David Freud, Baron Freud

https://en.wikipedia.org/wiki/David_Freud,_Baron_Freud

David Anthony Freud, Baron Freud (born 24 June 1950) is a British journalist, businessman, Conservative politician and welfare adviser and is a Parliamentary Under Secretary of State for Work and Pensions. He is a great grandson of Sigmund Freud, and son of Annette Krarup and Walter Freud. Freud's book describing his career in the city has been described as "morally ambiguous". Whilst working in the City of London he was called by a colleague the "Fraud Squad" because of his ability to "heavily promote new share issues that subsequently tanked."[1] Though having no previous experience in the welfare sector he was asked by Tony Blair to provide a review of these services. The "Freud Report" and his subsequent parliamentary career have greatly influenced government policy on the provision of welfare services. In the aftermath of the financial crisis of 2008 his policies have been described as "making the poor pay for the risk-taking of the rich."[2]

Education[edit] Freud attended Whitgift School, an independent school in Croydon, south London, followed by Merton College, a college of the University of Oxford.

Life and career[edit] Finance[edit] Freud was first employed by the Financial Times as a journalist, writing the Lex column over a period of four years. In 1983 he was hired by the firm then known as Rowe & Pitman. Freud admits that this job which involved "writing research on companies at the same time as taking money from them for advice" would be considered illegal today. This type of conflict of interest was outlawed only after the dotcom boom when analysts were being found to have publicly backed clients while privately trashing them.[3]

He worked on more than 50 deals, raising more than £50bn in 19 countries. Many were high profile, including the flotations of Eurotunnel and EuroDisney, while he orchestrated the rescue of the Channel Tunnel railway link and National Air Traffic Services. His role in the deals earned him a great deal of publicity and occasionally criticism. His rescue plan for the Channel tunnel rail link was subsequently lambasted for using "inaccurate and optimistic" figures by MPs.[4] He described the sector in which he worked as a "pioneering, piratical industry where we made up the rules". He admitted to feeling "equivocal" about Eurotunnel and Euro Disney deals, where investors lost millions of pounds and acknowledges "Both of those were bad deals".[5] The Telegraph observed that Freud’s Euro Disney financial plans “went so goofy they almost wrecked his career”[6]

By the late 1990s Freud was becoming increasingly concerned about how he was being perceived by associates: "I felt like Beowulf saying to those who turned against him, 'Didn't I feed you enough gold?'."". He was of the opinion that "If the rest of the country knew what we were being paid, there would be tumbrels on the street and heads carried around on pikes."[7]

By 2003, Freud had become the vice-chairman of investing banking at the firm, now known as UBS AG. He retired early at the age 53, claiming that he was bored with the City. "I spent most of my time firing people," following the downturn of stock markets at the turn of the century.[8] Between 2005-2008 Freud was chief executive of the Portland Trust, which aims "to promote the peace process" in Palestine and Israel using economic measures.[9]

One reviewer of Freud's book on his City career wrote that he “will be remembered in the City as one of the key players in several of the most embarrassing and badly managed deals in investment banking history”.[10]

Welfare reform[edit] In late 2006, Freud was appointed by the then Prime Minister, Tony Blair, to provide a nominally independent review of the British welfare to work system. Freud acknowledged that he “didn’t know anything about welfare at all”.[11] Despite the great complexity of the welfare system Freud came up with a draft plan for reform within three weeks of his appointment.[12] His subsequent recommendations called for expanded private sector involvement in the welfare system, for substantial resources to be found to help those on Incapacity Benefit back into "economic activity" and for single parents to be required to take paid employment earlier. Although his recommendations on single parents were immediately adopted, when Gordon Brown became Prime Minister in June 2007 other restructuring measures that involved paying private contractors thousands of pounds for processing long term unemployed people ("we can pay masses"[13]%29 were initially rejected but later implemented. He himself acknowledged there was no evidence that such schemes worked better than using the existing Job Centre resources.[14]

Dominic Lawson commented on Freud's appointment as welfare advisor:

“Perhaps David Freud’s greatest respray job was the stock market flotation of Eurotunnel. Not only did he come up with a clever way to make shares in Eurotunnel plc seem more than a wing-and-a-prayer speculation, he managed to flog the stock at the height of the stock market crash of 1987, even if it did involve getting Bob Maxwell to stuff a couple of his tame pension funds with the stuff... With such a reputation for finding gold in a mound of silage, it was not particularly surprising that John Hutton, the Work and Pension Secretary, should turn to this particular ex-banker when ordered by Tony Blair to come up with something snappy on welfare reform for the prime ministerial legacy.”[15] He was later rehired as an adviser to the government when James Purnell was appointed Secretary of State for Work and Pensions in 2008. He was involved in producing a white paper, published in December 2008, which would require most people receiving benefits either to participate in some form of employment or prepare formally to find paid employment later. "We cannot have people simply loafing about, doing nothing and expecting the state to finance their lifestyles," he said in comments to the white paper in question. "That is the way to the destruction of our society." Freud's vision of welfare reform would involve the removal of welfare benefits paid purely on the basis of need. In future people such as those receiving incapacity benefits would be forced to agree to a plan to enter employment or be subject to sanctions.[16] In 2013 Work Capability Assessments for disabled welfare claimants were described by Peter Beresford OBE, Professor of Social Policy at Brunel University, as "reminiscent of the medical tribunals that returned shell shocked and badly wounded soldiers to duty in the first world war or the ‘KV-machine’, the medical commission the Nazis used in the second world war to play down wounds so that soldiers could be reclassified ‘fit for the Eastern front’.”[17]

In February 2009, Freud joined the Conservative Party, which at that time was not in government. On 27 June 2009 he was created a life peer as Baron Freud, of Eastry in the county of Kent,[18] and became a shadow minister for welfare in the House of Lords.[19]

In October 2010 a number of Church groups and organisations complained to the Prime Minister David Cameron about Freud and chancellor George Osborne's "misrepresentation" and "exaggeration" of fraud in welfare claims that had the effect of stigmatising the poorest and most vulnerable in society.[20] In reply Freud stated that he was satisfied that his and Osborne's errors were "entirely inadvertant".[21]

As of 2012, Freud is in charge of reform of the benefits system.[22]

In April 2013, hundreds of anti-cuts activists delivered an "eviction notice" to the home of Lord Freud to protest at the Government's controversial welfare changes. Campaigners from UK Uncut protested outside Freud’s, home estimated to be worth £1.9m.[23]

In July 2013 Freud was criticised in The Guardian for his "withered meanness" that sought to explain the dramatic increase of food banks in the United Kingdom as being due to people taking goods that were available for free rather than anything to do with his welfare reforms.[24]

Freud is the son of Walter Freud and a great-grandson of the doctor and psychoanalyst Sigmund Freud. He was educated at Whitgift School, Croydon, and Merton College, Oxford, where he took a degree in Politics, Philosophy and Economics.

After starting out at the Western Mail, Freud worked at the Financial Times for eight years as a journalist.

In 1983 he was hired by the stockbroking firm then known as Rowe & Pitman. Later, he worked for S G Warburg, which was taken over by UBS. He was vice-chairman of investment banking at UBS before he retired. His book Freud in the City describes his life as a merchant banker.

By February 2009 the BBC was referring to him as Sir David Freud, at which point he announced that he would switch to working with the Conservatives - the culmination of what The Guardian described as a "tug of war" between the two main political parties over Freud. The newspaper also said that the move was "an apparent demonstration of his belief that the Tories are more likely to implement his radical reforms". On 27 June 2009, he went from knight to lord after his name was put forward by the Conservative leadership. He then became a shadow minister in David Cameron's frontbench team. When the Coalition Government was formed in 2010, Freud was made Parliamentary Under Secretary of State for Welfare Reform at the Department for Work and Pensions (DWP). In 2012, he outlined some of his thoughts on welfare reform in an interview by saying: "People who are poorer should be prepared to take the biggest risks, they've got least to lose. We have, through our welfare system, created a system which has made them reluctant to take risks, so we need to turn that on its head and make the system predictable so that people will take those risks". In the same interview, he said his primary concerns were the "nooks and crannies" in the benefits system where people could sit for long periods without ongoing scrutiny. He claimed the people who did this were: "The incapacity benefits, the lone parents, the people who are self-employed for year after year but only earn hundreds of pounds or a few thousand pounds, the people waiting for their work capability assessment then not going to it - all kinds of areas where people are able to have a lifestyle off benefits and actually off conditionality". In 2014, Labour MPs called for Freud's resignation after he was secretly recorded responding to a question posed at a fringe meeting of the Conservative Party conference. The question was whether some people with disabilities should work for a token sum in order to enjoy the non-financial advantages of engaging in the world of work, perhaps with their wages topped up by benefit payments. Freud, thinking out loud, agreed that there was a small group of disabled people who were "not worth the full wage" and said he would go away and think about it. Freud had to apologise. He said: "I was foolish to accept the premise of the question...I care passionately about disabled people...that is why through Universal Credit...we have increased overall spending on disabled households by £250 million, offered the most generous work allowance ever, and increased the disability addition to £360 per month". After the Conservatives won the general election in May 2015, Freud was promoted to Minister of State at the DWP, where he was given an enhanced role in overseeing the expansion of the Universal Credit scheme.