As I noted in The Ideology of Workfare, the ultimate goal of the cheap-work conservatives in Westminster is to roll us back to 1834, the year of the workhouse.
Today marks an historic step in the biggest welfare revolution in over 60 years.
What is he talking about is rolling back the welfare state, put in place by the Labour government elected in 1945, founded on the principles outlined by William Beveridge, the British economist who wrote Social Insurance and Allied Services, widely known as the Beveridge Report. Cameron is once again raising the giants of Want, Disease, Ignorance, Squalor, and Idleness – which rightly he describes as a “historic step”.
My government has taken bold action to make work pay, while protecting the vulnerable.
David Cameron’s “bold action” was to institute a system by which high street stores and other commercial organisations can get employees who will work for nothing, to the benefit primarily of those companies and the private workfare providers. Far from “protecting the vulnerable”, people are required to attend these back-to-work schemes while recovering from major operations or in recovery from cancer. More here. The Spartacus Report showed that not only were the government unconcerned with protecting the vulnerable, they had been informed how the policies Cameron has proudly introduced today would attack the vulnerable.
Key elements of this include: The ‘Benefits Cap’ which ensures no one can get more that £26,000 in benefits (that’s the equivalent of a taxed income of £35,000)
This cap on benefits for those out of work will apply irrespective of circumstances and the family’s history. Two groups of people will be affected: a small number of couples or single parents who have very large families. A much larger group of people who will be directly affected from today: any family with three or more children, who lives in private rented accommodation in London, or elsewhere in some places in the south east. Any such parents who are unemployed or who lose their job will from today have to decide they will move to a one or two bedroom flat (if they can find one at a manageable rent, and it will be much easier if their three children are all girls or all boys or all under 12), be cold, or move to a cheaper area of the country where their employment prospects will be much worse.
After rent, council tax, and utilities, someone with 4 children living in Tolworth, the cheapest part of Kingston, will have to live on 62p per day. That has to cover everything: food, school uniform, loo paper, the lot. It is clearly impossible to live on this. If you change the family circumstances a little, you can change the 62p figure – either up or down. But it is broadly accurate for a large number of those affected.
It seems strange to say to someone who has worked for 15 years, that on their first day out of work they will be plunged into poverty. Nor can we assume that they will have savings of any amount. The IFS record that 50% of people in Britain have less than £1000 in savings, and economic theory – income smoothing – argues that people with children should not save at that point in their lifecycle. (Tim Leunig, Institute of Economic Affairs)
- The ‘Universal Credit’ which will ensure that work always pays more than being on benefit
The winners on Universal Credit will be single parents who work less than 16 hours a week.
The losers will be single parents and second earners (usually women) who are working more than 16 hours and who would like to work more hours.
For example, a second earner who took a job for 16 hours a week under the pre-April 2011 system would be around £46 better off from working an extra four hours. Under Universal Credit, the same parent would only be £17 better off, less than a third of what they would get under the previous system.
If it doesn’t pay for women to work longer hours, household incomes will be hard hit. According to the IFS, over the last 40 years women’s earnings have accounted for around a quarter of the growth in incomes among low-to-middle income households. Men’s earnings, on the other hand, have accounted for only 10% of the growth.
Women’s work has become an increasingly important contributor to propping up living standards. Capping the ambitions of working women through the introduction of Universal Credit will only leave households worse off. (Vidhya Alakeson, Public Finance)
So working women, especially mothers, will be worse off. David Cameron’s reaction… “calm down, dear”?
These reforms will change lives for the better, giving people the help they need, while backing individual responsibility so that they can escape poverty, not be trapped in it.
That’s true, sort of, providing you do not care about single mothers, second earners, families with more than two children, disabled people, people recovering from cancer or from serious operations, or anyone unemployed for more than three months who will find themselves working almost full-time for no pay. (See I will work harder – Cameron is always right)
Past governments have talked about reform, while watching the benefits bill sky rocket and generations languish on the dole and dependency. This government is delivering it. Our new law will mark the end of the culture that said a life on benefits was an acceptable alternative to work.
Cameron may be right that the “benefits bill” will be cut. This will require considerable ruthlessness on the part of public services to deny help to those who need it – and such denial tends to become more expensive in the longer term – because thanks to the current government’s economic policies of cut, cut, and cut, UK unemployment rose by 129,000 in the three months to September 2011 to 2.62 million, and youth unemployment has risen to a record of 1.02 million and unemployment for women is at its highest since 1988. The Office for National Statistics (ONS) said the jobless rate hit 8.3%. For someone presiding over a government creating unemployment at this rate to talk merrily over ending the benefits culture as an alternative to work, says merely they have something much worse in mind than allowing people a basic pittance to live on when they are unemployed.
While we’ve been putting in place a sensible, modern welfare system that protects the vulnerable, our opponents have shown they are on the side of Britain’s ‘something for nothing’ culture.
We’ve stood up against the abuse that left taxpayers footing the bills for people on £30,000 or even £50,000 a year in benefits. It’s a fair principle: a family out of work on benefits shouldn’t be paid more than the average family in work.
To understand what a nonsense this is, I strongly recommend Simon Duffy’s article on Who Really Benefits from Welfare? where he explains with considerable clarity and vigour that people who are living on benefits pay taxes at a higher rate than literally anyone else in the UK. Most of the money that is given out on benefits is then taken back in taxation. A high proportion of the benefits paid to people living in private rented accommodation goes to their landlords, not to the claimant themselves.
This is a core part of the government’s task of turning around the legacy of debt, overspending and waste we inherited.
This is a return to the persistent lie by the Tories, which the LibDems have taken up in coalition, that the recession of 2008 was caused not by the banks financial crash but by Labour overspending on welfare and health.
We want money to go to people who need it, not subsidising the consequences of our broken society.
I’ve outlined here and here the expenses paid to Iain Duncan Smith and to Chris Grayling – “the people who need it”. We may also consider the real beneficiaries of the government’s workfare scheme, such as Emma Harrison, who paid herself £8.6 million in the past year. And of course the bankers, who were subsidised at such cost by the previous government as well as Cameron’s, but who are not in any way being targeted by Cameron’s policies.
Instead Cameron is taking benefits away from Sue Marsh. She has Crohn’s Disease, and “28 years later, I’m slowing down a bit. My body is complaining, I have deficiencies of this and crumbling bits of that. My bones haven’t developed properly and already have osteoporosis. My teeth have crumbled away from the steady coating of vomit acid. I can’t walk very far or stand up for long or pick up my children – I’m really, really tired.” But
people like me just lost everything. Regular readers will know, I have been told I don’t qualify for DLA and I almost certainly will lose Incapacity Benefit as nothing in the ESA descriptors would mean that I qualify for ESA. Even if I did I will lose it after a year as my husband earns more than £7,500 a year. I’ll never qualify for the Long term Support Group because I will never be “completely incapable of any kind of work at all”. Also, with a bit of luck, they’ll never actually tell me I’ve only got six months to live, I’ll just burst somewhere at some point. So that means I’ll never qualify because I’ll never be “terminally ill” (Though of course, I will be, potentially, every day.)
In a “bold action”, “compassionate government in action”, David Cameron and Iain Duncan Smith and every Tory and LibDem MP who voted for this Bill have simply decreed that Sue Marsh is no longer disabled, and therefore, not entitled to any help.
By reforming welfare we will get people into fulfilling jobs, not abandon them to poverty and dependency, save billions of pounds of taxpayers’ money and make sure those who really need help get it.
There is literally no indication that any of the above is true or will magically become true.
Far from getting people into “fulfilling jobs”, it is widely reported that the government’s private workfare providers are simply interested in pushing people through the system as fast as possible into any kind of job to get their fee (and in some instances are guilty of outright fraud), and that the Job Centres are close to useless for anyone who is educated, experienced, and looking for employment that matches their skills. More people will be abandoned to poverty as a direct result – indeed, from now on parents who have at least three children will be obliged to go into debt/risk homelessness, or to move from an area of high employment to one of low employment. There is no indication that any of these policies will overall save money. But if “those who really need help” are defined as “the extremely wealthy, who need household servants“, this is certainly true.
That’s compassionate modern government in action.
It’s also a huge tribute to the Secretary of State for Welfare, Iain Duncan Smith, who has worked tirelessly and with real moral purpose in tackling the blight of welfare dependency.
Charles Dickens cast a sardonic eye on that kind of thinking:
The members of this board were very sage, deep, philosophical men; and when they came to turn their attention to the workhouse, they found out at once, what ordinary folks would never have discovered—the poor people liked it! It was a regular place of public entertainment for the poorer classes; a tavern where there was nothing to pay; a public breakfast, dinner, tea, and supper all the year round; a brick and mortar elysium, where it was all play and no work. ‘Oho!’ said the board, looking very knowing; ‘we are the fellows to set this to rights; we’ll stop it all, in no time.’ So, they established the rule, that all poor people should have the alternative (for they would compel nobody, not they), of being starved by a gradual process in the house, or by a quick one out of it. With this view, they contracted with the water-works to lay on an unlimited supply of water; and with a corn-factor to supply periodically small quantities of oatmeal; and issued three meals of thin gruel a day, with an onion twice a week, and half a roll of Sundays. They made a great many other wise and humane regulations, having reference to the ladies, which it is not necessary to repeat; kindly undertook to divorce poor married people, in consequence of the great expense of a suit in Doctors’ Commons; and, instead of compelling a man to support his family, as they had theretofore done, took his family away from him, and made him a bachelor! There is no saying how many applicants for relief, under these last two heads, might have started up in all classes of society, if it had not been coupled with the workhouse; but the board were long-headed men, and had provided for this difficulty. The relief was inseparable from the workhouse and the gruel; and that frightened people.
For the first six months after Oliver Twist was removed, the system was in full operation. It was rather expensive at first, in consequence of the increase in the undertaker’s bill, and the necessity of taking in the clothes of all the paupers, which fluttered loosely on their wasted, shrunken forms, after a week or two’s gruel. But the number of workhouse inmates got thin as well as the paupers; and the board were in ecstasies. Charles Dickens, Oliver Twist, 1838
Benefits legislation is a reserved issue. When the Westminister government decrees changes, those changes must be made in all parts of the UK. It is constitutionally open to the Scottish Parliament to write its own legislation for reserved issues in line with the Westminister legislation, but until 22nd December 2011, over 12 years after the Scottish Parliament first met, the Scottish government had never done so.
But they did over the Welfare Reform Bill. SNP and Labour MPs – Scottish Government and Opposition – voted together to oppose the bill in Scotland. You can watch the debate here.
Nicola Sturgeon, Deputy First Minister, said:
“We recognise the welfare system is broken and needs to be fixed, but not at the expense of our most vulnerable people.
“Put simply, the Scottish government supports a welfare system that is simpler, makes work pay and lifts people out of poverty, however, this approach is being fundamentally undermined by the UK government’s deep and damaging cuts to benefits and services that will impact on some of the most vulnerable people in Scotland.
“We have put on the record time and time again our long-standing concerns about the lack of detail around key elements of the bill, which will have serious implications for devolved policies and services.”
Labour health spokeswoman Jackie Baillie said:
“The starting point for this reform is not about fairness or supporting people back into work, it is purely about saving money, often from the most vulnerable people in our communities. And, in Scotland, this amounts to a cut of £2bn, which will have a direct impact on household spend and economic growth.”
It’s important to note: Scotland pays more in taxes to the Treasury than is provided to us by the block grant. The claim that Scotland can afford to do more for the poor and the vulnerable because Scotland gets more from the government is untrue. In Scotland, the Tories are a rump party, without political power. We have a better welfare and benefits system because we have been electing left-wing governments. When I look at the mealy-mouthed reaction to the benefits cuts from Labour spokespeople in England, and the jealousy expressed by English people at Scottish benefits, I wonder what hell Ed Milliband thinks he is doing? Why can’t we have Labour leaders like Aneurin Bevan and William Beveridge, who know what they’re fighting for and love what they know?