UK Welfare Reform: Further Than She Ever Dared!

by Christopher Read

Since the 2010 General Election, the Conservative party has sought to remodel welfare along neoliberal lines, continuing and intensifying the work of New Labour, while finding a ‘compassionate’ rationale to do so. We have seen the Conservatives struggle to rebrand neoliberal reforms as ‘red Toryism’ and ‘the Big Society’ although, as if in exasperation, these vagaries recently gave way to a revival of the Thatcherite ‘Essex man’ at the recent Conservative conference. Regardless, these welfare reforms began back in October 2010 and the act which sets out their most significant and wide reaching reforms so far is the UK Welfare Reform Act of March 2012.

The act is founded on the principle that work must always be a financially more attractive option for welfare recipients than claiming benefits. This in turn is apparently based on the true fact that working is generally good for mental and physical health and wellbeing while long term unemployment has been linked to depression and ill health. It is also based on a certain political view of the individual and their relationship to society. Former Conservative leader Iain Duncan Smith (who didn’t manage to lead his party to an election due to losing a motion of no confidence) is largely responsible for this blend of socially conscious rhetoric and harsh Victorian orthodoxy. His Centre for Social Justice claims it can “fix broken Britain will an army of social entrepreneurs1” who can presumably sort out Britain’s “booming industry in baby farming2” which he seems to believe exists.

The founding principle behind the reforms does not take into account either childcare obligations or disability, which are two of the most common reasons why claimants do not enter the labour market. Lone parents (90% of which are women) and disabled people are also the two groups hardest hit by the reforms.

Charities and anti-poverty groups3 have already criticised the reforms, arguing they will be deeply counter productive if they are not matched by government action to create jobs, expand childcare provision or invest in social and affordable housing. Other strategies they recommend to complement the reforms include the provision of financial literacy and budgeting skills and more funding for adjustments and alterations to help disabled people enter the workforce4. These too have been ignored. In fact, local authority funding for childcare has fallen since 2010, and Disability Living Allowance (DLA), the money which is used by disabled people to make changes to their work stations, vehicles, computers and office equipment that allow them to stay in work, has been significantly reduced.

The reforms consist of 39 individual changes to welfare payments, eligibility, sanctions and timescales for payment and are intended to save the exchequer about £18 blln. However, research by Shelter and Cambridge University suggests that the reforms will in fact cost more in terms of the extra strain on local authorities, such as homeless accommodation services, and the NHS.

Income Support, Child Benefit and Child Tax Credit for lone parents will be reduced and lone parents will now face new sanctions if they do not find work promptly. They will only receive Income Support if their children are less than 5 years old. Lone parents whose children are older than 5 will have to apply for Job Seekers Allowance and find work regardless of local childcare opportunities. However, cuts to local authority budgets since 2010, and to early years projects such as Sure Start, have significantly reduced the opportunity to find affordable childcare. This will make it harder for lone parents to enter the workforce. A similar paradox is faced by disabled claimants of DLA because the cuts will make it harder for disabled people to stay in work (DLA is specifically designed to be used to make adjustments to home and workspace).

All welfare payments will be turned into one single monthly payment, paid directly to the recipient, called ‘Universal Credit’. This direct payment does not account for recipients’ possible rent arrears, mental health problems, learning disabilities or substance addictions. Research by Shelter5 suggests that this tends to lead to higher rent arrears and homelessness because vulnerable tenants rarely budget effectively. Housing Associations have therefore suggested that the reforms should be coupled with new financial literacy skills training so that claimants can budget better. The alternative is arrears, debt and homelessness.

Housing Benefit (and Universal Credit overall) will be capped at £500 per week6 regardless of the claimant’s location, family size and circumstances. In London, where rents are high, this could mean a large scale movement of poorer social groups to the periphery of the city, thereby intensifying the city’s geographical and economic segregation. The overall benefit cap of £500 per week appears generous, but London Property Watch7 calculates that average rents for central London range from £560 per week (for a single bedroom property) to £1500 per week (for a three bedroom property). So even if a claimant had no dependents, such as children, they would still be unable to cover their rent with the new cap (this is before taking subsistence into account), and would have to move outside of London to find affordable housing. This process is likely to be mirrored to a lesser extent in other cities as well and has lead to accusations of ‘economic cleansing’ by anti-poverty groups.

Other broader changes include raising all benefits annually by a percentage lower than the annual rate of inflation (using the Consumer Price Index rather than Retail Price Index), an overall reduction in Housing Benefit for all claimants, a reduction in Working Tax Credit for all parents and a reduction in Child Benefit and the Sure Start maternity grant for all parents. Women, single parents and young people are also most likely to be in part time, insecure and low paid work and will therefore be most likely to claim Tax Credits, Housing Benefit and Income Support, all of which are targeted by the reforms. Cambridge University’s research, Shelter and anti-poverty groups therefore all predict that women and children will be disproportionately affected.

Furthermore, Incapacity Benefit has been replaced with Employment Support Allowance, and disabled recipients of IB / ESA are being tested for their eligibility by the controversial private multinational ATOS Healthcare, who previously designed ATM’s. Condemned by the BMA and the NHS, ATOS has found 75% of former IB recipients able to work8, including people with terminal cancer, cerebral palsy, multiple sclerosis and Parkinson’s disease. Subsequent appeals have overturned 40% of these decisions (70% if the claimant is accompanied9), which are made by a computer rather than qualified medical professionals. The appeals procedure is very expensive for the government and the cost (at least £50mlln annually10) has wiped out the savings that were made by cancelling recipients’ IB. It has also lead to dozens of suicides among disabled people with severe health conditions found fit to work11.

Universal Credit replaces other benefits from 2013 onwards and includes new sanctions. If a claimant refuses work once, they lose the £65-a-week allowance for three months. If they do this twice, the forfeit their JSA for six months, and if they do it three times, it is forfeit for three years. The rules makes no provision for the special circumstances that could lead to a claimant refusing work 3 times such as poor mental health, learning disabilities or a dispute regarding prospective working conditions. This will mean that the claimant will have no recourse to public funds and will simply be left to fend for themselves.

Applications to Universal Credit will all be made online and will no longer be made via a hand- written form. Statistically the demographic most likely to apply for Universal Credit are those with the least access to the internet but no extra provision has been planned for this. Charities and anti-poverty groups have requested new PC’s in Job Centres Plus, Citizens Advice Bureau and libraries to cope with the changes. However, both government funding to CABs and local authority spending on libraries has fallen since 2010 and no extra provision of PC’s is planned. This will most likely mean that eligible claimants will simply not apply and be forced to turn to alternatives ways to survive. The Centre for Social Justice assures us that former claimants will instead become new entrepreneurs, only it may not be in the manner they intended, as fans of The Wire will attest. 

The effects of the Welfare Reform Act will be felt most keenly by the middle income quintile, especially if they are single or unemployed, followed by the poorest quintile, either single or unemployed. However, they will reduce the entitlements of all groups, regardless of income, household status or age. Overall, they will also affect the poorest quintile dramatically more than the richest quintile. The reforms will also see over £9 blln removed from the annual household budget of disabled people. The Scottish Drugs Forum, Poverty Alliance and Demos have argued that the reforms will see a marked rise in drug use and drug death.

Cambridge University12, The Poverty Alliance, The Joseph Roundtree Foundation13, Shelter14 and the Scottish Drugs Forum15 have deliberately identified key outcomes of the reforms. Unfortunately, their research makes for grim reading. The Scottish Drugs Forum is so concerned that it has included its criticisms in its annual report, for the simple reason that they counter the Scottish Government’s cross-party consensus on drug recovery. Given that the Conservative party’s stated position on substance misuse runs counter to scientific and expert advice16 regarding classification, prisons sentencing and the role of rehabilitation, this is hardly surprising.

These organisations agree that the reforms will negatively impact Britain’s mental and physical health with a disproportionate affect on the poorest, which will in turn put increased strain on local authority services and the NHS. This strain is in danger of eliminating any savings from the cuts, not least because cure is so much more expensive and early intervention or prevention.

A surge in alcohol and drug dependency is predicted, as is a rise in drug dealing, a common instance when communities are pushed into destitution through the removal of any recourse to public funds. This will in turn impact policing and the prison service and is predicted to be matched by a wider rise in crime. It is interesting to note (given our current government) that it is cheaper to send someone to Eton for a year than to prison.

These organisations also predict a worsening of our diets, especially among young children and lower income groups. Cheap food tends to have the least nutritional value and the most calories17. Other projected outcomes include a rise in teenage pregnancy and a significant negative impact on the early years experience of children from poorer backgrounds. This also comes at a time when a range of children’s charities and public sector bodies are discovering how vital the early years experience is to life chances and future development.

These reforms will hit unemployed families and families with low paid work, as well as all households with children regardless of income. They will disproportionately affect lone parents and in particular single mothers as well as disabled people and people with long term health conditions. There is no demographic which will not see a drop in income and there is no social group who will be protected from the affect this will have on our economy, our society and our friends. Frightening as the prospect is, it serves as a stark reminder that to successfully challenge these moves we must challenge the very concepts behind them. We must challenge the idea that childcare is somehow less meaningful than paid employment. We must challenge the idea that we are only worthy of respect when in full time paid work. And we must replace them with an obvious, human and omnipresent principle: from each according to their abilities, to each according to their needs.

Christopher Read has an MPhil in Politics from Sussex University and works for a community education service based in Edinburgh.



[2] Iain Duncan Smith: The Father of Four Who Wants to Provide Bread for Just Two, http://www.huffingtonpost.co.uk/hayley-meachin/child-benefit_b_2016625.html?utm_hp_ref=uk

[3] The Poverty Alliance, Briefing on the Stage One Debate Welfare Reform Bill

[8] ‘Benefit applicants: 75% fit to work or drop claims', BBC News, 28 April 2011

[9] Unfit for Purpose - Scottish CAB evidence on ESA, Citizens Advice Service, May 2010

[10] Sick and disabled people are being pushed off benefits at any cost, The Guardian, 31 July 2012

[11] The Poverty Alliance, Briefing Paper 18: Latest Developments in Employment Support Allowance

[12] Cambridge Centre for Housing and Planning Research, the University of Cambridge:

www.cchpr.landecon.cam.ac.uk/projects/detail.asp?ProjectID=169
www.cchpr.landecon.cam.ac.uk/outputs/detail.asp?OutputID=271

[15]Politics, welfare and recession could impact on drugs recovery, says SDF Chair, http://www.sdf.org.uk/index.php?cID=385

[16] UK Drug Policy Commission, A Fresh Approach to Drugs, 2012

 

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First published: 02 November, 2012

Category: Employment & Welfare, Housing

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2 Comments on "UK Welfare Reform: Further Than She Ever Dared!"

By treborc, on 07 November 2012 - 21:24 |

But of course it’s no more or less then labour did or would do if they were still in power. So picking on the Tories for carrying on with labour plans.

We see Miliband the bloke is off his rocker talking about a god dam Tory who died a long time ago Disraeli as if he was a socialist, then again I suspect he was more of a socialist then Miliband.

By Ann Carey, on 15 January 2013 - 09:16 |

Here is a copy of the letter I have written to my local paper today so feel free to use it to send to anyone you chose.

I hope that people are aware of the new welfare reforms due to come into force in April. Firstly these reforms, when put to the House of Lords, were rejected and recommendations were ignored. This resulted in accusations of ‘abuse of power’ by the House of Lords after the government overturned the House under the guise of ‘financial privilege’.

Over 70 agencies, including those who deal with millions of part time workers, children, cancer patients, the disabled and sick, self employed, the Housing Federation, the National Audit Commission, landlords associations, and more, have all asked that the government take into consideration the consequences for these groups of people and have made certain recommendations, all of which were ignored.

This means that a majority of only 66 MPs have dictated the fate of millions of people and disregarded the well informed advice from those various organisations throughout the UK.

Whilst the media has deemed these people to be ‘scroungers’, research undertaken by the Rowntree Foundation concluded that pensioners get one hundred per cent of needs met, a single mother gets forty per cent and a couple with children, sixty two percent of the minimum needed. Sixty percent of those receiving benefits work part time on low wages and cannot afford to even pay rent. Is this because they are lazy or is this because work is scarce and wages are far too low?

The proposed ‘Bedroom Tax’ will mean that anyone, regardless of needs, will have to pay fourteen percent more rent for one spare bedroom and twenty-five percent for two. Such needs could be for children in shared custody, parents taking up childcare with grandchildren whilst they work, medical needs, or multiple children under 16 of different sex.

The shortage of smaller properties for social housing was one of the points made by the House of Lords as being an unfair tax on those who do not have suitable homes to downsize to.

So who else beside the unemployed and part time workers will be worse off? Everyone!

Those who are in work will still have to pay higher prices. Councils will see a reduced income from housing benefit and will have to borrow from government, forcing council taxes up.

Unemployment will be even higher as local civil servants lose their jobs when government run agencies take over.

The self employed could be out of pocket under the proposed reforms, because losses will not taken into account in full as a deduction from household income.

Children will also suffer, according to Save the Children, as sanctions put on parents who make errors will mean suspended payments for up to three years, therefore starving children. Forcing people with children to take in lodgers could put children at risk by exposing them to people who may cause them harm. The government is obliged by Article 3 of the UN Convention on the rights of the child to ensure the child’s well-being are a primary concern.

According to the Residential Landlords Association, private landlords have already stated to the government that fifty two percent of private tenants would be displaced as the reforms will enforce a limit on the period of time that housing benefit can be received. After such a period, recipients would likely be unable to meet rent payments. Housing benefits will also no longer be paid directly to landlords, meaning tenants will be responsible for ensuring the money is given to the landlords. Many tenants have already asked for this to be reversed, as the direct payment gives them piece of mind that their rent is paid securely. Homelessless would certainly increase.

Forcing people to make their claims online only does not take into account anyone who cannot use a computer or those who cannot read or write. Have we become a nation that thinks those who are not literate should die of starvation?

To those who think creating chaos by changing the system to a new one, which will inevitably collapse under the strain,causing homelessness, poverty and destitution is worth saving £10 Billion a year to taxpayers, you should be aware that £70 Billion in taxes a year goes unpaid by the wealthy.

To put more perspective on what tax payers also pay, projected costs of new aircraft carriers for the Royal Navy is £10 billion, £18.5 billion was paid into the EU last year and a report conducted by Dr Sabir Giga of the University of Bradford last year found that the fallout from workplace bullying cost the economy £13.75 billion last year.

Roughly £100 billion is spent each year dealing with problems relating to promiscuity and relationship breakdowns and so far £420 billion has been spent on war. For a government to cut down the number of available jobs by privatizing industries and allowing unscrupulous corporations to take over, halving the workforce to increase the profits whilst calling those who lose jobs ‘scroungers’ and at the same time giving bankers billions of tax payers money and turning a blind eye to offshore tax havens that that syphon off trillions not billions… I’d say that something is badly wrong!

A peaceful protest will be held in front of the Hastings Town Hall at noon on Saturday the nineteenth.  Ann Carey (People Against Welfare Reforms-Facebook)

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