Iain MacWhirter ColumnistIN 1931, when the Labour Government of Ramsay MacDonald cut unemployment benefit in an economic depression, the Labour Party split and was almost destroyed as a political force for the next decade.
But the cuts in welfare made in George Osborne’s Autumn Statement have not only failed to cause a split in the Liberal-Tory coalition, they’ve won the support of the Labour opposition. In his bumbling Commons response yesterday, the one thing that the Shadow Chancellor, Ed Balls, had no difficulty saying clearly was that:
“Labour supports the cap on benefits”
Except, of course that it isn’t a cap, but a cut in real terms, since benefits like Job Seekers Allowance will rise at only 1% per year while inflation has been running at 2.5-5%. This represents a significant slice of a very meagre income. The current maximum rate for Job Seekers Allowance is £71 per week. I had to double-check that figure because at first I didn’t believe anyone could possibly be live on it. Of course, those receiving JSA will also be entitled to housing benefit and council tax relief, but that still leaves them with very little for the bare necessities of food, clothing, heat. Living on that kind of level for any length of time would not just be soul-destroying, for many of us it would be life-destroying.
The Chancellor justified the cut, which will take nearly £4bn out of the pockets of welfare claimants over three years, on the grounds that he was taking an equivalent amount from the rich by capping tax-free pension pots, ending Swiss tax havens and altering changes to tax thresholds. But this is hardly comparing like with like. Losing tax relief on the top quarter-million of a £1.5 million pension fund is hardly going to hit as hard as losing £5 out of a £71 allowance, and that is what the poor sod on JSA is looking at over the next three years. And since there is all-party support for this squeeze, there isn’t much hope of a reversal.
One of the remarkable achievements of this Coalition has been to fundamentally change the terms of the debate over welfare during this recession. There seems to very little public sympathy now for those on benefits. I hesitated before writing this column about welfare because I’m aware that, for many people, the issue is simply a turn-off: heard it all before, country’s run out of money, we’ve all had to tighten our belts. Labour focuses relentlessly on “hard-working” middle-income families – who, it is claimed, lost £1000 a year through yesterday’s jiggling with tax thresholds and entitlements. The Liberal Democrats used to be the party of conscience, but they are now signed up to the austerity programme and seem to have lost their voice.
The move by George Osborne to cap benefits at £25,000 last year was a brilliant piece of black propaganda. Certainly, it was absurd that some large families, living in expensive inner London boroughs, could be receiving housing and other benefits that amounted to more than the average wage. But it was only ever a tiny handful of individuals who were in that category and none at all in Scotland. But it created the impression that benefits were out of control and encouraging idleness. And yesterday the Chancellor recycled the image of the hard-working people getting up early to pay for “the neighbour still asleep, living a life on benefits”.
Normally, in times of recession, there is widespread sympathy for the workless for the obvious reason that there is no work around. That was certainly the case in the 1990-93 recession when some 58% of us thought that more should be spent on welfare against 28% today, according to research by the National Centre for Social Research. More of us, too, believe that welfare is a disincentive to finding a job. Yet, the big growth area in benefits in the last decade has been among the working poor. Wages have fallen so far in the last decade that some 4.4 million jobs in Britain pay less than £7 an hour. According to the Joseph Rowntree Foundation, six million people live in households which are receiving benefits even though at least one family member is working, and they will all be hit by the benefits squeeze.
Welcome to modern Britain. There was a pretty stark message buried in this Autumn Statement: Britain is becoming a very much harsher place as the country slides inexorably into a prolonged economic depression. The Chancellor has now extended the period of “fiscal consolidation” until 2018 – that’s eight years of austerity, low growth, and increased public and private debt. And who is to say it will end there? It is now clear that the scale of the 2008-10 crash was far greater than previously thought – 6% of the economy disappeared into the black hole caused by the banks. That may not sound much, but it is by far the largest economic contraction since the war. And unusually, the ground is not being made up in the recovery phase. Normally, after recessions, the economy bounces back because investment recovers as it becomes cheaper to borrow money, to buy machinery, to build houses. There is a natural rhythm to what is called the “business cycle”.
But this time it has got stuck. And there is very little reason to see any significant recovery soon. The British economy was supposed to be growing at nearly 3% this year, according to the 2010 forecast by the Office of Budgetary Responsibility, but we’re slipping back into recession. The Government blames the eurozone crisis and world market conditions, but the truth is that most G20 countries are growing a lot faster than Britain.
Yesterday’s jiggery-pokery with the deficit numbers can’t disguise the fact that government borrowing has not fallen in the way it was forecast and that the cycle of austerity is becoming a vicious one.
The more you cut, the more you have to cut. That’s the debt spiral that killed the Mediterranean countries, and it looks like we could be going the same way. Which means that for millions of families dependent on welfare, it is going to be a very hard road indeed.
14 Responses
The economic effect of the cuts leading to more cuts is so well understood as to be inescapable even for a bunch of rich toffs from Eton. That being the case the only question to be asked is why are they doing this to the poor and the disabled? Do they expect us to join, lemming like, in a mass suicide or to leave the country? Probably not but that will not stop this ideological, not to say pathological, hatred of the ill, disabled and those who have failed to find work so that they can tug the forelock in appropriate respect towards their masters from a position down in the gutter.
The only thing that comes out of a prolonged recession is the eventual ability, for those with hidden cash, to buy up assets cheaply. Russia gives us an example of how people fare when that happens and shows us who will take the reins of power.
I wonder just how much of the UK could be bought up at bargain basement prices several years from now before the next election and what sort of government the new owners would put in place. Whatever it is I doubt very much whether it will even be as ‘nice’ as the present one after human rights legislation has gone, when there is no legal aid and when revealing information on the internet results in punitive legal action.
Workhouses spring to mind as does forced sterilisation of those with genetic disabilities and the removal of the last vestiges of social benefits for those in need.
Not the best of predictions for the coming dystopia but unless these heartless and compassionless people can be stopped and a real sense of decency restored then I can see very little alternative.
The reason All of the parties keep going along with the cuts ‘in principle’ is because all of the data shows that73% of people asked say that benefit levels are a concern, so all parties who want a realistic chance of winning an election say it, but What I have mainly heard from Ed Balls, is we will wait until we see the details of the bill? so not sure what you heard, but my concern is who gets asked to come up with this data? because Ive never been asked, and as this report says JSA is only £71 and I think if this info was part of the question, people may realise that actually, its not enough to live on in today’s Britain and anyone in work should realise that if they lost their job they too may have to rely on this paltry sum to support themselves, and it is also misleading to say these people will also be entitled to housing benefit, because now if you have more bedrooms than you need you get 14% deducted from your benefit for one empty room and 25% for two spare rooms. So whereas at one time your home would continue to be your castle in times of hardship, you try taking money out of your £71 to pay your rent, so potentially you also have to move. The empty bedroom tax is affecting a higher proportion of disabled adults than ANY other group which that in itself is against the human rights of the disabled, like most of the cuts so far!
I am sure that Labour would stop singing this tune if they start telling the electorate how much money claimant actually get, I think that the conservatives have done an amazing job of making everyone hate benefit claimants! but I think Osbourne got carried away with his Autumn statement describing the people his cuts would affect as lazy people with the curtains closed while we all go to work! because actually the people it mostly affects are the people who do work and who are the strivers he said he supports! like he originally said we will protect the vulnerable, or Cameron certainly did, when they have not protected them at all. They have been hit harder than any other group. so lets hope the Autumn statement will bring about the Tory downfall, because I think the polls ask only in the city where they are too rich to have a clue about what benefit really means because I DOUBT THEY COULD CLAIM BECAUSE THEY HAVE TOO MUCH MONEY!
Sharon,
They fail to mention also if you are an unemployed couple on JSA then you have to live on £110 per week between you.
We have just been to our appointment with our housing association telling us that we will lose £75 per month because we have two spare rooms, they’ve told us they have very few 1 bedroom houses in the area and that they just can’t meet the level of people coming forward who are under occupied and who have asked to be rehomed in the area.
If we are still unemployed come April 2013, i can’t imagine how we are going to survive, we can barely make it on the £110, through buying cheapest brand items and some careful budgeting, never mind it dropping to £91.25!
The only way this country is going is into total economic and social collapse for everyone under this idiotic government. Maybe they should look at Iceland, now there is a nation doing well, i wonder why ?
its because there bankers were put in jail no bail out for them we should have done the same here rather than killing the disabled this political class stinks..jeff ..
An Act of Evil The Messing About with Welfare Benefits by this Millionaires Dummy
Dictatorship
Rotten Politicians Know Nothing of Austerity or Poverty and Shame upon the
” Official Opposition ” For being a Shambles of an Opposition
Tax the Rich Not the Poor
Osborne gave tens of billions to the I.M.F, tens of billions to the ultra corrupt E.U, tens of billions in tax cuts to the ultra rich, who then hide it in tax havens, billions of public money paid in salaries to the chairpersons of some 8000 quangos, most of which were set up by the E.U. The Tories sold off into private hands our gas,electric and water company’s, they destroyed and sold off our industries. They’ve took our jobs then blame us for being unemployed,Billions of public money given to a corrupt financial and banking system, all to buy their own seats on the board.They are privatizing the N.H.S, something they have tried to destroy since it’s inception, then you read the list of who will benefit from this and it reads like a list of the most corrupt criminals in history. Then you read things like this and the truth begins to reveal itself, http://www.constantinereport.com/allposts/the-fascist-writers-who-have-played-a-little-known-role-in-inspiring-david-camerons-welfare-state-policies/ This country is being governed by a criminal elite who will stop at nothing until the 99% are living in abject poverty,where poor northern towns are turned into ghettos policed by a privately owned police force, Blackwater anyone. The poor, low paid, unemployed,sick and or disabled,the honest people with a conscience,a brain and a heart whether rich or poor, have got to get together and scream enough is enough.War is on the horizon and this criminal elite will want your children to die, to again fill their pockets with blood money. We are governed by an elite of pathological liars, thieves any derogatory term you can think of is applicable. Don’t be happy just to sit back and watch the shit from Tory front men like Jeremy Kyle, who scour the council estates for the uneducated, unemployed no hopes who probably make up less than one tenth of one percent of the whole estate. On the estate where I live most people work in jobs that pay less than minimum wage, they need help with rents, council tax, etc. Anyone on less than £15.000 a year should not pay tax,then they wouldn’t need help and they would have money to spend. When looking at where the money is wasted, the saying, more chiefs than Indians comes to mind, the council in my town have managers who manage the managers in all departments why, maybe because they can’t do anything else and real work is beneath them. We need a fair, free press that will print the whole truth. Show these bastards up for who they really are.
The Austerity Project is only relevant to the poor, the disabled, the unemployed, the homeless, low paid workers and soon mid-pay workers. It is not applicable to the rich elites.
Ths is FASCISM
How many more times does it need to be said?
Since 1972 the average rise in inflation has been 6.2% or 1060% increase over 40 years Have wages or benefits increased by that much in 40 years? Need I answer that?
there is nowhere else like britain where we allow muppet mp.s to kill us daily with their understanding of the benefits system ,in america they got rid of firms like unum and would also do the same for atos ,but they hide behind these and take our dignitys away from us yes we are disabled and some would work but others cant and this to allow atos dwp to take our moneys way from us is now getting to the point of the nazis and thats whot we got in power taking daily from us kicking us while down but do the others shout nah its only a few who do and its a crying shame that more dont but labour today is not labour its still running under the colours of tony blair who was a little tory in labour clothes and this ed stil cant get it and ask wheres tony untill we get a good leader its more of the same of this lot yes nazies the lot of them pay tax nah they cry and get payed offshore to avoid it but please mp,s who read this do something decent with ones life and show these up for whot they are nazies jeff3
The system is rigged for the privileged to keep control and everyone else down. The more kindly among them need a nudge to give a sh** about the country they are fortunate enough to own:
http://hackinginquiry.org/
If benefits have to cover a share of council tax, “bedroom tax” , and charges for many council services, as well as rising cost of living, THIS IS A CUT, not even a cap. There needs to be a re-calculation of benefit levels to ensure basic living costs are covered. Even a short period of unemployment will push many people into crises which are expensive to resolve.
The system is rigged. The extraordinarily privileged and expensively educated 7% keep control and everyone else down by occupying 50% of the senior, decision-making roles in Westminster and Whitehall. The more kindly among them need a nudge to give a sh** about the failing country they are fortunate enough to own and run. Sign the petition:
http://hackinginquiry.org/
The DWP once accommodated braincells and was encouraging employers to make it physically and environmentally possible for disabled people to work with them, as well as to have the odd nervous breakdown, hospital appointment and collapse without being booted back onto welfare again. They called this excellent scheme “Positive About Disabled People”. To sign up you needed only to be capable of acknowledging that health conditions existed and willing to accommodate them.
However, it works, which is terribly confusing and threatening, and it requires skilful management, so it was abandoned in favour of stigma, persecution, slave labour, genocide and a fight to the death to become an undeveloped nation (http://www.guardian.co.uk/global-development/2010/nov/04/united-nations-report-britain-inequality).
Yet they managed to sell the idea to 250 employers before wandering off in the direction of the Nuremberg rally, and here are those 250 employers willing to have any of the 1.3 million disabled jobseekers among us sit alongside them in their offices and communicate with them over the internet (this is more than the brain-dead DWP or Work Programme will tell you so be sure to share this list of disabled-friendly employers):
http://www.whatdotheyknow.com/request/104171/response/252587/attach/3/Disability%20symbol%20national%20list.pdf
Notice the only large media outfit on the list is Channel 4. Notice the complete absence of the press who claim we are work-shy cheats but don’t and won’t or haven’t thought to, if you want to be nice about it, employ us themselves. They have held this position passionately for years now, never thinking to so much as glance over their offices or employment practises or the history of disability despite several decades worth of research available to them at the click of a button and despite obviously not having any personal experience to draw from or any imagination or many brain cells and despite claiming to be journalists.
The UK press are charlatans at play which is to be pleasant about them. The fact that their stupid, incoherent, juvenile and unpleasant “position” continues to hold water tells you all you need to know about most of them and why it is deadly necessary for us all that they are made to be responsible. This would be nothing at all to ask any decent person.
The two party state, democracy don’t make me laugh, the dems are chatting too labour about a coalition with them next time round, talk about being brain dead who in hell do they think is gonna vote for their sorry backsides?
This government have spent more in two years than Brown did in all his years in office. Austerity what a con, if they collected taxes and made companies pay a living wage but oh no they are in it for themselves working together sucking the plebs dry, while we let them!