Four months since the Welfare Reform Act came into effect in April, we are now seeing its brutal impact on the poorest sections of the working class. Councils are summonsing hundreds of thousands of people for non-payment of the council tax. Tens of thousands of social housing tenants are facing the threat of repossession because they cannot afford the bedroom tax on top of the council tax. From 15 July until September, the overall benefit cap of £500 per week (£350 for single people) will be rolled out across the country. If the total of a family’s benefits exceeds the cap, they will have the money taken off their housing benefit. The consequence will be that up to 80,000 families, most with three or more children, will face eviction within a few months, and for those in London, the prospect of having to move away.
It is not just the threat of homelessness, however, that faces hundreds of thousands of working class people. Many are experiencing hunger as they cannot afford to buy food. The Tressell Trust, which manages 325 food banks across the country, reports soaring demand. In the year to April 2013 it helped 346,000 people, three times as many as in the previous year; in all about 500,000 people had recourse to food banks during the year. The Tressell Trust also reported that demand in April 2013 was already double that for April 2012; new food banks are opening every week. Yet access to them is controlled through a referral system which restricts anyone from using a food bank more than three times a year, and for no more than three days on each occasion. People on benefits who are in social housing now have 60-70% less money to spend on food and household items after paying their bedroom tax, council tax and utility bills. They face rising food prices and a 1% cap on benefits. Life is being made intolerable for them; demand for food bank services will continue to soar.
The Children’s Commissioner for England reports that families with children make up 32% of the working population but are bearing 50% of the cost of austerity. But the burden amongst these families is not borne proportionately: the poorest 10% of families with children will have an average reduction in their standard of living of 22%; for the richest 10% it will be 7%. The number of children living in official poverty will rise by 500,000 to four million (after housing costs) while the number living below an adequate standard of living (the Rowntree Foundation Minimum Income Standard) is expected to rise by around 400,000 to 6.8 million children (around 52% of all children).
Councils are pursuing thousands of households for non-payment of council tax to add to the misery of the poor. In Wirral 5,700 summonses for non-payment have been issued: nearly a quarter of those households suffering the cut in council tax benefit. In nearby Sefton one in five of 17,500 households affected has been summonsed. This means that perhaps 500,000 across the country will face such summonses. The extent of non-payment of the bedroom tax is escalating: Magenta Living, formerly Wirral Partnership Homes, reported that 30% of the 2,600 affected households had made no payment by early June. This is similar to figures reported by other housing associations. Magenta also reported that the proportion of such households with rent arrears had risen from 30% to 72%. This figure will rise over the coming months. Housing associations across the country are experiencing serious financial difficulties not just because of bedroom tax arrears but because they cannot re-let three-bedroomed properties that have been vacated by those downsizing into smaller properties. This is making them more aggressive in pursuing debt. Magenta Living is issuing dozens of Ground 10 summonses which threaten repossession if tenants do not agree a payment plan for arrears as little as £136. Tenants are also now facing imminent eviction because the burden of paying the bedroom tax has prevented them from complying with court orders for paying off historic rent arrears.
Yet the ruling class has no intention of letting up on its offensive against the working class. Direct payment of housing benefit to tenants will start in October this year, creating panic amongst social landlords who forecast an explosion of rent arrears. However, Lord Freud, junior minister at the Department of Work and Pensions (DWP) reassured them, telling their recent conference that he will give social landlords powers to ‘recoup the rent arrears from tenants hitting the two-month trigger point [for mandatory eviction under the Ground 8 rule for assured tenancies] within six to nine months.’ This may force tenants on benefit to pay £15-25 a week off any rent arrears they have built up – five times the normal current rate of about £3.60 a week.
On 26 June we learned of the next instalment in the ConDem Coalition’s offensive when Chancellor Osborne announced a further £11.5bn state spending cuts for 2015/16, the first year of the next parliament. It was a politically-motivated spending review designed to heap pressure on the Labour Party in the run up to the general election which will take place by May 2015. It is clear that the election will be fought on the issue of who can whip the poor the hardest.
The measures that Osborne set out in his statement for attacking state welfare continue the punishment of the poor. The newly-unemployed will have to wait seven days to make a claim. With the average wait for processing benefit claims at 16 days – up to 25 days in some areas – it means that they may wait four weeks to get any money. Given that most newly-unemployed will have been in low-paid jobs, they can either turn to pay-day loan companies or the food banks to help them through a period without money. Even before they can make a claim, claimants will have to have prepared a CV. They will then be subject to even more harassment by having to sign on weekly rather than fortnightly. This is on top of an already-punitive regime where DWP figures show 80-100,000 people a month suffer some kind of sanction on their Jobseeker’s Allowance – mainly for ‘non-attendance’ at either an advisory interview or a work experience programme. Such sanctions mean a loss of one or two weeks’ benefit; the average number of sanctions five years ago was about 10,000 a month. Another Osborne measure is to force single parents to prepare for non-existent jobs once their youngest child reaches the age of three.
The government also intends to impose a cap on all welfare spending from 2015. This will exclude the state pension, which makes up 47% half the £220bn social security budget. The government will then be able to introduce further cuts in state welfare if the cap looks set to be breached. Local government spending will be cut by a further 10% or £2.1bn, which will mean that councils like Newcastle will have lost 60% of their central government support over a six-year period. It will result in the loss of a further 144,000 public sector jobs. Better-off workers will be hit by the abolition of the incremental pay system which cushioned the effect of the wage freezes of the last few years.
Yet far from opposing the government, the Labour Party has now committed itself to keeping within the spending limits set by the Coalition. In speeches made in early June before the spending review, both Ed Miliband and shadow Chancellor Ed Balls made clear they would continue to cut state welfare if Labour wins the next election. According to Balls, ‘Labour must start planning now for what will be a very tough inheritance in 2015. It will require us to govern in a very different way with much less money around. We will need an iron discipline and a relentless focus on our priorities. Labour, he added, would ‘look ruthlessly at every pound we spend’. In preparation for attacks on workers throughout the public sector, including the speeding up of the privatisation of the National Health Service and state education provision, Labour will set out ‘how we deliver better public services with less money, involving employees, charities, and the voluntary sector in our deliberations, as well as business and public providers.’
Labour’s strategy to win the general election will emphasise its commitment to defending the interests of the ruling class. Miliband therefore made clear that it would retain the cap on child benefit for those earning over £50,000. He also proposed ending the winter fuel allowance for wealthy pensioners. Labour also needs to rebuild electoral support amongst the middle class and better-off workers, many of whom believe that benefit claimants are ‘shirkers’ or ‘skivers’ – 47% of Labour supporters think benefits are too generous, while 71% support the overall benefit cap. So Miliband said ‘young unemployed people will have an obligation to take a job after a year or lose their benefits…we will do the same for everyone over 25 unemployed for more than two years.’ Under Miliband’s workfare scheme, businesses will have to pay virtually nothing, with workers receiving just a pittance: ‘For every young man and woman who has been out of work for more than a year, we would say to every business in the country, we will pay the wages for 25 hours a week, on at least the minimum wage.’
Labour will review the possibility of reducing eligibility to non-means tested contributory Jobseeker’s Allowance – a meagre £72 unemployment benefit available for just six months for those out of work. Labour would look at extending the two-year qualification period to five years. Given its vindictive attitude to unemployed people, it is not surprising that Labour refused to criticise Osborne’s proposal to impose a seven-day delay in claiming unemployment benefit, or that Labour Shadow Works and Pensions Secretary Liam Byrne condemned the overall benefit cap for not going far enough. Balls also proposed a three-year cap on state welfare spending which would include state pensions – a view he had to change when days later Osborne excluded the state pension from the Coalition’s spending cap. However, in suggesting that Labour would follow suit, Balls said Labour would consider raising the pension age yet further to compensate for the extra expenditure. Whatever the outcome, Balls and Miliband both signed up to staying within Osborne’s 2015/16 spending limits.
We have been here before. Prior to the 1997 election, Labour announced that it would continue with the remaining two years of the Tories’ three-year spending plan. It did, and practically brought the NHS to its knees in 1999. At the time we said that an incoming Labour government ‘will be more oppressive, more racist, more anti-working class than the Tory government it is almost certain to replace’. We were proved right in every respect. Over the past three years, Labour councils have shown that they will cut and cut again on the orders of the government, and squeeze the poor mercilessly. With Labour positioning itself to be back in office within two years, we will have to fight the lie that whatever its deficiencies, the Labour Party remains the lesser of two evils, that we need to support it even if we have no illusions about what it will deliver.
The truth is simple: a Labour government in 2015 will be just as oppressive, racist and anti-working class as the ConDem Coalition it replaces.
Robert Clough
Fight Racism! Fight Imperialism! 234 August/September 2013
