Politics and technology don’t mix – the welfare cash card is just another example

Note, 1st October 2014: This post was originally written in late 2012, when the idea was first floated, before IDS resurrected it at the 2014 party conference. Aside from this note, I’ve not updated it – in particular regarding the censorship proposals mentioned, and now sadly implemented.

All too often, it seems, politicians believe technology will solve whatever problem is bugging them. And so they make proposals, and in some cases throw money at the problem, with the intent of creating a wonderful technological solution to the problem. Sometimes, of course, it’s not even a real problem; just a pet issue of theirs. But almost always, because they don’t really understand technology, or exactly how it’s applied in the real world, things go horribly wrong.

Like the NHS IT program, for example, which cost a ton of money and had various contractors walk away from it. Or the more recent proposals to censor every internet connection in the UK, which thankfully seem to have been squashed for now.

The latest purveyor of a technical solution to a problem is Tory MP Alec Shelbrooke, who believes that by paying benefits via a ‘Welfare cash card’ it will be possible to stop claimants from buying things that are considered unnecessary. It will, according to the quotes in the Daily Mirror, even promote social good.

I’m going to leave the politics of this idea to one side for now, other than to say that I think it stinks, and I don’t quite see why some people on benefits should be told what they can spend money on, while others can, say, spend the child benefit they don’t really need on piano lessons for little Jocasta.

But, even if you think this is a good idea now, I hope that by the end of this, you’ll realise that it’s yet another example of someone putting a blind faith in technology to do something, without really thinking it through. And that’s pretty much what has caused so much public money to be wasted on ill-conceived technology projects through the years.

The big idea

The idea is that a ‘welfare cash card’ would stop people spending benefit money on ‘unnecessary’ things, a category which includes alcohol, tobacco, and even pay television. So, the logical conclusion of that is that this is a card which will only allow people to buy the ‘necessary’ things.

Because, presumably, it’s got a chip in it like a debit card, that means that our good friend “Technology” can spot what’s being bought, and prevent it, ensuring that benefits don’t get wasted on luxuries.

Whether you believe this is a good idea or not, that’s pretty much the concept. So now let’s examine it further.

Where does the money come from?

We have to presume that this card will be topped up somehow, either by being linked to a basic bank account into which benefit payments are made, or by being directly topped up using some as yet undefined mechanism, say topping up at a cash machine.

But that won’t work – because then you’d be topping it up from a bank account anyway, so why not just take cash out and spend it on what you want? I think we’ll have to assume that the card is linked to the account into which benefits are paid.

If that’s the case, we have to arrange that these accounts cannot have an ordinary cash card or debit card – otherwise, what’s the point? Money could be taken out and spent on anything.

More than that, they have to be special accounts that will reject some direct debits and standing orders, otherwise someone could just sign up to, say, Sky Television, that way. But what if a recipient wants to pay their rent, or their TV licence, or some other ‘allowed’ expense by standing order (even a fine!)?

We’ve now got a bank account that’s linked to a specific sort of card, and which has special rules about what standing orders or direct debits can be accepted. And that means that the bank has to have a special sort of account to handle this. So, which lucky bank wants to set up the systems to manage the accounts and issue the card? And how much is all that going to cost?

Going to the shops

All that – and perhaps there’s an easy way of magically getting money onto welfare cash cards that I’ve not thought of, and which still lets them appear like an ordinary card to every electronic till in the country – is before we’ve even got to the shops.

That, I’m afraid, is where Mr Shelbrooke’s idea dives even further into the deep dark pit associated with those who have a naïve belief in technology as a solution to problems. It also suggests to me that he’s not actually someone who does his own shopping.

What happens when you go to a shop? Just about any shop these days works like this:

  1. You put your items in a basket or trolley. Whatever items you like – with the exception of tobacco, you can put just about anything straight in a trolley.
  2. You go to the till. The assistant scans everything, and the till computer system works out the total.
  3. You decide how you’re going to pay.
  4. You put your card in the machine, or hand over the cash to complete the transaction.
  5. You take your goods and go.

Crucially, it is only at the penultimate stage that the cashier has any idea how you propose to pay for your goods. And so, consequently, it’s only then that the technology will be able to step in and say “Hang on, you’re paying by Welfare Cash Card. You can’t have that bottle of vodka”

What happens then? An embarrassed checkout assistant has to challenge the shopper, the shopping has to be unpacked to remove the prohibited items, and someone has to take time restocking them on the shelves.

Moritfication all round, I should imagine, not to mention plenty of tutting from the people being held up in the queue. And possibly some rather ugly situations.

How do we solve this?

There aren’t any obvious easy ways that I can think of. You could require every shopper to identify how they’ll be paying before any items are scanned, and then the till could automatically reject any prohibited items.

Is every single shopper in the country going to be happy to do that, just to make sure that those on benefits never buy anything inappropriate? Are the supermarkets going to be happy to make their staff ask those questions?

Or perhaps you could have special “Welfare only” tills? Again, that’s a pretty big investment by the shops, for tills that in many places will be empty a lot of the time – no one else is going to use them, fearing the stigma.

A question of scale

You’ll notice I’ve been talking about supermarkets here – because I also think that if such a system is introduced, it will almost inevitably cover only supermarkets. There are a couple of reasons for that.

First, you’re going to need a list of what’s acceptable for people on benefits to buy, and what isn’t, unless you leave it open to the individual person on the till to make a judgement, and trust that they’re not having a bad day and going to say to someone with a Welfare card “no, you can’t have that extra-soft toilet roll, that’s my money you’re spending.”

So, every item that’s going to be sold will need to be classified as to whether or not it’s allowable. That’s a lot of database work – and it’s a database that’s going to need to be updated when new products are launched. It’s also, like many of these things, very likely to suffer mission creep. If health is a concern, for example, where do you draw the balance between cheap mince with lots of fat, or slightly more expensive stuff with less? If getting value for taxpayers is the aim of the game, will people be able to buy branded drugs like Nurofen, or will they have to get generic Ibuprofen instead?

Every till at which one of these cards will be used will need to have its software updated, to allow it to check products against the lists.

That’s a lot of work, and for a small corner shop, it’s likely they’ll not be happy investing in the system upgrades required to support something like this. But without doing so, they won’t be able to take the cash card at all, for politicians will fear that they’ll turn a blind eye and let their local customers buy what they want, driving a coach and horses through the whole system.

Meanwhile, for the large chains, it’s going to be expensive. Tesco alone has just under 3000 stores in the UK. Some are bigger than others, but I don’t think I’ve ever seen one with fewer than four tills. Let’s take a ballpark guess at an average of just ten tills per store across the whole of Tesco, which makes 30,000 tills to upgrade. I can’t imagine that’s going to be cheap.

And unless you restrict the use of the Welfare Cash Card to just one chain – which would seriously disadvantage those who may have to travel some distance to get there, using their limited money on transport instead of food – the cost to the UK retail sector would be considerable, especially when you consider staff training as well.

Either the supermarkets have to pay for that – and why should they? – or central government has to meet the costs, and given their track record, I don’t think it’s going to save much, if anything, overall.

It just won’t work

Besides the technical problems in upgrading point of sale systems, and the necessary changes to the sales process, the other glaring flaw is that this just won’t work, unless you’re going to have an army of inspectors checking everything that people buy, either in store, or by analysing their receipts.

For example, someone who’s in receipt of benefits and smokes, but has no children, could buy something useful for a friend, like Pampers. And if their friend has unfettered access to cash, they could buy cigarettes and swap.

If your solution to this problem is to say that people without children shouldn’t be able to buy Pampers with their Welfare cash card, then think what you’re asking for.

You now want a card that not only appears like an ordinary cash card to tills, but links to a database that’s even more specific about what that person can buy. You want to trust that if someone’s pregnant, someone in whatever department manages benefit payments will remember to update the records linked to that card at an appropriate time to allow them to buy certain things when the child is due that they couldn’t buy before.

Since a standard debit card doesn’t hold all that extra information, you probably also need the tills in the supermarkets to query a database in real time – it won’t be enough now to know that a card beginning ‘1234’ can only buy essentials; the whole number will need to be looked up to find out if this is someone who can buy things for the baby they might be expecting. Which means now you’ve added links from supermarket checkouts to benefits databases into the system, at even greater cost, and with potential loss of privacy too.

None of this takes long to figure out. And as with other politically led IT systems, it doesn’t take masses of intelligence too. But as I know from when I once gave evidence to a Select Committee on computer pornography, when it comes to their pet projects, politicians seldom let a grasp of the technology get in the way of what they want to do.

6 thoughts on “Politics and technology don’t mix – the welfare cash card is just another example

  1. What they could do using current technology is to use off the shelf cash cards (like the the one Orange uses – cash.orange.co.uk) that look like ordinary Mastercard or Visa cards. You could then block certain Merchant Category Codes, though for alcohol/tobacco purchases this would work better if the beer and wine section was a physically separated shop attached to the supermarket.

    It’s not a great idea (the only ones who would really win would be Mastercard and Visa) and it wouldn’t be particularly effective at stopping people from buying whatever it is they want, but it’s not entirely impossible either – especially if the actual reason is to lower the government’s transaction costs by (sort of) banking the unbanked and not some “let’s get harsh on the poor” tory crusade (and let’s face it, “lower government costs” doesn’t play as well as “getting harsh on the poor” does in some constituencies).

    1. And that’s the problem, isn’t it? With today’s massive branches of places like Tesco, Asda and Sainsbury selling everything under the sun, you can’t just block specific categories easily, when people can put anything they like in their basket as they wander around.

      All those ‘unnecessary’ items would have to be in separate counters, in the same way that Tobacco is often handled, and I really can’t see the supermarkets going for that.

      To make this work, it seems to me that it would need a lot of reorganisation on the part of retailers, way beyond what is presently necessary to handle, for instance, fleet payment cards that can only be used for car related things.

  2. Initially I was thinking “Woo hoo! Sounds like a good idea…” but after reading on I can see now that this would be almost impossible to implement.

    Problem is that a lot of MP’s will not get past that first “Woo hoo!” stage.

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