Headlines on Thursday morning highlighted the Con Dem proposals for a shake up of the welfare system. This time we are promised a benefits revolution- a promised simplification of major benefits to just two, with the withdrawal of benefits taking place more slowly so that those moving into work don’t face the problem of losing more than they gain by taking a job. Noble sentiments that it is hard to disagree with, for sure. But can the rhetoric match up to the situation in reality?
From the time of the original Beveridge Report during the Second World War, the founding principles were the system’s universalism and social solidarity. Everyone would pay into the system, and everyone would be entitled to payments, Introduced by the Labour Party in 1945, the proposals became one of the cornerstones of the Welfare State, the others being the Education Act of 1944 and the foundation of the NHS by Bevan. Beveridge’s proposals were summarised thus:-
A comprehensive scheme of social insurance including unemployment and sickness benefit, maternity benefit, widow’s benefit and pension, guardian’s allowance, retirement pension and other grants.
A free National Health Service.
A system of Children’s Allowances.
An Industrial Injuries Scheme.
Training schemes for the unemployed.
From the start of the system however, there has been a tension between its objectives and the political limits on the social security budget. As Governments from 1945 onward have changed from Tory to Labour to Tory over the years, so the acceptable proportion of national income devoted to the welfare system has ebbed and flowed .Usually it is accompanied by a discussion of who are the “deserving poor” and who are the “undeserving”.
Means testing has usually been the means of ensuring that the budget is spent where it is “needed.” "Poverty” in this analysis is about behaviour and “dependency” rather than economics and social justice.
This tension is always at the heart of attempts to “roll back the frontiers of the state”, the heart of the neo- Liberal project. The austerity programmes being put into place across Europe, most noticeable in Greece , Spain Portugal and Ireland are merely the latest manifestation of this recurring conflict, with the same emphasis on cutting social welfare at the heart of all of them. Across Europe, governments are slashing welfare programmes to protect banks and profitability.
The last attempt at reform of the system came only in the past year as the outgoing Labour Government’s reform was roundly condemned by those on the left. This was described by the TUC as
“'…….. the wrong bill for the economic crisis we're in. With thousands of people losing their jobs every week, now is not the time to introduce even tougher conditions for claimants.
'We're also disappointed that the Government appears to be persisting with plans that amount to a 'work for your benefit' scheme. Paid work is scarce enough. Forcing claimants to work for their dole too could make this even worse.”
Single parents and those claiming sickness and invalidity bore the brunt of the new measures that were designed before the recession to place more benefit seekers in work., under threat of benefit cuts for non compliance ., or “ failing to relate to a work related programme by their job centre adviser with the threat that “ your claim for income support could be affected”
This was accompanied by measures of privatisation in the provision of services – particularly of the services designed to decide fitness for work, where specialised medical services are replaced by private providers whose services are so sympathetic and appropriate (not) that they feature regularly on the pages of Private EYE .
So Duncan Smith’s proposals seem to come on the back of this but in fact predate it. His Centre for Social Justice received a favourable press as it seemed to show the new caring sharing Tories as they reinvented themselves under Cameron. The group's aim was to "study the causes and consequences of poverty in Britain and seek practical ideas to empower the least well-off." The headlines on Thursday largely reflected the report “ Toward Welfare that Works” produced by Duncan Smith back then. http://www.centreforsocialjustice.org.uk/
Even then the motivation was clear.
“This picture is set against a backdrop of 13 years of continuously increasing expenditure, which has outstripped inflation," he said. "Worse than the growing expense though, is the fact that the money is not even making the impact we want it to. He continued saying "A system that was originally designed to support the poorest in society is now trapping them in the very condition it was supposed to alleviate." Ian Duncan Smith on the publication of his report.
His report reflects the belief that benefit levels themselves are not the problem but that the poor should get themselves a job as the way out of poverty, much as the last Labour government had done. However one crucial difference is perfectly obvious between the proposals then and the proposals now. At the time of the time of the report, costs for the new scheme were said to be around £3.6bn but reports now say that “those figures are going down”. You bet ya!!
Millions, not billions are now on the table .
To quote the Daily Star of May 28th
“SCROUNGERS will be forced to work or lose their benefits in a radical shake-up of Britain’s broken welfare system. New Work and Pensions Secretary Iain Duncan Smith unveiled tough new measures yesterday. He said the jobless will have to do community work to keep their dole money. Those who refuse to look for work or accept jobs will see their handouts axed. Mr Duncan Smith said he was sick of spongers viewing the employed as “bloody morons”.
He added: “Five million people are actually sitting there doing nothing, fulfilling no employment role. “We have created a benefits system which basically says you are better off out of work than you are in work. He said the jobless will have to do community work to keep their dole money. Those who refuse to look for work or accept jobs will see their handouts axed. Mr Duncan Smith said he was sick of spongers viewing the employed as “bloody morons”. He added: million people are actually sitting there doing nothing, fulfilling no employment role. “We have created a benefits system which basically says you are better off out of work than you are in work. “
Or believe the FT
“Holly Sutherland, a professor at the University of Essex and an expert in benefit reform, said on Thursday that the dilemma of a much slower rate of benefits withdrawal was “either that benefits are paid much higher up the income scale – which would be very expensive – or out-of-work benefits become very mean indeed”.
The first target will be the 2.5 million people in the UK – including 285,000 in Scotland – who receive incapacity benefit. They will now be reassessed for work under much stricter” medical tests” performed by those privatised providers.
At least Norman Tebbit, when he said that the unemployed should “ Get on their bikes” was being honest. Neither Duncan Smith or the liberal press who report on him are.
There are other problems with these plans . They assume that there are jobs out there to be filled, a very rash assumption. The TUC Labour Market report (http://www.tuc.org/economy/tuc-17938.fo.chm) reports that unemployment has reached a figure of 2.5 million, chasing around half a million jobs. Moreover interestingly, the trend is that short term unemployment is falling- those who have been unemployed less than a year , while the longer term unemployment continues to rise.
Two and a half million into half a million? These figures are incompatible.
And that was before the Con Dem plans for the economy were unveiled. Cutting the Future Jobs Fund alone cost 40,000 jobs this year, as well as 10,000 student places. That is before the cuts that are being made in local services are taken into account, and by any estimation, these are likely to dwarf the 23,000 redundancies already seen in local government. Remember this £6.25 billion is just the first tranche of cuts that are to be made. A full review of expenditure will be revealed in the autumn.
Economically the programme being followed by the Con-dems has been described by Prof D Blanchflower thus-
“Expect unemployment to increase to well over three million by the end of the year and youth unemployment to be above a million, unless the government reverses course immediately.
At the press conference the Chancellor argued that these cuts are intended "to boost confidence in the economy and protect jobs". Far from it they will likely destroy jobs and cause confidence to collapse.”
Capitulation to Treasury orthodoxy risks further recession, as not only Keynsian economists have been warning, but the US Treasury Secretary.
Through the pre election and election period, Tories continually harped away at a theme of “Broken Britain”,. Anything they disliked or disagreed with, was a “symbol” of “Broken Britain.” Like chanting yogis they had their meaningless mantra.
Poor housing? That was broken Britain.
Social Tragedy? That was broken Britain.
Rising unemployment, falling and failing public services, falling standards of living and increased for the many not the few?
That’s breaking Britain- Con- dem style 2010.
