- Created: Wednesday, 19 February 2014 12:28
- Written by Cat Wiener
Fight Racism! Fight Imperialism! 237 February/March 2014
Over the past three years the ConDem government has carried out an aggressive programme of benefit cuts and welfare reforms that amounts to a crusade against the working class. Alongside falling wages and soaring living costs, these changes have driven more and more people into destitution so that, according to a new report by the Rowntree Foundation,1 one fifth of the population in Britain lives in poverty.2 And, despite claims by the Coalition that it would ‘make work pay’, the reality is that the largest proportion of people living in poverty are in households where at least one adult is working. CAT WIENER reports.
The government has attempted to set ‘workers’ against ‘shirkers’, to paint a picture of a society where living on benefits is a ‘lifestyle choice’ and the tax paid by ‘hardworking families’ is squandered by work-shy benefit claimants on cigarettes, alcohol and, inevitably, ‘wide-screen televisions’.
In one particularly hubristic speech in January, Work and Pensions Secretary Iain Duncan Smith compared himself to a Victorian anti-slavery campaigner, freeing the poor from the shackles of welfare. But in its brutal and punitive impoverishment of the working class and vicious ideological onslaught on the very concept of social security of any kind, this government has more in common with the Poor Law reformers of the 19th century who replaced a centuries-old entitlement to relief in times of hardship with a brutal choice between low-paid and insecure work, the workhouse – or starvation. In doing so, they set out to ‘stigmatise relief’ so that it became ‘an object of wholesome horror’.3 Chancellor George Osborne has warned of £25bn in further cuts to welfare after the next election and plans for compulsory work-for-dole schemes are being revived.
Shadow Work and Pensions Secretary Rachel Reeves has warned that no-one can expect to ‘linger on benefits’ under a Labour government and that her party will be even tougher on welfare claimants if elected. With half a million people already dependent on handouts from food banks to survive, who needs the workhouse?
‘Making work pay’: the working poor
The Rowntree Foundation report found that 13 million people in Britain – 20% of the population – were living in poverty in 2011/2012. The authors warn that this deterioration risks becoming ‘a downward spiral’. They also point out that an unprecedented 8% fall in median incomes over the previous four years lowered the poverty threshold, so that a further two million households considered poor in 2007/2008 are now above the new threshold, despite having seen no change in income. For the first time ever, the number of people living in poverty in working households (6.7 million) outstrips those in workless or retired households combined (6.3 million).
In April 2013, George Osborne defended his new tranche of benefit cuts with the claim that the Coalition would ‘make work pay’. But the figures show that for nearly seven million people in Britain’s low wage economy, work cannot pay, and cuts to in-work benefits are leaving increasing numbers of people in poverty. The report found that:
• The proportion of low-paid jobs increased in 2012, and around 250,000 people were estimated to be on zero-hour contracts (the real figure could be as high as a million).
• Among those in work, the number paid below the national living wage of £7.40 per hour rose to five million. Not surprisingly, nearly half of all working families in poverty include an adult paid below the living wage (46%).
• While median incomes grew just 1% in 2012, the cost of living (measured by the consumer price index) rose nearly 3%. As the report puts it, ‘the fall in median incomes over the last two years [to 2012] has wiped out all the gains of the previous decade.’
While unemployment decreased slightly, under-employment has risen. In the first half of 2013, the report found a record number of people – 1.42 million – in part-time work but wanting full-time work (up 150,000 on 2011). Not that full-time work is any guarantee of a household lifting itself out of poverty – 72% of couples living in poverty were in households which worked at least 35 hours a week. More than one million working households already rely on housing benefit. The authors make the point that a comparatively low unemployment rate is deceptive: ‘labour market problems are manifesting themselves in different ways – falling real wages, under-employment and insecure working conditions’. In fact, the attack on benefits was always intended to drive down wages and conditions.
Many low-income working families have been penalised by changes introduced in 2012 which raised the number of hours of work per week needed to qualify for Working Tax Credit. The majority of those affected – some 212,000 households – were unable to get extra hours, with families losing up to £75 a week.
‘Skivers’ vs ‘strivers’
‘Every penny bestowed that tends to render the condition of the pauper more eligible than that of the independent labourer, is a bounty on indolence and vice’. Report of the Poor Law Commissioners 1832
In January 2013, Osborne said the Coalition’s reforms were about being ‘fair to the person who leaves home every morning to go to work and sees their neighbour still asleep, living a life on benefits’. This refrain – of ‘hardworking families’ versus scroungers on benefits – is central to ruling class attempts to divide the working class and push through ever more stringent attacks on out-of-work benefits. But, as the report stresses, ‘attempts to portray the workless as a breed apart are quite at odds with the evidence’. It shows, instead, an increasingly fluid situation with the majority of people moving constantly between short-term, low-paid jobs and unemployment. For example:
• One in six people of working age – one sixth of the workforce – claimed Jobseeker’s Allowance (JSA) at some point in the last two years (to 2013). Nearly half had never claimed JSA before.
• While around 1.5 million people are claiming JSA at any time, between one third and one half of claims are made within six months of a previous claim ending, suggesting insecure temporary work. The average period of any one claim is 13 weeks.
As for the pernicious Coalition myth of ‘whole families who have never worked’, of the 17% of households that had no-one of working age in work in 2013, only in 8% of those (1.5% of all households) had no one ever worked. Of that tiny percentage, 55% were households made up of people aged under 25, the majority students. Unemployment for those aged 16-25 is around 21%.
‘[The old Poor Law is]…A national provision for discouraging the honest and industrious, and protecting the lazy, vicious and improvident; calculated to…hinder systematically the accumulation of capital, scatter that which is already accumulated and ruin the taxpayers.’ Report of the Poor Law Commissioners, 1832
The ruling class narrative of a ‘culture of entitlement’ is enthusiastically taken up by the media, who regularly publish lurid and highly embellished stories of a life of luxury lived by claimants at taxpayers’ expense. In reality, the report shows, ‘for those not working the price of state financial support is discipline and demonisation. The real value of that support, already low … continues to fall’. Out-of-work benefits, especially for single adults of working age, are already set at subsistence levels. JSA for single people is 40% of the minimum income standard4 – it provides only enough for food, fuel and water. A couple with children receives 60% of the minimum income standard. A growing number of people are experiencing ‘deep poverty’ (below 50% of median income). For such households, there is no margin. The loss of council tax benefit from April 2013 costs an average of £2.60 per week, but has had a catastrophic effect when two million of the 2.4 million affected already live in poverty and three-quarters in deep poverty. By October 2013, 450,000 people faced liability orders for council tax arrears.
It is the combination of cuts and reforms which is driving so many to desperation – the 522,000 households affected by the bedroom tax at an average £16.90 per week, the overall benefit cap which affects 27,000 families (and therefore at least 100,000 children) at an average loss of £75 per week5 – and which Iain Duncan Smith is considering reducing still further. It is estimated the 1% cap on upgrading benefits will leave nine million people worse off by April 2014.
Many more claimants are left destitute as sanctions against those claiming JSA are deliberately ratcheted up. Between 2010 and 2012 800,000 people faced some kind of JSA sanctions; between June and October 2013 the figure was nearly 600,000. Labour’s Rachel Reeves has promised an even tougher sanctions regime if elected.
Meanwhile, the report details how the cost of living has soared, leaving even families with an income high enough for them to be deemed ‘not in poverty’ increasingly unable to afford a minimum standard of living. In 2012, the poorest households typically spent more than a quarter of net income on housing (and for those in the bottom fifth of income distribution living in private rented accommodation it was as much as 54%) – a figure set to increase as rents continue to rise. In addition food prices have risen 41% in the last decade and fuel prices have more than doubled (140%). Domestic water charges are up by 69% and transport costs are up 87%.
Research into poverty and social exclusion by Bristol University published in March 20136 found that:
• Almost 18 million people cannot afford adequate housing conditions;
• 14 million cannot afford one or more essential household goods;
• 12 million people are too poor to engage in common social activities considered necessary by the majority of the population;
• 5.5 million adults go without essential clothing;
• 4 million children and adults are not properly fed by today’s standards;
• 4 million children go without at least two of the things they need;
• 1.5 million children live in households that cannot afford to heat their home.
It is a grim testimony to the toll of austerity measures on the working class that – in one of the seven richest countries in the world – half a million people are now dependent on emergency handouts from food banks to survive. Food banks report a growing demand for ‘kettle boxes’ by those who can no longer afford fuel for cooking.
The new Malthusians
The 19th century reformers argued that poor relief provided an incentive for the unemployed to procreate. Our new Malthusians too have their sights trained on the children of the poor. As David Cameron put it, ‘we must ask whether those in the welfare system are faced with the same kinds of decisions working people have to wrestle with when they have a child’. Iain Duncan Smith has suggested benefits may be limited to two children. In 2013, 2.7 million families with children were in receipt of tax credits. At least two million of the children living in poverty in Britain are in working households – 410,000 in families where all the adults work full-time. The report says that tax credits have helped lift more than 1.5 million children out of poverty. In a sinister comment in January, Iain Duncan Smith suggested that it was time to review tax credits because they pushed people above an ‘arbitrary’ poverty line on paper but failed to change their lives, and some ‘unproductive’ people spent the extra money on drink and drugs rather than food for their children.
‘I hope after what I have said of the New Poor Law and its results,’ wrote Friedrich Engels in 1845, ‘no word which I have said of the bourgeoisie will be thought too stern’.7 But he welcomed the fact that the law – supported by all the political parties – made clear to ‘even the dullest’ that ‘the non-possessing class exists solely for the purpose of being exploited, and of starving when the property holders can no longer make use of it’ and that this anger and desperation was accelerating the building of an independent working class movement across the country. It is time that outrage at this new onslaught on the working class fuelled the same response.
- Tom MacInnes, et al, Monitoring poverty and social exclusion 2013, Joseph Rowntree Foundation and New Policy Institute, December 2013.
- Where poverty is calculated as household income, adjusted for size and after housing costs have been deducted, below 60% of median household income.
- Edwin Chadwick, Report to Royal Commission on Poor Law, 1832.
- A categorisation based on what the public thinks constitutes a minimum standard of living in the UK today. It is the minimum income that would allow an individual to participate in society and includes social participation and travel as well as food, heating and household goods. It is updated annually at least in line with inflation.
- DWP figures up to November 2013, published January 2014.
- The impoverishment of the UK today, University of Bristol, March 2013.
- Friedrich Engels, The Condition of the Working Class in England, 1844.