Some arguments about the UK government's welfare reform programme - They are not trying (very hard) to reduce welfare expenditure
- Category: Analysis
- Published on Tuesday, 21 October 2014
- Written by Richard Atkinson
- Some arguments about the UK government's welfare reform programme
- 1. They are not trying (very hard) to reduce welfare expenditure
- 2. They do not want, at all, to reduce welfare dependency
- 3. They are not interested in getting people into work...
- 4. ... because they don't know what to do with people when they are working
- 5. They are not, exactly, aiming to abolish the welfare state
- 6. … not least because the present welfare state is their own, neoliberal, creation
- 7. They are converting the DWP into a punitive arm of the state
- 8. They are looking to create a low waged, unskilled, precarious workforce
- 9. They are enforcing a patriarchal discipline on women and families by means testing
- 10. They are winning ...
- 11. ... and Universal Credit will seal their victory for a generation
- 12. They have a problem with pensioners, which they have yet to sort out
- 13. Labour are as deeply committed to these aims as the Tories
- 14. Why it’s Welfare, not Social Security
- 15. Why it’s back to 1601 not 1834
- 16. No-one asked for welfare
- 17. Against welfare: for class independence
- ADDENDUM - On proposals for an Unconditional Basic Income.
- All Pages
1. They are not trying (very hard) to reduce welfare expenditure
The total welfare spend under the Coalition is still increasing (as critics from the right have noted) instead of flatlining as they originally claimed to plan. Had they been serious about reducing expenditure they could not have largely exempted pensioners, who receive approaching 60% of all welfare payments from the scope of their cuts. Reducing expenditure is not in fact their main aim. Rather they aim to reconfigure both expenditure, and the experience and understanding of welfare, to meet the needs of capital.
This does not mean the cuts are not real: they are and they are getting worse but they are concentrated on the working age population. The total planned cuts, not yet fully implemented, amount to about £23 billion a year, or around 25%, compared to what expenditure would have been, for people aged 16-65. The effects are generalised across the working age population, in work and out of work. Disabled people will face the biggest cuts of all proportionately but many of these cuts have yet to be fully implemented. This has been enough to cause widespread hardship but not enough seriously to divert the demographic growth of pensioner welfare and the impact of rising rents and declining real wages. Notably, there has been no attempt at all to reduce the scope of the welfare system, for instance by excluding people in work.
The earliest cuts, from 2010, affected primarily people in work - like the increase (from 16 to 24) in the hours limit above which couples could claim Working Tax Credit; the time limiting of contributory Employment Support Allowance (ESA) - marking the effective end of the contributory system established in 1948 - and restrictions in the rent allowed in private rented accommodation. These amounted to a major attack in themselves but were just a preliminary exercise before the assault which began from April 2013.
The biggest reductions in expenditure since 2013 are hidden - they come from below inflation annual uprating (1%; nil from 2015) across most benefits and tax credits combined with a steadily increasing pressure on household incomes. More money is needed for rent because of Housing Benefit reductions; contributions to council tax are now required from all non-pensioner households; working tax credit is reduced, employment support allowance is means tested for people with other resources like a working partner. These cuts are now set to continue indefinitely under the caps on welfare expenditure supported by both Labour and the Tories, creating a background of misery for millions of people at the mercy of the neoliberal state.
More dramatic in effect than these systemic attacks have been cuts which are actually smaller in the savings achieved but deliberately targeted at the points where they produce most pain. The bedroom tax claims to save £500 million and in fact probably saves almost nothing - but people lose their homes through it. The abolition of the Social Fund - emergency cash support from the DWP - saves even less because the help formerly provided was largely in the form of loans and recovered from later benefit payments - but it is the biggest single factor behind the explosion of food bank usage. The abolition of council tax support is producing a cumulative nightmare as one year's arrears are added to the next and enforced, increasingly, by bailiff action. The benefit cap affects mainly people with large families or with private rented accommodation in London where it designed to enforce a social cleansing of the most expensive areas. Less than 50,000 households have been affected in total, often not by much and not for long, but the propaganda value has been maximised by publicising a few statistical outliers. (Recent Tory proposals for a reduced benefit cap of £23,000 will have a more widespread effect). Coming in October 2014 is a 7 day waiting period at the start of most benefit claims - again the savings are tiny but the rule is deliberately designed to have maximum impact at the most difficult time. These are cuts for their own sake - official, politically sanctioned sadism with no fiscal or economic rationale at all but intended to normalise and make acceptable new levels of cruelty.
It is the April 2013 cuts that account for the sharp rise in food bank usage since then. They are cumulative, and multiple cuts can affect the same people. It takes time for the full effects of falling incomes and withdrawn services to be felt and sure enough, we are only now beginning to see the first signs of increasingly acute, widespread, distress: homelessness is starting to rise as repossessions increase; household incomes for the poorest families are falling; increasing numbers of children are being taken into care. But it is only eighteen months into this new regime and the worst is yet to come.
Then consider that much of the most acute suffering associated with welfare reform has been caused, not so much by cuts to expenditure as by the associated tightening of claimant discipline through sanctions, and through ATOS medicals. And offset against notional savings to the state through welfare reform should be several billion pounds paid to welfare to work providers like ATOS, G4S and other Work Programme contractors to implement these new punishments - both costly and largely ineffective in their stated aims, these programmes have nonetheless been uncritically adopted by this ‘austerity’ government. These costs are never included if official counts of welfare expenditure. But then reducing overall expenditure on welfare is not really what they are after.