Welfare warfare

The House of Commons debated the Welfare Benefits Uprating Bill today. As with all Bills, the Secretary of State Iain Duncan Smith was obliged to consider whether it was compliant with the Human Rights Act.

“In my view, the provisions of the Bill are compatible with the convention’s rights,” he droned.

Well, that’s a relief for the millions about to have their benefits capped.

Clause I of the Bill says it all. “The Secretary of State must, in each of the tax years ending with April 5 2014 and April 5 2015 make an order by statutory instrument increasing each of the relevant sums by 1 per cent.”

Pretty well every benefit is affected. Child benefit, income support, jobseeker’s allowance, housing benefit, statutory sick pay and statutory maternity pay, all limited to a 1 per cent rise well below inflation.

The implications for everyone who receives any of these, even if they are in work, are huge.

A couple with two children who pay £130 a week in rent, with one of them working 40 hours a week at minimum wage – equating to £13,000 a year – will be £3.50 a week worse off this April, £8 a week worse off the next April and £13 a week poorer by 2015.

Until this government came in, working-age means-tested benefits were raised in line with the “Rossi index.” This was introduced in 1987 by then Tory social security minister Hugh Rossi, who decided that benefits should be uprated each year in line with the retail price index (RPI).

On taking office in June 2010 Duncan Smith immediately switched calculations to the consumer price index (CPI), which does not include housing costs and therefore rises more slowly than RPI. Over 10 years a benefit calculated by CPI would end up being worth 86 per cent of one calculated by RPI.

This measure alone will have taken £10.6 billion out of the welfare budget by 2015. But it’s not enough for the government. Now the link between benefits and inflation itself has been severed.

The brutal cap is defended by Chancellor George Osborne on the grounds that it is not fair on working people that out-of-work benefits have risen by 20 per cent since 2007 while average earnings have risen by 10 per cent.

Using the fact that wages have not kept pace with inflation, which is in no small part down to the government, as an excuse to attack benefits is a particularly cynical tactic.

A cut in income for working-age parents also has an impact on their children. Already the coalition’s record on child poverty is dire.

One of the good things Labour did between 1997 and 2010 was a serious campaign to eliminate child poverty in Britain. Targeted benefits and support for the poorest families were provided.

In 1997 26 per cent of Britain’s children were living in poverty. By 2010, that was 17 per cent, and it was on a trajectory that would have reduced that to 10 per cent by 2022.

But there was a stark change in the graph as soon as the Tory-Lib Dem coalition took power. The child poverty rate rose immediately. It’s now at 21 per cent and is set to rise to 25 per cent by 2017.

The effects of poverty on health are obvious. Studies by the Zacchaeus 2000 Trust show that in one of London’s poorest boroughs, Tottenham, the number of children born with low birth weight was 12.5 per cent, compared with a national average of 7.5 per cent. In healthier countries it is lower – for example it stands at 3.8 per cent in Iceland.

Low birth weight often leads to further problems in later childhood and has been linked to underachievement in education.

So the benefits cap will keep child poverty rising. Who else is affected?

Disability benefit is affected slightly differently. However, the government’s welfare strategy has still thumped disability benefits very hard.

Since the “emergency Budget” of 2010 £500 million has been taken from the pockets of disabled people.

The Benefits Uprating Bill does further damage. The employment support allowance cut takes another £87 a year off each claimant. This goes hand in hand with the abominable Atos testing system which puts many disabled people through appalling stress as they’re told they’ll lose their benefits and be forced to go to work, even if they’re not in a position to look for a job. Then the applicant appeals and often wins.

Housing is another major source of misery, poverty and poor health in Britain. Instead of controlling the exorbitant rise in rents, the government is controlling the level of housing benefit that is paid to all claimants irrespective of their landlords.

It is common for me to come across constituents who are paying 300 per cent of what their neighbours in council houses pay, renting from landlords who privately let homes they bought cheaply from the local authority under Thatcher’s right to buy.

The effect is the social cleansing of many inner London boroughs as those in receipt of housing benefit cannot afford to pay the gap between the benefit and the market rent. They are forced to move into even less acceptable cheaper accommodation elsewhere. This is cruel and brutal, and can only be addressed by a massive council-house building programme and the registration and regulation of all private tenancies.

The politics behind the debate are interesting. In his Autumn Statement last month the Chancellor announced his 1 per cent uprating cap.

This made BBC political correspondent Nick Robinson very excited. This was a “trap for Labour.”

Osborne followed up by challenging the Labour front bench to admit that they were the friends of the “scroungers” so beloved of Tory media myth-makers rather than the “strivers.”

The “trap” was aimed at pushing Labour into marginalising the very poorest in our society and accepting the arguments put forward by former new Labour ministers such as Jacqui Smith, who said she didn’t want the image of the Labour Party to be that of caring more about those unwilling to work than for those struggling in work.

The old taunt that Labour was a party careless with taxpayer’s money was trotted out. But the argument is surely very straightforward.

We live in a society that is deeply divided between the richest and the poorest. The only protections against destitution are the benefits system, the provision of council housing and the National Health Service.

Whenever Labour has clearly campaigned for a fairer society, closing the gap between rich and poor and ensuring that every child is properly valued, the message has been understood by those in work and those out of work alike.

The real “trap” is accepting the daily drip-feed of the Murdoch newspapers, opposing anyone in receipt of any benefits. That is the slippery slope to the abyss.

In this context it is regrettable that shadow chancellor Ed Balls should come up with a good suggestion – that all long-term unemployed should be offered a job – and then ruin it by saying the refusal to accept what could be a wholly inappropriate job will be punished by the loss of benefits. It is a depressing first step on the road to workfare.

The austerity proposed by Osborne after the 2010 election was supposed to pay off the debt created by the banking crisis.

The reality is that two-and-a-half years into this government the debt is higher, taxation income has fallen due to rising unemployment and the poorest people are paying the most for a crisis that was not of their making.

A welfare state is not necessarily socialism, but it is a step in the direction of a society based on need rather than greed.

The Tories have shown their contempt for the poor. It’s up to Labour to stand with the poor majority rather than the wealthy minority.

Labour must reject austerity at the Autumn Statement

Ahead of next week’s Autumn Statement by George Osborne, the OECD reports today that the Chancellors ‘deep fiscal consolidation continues to drag down growth’ and that ‘unemployment is expected to rise slightly in 2013’.

At the same time the report is supportive of the ongoing austerity policy, specifically backing the increase in the pension age and introduction of universal credit, as measures to get growth moving again.

Labour should seize on the contradictions in the report and not only condemn the austerity policies and punitive attacks on working people.

When it comes to the Autumn Statement next week, Labour should be ready to offer a positive alternative of long-term public investment to create jobs that will lift the economy into growth.

This was outlined at last week’s Alternatives to Austerity: Investment Not Cuts meeting in Parliament.

Shelly Asquith, chairing the meeting, opened it by saying we can’t sit back and wait for the Coalition lose – we need to win with an alternative message that rejects Tory economic plans and mobilises Labour voters.

Katy Clark MP kicked off by saying we need to recognise that Gordon Brown had made the right call by introducing a fiscal stimulus in 2009. It was that policy that meant the Tories entered government with a stable and growing economy, and the impact of austerity meant we should back the same policy again.

She said it was clear that the Tories spending cuts agenda, with the stated aim of cutting the deficit, was a poor mask for their real aim of rolling back the state and public services.

Mick Burke, in his contribution, repeated the point that it is not sufficient to condemn austerity – we need a positive alternative of investment, in housing, health, education. And while welcoming the direction of the Five Point Plan, he said it was ‘woefully inadequate’ in matching up to the scale of the economic crisis.

In terms of getting investment moving, and at a much more ambitious level, he said ‘Now we own banks, we should instruct them to invest’ .

Crucially, Burke highlighted that Osborne was already making plans for an incoming government to make further cuts in 2015-17 – and that Labour should reject them. Justifying this, he said the previous Labour government lost two million votes in 1997-2001, more than in subsequent Parliaments, when it stuck to John Major’s spending plans. George Osborne is laying the same trap.

Steve Turner from Unite urged Labour to reject austerity policies, highlighting Osborne’s trap for an incoming government, and adopt the positive spirit of Labour governments in the 40s, 50s and 60s.

He said the party should consider the real impact on its supporters of the policies it was advocating, and urged them to focus on living standards for ordinary people. In his words, ‘One Nation means nothing if you don’t represent the 99%.

Issues like living wage legislation, developing rent regulation in private housing as well as boosting construction, and taxing bonuses of state banks would all be popular, and would get the economy moving.

The starkest warning however, about the Osborne Trap, was that if an incoming Labour government carried out further austerity on its own supporters, it would risk decimating its own support like its sister party PASOK in Greece.

Now that the Labour Party has opened its policy debate to the public, get online and urge the party to reject austerity.

We will be circulating a model submission shortly.

By Ben Folley

Recapture the disenfranchised – don’t court Tory voters

The Labour Party was founded in the late nineteenth century to be the very voice of the working man, who for so long had been let down by the political instability that the liberals and Conservatives provided. At a glance we safely assume that society has improved for the better since the nineteenth century and therefore the role of the Labour Party has become more moderate, as a result of more equal society. However, if we consult the hard evidence in front of us one cannot avoid that we are living in an age in which unemployment is higher than it was in the early Edwardian era and social deprivation is as much an issue as it ever was. With austerity crippling working people and ordinary households up and down the country, surely it must be time to lead a return to Labour values of old, which put the must vulnerable in society before the comfortably minority.

Several weeks ago Caroline Flint the Shadow Secretary of State for Energy and Climate Change quoted that Labour needed to “attract former Tory voters”. This single brazen statement represents the apathy at the heart of the Shadow Cabinet. In a time in which unemployment is at 8.4%, the highest since 1995, with a fifth of all working adults living in low income households and to top it off, the country has been plunged into a double dip recession, Caroline Flint is dragging back the centrist mediocrity of New Labour.

When Britain is in the face of an economic crisis and it is the poorest who are feeling the burdens of savage cuts, it is astounding that Labour frontbenchers can put courting Tory voters highest on their agenda. This is a betrayal to the millions of struggling people who rely upon the Labour Party to give them a voice and protect their welfare state and society. It is a distinct lack of ambition and values that Caroline Flint expresses, in believing that Labour’s chief job should be to win over a select group of the Conservative vote, whilst refusing to even contemplate winning back the working class vote in the North of the Enlgand, Scotland and Wales, that Labour lost along time ago. Every political party needs a core support, the Tories have their Middle England clique, it is about time that Labour reconnects with working people, who comprise the largest proportion of our society and bare more electoral weight than the select group of affluent Tory voters.

The betrayal is not just a tactical slip, but it is fundamentally abhorrent for the Labour Party to be focusing its attention upon middle England, whilst the rest of the country slips deeper into recession. This distinct lack of direction is indicative of the party as a whole, who has the chance to re-build and re-connect after the crushing electoral defeat of 2010. Milliband has suitable ammunition to take the economic game to the coalition, the economy is faltering under their watch and 50p tax cuts are there to be scrutinised and abhorred. With the rest of Europe issuing a defiant rejection for botched and ideological austerity, it would seem common sense for the Labour movement to feed into the climate of distain for the economics of the right and find a growth package tailor-made for the poorest in the country, who are feeling the effects of the downturn more then the average Conservative voter could every conceive.

The recent council elections were not as much a resounding victory for Labour, who have failed to impress the hardest hit, instead it was a rejection of Conservatism. This has to be a clear message to Miliband that decisive leadership and action is needed, with a new swift change In direction with more emphasis on winning back the votes of those who have relied upon Labour for so many generations.

It would be easy to court former Tories, however, the morally sound and tactically astute decision would be to recapture the disenfranchised classes, who for so long have felt let down by the political landscape. The days of dedicating policy making to middle England must end, in order to strengthen the equality of our democracy and re-ignite the core values of the Labour Party, upon which so many depend.