Economy

I’m reposting this March ’08 post because banker David Freud is prominent right now as the evil genius behind New Labour’s brutal welfare reforms.

As the BBC, particularly, seems to be regurgitating government press releases almost verbatim, accepting Freud’s outright lies (he claims 2/3 of Incapacity benefit claimants fraudulent, when the DWP’s own figures say 99% are legit) as gospel truth, swallowing unquestioningly the government’s premise that being jobless is in itself a crime, I thought it prudent to have another look at why it might be that Freud is getting a such an easy time of it from the media. Know the enemy etc.

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Who is David Freud, and why’s he getting such an easy ride from the media?

Freud is the connected City banker and former journalist who made his name in PFI deals and massive privatisation schemes and so was, of course, the perfect choice to conduct the review of welfare policy that resulted in yesterdays budget announcement that sick people will be forced into to work, fit or not, by the imposition of even harsher medical tests.

In the UK sick people with no income may claim Incapacity Benefit, ICB, a benefit paid for by national insurance contributions *from working people* and payable to working people off sick. Those who do not have sufficient contributions get another non-contributory benefit, Income Support.

The current medical testing regime is already one of the harshest in Europe.

For the first 28 weeks of absence from work due to illness or injury, an employed person is entitled to just £72.55 a week. This is called ‘Statutory Sick Pay’ and it is paid by the employer. Self-employed people can claim the Lower Rate Short Term Incapacity Benefit, currently £61.35 a week, plus £37.90 for an adult dependant.

For weeks 29 to 52, for both employees and the self-employed, the Higher Rate Short Term Incapacity Benefit is £72.55 a week for the claimant and £37.90 for an adult dependant.

After 52 weeks, a single adult is eligible for as little as £81.35 a week in State Incapacity Benefits (£4,230.20 a year). If that same adult had a spouse, they may receive just £130 a week (£6,760 a year). Additional benefit depending on age also applies – £17.10 for under 35s, £8.55 for those aged 35 to 44.

Furthermore, Incapacity Benefit is taxable after the first 6 months of claiming.

The unsubtantiated claims of the Daily Mail and James Parnell notwithstanding, it isn’t easy to get Incapacity Benefit to begin with; now it’s to be made even more difficult to obtain – even though it’s an entitlement you’ve already paid for from contributions from pay.

But then you can’t sell off a social security system and bureaucracy that actually pays out money, can you? Where’s the profit in that?

The second element of his report is the proposal that responsibility for such “support” and “training” programmes should be handed over to 11 large contractors, each of whom would have total responsibility for one region. They would be given the contracts to look after claimants for up to three years and would be paid according to results, with a “successful” long-term outcome being that the claimant stops claiming for up to three years. In other words, they would share in the benefits “saved”.

This would be a recipe for coercion of claimants, as well as creating untold opportunities for fraud as the corporations seek to provide training and support for claimants with their sister companies. This bonanza for the employment services companies comes despite Freud’s admission that there was “no conclusive evidence that the private sector outperforms the public sector on current programmes”.

Let’s face it. Darling and Brown have nothing else left to sell to cover the great gaping hole in the public accounts.

The bloated rich got away virtually unscathed in the budget, as did corporations; a sop of a rise in universal child benefit was thrown to the vast, struggling, indifferentiated middles (the poor won’t get it, it’ll be deducted from their benefit, so that’s all right) and the chancellor also chickened out on green taxes for fear of the wrath of the airline and transport industry. but the least able to fight back, well, screw them.

There is no black hole in the public accounts, apparently, there is no looming recession – no, it’s all the fault of those lazy workshy sick people – just look at them leeching off the state to the tune of 50-odd quid a week. Each! There’s your hole in the public accounts! Why, they should be out there picking leeks in Lincolnshire in the rain for a fiver an hour less four fifty in deductions – what’s a little diabetes or kidney disease or arthritis when Nelson commanded a ship with his arm blown off? Bunch of frauds, the lot of them, according to Freud.

Fewer than a third of the 2.7 million people claiming incapacity benefit are legitimate claimants, a government welfare adviser has said.

David Freud, an investment banker, said up to 185,000 claimants work illegally while on the benefit.

He told the Daily Telegraph it was “ludicrous” medical checks were carried out by a claimant’s own GP.

What? Their own doctors said they’re too sick too work? Then they must be lying. Or there must be something wrong with the tests. Stands to reason. But no, David Freud doesn’t even know the system he’s criticising. ICB medicals are carried out by BAMS, the privatised medical service.

State Incapacity Benefit can be claimed for an initial 28 weeks on the basis of assessments provided by the individual’s doctor.

After 28 weeks, individuals must complete a lengthy questionnaire and be assessed on their ability to carry out any occupation – not just the role carried out before they became ill. Fifteen different functional areas are examined covering physical, mental and sensory abilities. Each functional area is assessed and State Incapacity Benefit only continues when the total impairment is sufficiently significant across the full range of areas.

Whatever, the government can’t be spending all this money on unproductive sick people, not when there’s a war to fund. (Funny how Iraq didn’t get mentioned in the budget..).

You’d think the media would notice and investigate the background to these draconian changes; remember when Thatcher stopped the free school milk? Then it was all “Thatcher, Thatcher, milk-snatcher”. But unelected crony David Freud does something much, much worse and yet the British media consistently say very little that’s not laudatory about the very rich man who wants to drive the already poor in deeper poverty.

Why?

It could be because British journalists have swallowed the myth of New Labour meritocracy (largely because it justifies their own privileged positions as deserved) seeing those who are poor, or sick or otherwise disadvantaged as being there through their own fault (the converse of which is that the rich, like Freud, are rich because they are such superior beings). I’m pretty sure there’s a generous helping of that, yes, but I think mostly he’s getting an easy ride because of his name and his connections.

No-one wants to offend a Freud, it’d be career death to any budding journo.

Freud is related by birth and marriage to a family that’s embedded in the cultural and public life of the country, not least in the media and journalism.

Other notable members of the Freud family in the media include such luminaries of spin as Edward Bernays, the father of public relations. Cousin Matthew of Freud Communications PR agency for Live8 and the G8, is married to Elisabeth Murdoch, daughter of Rupert and media mogul in her own right.

The backing that Live 8 has won from media mogul Rupert Murdoch is just one indication that a massive business machine has been set in motion. Murdoch’s British tabloid the Sun gave the event enthusiastic support, although it is not a paper noted for its interest in Africa or liberal causes. It is, however, a key supporter of Blair.

The Murdoch and Live 8 connections are close. Elisabeth Murdoch, Rupert Murdoch’s daughter, is married to Matthew Freud, one of the organisers. Freud runs a leading public relations company that is, according to the Financial Times, one of the most influential in the UK. It has the largest media and entertainment client list in the country, with clients including famous actors and major companies such as AOL—of which more later. He and his wife also have connections to the Blair government. They sit on various government committees, and his company, Freud Communications, has organised events for both the government and the Labour Party.

And of course the man himself is a former FT journalist. How very nicely cicular.

Should any future scholar want an exemplar of how Labour turned into a party of patronage and moral corruption they could do worse than study the history of the younger sprigs of the Freud family during the Blair years. The rise and rise of the Freuds and the abolition of Clause IV are all of a same piece, as is the victimisation of disabled people by someone who’d probably spend more on feng-shuiing their conservatory than 6 months incapacity benefit pays someone with cancer. Yes, very socialist.

When – and they will be if there’s any justice in the world – Labour politicians are called to account for the ruin of the country, they’ll probably claim that they were deliberately subverted from within and it was all a capitalist plot.

But no. New Labour know and have always known exactly what they’re doing: eventually corporations are to have complete control over people’s livelihoods and the conditions of their existence and David Freud and his colleagues in the media/political/City nexus are right in the vanguard of the process.

The experts and academics present were the theorists and ideologues of welfare to work. What linked many of them together, including Aylward, was their association with the giant US income protection company UnumProvident, represented at the conference by John LoCascio. The goal was the transformation of the welfare system. The cultural meaning of illness would be redefined; growing numbers of claimants would be declared capable of work and ‘motivated’ into jobs. A new work ethic would transform IB recipients into entrepreneurs helping themselves out of poverty and into self-reliance. Five years later these goals would take a tangible form in New Labour’s 2006 Welfare Reform Bill.

Unum Provident is already delivering incapacity benefit medicals for the government while selling policies by emphasising the lack of state benefits. No conflict of interest there, then.

I wonder if- and if so, how many – Unum Provident shares Brown, Darling, Freud et al have in their private portfolios?

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[Edited slightly for grammar, spelling and general incomprehensibility]