Category Archives: Welfare system

Blair is living in a state of deluded denial

There never was a truer example of ‘when you’re in a hole, stop digging’.   His article in the Observer today is a gift to his opponents, but it does even more damage to himself.   He reveals himself as increasingly deserted even his previous closest followers, an utterly broken man watching everything he stood for swept away before his eyes.   He has gone from opposition to delusion, from hysteria to denial.   But what is perhaps most disturbing of all is that he can’t, as he himself candidly admits, understand why the Corbyn earthquake is happening.   He just blankly refuses to acknowledge the passionate resentment which he and New Labour created by laying the foundations for the financial crash of 2008-9 and making the squeezed middle and brutally punished poor pay for it, by taking Britain without any constitutional approval into an illegal was with Iraq, by introducing into politics the hated regime of spin and manipulation , by indulging now his squalid lust for money-making, and by clearly having no more overriding desire than to strut the world with Bush.

He describes his opponents as trapped “in their own hermetically sealed bubble”, when that applies exactly to himself.   If what he says were really true, why has the Labour electorate swelled to over 600,000, 50% larger than he managed even at the height of his pomp when so many were glad to be rid of the Tories on 1st May 1997?   Why is he so unfeeling and unapologetic about aligning the New Labour alongside the Tories in pursuit of austerity from 2010 onwards, especially since Osborne’s policy (to shrink the State) has been so dramatically unsuccessful in reducing the deficit?   Why did he urge the Blairites to support the government’s welfare bill which opposed every tenet of the real Labour Party?   Why did he push for privatisation of the NHS and other public services?   Why did his acolyte Mandelson say “New Labour is “relaxed at people becoming filthy rich”, and proved it by letting inequality balloon to even highe heights than under Thatcher?

So after doing all those things, how does he expect Labour members and the country to treat him?   After a 20-year temp;orary iruption of hi-jacking the party down a route utterly alien to its founders, in order to ingratiate himself with corporate and financial leaders on their terms, how can he imagine that anyone wants him back?   He has a lot to learn, less egoism, more humility.

Iain Duncan Smith demands that same proportion of disabled people work as able-bodied

As part of the government’s plan to extract £12bn from social security benefits, IDS has announced his latest target is “the disability employment gap”.   According to analysis of official ONS figures, this represents the difference between the number of disabled people who are in employment (48%) and the figure for the general population (73%).   The implication is that IDS expects the same proportion of disabled people to work as those who are able-bodied!   Just what does he believe disability means?   There is a long and aggravated Tory history behind this latest announcement, beginning with Thatcher’s attempt to conceal the true unemployment figures by switching applicants en masse to the category of disability and making them subject to incapacity benefit rather than unemployment benefit.

This legerdemain was prompted by unemployment spiking at 3.1 million in 1986.   It led to 1.6 million claimants being badged as incapacitated rather than jobless.   As soon as the unemployment crisis passed, the Tory government changed course and did all it could to cut back the numbers who could be classified as disabled.   The Blair continued the action, but did not get far.   The really big cutbacks only took off with the Cameron government which took on the big French IT firm, Atos, to carry out ‘work capability assessments’ on a systematic and relentless basis to force disabled persons back to work by declaring they were fit to work and therefore if they failed to get work they would be liable to loss of benefit for anything between 4 weeks and 3 years.   This infamous system generated massive complaints, but the government carried on regardless.

The objections were mainly that the examinations by Atos were often perfunctory and the questions asked largely irrelevant, and leaks from DWP staff indicated that the government had set targets for the removal of claimants from the benefit lists.  DWP of course denied this, but that can be taken with a pinch of salt from a department so desperate to conceal the truth as to now being found out using invented stories from fictional claimants, not just once but at least twice, to pretend that benefit sanctions were actually positive and beneficial!   In fact the Information Commissioner has now overruled attempts by DWP to withhold statistics of the number of claimants of incapacity benefit and employment and support allowance who died after being declared fit for work and then had their benefits stopped.   DWP then said it had always intended to publish these figures!   It seems impossible for a government department to stoop any lower than these constant lies, subterfuges and chicaneries, and since they are all politically driven IDS, if he had any integrity, ought to resign.  But of course he won’t.

Anti-austerity should be clincher of Labour leadership contest

Austerity is the wrong policy on every count.   Over-spending was not the cause of the financial crash,  so austerity is not the right policy for dealing with what did cause it which was the bankers’ arrogance and irresponsibility triggering the global recession.    When the massive bank bail-outs led to huge budget deficits, austerity was the wrong policy to cut the deficits because prolonged contraction of the economy makes deficit reduction far harder to achieve than systematic growth and expansion.   And all that still leaves aside the cruel torture of impoverishment and hopelessness which endless austerity imposes on the innocent victims of the crash whilst letting the guilty perpetrators go free.

In the Labour decade before the crash the average budget deficit was 1.4% of GDP, half the average under Thatcher and Major.  Moreover Labour inherited a national debt from the Tories in 1997 which stood at fractionally under 40%, but reduced it to 36% by 2007.   So there was no Labour over-spend, though there certainly was substantial Tory over-spend.   In neither case however was austerity justified as a counter-measure when the true cause was external and the real motive for its imposition was, and still is, Osborne’s desire to shrink the State rather than primarily to cut the deficit.

The bail-outs did produce a peak budget deficit of £157bn in 2009-10.   The stimulus of Alastair Darling’s last two expansionary budgets cut this by £40bn by the end of 2011, but the Osborne austerity budgets then kicked in which slowed deficit reduction by two-thirds. That’s because continuous contraction of the economy flattens growth which then enforces a slowdown in deficit reduction, which is exactly what happened in 2012-3 and which now seems likely to recur if Osborne imposes his £12bn further cuts in benefits plus another £29bn cuts in public expenditure.

Most wicked of all is the Tory indifference to the merciless battering inflicted on the squeezed middle and the helpless 20% at the bottom of society.   Over 150,000 elderly and disabled persons no longer receive help with washing and dressing because Councils are now so cash-strapped that they can only afford help to those with the most extreme needs or none at all.   Councils now, because they cannot fund alternative accommodation, regularly every day at 700 different locations break the legal requirement that children should not be forced to stay in bed-and-breakfasts or shared hostels for more than 6 weeks at a time.   And to sidestep the opprobrium arising from austerity increasing child poverty, the Tories have cynically changed the definition of poverty to avoid any measure based on lack of money and instead to focus on ‘life chances’.

Tory welfare reform is pure political mischief, but at least 124 of us voted against it

It is extraordinary that the Labour party could have got itself into such a muddle over welfare reform (which is Tory-speak for crippling welfare cutbacks) when Osborne’s sole motive for this bill, which had its second reading today, is to create divisions within Labour and label it as the party of shirkers.   The bill is awful.   Despite some useful provisions on apprenticeships, it ignores the plight of children in low income working households, removes the concept of child poverty from the statute book, increases the number of children living in poverty, worsens work incentives for people with below average incomes, and cuts the incomes of sick and disabled people.   The attempt of the interim leadership to square all this with Labour’s need to get on-side with public opinion, repeatedly corrupted by Osborne and the Tory tabloids ranting against the poor and jobless, predictably got the worst of both worlds – a split party and an unconvincing compromise presented to the electorate.
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Labour leadership contestants need to break out of Tory cage

What is so disappointing (so far) about the Labour leadership contest is the failure to edge the party to any significant degree away from a look-alike Tory posture.   Osborne launches the biggest cuts programme of the last century, and we are told that if we wish to be taken seriously we must be as fiscally conservative as the government.   Osborne preens himself with running the economy on a permanent surplus, and Labour, not to be outdone, endorses the idea, absurd and unworkable as it is.   The Tories taunt Labour for being on the side of shirkers against strivers – a ridiculous claim when Osborne has just impoverished millions of workers in poverty by severe cutbacks in working tax credits – but Labour, for fear of being lampooned by the Mail for being soft on ‘lifestyle’ benefit recipients, lamely echoes its support for tightening the benefit cap.   When is Labour going to stand up and assert what it really believes in?
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The Blairites are beginning to panic about Jeremy Corbyn

Having at the outset of the leadership contest been contemptuously written off as ‘unelectable’, Jeremy Corbyn seems to be surprising everyone that he is now rapidly emerging as a serious contender.   But they shouldn’t be surprised.   He represents what the majority of the Labour Party have been crying out for for years – a leader who does not think that we should all behave like mini-Tories, who is not an insider member of the enclosed Westminster bubble, and who genuinely engages with grassroots activists campaigning across the country and indeed internationally.

The Blairites don’t get it because they believe that their ideology of light-touch financial deregulation, market fundamentalism, privatisation of public services, relaxed attitude to people becoming filthy rich, keeping the unions on a very short leash, and hob-nobbing with the corporate elite is the natural order of modern politics.   But those are Tory themes and they are not shared by the vast majority of Labour members.  They are in fact the reasons why throughout the noughties the leadership became so estranged from the grassroots base of the party.   To return to these basically Tory themes now would risk not only alienating further a disconsolate party, but actually splitting it altogether.
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Child poverty could be Tories’ Achilles heel

The Tories’ relief that the child poverty figures just published in the official Households Below Average Income (HBAI) statistics didn’t show an increase was palpable.   But that conceals the real story.   The Tories have form on this issue.   Child poverty tripled under Thatcher from 1 in 9 children to 1 in 3, but then fell by 800,000 under Labour after 1997.   Unexpectedly this trend continued initially under Cameron with a fall to 2.3 million in 2010-11 because middle class earnings declined (so that the threshold of 60% of average earnings dipped a bit) while benefits protected the poorest.   However that easing of the child poverty stigma has now come firmly to an end as a result of the housing benefit cap, the bedroom tax and the 1% cap on benefit increases.   Indeed it is now forecast, particularly if the new round of £12bn cuts is launched in the budget, that child poverty will have increased by one-third to 1 in 4 children by 2020.
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Welfare cuts will make nonsense of Cameron narrative of working class conservatism

Osborne is in a fix.   If he is determined on £12bn welfare cuts come what may, he has a choice: either at least part of the half of social security spending which is currently protected will have to be raided, or there will almost certainly have to be significant cuts in in-work benefits which would seriously undermine Cameron’s claim/fantasy to be champion of blue collar conservatism since such workers are heavily dependent on these benefits.   Of the £220bn social security budget, State pensions take £92bn, universal pensioner benefits £2.8bn and child benefits £12.7bn.   That leaves only 3 large sectors within that budget which are being targeted – tax credits, housing benefit, and disability benefits.   All three are politically explosive.
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Osborne’s £12bn cuts mainly from those in work will backfire badly

Contrary to incessant Tory propaganda about a pervasive culture of welfare dependency, the evidence actually shows jobless benefits claims are now at a 35 year low, but will be put at risk if Osborne pursues his £12bn welfare cuts at the expense mainly of people in work.   Of the three out-of-work benefits – unemployment benefit and income support mainly for single parents and disabled persons – the proportion of the working age population receiving one of these benefits (according to the Resolution Foundation) peaked in 1993 at 17%.   It now stands at 10%, its lowest level since 1980.   The number of children living in workless families has also dropped from 20% in 1996 to 12.5% now.   There are now fewer than 100,000 workless couples with children (excluding where adults are disabled).   Moreover the UK employment rate for single mothers has risen from under 40% in the early 1990s to 62% now, and has continued to rise through this latest recession.

These statistics point to two important conclusions.   One is that the Tory-promoted stereotype about a welfare class opting for a life of State-funded leisure is utterly wrong.   The other is that the gains that have been achieved by providing significant financial support for working households are in danger of being eradicated if Osborne gets his way by victimising those on in-work benefits.   Because the government regards pension benefits as out of bounds, the welfare cuts will be mainly concentrated on tax credits and disability benefits.   But this will have perverse results.   Reducing the value of tax credits may well make it no longer economically worthwhile for people on the lowest paid margins to work.   Equally, if Osborne curbs Britain’s system of maternity pay and rights which has kept so many young mothers connected to the labour market, the economic incentive to stay connected will simply drain away.

The real answer of course is raising the wages of the depressed bottom third of the working population.  It has been estimated that the saving to the State in tax credits and in-work benefits would actually outweigh the cost of the higher wages.   What is really needed now is a significant rise in the minimum wage, currently £6.50 an hour, to a Living Wage standard of (say) £8 an hour which is then annually increased either in accordance with the national average wag or with inflation, whichever is the higher.

Osborne will certainly not do this.   But what he will do, just as his deficit-cutting machine will choke off growth, his welfare cuts machine will whittle away most of the employment gains of the last 20 years.