Iain Duncan Smith claims there'll only be winners in his welfare reforms. Many of us will soon discover how wrong he is
Government by hyperbole and bald assertion was an aggravating Blair-Brown habit, but it has reached new heights with David Cameron. Toynbee Hall in Whitechapel ? a bit of deprivation handy for Downing Street ? is the spot for prime ministerial flights of fancy on welfare and poverty. Here Tony Blair astounded a hall full of economists with his pledge to abolish child poverty by 2020. Here this week, David Cameron laid claim to "the most ambitious, fundamental and radical changes" to welfare since Beveridge, which would lift 300,000 children out of poverty.
But with no plan B economic policy, Cameron can only leave many more poor children in his wake. The Institute for Fiscal Studies expects the numbers to rise. Taking �81bn out of public spending as unemployment rises and real wages fall, how could it be otherwise?
But Cameron's gift for planting great political myths in the popular imagination, aided by his mighty press, means he wins most arguments ? until found out. This week it's welfare. Polls show the public deeply believes immigrant/teen mother/druggy idlers live the high life on others' hard-earned taxes. One anecdote is worth a hundred facts, but phoney facts can be very useful too ? until found out.
Was there a serious problem of a ballooning welfare bill? Mike Brewer of the IFS says unequivocally no. "Labour deliberately increased spending on specific things, such as pension credit and child tax credits." These had precisely the planned effect, taking a million pensioners and 600,000 children out of poverty. The Department for Work and Pensions bill didn't rise until the crash.
Next myth: there are growing legions of families where no one has ever worked, Shameless for generations. But here are the facts from the Office for National Statistics, well spotted by Channel 4 News. Long-term unemployment hasn't risen ? it has fallen tenfold over the last decade. In 2000 47,700 had claimed jobseeker's allowance for five years or more. By this year there are only 4,220 long termers. Research by LSE Professor John Hills shows low earners in the bottom 20% move in and out of insecure work in temporary jobs, never getting their foot on a ladder. The growth of agency work consigns willing workers to a life revolving through the jobcentre door. That is not Cameron's "benefits culture": it is a miserable, underpaid culture of outsourced jobs with no future. Labour's tax credits made this work just about worth taking, but taxpayers' money subsidises employers not to pay a living wage or pension. (No thanks, ever, from the CBI.)
True, numbers on some disability benefits grew: Labour had started to tighten the screw. There will always be bogus "bad backs" caught running marathons, but it is another myth that disability claims were inexplicably out of control. Most of the rise in disability living allowance claimants is due to disabled children and young adults who used not to survive, together with the increase in old people ? and campaigners encouraging more people to claim.
It's a myth that incapacity benefit rose: it plateaued for a decade. Will it shrink now? The DWP has earmarked hefty savings of �2.1bn. Tougher medical tests for the new employment support allowance are finding 30% "fully fit" ? but let's see how many of these borderline cases employers actually take on. As for the work programme, to help people into jobs, only two of its 35 prime contractors are from the "big society" voluntary sector: the rest are big firms who will subcontract the real work to specialist charities, skimming 21% off the top: watch out for this unfolding story.
The housing benefit bubble was another convenient myth. The bill did rise 30% in a decade, but that's surprisingly little when house prices and rents rose 50%. Cameron has backed off one housing benefit cut, but other deep cuts will see many evictions and the poor removed to lowest-rent zones.
So will universal credit mean work always pays? Yes, but it already did for most. There will be more incentive to work, but keeping 35p in every �1 they earn is only an extra 5p for most ? hardly life-changing.
What of work and pensions secretary Iain Duncan Smith's great claim that universal credit (UC) will have virtually no losers? True, it will be a better-run system, so long as the massive new computer system works. Once UC starts in 2013, there will indeed be more winners than losers.
But here's the catch ? and it's such a breathtaking swindle that Duncan Smith's sanctity should be taken rather less than at his own valuation. By the time UC begins, �18bn will already have been stripped out of benefits of all kinds. These cuts over the next two years will leave millions of losers, many losing a lot ? and children most of all.
The Child Poverty Action Group, adding up the cuts, shows a baby born this April will have �1,500 less than one born in April 2010. Meanwhile, the IFS points out, everyone drawing any benefit will lose 1%-2% every year forever on the reduced CPI inflation measure. No losers? This �18bn will feel a mighty loss ? and before long it will flash up in lights in the poverty figures.
This bill has been published without two vital ingredients: policy on paying for childcare and council tax benefit is, as yet, undecided. Daycare Trust research shows nursery prices rose twice as fast as wages last year, yet childcare credits will be cut by 10%. How are all these extra single mothers to be helped into work while losing another �430 a year in childcare support? The DWP expects savings of �300m from childcare cuts ? but if just a few working mothers fall back on to benefits, the welfare budget will lose more than it gains.
This is still frustratingly only the surface of what's going on. The government has escaped this week because most media accept its word and don't read the small print. But the facts will emerge soon. Claimants who have not yet understood will find April's sudden drop in income a terrible shock. Real hardship ? and a political storm awaits. Hold on to just one big fact: you can't cut �18bn from the poorest and neediest women, children and disabled without causing harm. Lurid examples of scroungers and cheats will only disguise what's happening for a short while. Will people protest as much about children as about trees?
Health & wellbeing Bradford Bulls Mervyn King Tony Cottee Documentary Celestine Babayaro
No comments:
Post a Comment