scrounger

Welfare changes founded on Tory rhetoric

The government is about to implement the biggest overhaul of the benefits system since the creation of the welfare state. These reforms have been heavily criticised by 17 charities and non-profit organisations in a report to Birmingham City Council which says that the reforms make child poverty targets “unachievable” and the Chief Executive of Birmingham CAB has warned of “social meltdown”.

Iain Duncan Smith purports that the main purpose of these welfare changes is to provide a greater incentive for people on benefits to work and that these changes will make the welfare system fairer, but fairer for who?

The government’s Universal Credit (UC) will be a new single payment for people who are looking for work or on a low income and will, the government say, help claimants and their families to become more independent.

The government plans to launch UC in April, starting with a number of pilots in parts of the north-east England and then it will be introduced nationally for new claimants from October 2013. Existing claimants will be transferred to the new system in stages until 2017. It will replace the current system of tax credits and benefits for working age people with a new single payment which is paid monthly rather than the current system of weekly or fortnightly payments.

The main differences between Universal Credit and the current welfare system are:

  • UC will be available to people who are in work and on a low income, as well as to those who are out of work
  • most people will apply online and manage their claim through an online account
  • claimants will receive just one monthly payment, paid into a bank account in the same way as a monthly salary
  • support with housing costs will go direct to the claimant as part of their monthly payment.
  • There will be a benefit cap in line with the average weekly wage

There will be a maximum cap on benefits that a household can receive based on the average earnings of a working family (this includes other benefits such as Child Benefit). The benefit cap is designed to make it impossible for anyone to receive more on benefits than the average weekly wage after tax and national insurance.

  • For couples and lone parent households the cap will be £500 a week
  • For single adults the cap will be £350 a week

The benefit cap will be brought in nationwide in April 2013 and reductions will be made to housing benefit payments until universal credit takes over in October 2013.

The benefit cap will most certainly hit larger families and those who live in comparatively wealthy areas the hardest, and Mumsnet suggest that this “may result in ghettoisation of poorer working people and some people being forced to leave their homes.”

Other concerns include fears that UC will result in harsh assessments of people with disabilities and those who are currently unable to work because of illness as well as there being unrealistic expectations for lone parents with young children to go out to work.

Estimates from Disability Rights UK have suggested that 67,000 households will be affected in 2013-14 and 75,000 in 2014-15, with 54% of these being households in Greater London.

Other concerns raised refer to how Council tax credit will be administered by local authorities. The Instititute of Fiscal Studies (IFS) has predicted there will be problems with this because local authorities have been given less funding to administer the credit, which may lead to crude fixes and arbitrary means-testing. The IFS predicts poor families will end up paying 19% of their council tax.

Claimants will have to sign a claimant commitment form to get UC (apart from some groups of people who are excluded such as those with caring responsibilities). If you’re out of work this form sets out what you must to do look for work, such as preparing a CV or registering with a recruitment agency. If you don’t stick to the agreement, your benefit may be reduced or withdrawn.

Mumsnet argue that this commitment will tie in to the workfare schemes, where people will have their benefits cut if they are unwilling to work unpaid for six months. This is called the community action programme or ‘support for the very long-term unemployed’, but critics say it could be an easy way for companies to get free labour and take advantage of people who have been unable to find work (not to mention the fact that it would essentially remove paid jobs from the labour market by converting them into ‘free placements’).

Claimants with limited capability for work-related activity (as defined by a work capability assessment); Claimants who receive the carer element; Those who are responsible for a severely disabled person for at least 35 hours a week or a lone parent with a child aged under one are exempted from this commitment but there are concerns.

The new way of assessing fitness to work for people with disabilities has shown a ‘tick-box’ approach that doesn’t consider individual needs and may disregard ‘hidden’ disabilities, such as autism and mental health problems.

It is also feared there will be targets for private companies who carry out work capability assessments, which will reward them for declaring more people fit to work. This was the subject of a Channel 4 Dispatches programme: Britain on the Sick.

Claimants will have to meet degrees of conditionality in order to receive UC and claimants for the basic part of universal credit will be divided into different groups:

  1. No work-related requirements – because they may already earn enough or they may not be able to work at all.
  2. Work-focused interviews only – designed to keep people in touch with the labour market. This group would include a lone parent of a child between the ages of one and five.
  3. Work preparation group – claimants need to prepare to move to work or better paid work and may include people with a limited capability for work.
  4. All work–related requirements group – need to be looking for and available to do any type of work, usually full time. There will be concessions for parents of children aged 5–13 (where work hours would be limited to school hours), although it appears there may be concessions regarding work hours for parents who care for children aged 13–16, too.

There will be a three-month period where claimants will be able to look for work in a specific area and at a level of pay they have previously had, after which they must be willing to accept anything.

These requirements may be designed to help people into work, but the tough sanctions (fixed period sanctions of 91 days for the first failure; 128 days for the second failure, if it occurs within 52 weeks of the first; and three years for third and subsequent failures, if they occur within 52 weeks of the previous failure) mean that people will be forced into low-paid jobs.

Further sanctions will be applied if:

  • There is a failure to undertake mandatory work activity without good reason
  • There is a failure to apply for a particular vacancy without good reason
  • There is a failure to take up an offer of paid work without good reason
  • Paid work ceases by reason of misconduct, or voluntarily without good reason
  • Pay is lost by reason of misconduct, or voluntarily without good reason

If a claimant starts work, some of their earnings will be disregarded before there are any deductions to their UC payment. Once these disregarded earnings have been taken into account, UC will be withdrawn at a rate of 65p for each £1 of net earnings. So, after the disregard, claimants will be £35 better off for every £100 they earn. Not a great target for aspiration.

The government plan for UC is that it will be managed online with the notion of paying benefits monthly to reflect the world of work. The reality of this being that those receiving even a low income will likely have more monthly income left at the end of the month that those relying solely on benefits, further proliferating the dependency of ‘pay-day’ loans.

The Chartered Institute of Housing states that 400,000 of the country’s poorest families – among them those in poverty and on the minimum wage – will have less income in 2015 than they did in 2010, despite ministerial assurances that no one would lose out under its plans. The CIH calculations show that “the government’s aim for households to be better off in work than out of work under universal credit is not the case for all families.” They report that households that earn £247 or less a week will see a fall in real income in 2015, and lone parents with up to three children will always be worse off if UC remains in its current form.

There has been widespread concern about managing UC online with major concerns about the IT capabilities of the new system which is supposed to work alongside PAYE tax details, and employers are supposed to feed payment details into the system to make the benefits system ‘dynamic’. Reports suggest the system is not ready and there have been large delays in processing information. The system relies on real-time information being provided to track claimants’ earnings. All employers are supposed to submit wage information, but it may prove difficult for smaller companies to do so.

Other concerns focus on the assumption that all claimants can manage accounts online, with the Citizens Advice stating that “The new universal credit system risks causing difficulties to the 8.5 million people who have never used the internet and a further 14.5 million who have virtually no ICT skills,”.

Further concerns are stated in full elsewhere regarding the implications of UC being paid monthly and being paid to one member of a household, and the gap that may exist when the current system is phased out and the new one starts.

George Osborne is fond of saying, “where is the fairness…for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next-door neighbour sleeping off a life on benefits?” And the Cameron has often talked of the benefits bill “sky-rocketing” while “generations languish on the dole and dependency”.

The assumption then that everyone is online and able to update their ‘account’ simply based on this Tory contemptuous rhetoric of the ‘benefit scrounger’, living an ‘idle’ and indulgent lifestyle spent watching Jeremy Kyle on their 50” plasmas and updating their FB pages.

The reality of course is far different – The benefit scrounger is the bogeyman of British politics, stalking the corridors of Westminster.

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Time to stand up and be counted

In the midst of a media frenzy that focused on the Leveson-inspired Royal Charter for press regulation you could be excused for not being aware that MPs on Tuesday were debating a piece of emergency legislation that could set a dangerous precedent and threaten civil liberties.

For Labour MPs, the vote should have been very clear, very straightforward, very simple as the Tory led government had been defeated in the courts because quite simply, the Department for Work and Pensions (DWP) had been found to have broken the law.

Workfare and the spurious ideology that underpins it has been exposed by the ongoing activism of community campaigning groups such as Boycott Workfare, and came to the fore as a result of action taken by a young woman from Birmingham, Cait Reilly, who refused to work for free in Poundland as this prevented her from undertaking voluntary work at the Pen Museum in Hockley.

This brave action, standing up against the Tory rhetoric of ‘scrounger v striver’, and against an aggressive right wing press who have determinedly portrayed our growing army of young unemployed people as workshy scroungers lacking any real aspiration or initiative, Cait took the Tory Government to the courts, and the courts found in her favour.

The Court of Appeal ruled that the DWP had illegally sanctioned unemployed people who had been forced to work for free. The Court noted that the ‘Workfare’ scheme itself was not breaking the rules; but ruled that the DWP had not given sufficient legal information to those on workfare about what they were required to do, and their rights. As a result of violating the law, the Court of Appeal awarded damages of between £530 and £570 to jobseekers who had been illegally forced to work for organisations such as Poundland for no pay.

The response of the DWP was to immediately table the Jobseekers (Back to Work Schemes) Bill.  This bill, effectively reversing the Court of Appeal’s decision in order to “protect the national economy” from the claims of the other 225,000 participants in Workfare and similar schemes whose cases might result in compensation claims for the government of over £130 million.

This response was not surprising; with the Tory led government seemingly declaring themselves as being above the law and pushed through legislation rushed through Parliament on the quiet, to initiate proposals to change the law retrospectively.

Tuesday’s vote should not have been clearer for our Labour leadership, in the knowledge that a Tory Government had been defeated in the courts because it broke the law.

The vote should have been clear for our Party, being the one organisation that avowedly supports ordinary people, and at this juncture in Britain’s history, is needed more than ever to rescue working people and hard working families from the savage austerity foolishness that this Tory led Coalition is espousing.

Our Party surely would not bolster the Tories, assisting them with their onslaught against some of the poorest in society and allowing them to ride roughshod over British law?

43 Labour MPs (including Hall Green’s Roger Godsiff) stood by the true tenets of the Party, standing up for core Labour values of decency and justice, breaking the whip of abstention and voted against the proposal.

Our Party, formed in unity to provide a collective voice, and to improve the living and working conditions of the working classes have seemingly let us down.

Have those who we put our trust in, to represent our interests and our Party values lost touch with their founding roots and have the ‘ordinary’ working classes been abandoned?

Like many party members out there I am struggling to understand what went so very wrong and believe that those involved in the decision to abstain on the bill, and those who espoused the party line should not only face up to the ire of us all but be held accountable for their actions.

Labour is in a strong position to win the next election but only if it continues to confront the coalition on basic issues of social justice. Our Party must not make this mistake again.

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We’re Rebuilding Britain