David Anthony Freud, Baron Freud, (born 24 June 1950) is a British politician, life peer, and former investment banker who served as Minister for Welfare Reform from 2010 to 2016. Before he joined the Conservative Party, he was vice-chairman of investment banking at UBS and a government adviser on welfare reform.
Early life and career
Freud is the son of Walter Freud and a great-grandson of the physician and pioneering 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, Freud 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. In 2006, Freud published his autobiographical book Freud in the City which describes his life and work as a merchant banker in the City of London.
Political career
In 2006, Freud was asked by Tony Blair to review the UK's welfare-to-work system, with Blair having been impressed by Freud's raising of finance for Eurotunnel and EuroDisney while at UBS. However, many of Freud's ideas were not implemented because of objections made by Gordon Brown. Freud's 2007 report titled Reducing dependency, increasing opportunity: options for the future of welfare to work called for the greater use of private sector companies who would be paid by results, for substantial resources to be made available to help lone parents and people on Incapacity Benefit back into work, and for a single working-age benefit payment to replace Housing Benefit, Jobseekers Allowance, etc. His central thesis was that spending on 'delivery' – such as schemes to get people back to work – would save money in the long run because there would be fewer people being paid money in the form of benefits. Freud wrote:
In 2008, during the banking crisis that had begun the previous year, Freud became an adviser to Work and Pensions Secretary James Purnell and was asked to "help implement nothing less than a revolution in the welfare state" after a "sea change in Labour's thinking about the benefits system". Some of his ideas were incorporated into a white paper published later that year. However, he came to the belief the Conservative Party was "more likely to implement his radical reforms" and announced he would switch to working with the Conservatives. Purnell later resigned after Gordon Brown refused to cut welfare spending. On 27 June 2009, Freud was made a life peer after his name was put forward by the Conservative leadership. He then became a shadow minister in David Cameron's frontbench team.
When the Cameron–Clegg coalition was formed in 2010, Freud was made Parliamentary Under Secretary of State for Welfare Reform at the Department for Work and Pensions. 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 2012, he argued that many people were on benefits as a "lifestyle choice" rather than using it as a safety net. In 2013, he stated in a House of Lords speech, to much criticism, that the number of food banks were increasing because people want free food rather than growing poverty.