Some arguments about the UK government's welfare reform programme - They have a problem with pensioners, which they have yet to sort out
- 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
12. They have a problem with pensioners, which they have yet to sort out
Thus far the Coalition have avoided tackling the problem of pensions, a growing and unwanted expense for capital. They have excluded most pensioner benefits from the war on welfare, in the hope of gaining a short term electoral advantage. They have allowed the benefit for the poorest pensioners - Pension Credit - to be eroded in value but protected the universal State Retirement Pension. But this still leaves them with a growing pensioner population and a growing cost to which Cameron has committed the Tories at least, indefinitely. The calculation has been that the electoral return on this cost (that is the degree of consent to neoliberal, austerity policies) has been sufficient to justify the expense - but the calculus here can shift.
One effect of all this is that the one date which is imprinted in the psyche of most poor people from their late 50’s on is their qualifying age for state pension credit (QUASPC - yes it’s an acronym). This is actually female retirement age but also the qualifying age for pension credit for men and for mixed-age couples; it is going up continuously until 2021 by which time it will be 66 for both sexes; until then it changes month by month. This date acts like a promise of deliverance and plenty when you’re struggling along on JSA or ESA. Your money will often more than double overnight on that frabjous day. Problems like the bedroom tax and abolition of council tax benefit will simply evaporate. You escape the benefit cap and get guaranteed annual upratings. You can no longer be vilified in the press and on TV; you have suddenly become a meritorious citizen with richly deserved entitlements, not a scrounging lowlife. You have moved into a different realm and have your bus pass as proof of citizenship there.
Pensioners in fact are being recreated as a separate, loyalist, enclave within the neoliberal state, whose political effectiveness was apparent in Indyref - around 70% of Scottish pensioners voted ‘No’. This is a development not confined to the UK - social security and Medicaid, the principle elderly benefits in the USA, were exempt from most of the Reagan and Clinton welfare cuts - and relatively recent - the more generous treatment of the elderly poor in the UK dates only from the 1990s.
Within that enclave things look different. Income inequalities within the pensioner population are real enough but lower than in the rest of the population and are, for now, decreasing. Welfare cuts do affect some pensioners but not very visibly. Pensioner poverty is at lower rates than poverty elsewhere and mitigated by the continuation of the full range of free services - prescriptions, bus travel, TV licences etc. Pensioners, at the most basic level, do not tend to use food banks.
The problem for the ruling class is that this relative generosity is unsustainable. They have the sketch of an outline for a solution. They will abolish the efficient, low cost, SERPS and replace it with a flat rate pension, leaving the field open to the private pensions industry to sell its high cost, massively corrupted wares as a supplement. Then they are considering privatising the administration of State Pension to create yet another cash flow infusion for needy contractors. They will raise state pension age - to 66 for both sexes from 2021 - and keep raising it. They will squeeze the life out of public sector pension schemes, purloining the assets wherever they can. They will ration, cut back, automate and inflate the charges for, both social and NHS care. They will try to incite generational resentment. But still approaching 60% of the welfare budget is directed at pensioners and they need more ways of getting at this income stream.
They are divided about what further moves to make. The Tories have committed themselves to maintaining present provision for another electoral term in a straightforward calculation of the political benefits. Labour politicians are practically wetting themselves in their eagerness to present their alternative, their hands spearing the air like a coven of Hermione Grangers - ‘Please sir, we know the answer’ - as they audition for the government role.