‘Fairness and Simplicity’: Who Benefits from Universal Credit? (2018)

From the April 2018 issue of the Socialist Standard

An account of how it works from someone who has been on this ‘benefit’.

When Iain Duncan Smith, as the Work and Pensions Secretary, announced in 2010 that Universal Credit would replace six welfare benefits, he said that this would ‘restore fairness and simplicity’ to the system. Nearly eight years on, few would agree that Universal Credit has been either fair or simple.

One aspect of Universal Credit which has been anything but simple is its introduction since pilot schemes began in the North West during 2013. Then, it was expected that the new benefit would be fully implemented by 2017, a target which has since been put back five years. Given the problems many people have experienced claiming Universal Credit, it’s probably a relief to others that the rollout has been delayed. The benefit is being introduced in stages, going by postcode area. By the end of this year, in every area, new claimants or existing claimants of other benefits with a change in circumstances will have to apply for Universal Credit. Then, it’s planned that all remaining people receiving the benefits being replaced (Jobseeker’s Allowance, Employment and Support Allowance, Income Support, Housing Benefit and Tax Credits) will be transferred over by 2022, unless there are any further setbacks. The number of people already claiming Universal Credit was 700,000 as of 14 December 2017, a rise of 6 percent on the previous month.

One of the main stated goals of Universal Credit is to encourage its claimants to find jobs. In December 2015, the government boasted that ‘Universal Credit claimants are eight percentage points more likely to have been employed in the first nine months of their claim – 71% for Universal Credit versus 63% for Jobseeker’s Allowance’ . Amazingly, another of its aims is to heal the sick. When it was first announced, the then Work and Pensions Minister Chris Grayling said he hoped it would get at least half of the 2.5 million people claiming sickness benefits back into employment. But before Universal Credit can work its magic on someone, they first need to set up a claim.

The state prefers people to make their claim online, which immediately makes the process far from simple for those who lack computer skills or easy access to the internet. After entering your details on the government website, the system requires your ID to be verified by another organisation. This involves photographing your ID and yourself (face-on and in profile) and uploading the pictures to their website. This stage in the process may not be easy for any claimants without sufficient paperwork or a smartphone; the system isn’t designed to be accommodating to those most vulnerable and in need, such as homeless people. The initial online form also has sections to type in what kinds of jobs you are looking for and how you will do this, unless you have a medical condition which prevents you from working.

An appointment will be set for within a few days to attend the job centre. Then, staff make further checks of ID, and your ‘commitments’ of what you’ll do to find work are clarified. These may be ten hours a week trawling through websites, fifteen hours writing applications, two hours travelling to the job centre appointment and back, eight hours compiling a CV and so on, as long as they add up to 35 hours each week.

Waiting Days and Assessment Periods
Once your claim has been set up, the next hurdle to overcome is the delay before payments start to come through. Until February, when a new claim was made by most job seekers, no payment was given to cover the first week, a period called ‘waiting days’. However, you would still be expected to spend 35 hours looking for work during this time. No reason is given for this rule in official documents, and no reply was received to a request for an explanation. It would be easy to assume that this policy was there just to reduce costs to the state and deter people from making a claim.

When Universal Credit was designed, it was decided that the first payment would be received 42 days after making a claim, including the waiting days. In February this ‘Assessment Period’ was reduced to 35 days, still far too long to manage without being able to buy necessities. The 42 day limit was often not kept; during June 2017, for example, around one in five claimants waited even longer for their first full payment. In comparison, people claiming JSA or ESA during 2015 and 2016 had to wait a relatively easy two weeks before receiving any money.

From the beginning of the claim, it’s a requirement that claimants regularly update their online records (called the ‘journal’) with details of what has been done to look for work. The website also allows messages to be sent between the claimant and job centre, and checks that notifications about rules have been read. Weekly ‘Work Search Review’ appointments at the job centre are set, when the ‘Work Coach’ offers some guidance about ways to find employment. More importantly, they review what’s been written in the journal and decide whether sufficient effort has been made looking for work. Twice I was accused of not doing enough, just because the adviser hadn’t clicked on the box showing what had been written.

If it’s decided that not enough has been recorded, or if jobs haven’t been applied for, or if appointments have been missed, then payments can be stopped or reduced, known as a ‘sanction’. How much and how long sanctions last depend on what you’ve been judged to have failed to do and how often you’ve been sanctioned in the previous year. A sanction can last between seven days and three years, with a perplexing set of rules specifying which offence brings which punishment. For example: ‘Do all the activities you’ve agreed with your work coach. If you don’t, your payment will be reduced until the day before you do as you agreed. Once you’ve done this, your payment will be reduced for an additional 7, 14 or 28 days.’. During March 2017, 6.9 percent of claimants were having their payments reduced through being sanctioned, more than the 0.4 percent of people claiming JSA , suggesting that the new system is stricter.

The difficulties which come with Universal Credit described above are faced by claimants willing and able to look for employment. Different problems are faced by claimants with health conditions. After completing a medical questionnaire and sending in a Med 3 form (what used to be called a ‘sick note’) from the GP, they will have to undergo a ‘Work Capability Assessment’ at the job centre. This is a medical examination to judge if they are too unwell to manage a job, with the decision made by a benefits assessor overruling that of the GP who signed off the Med 3 form. Failing a Work Capability Assessment is what Chris Grayling meant when he said Universal Credit would help half of those claiming sickness benefits back into work.

When the Payment Arrives
Five or six weeks after making the claim, and if there have been no sanctions, then the first payment should arrive. A single claimant aged 25 or over receives £317.82 each month, with additional amounts paid to people with disabilities or children and to cover rent. The government says that Universal Credit provides ‘every financial incentive to stay in work, because work will pay’, a euphemism for the benefit payments being less than people need. The Minimum Income Standard website says that a single person requires £765.48 each month (excluding rent and council tax costs) for a ‘decent standard of living’, based on April 2017 prices (www.minimumincome.org.uk).The government says that Universal Credit’s approach ‘enables people to take much more control over their own lives’, although it’s not explained how you can have control of your life when you can’t afford basic necessities.

A difference between Universal Credit and the benefits being replaced is that it is supposed to be paid monthly to the claimant, rather than fortnightly. Ostensibly, this is intended to prepare claimants for budgeting over a month, as most employed people do. Another difference is that this monthly payment includes the component to cover rent. Under the old housing benefit system, money for rent was usually paid directly to the landlord, which didn’t prevent arrears building up due to delays or complications with a claim, but gave more assurance to the landlord that their rent was on its way. Not all of someone’s rent may be covered by the benefit anyway, for example when a single person is living in a property judged too large for them. The consequences of all this are that some claimants have been unable to afford rent or have spent the money intended for it on other things, leading to arrears building up. In Southwark, Universal Credit claimants renting social housing were each in arrears by an average of £1,178 in the first few months of claiming. The state has back-tracked on some of its policies about the rent component, and from April it will be easier to have this paid straight to the landlord.

Many new claimants aged between 18 and 21 don’t get the rent component of Universal Credit at all. Presumably, the reasoning behind this is to deter young people from trying to find state-subsidised housing, which ignores the needs of many young adults who, whether through overcrowding or fraught family relationships, can’t or shouldn’t live with their parents.

For claimants with a mortgage rather than a rented property, there is very little assistance towards housing costs. It’s possible to receive money to cover interest on a mortgage (rather than the mortgage itself), but this is at a flat rate of 2.61 percent rather than the actual rate, and a claim needs to be in place for nine months before this is paid. The rules are even harsher from April, when any payments for mortgage interest will be a loan rather than a benefit.

Once a claimant finds employment and declares it to the job centre, Universal Credit is still paid after they start work until the first wages are received, which at least balances out the unpaid ‘waiting days’ at the beginning of the claim. The job centre will know when wages have been received even if the claimant doesn’t advise them of this, as the computer systems for tax and national insurance contributions are linked to that of the job centre.

Universal Credit claims can continue if you’re employed and on a low income, as long as you are looking for more work. Just over two fifths of claimants are in employment, many will be on zero hours contracts or irregular shifts, or be self-employed. This means they are likely to be earning different amounts each week, or even nothing, and trying to maintain a Universal Credit claim to top up wages is far from straightforward, or lucrative. Self-employed claimants have fallen victim of the ‘Minimum Income Floor’ clause. This refers to an amount which the state assumes a self-employed person will earn each week, based on their particular trade. This amount is then deducted from the amount paid to the claimant, even if they haven’t earned that much, leaving many claimants short of enough money to survive. According to the state, ‘this will encourage you to grow your business and make sure it can support you’. From April, when a self-employed claimant earns more than the threshold to qualify for Universal Credit, any surplus is taken into account for six months, meaning they won’t receive benefits until this surplus is reduced through subsequent months earning less. This leads to a complicated situation where they re-apply for Universal Credit knowing they won’t receive any, but just so that the declining surplus is logged. According to the Resolution Foundation thinktank, roughly 2.5million households in employment but on a low income will be over £1,000 a year worse off by transferring to Universal Credit (Guardian, 20 November).

Consequences
The bureaucrats who devised the rules behind Universal Credit don’t have to live with the consequences of their actions. The restrictions, confusions and delays in receiving Universal Credit are forcing its claimants into poverty. The long wait for the first payment has left thousands of people without the means to buy food and other basics, and with rising debts from unpaid bills. Private sector landlords may not want to wait to receive their rent, and so either may evict someone or refuse to house them in the first place. Among the issues discussed at the job centre appointments are how to apply for advance payments and where to get budgeting and debt advice, as the staff realise that people will get into difficulties, especially early on. Staff may be able to issue vouchers to receive supplies at a food bank, or refer claimants on to another agency to get a voucher. According to The Trussell Trust, which operates Britain’s largest network of food banks, demand for its parcels has risen by 30 percent since last April in areas where the rollout of Universal Credit is most advanced (Guardian, 7 November).

Predictably, Universal Credit has attracted a barrage of complaints and criticisms. The government opened up an online consultation, and of the 55 responses left on their website, only one was positive. Respondents described the benefit as ‘inhumane’, ‘an absolute shambles’ and ‘disgusting’, with many people writing about how scared and poor claiming Universal Credit has made them. Even Tory ex-Prime Minister John Major, writing in the Mail on Sunday joined the backlash, saying that the benefit ‘although theoretically impeccable, is operationally messy, socially unfair and unforgiving’ (7 October). Iain Duncan Smith promised us ‘fairness and simplicity’, remember.

Regardless of any guidance given by job centre staff, the way that Universal Credit ‘encourages’ people to find employment is by its brutality: the long wait for not enough money, the constant threat of a sanction, the confusing, obstructive rules. Wage labour is less harsh by comparison, so claimants are pushed towards it, or to the desperation of trying to maintain a claim longer-term. This reminds us that the state isn’t there to support people, it’s there to support a system which needs wage labour. The pressures, both financial and emotional, on claimants are like a punishment for falling outside the system’s expectations.

Clive Hendry

Greasy Pole: Rough Ride On Runway Three (2016)

The Greasy Pole column from the December 2016 issue of the Socialist Standard

Head and shoulders above the rest is how Chris Grayling emerges in many group photographic images of our mistresses and masters in government. He is outstanding  in ways other than a physical presence because, since he first got into Parliament in 2011 as the Honourable Member for Epsom and Ewell, he has held a generosity of ministerial offices including a spell when the Tories were in opposition as a Front Bench Shadow Minister. His record has given him valuable experience of normalising some controversial matters, to the extent that it seemed natural that he should be Secretary of State for Transport when at the end of October it was confirmed that the dispute over the third runway at Heathrow Airport had been settled. Settled, that is, to the extent that it will be laid down together with all the associated horrors of chaotic terminals and jam-packed roads and atmospheric pollution – and engine noise.

Heathrow

It was a matter of going along with a recommendation by the Airports Commission to develop Heathrow rather than Gatwick Airport, which was hoping to be allowed to have a second runway. Grayling stated the case for Heathrow: ‘The step that government is taking today is truly momentous. I am proud that after years of discussion and delay this government is taking decisive action to secure the UK’s place in the global aviation market – securing jobs and business opportunities for the next decade and beyond’. This news was the worst possible for thousands of people – for example those in Harmondsworth, where  some 700 homes, an ancient church and eight Grade Two listed buildings and a graveyard would disappear under the bulldozers, as would the nearby ancient village of Sipson. And to another, crucial objection Grayling had an answer – if that is the correct term – ready: ‘No airport is able to be silent’, he assured the objectors and others and then, before the gasps of outrage had died away,  'but we have studied new supplementary evidence that shows it won’t be quite as noisy as some people seem to think it will be’.

Combative 

These assurances might have been more effective if they had been voiced by someone with a less turbulent and discouraging past than Grayling. He was appointed to his present job last July; in the past he has held nine others of varying responsibility and the most he has survived in any of them was two years. His first experience of office was as Minister for Employment, from 2010 until 2012, when he was responsible for the supposedly constructive work of the Job Centres. He quickly gained a reputation for his combative style including a reduction in costs by making some 100,000 staff at the Job Centres redundant, with a predictable effect on the benefits of out-of-work people who were condemned by him for ‘being habitually unemployed, generation after generation, living in sink council estates’. He carried this assessment style over into his later job as Lord Chancellor and Minister for Justice  when he laid down that prisoners should be encouraged to remodel themselves away from their ‘something for nothing culture’ and he took steps to stop them receiving books from their families and friends. He also encouraged private companies such as Securicor and G4S to play a greater – and more profitable – part in the supervision of prisoners released early on licence. These achievements were responsible for him being dubbed ‘Failing Grayling’ and made it difficult to understand why he had been appointed to some of the more sensitive posts in government.

Demonstrators  

But Grayling’s store of Arguments for Survival is unusually deep, enabling him to survive when his rivals have given up. When he was dumped with the responsibility for seeing the Third Runway through to establishment it had been in process, from one side to the other, for a very long time. It was another example of politicians who habitually encourage us to trust them for their talent for crisp clear-headed attitudes but are liable to change their collective minds, often diametrically from one embattled side to the other – at times developing nothing better than a state of chaos. Heathrow was opened as ‘London Airport Heathrow’ in 1946, coming out of the purchase in 1930 of 150 acres of land by an aircraft engineer from the vicar of Harmondsworth. Over the years it repeatedly expanded, with a succession of Terminals until in 2001 the then Labour government was persuaded by a campaign to manage the aerospace congestion by building a further runway. In 2003 Alistair Darling, when he was Minister of Transport, produced a White Paper which effectively set the debate going, confirmed by another White Paper in 2005. This set off a widespread, organised protest movement which objected to the proposal on the grounds of aircraft noise, atmospheric pollution and road traffic congestion – on one occasion making its points with a band of intrepid demonstrators on the roof of Parliament. This did not persuade the Labour government with its Prime Minister Gordon Brown to change its policy.

No Ifs No Buts

That had to wait for 2009 and the future Prime Minister of the coalition government David Cameron who made many people feel a lot better with his famous declaration including the phrase that ‘…the third runway at Heathrow is not going ahead no ifs, no buts’ and after the 2010 election the Lib Dem Nick Clegg was encouraged to try to seduce a few votes, along with all those others who had believed him in the matter of student loans, by agreeing that the whole idea of a Third Runway was dead in the airways. And there was the next Tory Prime Minister Theresa May who in January 2009 intervened  like a seasoned objector on the matter of the Labour government plan to approve the terminal: ‘A third runway will result in thousands of additional flights, increased noise and more pollution for thousands of people. The government’s promises on the environmental impact of this are not worth the paper they are written on’.

We are accustomed to the exposure of politicians in a confusion of their impotence. In the case of the third runway the reasons are readily available. Heathrow is effectively owned by a number of investment funds in countries such as Qatar, Singapore, China while the British Chamber of Commerce expects it to bring £30 billion of ‘economic benefits’ to the UK economy between 2020 and 2080. Aircraft fly, people travel, goods are flown back and forward across the world, influenced by profits or loss – by those ‘economic benefits’. The third runway is not judged on its effects on human welfare but on which side of that equation it operates.

Ivan

Greasy Pole: Attack Dog? Or Barking Mad? (2014)

The Greasy Pole column from the June 2014 issue of the Socialist Standard

Any Honourable member who came into the House through inheriting a seat left vacant by the retirement of an independent, blue-blooded Old Etonian will have devoted some thought to the best way of Making A Name For Themselves. Epsom and Ewell in the lushly arboreal county of Surrey has been palaeocrystic in its loyalty to the Conservative Party. Between 1978 and 2001 it was represented by Archibald Gavin Hamilton Kt PC who was knighted in 1994 and then eventually made a life peer in 2005 as Lord Hamilton of Epsom, of West Anstey in the County of Devon. At 6 feet 6 inches he was the tallest MP, an early recruit of the Conservative Monday Club and chairman of the 1922 Committee. Among his other junior posts was Parliamentary Private Secretary to Prime Minister Margaret Thatcher. And oh yes; he now plays bridge for the House of Lords team.

Grayling

Hamilton's resignation left the Tories of Epsom and Ewell seeking a replacement. Among the hopefuls there was Chris Grayling – if they were prepared to overlook the embarrassing fact that he had once been a member of that chaotic spasm the Social Democratic Party. He had trodden the well-worn path of Cambridge, TV journalism, management consultancy and the obligatory candidacy in some impregnable fortress of the provincial Labour Party. He was chosen as the candidate and in the 2001 election he had a majority some way above 10,000. In the Commons he soon attracted attention with junior jobs in Transport, Work and Pensions and the Home office. Whatever else this experience offered him it was a valuable opportunity to establish a reputation – which the Tories badly needed then - for determined aggression.

That was a time when the Blair governments were persistently vulnerable to hostility from any ambitious predator and Grayling fitted this role well enough to earn himself the title of 'attack dog', undeterred by the fact that he would be subjected to the same treatment if the Tories were to get back into power. In 2005 he attacked Cherie and Tony Blair, and in 2007 Gordon Brown, for breaches of the ministerial code in their foreign travel. And among the most dramatically newsworthy, in 2005: 'I am astonished that Mr. Blunkett has broken the Ministerial Code on yet another occasion. This is getting beyond a joke' – which persuaded Blunkett to resign from a governmental post for the second time in a year. It all went a long way to solidify Grayling's standing as the Tories' attack dog, helping them back to their rightful place in power.

Benefits

Grayling's appointment after the 2010 election as Minister of State for Employment encouraged him to turn his attention to other targets. For example those hordes of idle, manipulating layabouts who, rather than submit themselves to compliant exploitation, lived by dishonest claims for state benefits and so almost bled the City of London to extinction.

In 2007, during his time in opposition, Grayling had said that a problem for the next – presumably Tory – government was that the benefits system was causing 'billions of pounds' to be lost to fraudulent claims but in fact most of this was due to departmental errors so that less than £1 billion was in question. In another field there was the award of a lucrative contract to administer some 'Welfare-To-Work' schemes to Grayling's preference the firm Deloitte Ingeus after they had made a donation of nearly ￡28,000 to Grayling. And there was the matter of his expense claims, in which he spread the cost of extensive improvements in his flat in Pimlico over two years so that he could claim the full amount in total. As a whole these matters, together with many others of similar style, do not support any image of Grayling as a minister conforming to the same style of living and contributing as he seeks to impose on the rest of us.

Baltimore

In September 2012 Grayling was promoted in a reshuffle to join the Cabinet as Secretary of State for Justice and Lord Chancellor. This change was not universally welcome; in March 2010 he had almost brought about his own disappearance from the gaggle of aspiring promotion prospects by the protests greeting his approval of landlords choosing to discriminate against gay and lesbian couples. In what is known as the Criminal Justice System there were similar reservations for in August 2009 he had upset the police and local councillors when he likened the crime in Moss Side, Manchester to what was depicted in Baltimore by the American TV series The Wire as'urban war'. In fact there was little similarity between the two cities; the police said that gang-related shootings were down by 82 percent and the Manchester Evening News reported that there had been no such murders during the previous year –a pretty awful situation but nothing like as bad as Grayling alleged. There was also a distinct, strongly expressed, opposition to his appointment from the lawyers, still smarting from the cuts in legal aid payments, because they interpreted the fact that Grayling was the first Lord Chancellor without any legal qualifications as a message that the law was now 'negotiable'.

Books

So there could be no surprise that Grayling turned his attention to the prison system and what goes on in it and what is expected of it. His policy was summed up by one of his staff as 'Offenders can't expect something for nothing any more'. And it turned out that 'something' included books mailed to prisoners by their family, which are now banned. One of the objectors to this restriction was Eric Allison, prison correspondent of The Guardian, who some years ago was released on licence from a life sentence. Allison ascribes his turning point to the opportunity to read, which separated him from the nearly 50 percent of prisoners who struggle with a reading age of or below that of an 11 year old: 'I suddenly thought where have you been all my life? I just devoured books'. It went on from there, over the years until he came out a changed man.

Can we expect anything as dramatic and impressive from our Lord Chancellor Chris Grayling? The attack dog . . ? Perhaps just one more thing of note: he is now known among his staff as Failing Grayling.

Ivan