Brit Welfare Or Class Warfare? What Would Borgen Do?

Last week, think tank policy-wonks, rent-a-rant political bloggers, assorted pressure group spokeswo/men were all encouraged to express indignation or admiration for George Osborne in equal measure.

‘The un/deserving poor’ came in for considerable comment. And apparently, if ‘the deserving rich’ were made to pay proper tax, they’d leave the country. But if they’re just using all our stuff, like roads, parks, schools and hospitals without paying for it, would we want such a bunch of free-loaders to stay, you might – quite reasonably – ask?

The Government claims that there just isn’t enough cash to go around right now and that we must all do more with less. Ok, so let’s work with that. Been there often and have a pile of those t-shirts, so let’s go find a solution.

According to the tax man, all these well-to-do people, currently owe us something like £35 billion and rising. Some claim that the figure could be as high as £120 billion. So there’s a good chunk to kick-start our solution with.

Now, these same affluent folk receive all manner of (whisper it) benefits – shhhh!! From child benefit for multimillionaire parents to bus passes for well healed pensioners, there’s no end to the benefits enjoyed by rich people, who don’t pay all their tax – benefits paid for by poor people, who, devoid of choice, do pay all their tax.

Ok, so that’s possibly a tad simplistic but you get my drift, I’m sure.

Moving on we find Help-to-buy schemes for those looking for a £600K luxury pad, and free child care for those earning £300K. There’s 200-300 quid’s worth of help with your heating bills, but it’s of some comfort that the Government has decided to stop paying this benefit to 93,000 Brits living in hot countries like Spain, France, Greece and Portugal. This will save almost £17million a year. Enough to cosily insulate several thousand council houses.

Brits living in Switzerland will still get their winter fuel allowance. I guess Boy George and Call-me-Dave seeing all that snow on their winter skiing holidays feel sorry for ex-pat Brits living there, who must all be poor. Obviously.

Back in Blighty, another bungle is slowing our route to a solution for the moment. Apparently the NHS are rehiring 4,000 staff that were axed due to the 2013 cuts. The Government shelled out £1.39billion of taxpayers’ money on redundancy pay last year, only to rehire everyone again this year. Oops… £1.39billion?! WTF?

You really couldn’t make it up.

But mistakes happen and, to be fair, George and the lads have tried to save some money. Take the bedroom tax, for example. We can all agree that it is a calamity that one person should live in a place with two bedrooms. I mean, that’s just grotesque extravagance. And according to the Government’s own figures, charging these benefit scroungers £16 a week for the privilege would save the taxpayer £480million a year.

This would certainly go a little way towards recouping some of that £1.39 billion NHS blunder. Shame that, a year on, it seems that the bedroom farce might actually end up costing us more money than before.

If all this is beginning to resemble the proverbial omni-shambles, it probably is. Does it perhaps have nothing to do with economics but everything to do with politics?: “This time next year Rodney, we’ll be millionaires” or “Shrink the state Dave and next year we’ll all …” – we’ll all what, George?

Whatever your political persuasion, if you’re a regular human being, it is clear that something isn’t quite right here.

A simple solution would appear to be what the Brits call Means Testing.
In Britain, Means Testing is a dirty word. Ok, two dirty words then. It’s perceived to be demeaning and degrading but, as far as I can see, the only people who benefit from the absence of Means Testing are wealthy people. If Means Testing were introduced for all benefits, wealthy people wouldn’t get any benefits. QED.

Poor people already go through no end of demeaning, degrading processes on a daily basis and if Means Testing means that there’s more money for those who need it most, I doubt that they’d mind in the least.

We’re clearly talking serious welfare fail here,
So, What Would Borgen Do?

What immediately strikes you, when you begin to bone up on welfare across the North Sea, is the language. The words they use. We say Means Testing, Borgen says Need Determination (trangsbestemt). We say Tax Burden, Borgen says Tax Contribution (skatteydelse). We say Unemployment Benefit, Borgen says Jobless Support (arbejdsløshedsunderstøttelse). And they’re not just words, those words give away an entire attitude.

Next point to note is that Danes actually pay sufficient taxes to support their welfare state: 25% VAT, top rate of income tax = 51.5% . And, despite the fact that the Danish tax man suffers an estimated DKR 4 billion (GBP 400 million) of uncollected tax every year, most Danish people and firms actually pay their tax.

In fact, 4 in 10 Danes say that paying their tax makes them ‘happy‘, which seems a tad bizarre to most of us. What the other 6 Danes think is unclear, but perhaps the fact that 89% of Danes trust each other – and that includes trusting the State – has something to do with it.

Of course, Borgen hasn’t escaped the global downturn entirely and there has been some serious bits of Need Determination going on. Mind you, they did start from a pretty high bar.

5.4% of Danes are jobless right now. Automatic jobless support, or an ingenious system called “Flexicurity” at up to 90% (average 52%) of previous wage has been reduced from four years to two. Borgen also ‘means tests’ UB, with the lowest paid getting the highest percentage of their previous wage. No one seems to feel especially degraded by this.

But check this out: Smart governments realise that you need to leave even the jobless with enough cash to keep the tills ringing, so they don’t stint on unemployment benefit. Holland leads the field in UB with 70% of previous gross wage, Denmark is at number 11 with 52%, just ahead of Russia. The UK ranks 46 (out of 51 countries) with just 18% of previous gross pay, behind Venezuela, Azerbaijan, Egypt and Belarus.

Just for a laugh, Romania is ahead of the UK by a country mile at number 18 with UB at 45% of previous gross pay and Bulgaria is sandwiched between France and Canada in 16th position with 47%.

So, a timely piece of advice to all jobless Brits: Get a one-way ticket to Romania or Bulgaria, take full advantage of your EU citizenship and become a benefit tourist!

When our Danish friends turn 65, Borgen pays a basic ‘People pension’ (Folkepension) to all its citizens. In 2014 this amounts to DKR12K (£1200) a month for single seniors. According to how much money you earn, if you carry on working, and depending on any investments, you can get additional money, in line with your need – i.e. ‘means tested’. There’s also help with all manner of stuff like winter fuel allowance of up to DKR 7K (£700), additional health costs and such like, all tapered depending on the size of your bills and your financial status. In other words, such additions are also generally Means Tested.

No bus passes for anyone but plenty of travel card concessions for youth, seniors, carers and handicapped travellers (yes, disabled people are still handicapped in Denmark).

Like in the UK, Borgen’s National Health Service is free at the point of use. Up to a point. If you have quite a bit of money, you buy an additional insurance policy from co-operative Sygeforsikringen Danmark, a sort of John Lewis of medical insurance. Taxes pay for 85% of Borgen’s healthcare.

Housing Benefit is means tested from the ground up. All families are offered Child supplement, which is divvied up into an impressive panoply of tailored programmes, depending on individual circumstances and the ever present ‘need’. ‘Handicap Support’, the equivalent of UK ‘Disability Living Allowance’ is another major section sliced and diced into education, medical, housing, work, transport, all dependent on individual needs. There doesn’t seem to be any mention of Atos Healthcare though.

Borgen has clearly taken a hit to its welfare finances over the past few years, but seems to have managed to shield core services, finding economies away from the front line.

But then, Denmark is largely governed by a Social Democratic coalition system, even when there’s a right leaning coalition. The clue is in the name – Social Democracy puts people first, profits second.

The conclusion? Borgen’s budgeting has everything to do with economics and little to do with politics, whereas Westminster’s budgeting has little to do with economics and everything to do with politics.

So, can we please stop this experiment now George

It hasn’t worked and it isn’t going to work

Get over it




2 thoughts on “Brit Welfare Or Class Warfare? What Would Borgen Do?

  1. Well, if you consider the investment of money, time and creative energy that goes into crafting the perfect advertising slogan, it is clearly crucial how you vocalise a sentiment. So why not national attitude?

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