider companies because, not having gone through this system myself, I’m not sure whether it should be applied or not. My understanding is they would get £600 per referral, with higher figures if a jobseeker actually got a job afterwards. Can anyone confirm this is what would happen here?

15 thoughts on “Tory ‘something-for-nothing’ culture: The real reason the economy has bombed

  1. Mystified & Ancient Order of Normal

    If any group get something for nothing, it is the MPs. The ‘expenses’ they claim for 2nd homes so that they rent out their other home to their next door MP for £,1,500 pcm. Meals, drinks, travel etc etc… these bastards claim far more in a year than an average benefits claimant would expect in 15+ years.

    Let’s remember, 2 million people have lost their jobs since 2010 due to Tory policies, most were very happy in their jobs, getting paid, paying taxes, spending in shops etc. Now they are called scroungers despite not actually wanting to be out of work but forced out of work due to the Nasty party.

    I look forward to 650 MPs handing back all the BENEFITS they claim… sorry ‘expenses’, must word things correctly or it will be deemed illegal, isn’t that right IDS 😉

  2. No job, no benefits, no income for a whole year. Thanks, Cleggy.

    Just dismaying. What’s worse is that we’re probably in for another fifteen years of this unelected Tory Reich. I feel sick every morning, wondering what new cruelty they’ll come up with next. I wish I could afford to emigrate, but I can’t even afford to live inside a building any more.

  3. chibipaul

    I think ending a something-for-nothing culture is a really good idea!
    Businesses getting labour that they don’t have to pay for is disgraceful and should be stopped.

    But that is the only way you will get everyone off benefits isn’t it Herr Schmitt.
    The economy cannot support full employment. So you will have to keep handing out free labour if you wish to achieve that goal.

    So there will still be a something-for-nothing-culture or people on benefits.
    You can have that for nothing btw
    Moronic little ratbag.

  4. Duncan McLean (@A_D_McLean)

    ““We’re going to end the ‘something-for-nothing’ culture.”

    “Sometimes a phrase stands out from everything else that’s said around it, launches itself at your face and forces you to confront the enormity of the lie it encapsulates.”

    You think you guys have problems. At least IDS stands as a Tory.

    When your Labour Leader – that’s right, your Labour Leader, says –

    “Scotland cannot be the only something for nothing country in the world.”

    you know the game is up and the lunatics have taken over the asylum.

    Apparently, the SNP are betraying the poor by standing up for universal benefits such as free prescriptions, free education and free social care – unlike Labour, who ended their last term in government standing up for non-doms and multi-national tax avoiders.

    Read the rest of Johann Lamont’s speech and weep for the inheritance the current crop of Labour leaders have thrown away.

    The Westminster mindset is now a major block to social progress.

    Scottish independence will deliver a huge blow to their self-importance and institutionalised corruption – it is time the left in England, Wales and NI got behind it.

  5. Phil The Folk

    Lets get this straight…when the Tories go on about the something for nothing culture, they need to look at their own front bench, because none of them have ever held down a proper job, and they inherited all their wealth, now that’s the something for nothing culture that needs to be dealt with! Yes????

  6. kittysjones

    The aristocracy are the real ‘something for nothing’ culture, they think they are entitled to everything, whilst everyone else deserves nothing. The Tory-led Coalition baffles us with bullshit like ” We need to ‘incentivise the unemployed into work’ by taking money from them. BUT the wealthy need to be ‘incentivised’ by having OUR money handed to them. Talk about contradictory, incoherent bollocks!
    That’s Tory I d e o l o g y for you.

    Great work Mike .

  7. Thomas

    With a few notable exceptions, our MPs are more greedy then we could ever hope to be. Moat cleaning, duck houses ect, and they put the blame on us. I think I’ll waste my vote rather then voting for any of the big three parties.

  8. lorraine

    they are like spiteful children….we tell them no over the mps expenses scandal,so they turn right back round and steal it all back from the poor,disabled and job hungry people. rubbing our faces in the fact they intend to keep the rich rich and all parlimentary priviliges at the maximum.

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