‘The welfare system is broken. We have to accept that the welfare bill has got completely out of control and that there are five million people living on permanent out-of-work benefits. That is a tragedy for them and fiscally unsustainable for us.’
George Osborne, Chancellor of the Exchequer, 9 September 2010
The ConDem emergency budget on 22 June announced cuts in welfare benefits totalling £11bn by 2014/ 15. On 9 September Osborne promised a further £4bn welfare cuts, the details to be given in the October spending review. It is no accident that the government has chosen to focus severe cuts on the poorest and the most vulnerable sections of the working class. While the Tories claim that ‘we are all in this together’, only some of us will pay the price. There is no doubt that the working class will be forced to pay the most for this crisis through a considerable fall in its living standards. To ensure public support for these cuts the ideological assault on the poorest sections of the working class has been renewed with vigour.
‘Let them eat cake’: the ConDem welfare cuts
The cuts in state benefits are aimed at poor families, the unemployed and lone parents. Far from defending the most vulnerable, as Osborne claimed, these sections of the working class are the victims of particularly spiteful cuts and have been targeted because of their so-called ‘lifestyle choice’ to be unemployed and poor. Only a bunch of over-paid, pampered millionaires who made their wealth from grinding down the poor all over the world could argue that poverty is a lifestyle choice. Osborne made a particular point about the explosion of the cost of benefits to the state when in fact so-called ‘out-of-work’ benefits amount to only a very small percentage of the total and have not substantially increased. Nonetheless Osborne’s main targets were the ‘long-term’ unemployed and lone parents: the category ‘scroungers’ was rekindled.
Overall, all state benefits (except state pensions and pension credit) that rise in line with inflation will now use the consumer price index (CPI) rather than the retail price index (RPI). It is estimated that this will save the government £1.7bn in the first year, and a total of £5.84bn up to 2014/15.
Child Benefit: from April 2011 it will be frozen until April 2014
Child Tax Credit (CTC): from April 2011 CTC will not be paid to families with an income over £40,000. From April 2012, those with an income of £30,000 and over will not be eligible for CTC at all and those earning over £25,000 will receive a reduced rate.
Lone parents claiming support: the current rule is that most lone parents whose youngest or only child is under ten can claim Income Support (IS). From 25 October 2010, thanks to the previous Labour government, this age limit will be lowered to seven. From October 2011, the age limit goes down further to five.
This means that many lone parents will have to sign on, be available for and be actively seeking work in order to receive benefits. Many will only be able to find temporary or low-paid work if they are lucky. If they fail to comply with their jobseeker’s agreement without good cause their benefits can be cut off. Some help is available for childcare, but only up to 80% of costs. Curtailment of housing benefit (see below) means that the transfer from IS to Job Seeker’s Allowance will punish lone parents even more.
Sure Start Maternity Grant: from April 2011, the grant will be restricted to the first child.
Health in Pregnancy Grant: will be abolished in January 2011.
Child Trust Fund: from January 2011, all payments will stop.
Disability Living Allowance (DLA): from April 2013 the government will introduce ‘objective medical assessments’ for all DLA claimants. The government’s statement confirms that their aim is to reduce the number of people receiving the benefit. Similar changes were brought in for people claiming incapacity benefit, the result being a steep fall in the number of people receiving it.
‘Let them move house’: Housing Benefit
Local Housing Allowance (LHA): LHA was introduced in April 2008 to provide Housing Benefit (HB) for most claimants renting private sector accommodation. The amount of LHA awarded is calculated on the number of rooms that the claimant’s household needs and is based on the median rent for the area. Since April 2009, LHA has been capped at the five-bedroom property rate. Originally, as an incentive for families to search for cheaper properties, they were allowed to keep up to £15 a week if the rent was lower than the LHA rate for the area. Thanks to Labour, this ‘concession’ will be abolished in April 2011.
As a result of the ConDem cuts, from April 2011, LHA (per week) rates will be capped for each property size: £250 (one bedroom); £290 (two bedrooms); £340 (three bedrooms); and £400 (four bedrooms or more). From October 2011, LHA will be set at 30% of local rents rather than at the median rent.
The government has argued that the cost of LHA benefits has ballooned and must be cut back. The cuts have been made regardless of the property boom that has feathered the nests of landlords or the disgraceful shortage of council housing due to government policies over the last 30 years. Tenants will be made to suffer. London tenants will be hardest hit because rents are high: tenants facing rents higher than the cap will have to move or pay the difference themselves. Claimants with large families will have their rent capped to four bedrooms irrespective of their needs. The National Housing Federation has argued that 750,000 people will be at risk of losing their homes in London and the south east.
Housing entitlements and family size
From April 2013, working age HB claimants living in social housing deemed to be too large for their household size, will have their benefit capped. Claimants will have to either fund the difference themselves, move to smaller social-rented properties or move out. Tory councils have been quick to make use of this provision: the Royal Borough of Kensington & Chelsea began harassing its existing tenants about moving to smaller properties as soon as this announcement was made.
Housing benefit and JSA
From April 2013 HB will be reduced to 90% after 12 months for claimants receiving JSA. This change punishes claimants for being unemployed and will especially affect people living in areas where there are no jobs, or lone parents who can only work limited hours.
The ‘Big Society’
‘There is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look after themselves first. It is our duty to look after ourselves and then to look after our neighbour.’ (Margaret Thatcher, Woman’s Own, 31 October 1987)
It was the Tory Thatcher governments of the 1980s that pinpointed the welfare state as the cause of social breakdown. Under the influence of US right-wing ideologues, Thatcher argued that ‘welfare dependency’ had created an ‘underclass’ characterised by unemployment, crime and illegitimacy. Young people and single parents became the targets of ‘reform’ of the welfare system. Admiring ‘Victorian values’, and especially the civic role of volunteers and charities, Thatcher drew a sharp distinction between the ‘deserving’ and the ‘undeserving’ poor.
‘History repeats itself, the first time as tragedy, the second time as farce’ (Karl Marx).
While Mrs Thatcher eschewed society altogether, Prime Minister David Cameron’s ‘Big Society’ model relies on exactly the same crude prejudices and hatred of the working class and the poor. ‘Communities’, charities, faith groups and volunteers are expected to take up the roles that the state will no longer perform, in particular anything that benefits the working class. Long queues of middle class busy-bodies will be forming, keen to judge the lifestyle of working class people, just as the Poor Law Guardians did in the 19th century. The Pope’s recent visit was used as an opportunity for all these ‘do-gooders’ to drive home the threat that, from education to health and welfare, only those who toe the line will be supported.
The ConDem attack is simply a continuation and deepening of the assault on the working class begun by the Thatcher government in the 1980s and fully endorsed by Labour governments ever since. The capitalist crisis, despite mini-booms, has been growing in severity up to the financial collapse in 2008. There can be no doubt that throughout the last 40 years, the ruling class, whether in the shape of Tory, Labour or ConDem governments, has pursued one aim, to defend the interests of British imperialism, and it has done so at the expense of the working class. Building resistance to this assault is not simply a question of fighting the public sector cuts, it requires the mobilisation of the forces who have nothing to lose.
Carol Brickley
FRFI 217 October/November 2010
