Harder times for the unemployed (1996)

From the October 1996 issue of the Socialist Standard

There is nothing governments can do to solve the capitalist problem of unemployment. Indeed, there is little talk these days about 'solving' it, the emphasis is simply on what to do with the 'culprits'

From October Unemployment Benefit—the Dole—will be known as the “Job Seekers Allowance”. Along with this will come targeting agreements, directives, responsibilities, job plans, prescribed programmes, reviews and flexibility. Buried under the tarnished gloss of this jargon lie compulsion, regimentation, sanctions and hardship for those who challenge the myth of exploitation by an employer as a “choice”. It means that the Tory government have finally recognised that the exercise of continually massaging the jobless figures is a worn-out facade and that the use of coercion is the only alternative in an effort to reduce the cost of maintaining the jobless white at the same time this will provide an opportunity for employers to take full advantage of short-term orders and low stocks for which cheap casual labour is ideally suited.

Austerity measures

The JSA should be viewed in the context of a long list of austerity measures affecting Social Security payments over many years. With the cost of Social Security a burden on the capitalist class all changes have been implemented with a view to reducing this financial bill. But paradoxically government intentions have not been matched by the reality. For despite the efforts to deter claimants by increasing the complexity and size of the benefit forms, along with tougher criteria on claimants' entitlement, the working class under the pressure of circumstances have in increasing numbers applied resourcefulness to find loopholes in the DSS minefield. Hence, the total bill for running the DSS has escalated to £93 billion. Whilst actual payments have decreased in relative value the total number of claimants has actually increased—along with fraud and the take-up rate for different benefits. Yet fortunately for the capitalists the take-up rate still falls far short of that estimated, resulting in a surplus of £3.2 billion returned to the Treasury in 1995/96, the difference between expected claimants and actual payments.

The government hope that the full enforcement of the sanctions contained within the JSA will make substantial savings and reductions in the unemployment register. Firstly by deterring registration, and secondly by placing the onus of finding a job on the individual claimant irrespective of the state of the labour market. By ignoring the fact that labour market demand is virtually stagnant and that the unemployed reserve are on hold until more production becomes profitable, it is a short step to asserting that the non-existent jobs are really there and that it only needs the unemployed to become “Jobseekers” to winkle them out or even to create them.

Workers who disagree with their Job Agreement (which is in fact a contractual obligation backed up by penalty reductions in benefit if not carried out) and its clauses of Job Plan, Jobseekers Directives, Review Procedure, regular attendance at Job Centres for “active signing” and are unable to prove they are “actively seeking work”, can expect a withdrawal of benefit for 1 to 26 weeks, or at least be faced with the misery of applying for hardship payments for their dependants only.

When these measures are combined with the changes that have already taken place in limiting Unemployment Benefit, Housing Benefit and Mortgage Interest payments and the action taken to align accommodation with the circumstances of unemployment through a notional “Relevant Rent” —take your choice, bedsit or doorway—they amount to increasing oppression and frustration for the unemployed.

Job Centre chaos

It is not only the claimants who are going to suffer the consequences of implementing the sanctions contained in the JSA. On the other side of the counters are another group of workers who have to deal with the short fuses generated by capitalism in a panic. On them falls the burden of being the paid enforcers when it comes to applying the sanctions. To help them in their endeavours they will be computer-linked with other Job Centres nation-wide and with the local labour Market System so they can ensure claimants are targeted and doing the rounds and that the Job Centres are also expected to reach the target demanded by Peter Lilley of 25 percent efficiency savings over the next three years. On top of this they will have received training in counselling skills to persuade claimants that the various options (which they have no choice on), contained within their Job Plan—retraining, employment placement; voluntary-work; signing up with employment agencies etc. are all in the claimants’ short-term interests, provided that is that they are happy to ignore the low wages, part-time and casual one-hour contracts and adverse working conditions which are not even acceptable to the low standards of the Health and Safety Executive. In order to protect Job Centre staff from the expected fallout from the outraged claimants who have sussed they have been classified as forced labour, the staff will be enclosed in booths protected by hardened shatterproof Perspex with security guards patrolling the floor.

Such a volatile situation with workers blaming each other instead of the system of wage slavery can only be expected from capitalism. Indeed as long as capitalism lasts the workers’ relative misery', destitution and deprivation will continue to fluctuate with the sway of boom and crisis.

This continuing uncertainty will find no relief by supporting the Labour Party. They have made it quite clear they agree with Peter Lilley that some form of sanctions are necessary for the unemployed. Their total agreement with letting the market set its own level of compulsion is sufficient testimony to the fact that they will end up doing much the same as the Tory ratbags are now applying. In any event it is not which party is in government but the compulsion built-in to the wages system that is detrimental to human relationships and the obstacle to our social well-being.

Gravedigger

Cooking the Books: “Mass unemployment” (2006)

The Cooking the Books column from the September 2006 issue of the Socialist Standard

The government’s Welfare Reform Bill is currently going through Parliament. It provides for people on incapacity benefit and single mothers to be harassed to take some crap job or have their benefit cut. New claimants are to be treated even more harshly. This is par for the course. Cutting back on welfare payments has been the policy of all governments, whether Labour or Tory, since the post-war boom came to an end in the 1970s.

The Green Paper which preceded the Bill, bearing the Orwellian title of “A New Deal for Welfare: Empowering People To Work”, sets out the problem as seen by the government:

“In the 1980s and 1990s the welfare state failed those who most needed its help, instead of combating mass unemployment, the welfare state alleviated its worst effects and diverted people onto other benefits.

Instead of helping people into work, it locked them into long-term dependency. By 1997, there were almost 5.5 million people on benefits, 3 million more than in 1979. The number of people claiming unemployment benefits had risen by 50 per cent, while the number claiming lone parent and incapacity benefits had more than tripled.”

This assumes that, if only they had tried, the (Tory) governments of the 1980s and 1990s could have combated “mass unemployment” by somehow creating new jobs as an alternative to paying unemployment and incapacity benefits. But governments can’t create jobs at will.

The Green Paper says that total employment in Britain is now at a record high “having risen by 2.3 million since spring 1997” (when Labour took over). This is indeed what the statistics show but “employment” doesn’t have the meaning which the unwary might assume of full-time employment. It includes part-time employment however short (even one day a week), the self-employed and family members who help them, and people on training courses.

The statisticians divide the population of working age (16-64 for men, 16-59 for women) into three groups: people in employment, the unemployed and the economically inactive. The latest figures, released by the Office for National Statistics on 12 July, show that in the three months to June there were 28.9 million (74.6 percent of working age population) in employment, 1.65 million (5.4 percent of economically active working age population) unemployed and 7.85 million (21.1 percent of working age population) inactive.

The government has set itself the aim of achieving “an employment rate equivalent to 80 percent of the working age population”. A look at the above figures shows that this would be the equivalent of reducing unemployment to zero. But this is not how the government aims to achieve this.

Their plan is to reduce the number of economically inactive by at least 2.3 million:

“To achieve our aim, we will reduce by 1 million the number on incapacity benefit; help 300,000 lone parents into work; increase by 1 million the number of older workers.”

This is all very well but where are the jobs to come from? The latest ONS figures give the number of job vacancies in the three months to June as just under 600,000. Gordon Brown believes that by encouraging “enterprise culture” the Labour government has created the conditions which have allowed businesses to expand and take on more workers and that, if it continues this, more jobs will be created.

What is more likely to happen is that the employment rate will go up a little (with a contribution from people going on government-funded training courses) but not to 80 percent. Instead, the unemployment rate will go up as a result of people on incapacity benefit being transferred to “job seekers allowance”. The government won’t be too displeased with this as they will have saved on welfare payments, since unemployment benefit is lower than incapacity benefit. But it will also, unintentionally, reveal that the “mass unemployment” of the 1980s and 1990s never really went away.

Goodbye to the Welfare State . . . as we know it (1998)

From the March 1998 issue of the Socialist Standard

As members of the working class living on state benefits are well aware, it is quite impossible to put a little by for a rainy day, for every day is forecast as a downpour, and trying to keep your head out of the deluge is a constant problem. And for those who are wholly dependent on benefits as their only source of income, their whole lifestyle is dictated by their resourcefulness in eking out their pittance from one day to the next. Yet the Labour government is planning to make things worse.

One of the major problems for the Labour government is the ongoing increase in the benefits bill—which this year is approaching £100 billion—accounting for the largest slice of government expenditure. The changes in the NHS and education system, brought about by the Tory administration, were plainly underfunded and have resulted in Labour putting Tory Plan B into effect by instigating a deliberate purge in social security payments to enable them to fund the NHS and education changes set in motion by the previous government. In order to meet these financial targets Blair needs to make savings of around £8 billion on the social security budget.

Scraping the barrel

Alongside this Labour are also faced with the problem of attracting skilled workers back into the workforce should the economy show signs of improving. Why put workers through costly training programmes when there are ample skilled workers already available, albeit suffering ill-health or disability to varying degrees? Far better to meet the demands for a low paid, short-term casual and part-time workforce by scraping the barrel and getting the skilled disabled—specifically those who are suffering less than 65 percent disability—back into the labour market. With 2.8 million people of working age claiming benefits due to ill-health or disability, Harriet Harman, the Secretary of State for Social Security, intends to ensure their amount of benefits does not act a disincentive to them returning to employment.

This explains the emphasis Tony Blair places on “offering the opportunity” to those who are sick and disabled to provide for themselves with “appropriate support”. But such explanations also provide the means for the Blair government to distance itself from the present obligation of “provision of universal benefits for life” to a scenario of capping universal entitlement to incapacity and disability benefits to one, or two years, so that after that period means tested benefits come into operation.

The present Social Security Review is the third since the Beveridge proposals for a two-tier National insurance/national assistance social security system were implemented in 1948, with each review making major changes in “the application of universal entitlement” by a mixture of increased bureaucracy and deterrence through lack of appropriate information, or any help from qualified staff at point of access to enable benefit claimants to actually receive their full entitlement. This is a major reason why one million pensioners fail to apply for the full range of various benefits that are available.

The whole purpose of the two previous reviews was to make substantial cuts in the social security budget. So we should not expect this one to be any different. But another lesson of history, which Labour have failed to learn (and as the present cost of social security amply illustrates), is that the previous reviews proved to be damp squibs when confronted by workers more resolute in keeping their heads above water than meddling politicians or inept bureaucrats.

Blair is bowing to the need to impose austerity measures in response to the global crisis of capitalism and the Maastricht criteria in order to ensure British capitalists are well-placed if and when the upturn in the global economy occurs and for possible entry into the single European currency. Such measures also offer the opportunity of projecting the image of a “reforming government” when plainly they are no such thing, but merely a reorganising (and cutting-back) on past reforms.

It is also hoped to curtail fraud and abuse by developing an integrated computer system for the Employment Service, the DSS, local authorities and the Inland Revenue. Initially this reorganisation will put increased pressure on DSS staff and hinder them in achieving their cost and efficiency targets set at 25 percent savings, and also undoubtedly lead to inevitable delays in claimants’ payments whilst claims are being processed. As for claimants, with delayed payment notorious for the creation of a “crisis period” any further adverse moves will only exacerbate the problems of those caught up in the poverty trap.

Various leaks have suggested which benefits could come under the hammer. For instance, Child Benefit is likely to be limited to under 16-year-olds and also capped for those who earn over £20,000-£30,000 a year. Likewise Statutory Sick Pay and Statutory Maternity Pay face the possibility of being capped at the level of £20,000 yearly earnings—resulting in 8.8 percent of claimants of SMP who are currently over that bracket having their disposable income accordingly reduced. Incapacity Benefit could be limited to one or two years, after which those claimants found to be only 65 percent disabled will be encouraged back into the work force by linking them to the means-tested Disability Working Allowance, or something similar. Should this “opportunity” to return to wage slavery found to be wanting no doubt more compelling measures will be used in conjunction with the Job Seekers Allowance. For those in receipt of Severe Disablement Allowance and Industrial Injuries Benefit there is the possibility of both these benefits being amalgamated under a new disability heading and either taxed accordingly, or made an overlapping benefit against other disability benefits.

Since the introduction of policies such as Care in the Community, and with the creation of unitary authorities, many Social Services departments are being hard pressed to meet many of their statutory obligations within their present budgets. This state of affairs has resulted in them considering charging for some of the services they dispense to the mentally and physically disabled. This raises the possibility of claimants currently receiving either the care component for Disability Living Allowance, or if aged over 65, Attendance Allowance, finding they will have to forfeit these particular benefits for receiving local authority care or support. It is also highly likely that both these benefits will, be capped for those earning over £20,000 a year, or taxed as income—and therefore in a roundabout way means-tested—or even for that matter directly means-tested.

The introduction of disablement benefits undoubtedly enabled many recipients to partake in activities which previously had been denied them, especially those who experienced difficulties with mobility. The prospect of this continuing looks bleak for those claiming the mobility component of Disability Living Allowance for it is highly possible that on reaching the age of 65 they can look forward to a life sentence of being housebound with the mobility component being cut from that age.

If such measures are actually put into practice the limited autonomy the disabled presently enjoy will face even further erosion, leading no doubt to an explosion of discontent from the numerous charities and agencies involved with disablement issues, and also from those who were instrumental in obtaining reforms of this nature—in recognition that the needs of the disabled outweigh those of the able-bodied. But with Blair clearly stating that “the welfare state had been left behind by social and economic change”, it is pretty obvious their pleas are going to be met with cynical platitudes from the politicians.

Deterring take-up

Whatever austerity measures are actually imposed on those benefits which presently come under the criteria of “universal entitlement”, the general trend will be towards linking them with some form of means-testing in order to deter the recent high growth in the take-up rate for benefits—especially from the sick and disabled. The high take-up rate for disability benefits in particular proved to be a stumbling block for the Tories, who sought to curb it by installing a stricter medical criteria, and by introducing the Benefit Integrity project which randomly selects 12 percent of claimants for review (this alone is expected to cover 500,000 disability claims) and resulted in 10 percent of those reviewed having their payments cut. Yet despite these and other measures workers have managed to counter them by adopting the realistic attitude of “getting what they can from the system”, and responding in kind with 345,859 new claims for DLA and a further 55,605 new claims for Industrial Injuries Benefit since April.

With a full-blown means test unlikely to become the norm for claiming benefits—for the extra cost of administration would be self-defeating—and with Blair making a point of emphasising that the means-tested safety nets of Income Support, Housing Benefit and Council Tax Benefit also face scrutiny, it can be expected that cuts will be implemented on these already meagre handouts. For instance, Housing Benefit and Council Tax Benefit could be made applicable to only one person per household—irrespective of whether other members of the household claim Income Support. Alternatively, claimants could be made to pay 20 percent of their rent before Housing Benefit comes into operation. If such measures are adopted it will inevitably mean that means-tested claimants will feel the pinch by being expected to pay a portion of their benefit towards rent.

Socialists argue that all reformist activity is subject to the changing nature of capitalism. To fight the same old welfare reform battles over several decades is demoralising enough, but when previous reforms are put into reverse the case against the system which puts profits before needs is stronger than ever.

Even before Labour won the May election, the Child Poverty Action Group in their Rights Guide to non-means-tested benefits, made a point of forecasting that “Is it naïve of us to hope that our successors(s) as authors of this Guide will have a comprehensive range of non-means-tested benefits to describe here in six years time?” (March 1997.) Frankly with Blair and his ilk locked into the profit system, the Socialist Party can confidently assure the CPAG that their guide for 2003 will be a decidedly slimmer version.

G. Digger

Labour and the work ethic (1997)

From the July 1997 issue of the Socialist Standard

  In the aftermath of that great non-event that was the general election we can soon expect to see what measures the new Labour regime has in store for us in its mission to make British capitalism yet more ruthlessly "efficient" and exploitative.

One person who should know is Labour’s own "Prince of Darkness”, political gangster- extraordinaire Peter Mandelson (Minister Without Portfolio). In BBC 1's On The Record programme (11 May), amid the waffle and lying (and his claim that economic growth could bring “prosperity for all” is a twenty-four carat lie), he dropped us at least one very interesting clue. More than once Blair’s whizzkid identified as a key Labour objective the reinforcement of the work ethic and in so doing signalled the government’s commitment to further putting the screws on the working class.

The “work ethic” has a history as long and as horrible as modern capitalism. With roots in the Calvinist Protestant variety of religion it was swiftly seized on by the capitalist class as a powerful ideological weapon. At the time of the industrial revolution it was all the bosses could do to make their workers knuckle under. Only recently driven off the land by enclosure and made completely dependent on working for a wage, the new working class was not used to the regimentation demanded by industrial capitalism and resistance to it was widespread.

The bosses’ response, alongside the removal of all means of living independently of the wages system, the threat of mechanisation and naked repression, was to hammer home the belief that work for the sake of work was a great and noble thing. From being simply a means to an end, the work ethic held up work as an end in itself, to the point of becoming the meaning of life. This was a convenient ideology for the capitalists as the labour of those forced to work for them was the source of their wealth and power. More convenient still was their success in grinding this belief into the population at large, so that the exploited not only accepted their exploitation, but became more or less enthusiastic about it.

This process has continued to the present day, with the lesson continually drummed into us at every stage of our lives that giving up the bulk of our time and energy to the creation of profit for the ruling elite in jobs we usually hate is somehow a desirable way to live—indeed the only way to live. “Education” in schools and colleges is only the most obvious way we are conditioned (or brainwashed) into accepting the work (or slave) ethic and our subservient position in the system. It was after all no accident that the departments of education and employment were merged.

It is hardly surprising that Mandelson should than have expressed such zeal for reinforcing this ideology. Capitalism likes us to be as cheap, obedient and eager to knuckle down to the job as possible and this has become ever more so as the “global market" and suchlike has forced national economies to get rough, tough and more mercilessly exploitative than ever.

In a world of "flexibility", short-term contracts and job insecurity the work ethic may be more important than ever to the ruling class in securing a working class resigned to the anxiety of slaving away in whatever employment the system chucks at it. That firm bosses' favourite the Job Seekers Allowance is an attempt to cut social (in)security expenditure, but also to ensure that the unemployed are "actively seeking" work, i.e. are firmly locked into the treadmill of work by being forced by sheer poverty to search for absolutely any job going, even when such jobs are non-existent.

At the back of the Minister’s mind may be the fear that capitalism's restructuring and long-term mass unemployment has led many people to lose their identification with a certain “career” and even with the whole world of employment: many people are sensibly asking themselves whether wage and salary labour is really that desirable after all.

To counter such developments, we can expect the Labour government’s commitment to the work ethic to be reflected in their education, social security and law and order policies: in other words a continuation of the Tories’ policies of heightened regimentation, austerity and repression. Whatever they do though they will not be able to stop more and more people seeing how criminally unnecessary this system of exploitation, pressure and misery is in a world where a few voluntary hours a week enjoyable, useful activity is all anyone need contribute to supply what is needed for everyone to lead a comfortable, fulfilling life. Down with the work ethic—a tool with which capitalism has stolen our lives, our energy and our world.

Ben Malcolm

‘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: Darling turns the screw (2000)

The Greasy Pole Column from the August 2000 issue of the Socialist Standard

When New Labour came to power, it was assumed by many that knee-jerk government was over. But as Labour climbed the greasy pole, "principles" and beards were quickly shed

The governments of John Major and Margaret Thatcher did not go down in history for creating a harmonious country free of poverty, stress and disease but they will be remembered for a few other things—handbagging opponents, rampant unemployment and sleaze. And in response to these things, knee jerk policies—the rushing out of a parliamentary bill or some other measure after some sudden, media-motivated panic about a problem which, until then, had existed for a long time unmolested by any attention from frantic ministers. The idea of the knee-jerk was to give the impression that the government was alert to the concerns of the voters and would act on them with all possible speed. What really happened was that polices were trotted out which quickly ran into trouble precisely because they were so badly designed and so had to be withdrawn or reshaped, to the acute embarrassment of their originators.

When Blair's Labour Party came bounding into power in May 1997, overflowing with youthful vigour and optimism and fresh ideas, a lot of their supporters assumed that knee-jerk was a thing of the past, with the rest of the nightmare of Tory rule. From then on every government action would be weightily considered, carefully worked out after proper consultation and responsibly presented. It was, they triumphantly assured each other, the only way of dealing with any problem. New Labour, New Sobriety.

Benefits 

Well it did not work out like that. Just like the Tories before them, the Blair government gives every sign that they are not in control of the situation, that they are in a continual state of panic, cobbling together policies as each emergency hits them in a desperate attempt to keep the voters' confidence until it is time for the next election. We have seen several examples of this recently, as things get worse and worse for the government. We have seen Jack Straw's infamous crackdown on asylum seekers and his blundering attempts to reduce the crime statistics. We have seen Tony Blair's astoundingly mad suggestion to give the police powers to drag public order offenders to the nearest cash dispenser to pay an on-the-spot fine.

Another knee-jerk which has caused the government some embarrassment is the attempt to suspend state benefits for people who breach community penalty orders. The government's original idea was that the matter should not be tested in the courts, where the breach would have to be proved. It would need only a probation officer or a community service officer to allege that there had been a breach and to summons the offender for the Department of Social Security to cut the person's benefit—entirely in the case of Job Seekers' Allowance and partly in the case of Income Support—for up to 26 weeks.

A predictable objection to this proposal was that to cut the benefit of a person who had no other means of support was more or less inviting them to go out and commit a few more crimes just to get by. The Tory peer Lord Windlesham who, as a past chairman of the Parole Board has some experience in the matter, condemned the measure as ". . . rooted in deep ignorance of deviant behaviour and the most effective ways of countering it". The Penal Affairs Consortium described the proposal as ". . . retrograde, counter-productive and bound to increase crime". Such arguments did not impress the government, who are among the small minority who, in face of overwhelming evidence, deny that there is a link between crime and the levels of poverty. Nor were they impressed when it was pointed out that cutting benefit would not affect offenders who are in employment and who could therefore breach their community orders without fearing a cut in their income. The lawyers' argument, that courts, and not some government agency, should deal with breaches of their own orders was similarly dismissed.

Darling's beard 

The person with the job of implementing the policy is Alistair Darling, who glories in the title of Secretary of State for Social Security. In fact there was a time when Darling had strong reservations about the proposal but these were not based on any principled objections, nor concerns about the welfare of people whose only income he wanted to take away. Darling was worried about which ministry was going to have to pay to administer the measure. When he lost that battle he enthusiastically supported the idea. Which is just what would have been expected of him for he is a man who might politely be described as a pragmatist but more realistically as an unprincipled, ambitious climber. Just how ambitious was illustrated in the matter of his beard which, when he first came onto the political scene, was almost as luxuriously dense as Frank Dobson's. Darling liked his beard; his wife liked it a lot. But in 1996, when he was opposition spokesman on Treasury and economic affairs, Darling was visited by some of Gordon Brown's heavies who tactfully informed him that the beard had to go. It did not, apparently, inspire trust in what is known as the financial community (the people who make profits and losses from useless fiddles like selling and buying currencies all day long) and so could work against Labour's interests. Of course Darling, who is rumoured to have once been a Trotskyist, could have told these people that he had not come into politics to butter up financiers, except that that was why he had come into it. So gradually, over a short period, the beard came off. So Darling kept his job. And got promoted.

And the "financial community" was very happy. "In opposition," said the Financial Times on 14 June 1997, "Mr. Darling was widely praised for his handling of his City brief . . ." The admiration for him did not flag after the election, when Darling got into government, as Chief Secretary to the Treasury: "He is about as unscary as they come . . . Just the sort of person the City could deal with . . ." rhapsodised one senior banker. "Flexible on regulation and willing to listen . . ." burbled a City chief executive, who may have been nervous about what regulation might do to his firm's profits. With those kinds of commendations, Darling was not likely to lose sleep over measures designed to drive desperate and alienated people even deeper into impoverishment and despair.

Contracts 

When the attacks began on the proposal to deny benefit to people who breach their community penalty orders Darling did not show up so well; his admirers in the City would have been disappointed. Apparently devoid of any valid argument to support the cuts, he fell back on a spurious one: “Surely it is not unreasonable to say to someone if they enter into an agreement they should stick to it? . . . We are all responsible for our actions. Society is built on a contract. There are rights, yes, but there are responsibilities too” (Guardian, 24 June 2000).

That argument may have pleased one or two Labour dummies (one noble lord moaned "Why can't these people toe the line when they know the issue with which they are faced?") but it did not answer the case. As a lawyer Darling should know about the desirability of a contract being between equals. This would not have been the case with many community penalties, which are imposed on an offender waiting trembling in the dock to hear their fate from a judge or a bench of magistrates sitting on high. Community penalties were designed by the law to be direct alternatives to imprisonment, which brought an element of coercion into the acceptance of the "contract". In any case the ex-solicitor Darling seemed to have overlooked the fact that the need for an offender to agree to a community penalty was abolished some years ago; courts can now make such an order whether the defendant agrees or not.

But enough of Darling as a lawyer. What about him as a politician? Society is indeed built on a contract—or rather this society is built on the "contract" between the class who monopolise the means of wealth production and distribution and the rest of us, who "contract" to be exploited in order to live—and to lubricate and maintain the whole system. This is another contract between unequals because the working class have the choice to submit to their own exploitation or live on, or below, the bread line. For example, as Darling himself has pointed out (Guardian Special Reports, 22 August 1999), of the 2000 children born every day in Britain a third will be born into what is officially known as poverty. Left as it is, he said, many of these children will not only be born poor but will die poor. That is a fair measure of the effects of the capitalist society which Darling and his party support.

Promises 

When parties like New Labour present themselves to us at elections, wheedling and cajoling, they offer to enter a contract with us: give them our votes and they will organise capitalism so that it behaves as if it were not a society of privilege and exploitation. For some reason this kind of appeal, from Tory as well as Labour, is seductively successful at one election after another. It was effective in 1997, when millions of people contracted with Labour over its promises, for example to provide " . . . better schools, better hospitals, better ways of tackling crime . . . one nation, with shared values and purpose . . ." The Labour Party did not say then that their part of the contract would involve the deeper humiliation of the more vulnerable members of the working class while they fawned on wealthy capitalists and "celebrities". They did not say that, in knee-jerk policies and many other ways, they would run British capitalism in a style distinguishable from the Tories only because, as in the case of Darling's benefits cut for offenders, it would be even harsher.

Ivan

They Say: “We Can’t Afford it.” (2010)

From the July 2010 issue of the Socialist Standard

The aspirations of the majority of the world’s population are being frustrated by capitalism’s economic constraints.

In May 2010, the Coalition government in the UK announced cuts of £6.2 billion in an attempt to begin to reduce the budget deficit of £156 billion for 2009/2010. These cuts will very noticeably affect people’s lives. For example, it was reported that £780 million would be cut on transport, £836 million on communities and local government and £325 million on education. Devolved administrations in Scotland, Wales and Northern Ireland will have to cut back £704 million. Local authorities will be expected to reduce expenditure by £1.165 billion. Many more expenditure reductions were announced in the June emergency budget.

It is vital to realise that this economic crisis is just the latest in a series of slumps which are quite natural to the capitalist system. In the past, supporters of this system have quite mistakenly believed that politicians would be able to rid society of the detrimental effects of the trade cycle. Gordon Brown is particularly infamous for his claims to have “abolished boom and bust”. Past slumps have, of course included the Great Depression of the early 1930s, and recessions of the mid 1970s, the early 1980s and 1990s.

Reforms = Continuation of Capitalism
When confronted with the case for genuine socialism, many apologists for the capitalist monstrosity have maintained that through the introduction of reforms, political leaders would be able to establish a “fairer” and “better” society.

Let’s look at aspects of this reform movement. In 1942, the Social Insurance and Allied Services were created by Beveridge in order to aid those who were in need of help, and/or in poverty. The benefits were designed to aid the sick, unemployed, retired or widowed. When state welfare reforms were introduced after the Second World War, they did produce some improvement in working class living conditions in the UK, for example in the areas of education, housing, child employment, work conditions and social security. No doubt, one motive for these reforms was an attempt to distract workers attention way from more radical, left-wing ideas, which claimed to offer an alternative to capitalism. Such motives had been employed in Germany during the 1890s by Bismarck.

The benefits from reforms have, in reality done little more than to keep workers and their families in an efficient condition for employment. In economically developed countries, such as those in Europe and North America, whilst the worst excesses of poverty have been partially alleviated, most of the social problems of inequality, unemployment (or the threat of it), sub-standard housing etc., remain.

The reforms which are made in capitalist society, have to be reconciled with the profit-making needs of the system. These reforms will often be turned to the benefit of the capitalist class at the expense of any working class gain. This explains the limited nature of reformism as far as the workers (the majority of people) are concerned, and how many of the supposed benefits can be eroded. Take for example social security, housing and education.

Underlying the whole system of the provision of “benefit” to those unable, for various reasons, to take part in the employment process, is the suspicion, encouraged by the ruling class, that many of those in receipt of these benefits “may not deserve them”. The value of the benefits, such as Job Seekers’ Allowance, Income Support and state pensions frequently declines over periods of time, since the government insists that the previous levels “cannot be afforded”. Pressure is put upon claimants to “justify” their claims.

As regards social housing, council house building is a minute fraction of what it was 50 or 60 years ago and the cost of having a roof over one’s head has become much greater, causing through mortgages, huge levels of indebtedness.

In the sphere of education, tuition fees and student loans have put enormous pressure on the young who are seeking to increase their knowledge and skills, in most cases, in order to make themselves “more employable on the job market”. According to the online student magazine Push, in 2009 students faced an average debt of £5,000 for each year of study. Some students in London have debts of around £30,000 by the time they finished their courses. When these students do finish their studies, they will most likely have to find a place to live, on a more permanent basis. Hence, the need for majority to take out a mortgage and build up even more debt for themselves. How much of this was foreseen by the reformist proponents of large-scale higher education and home “ownership” under capitalism?

It’s the Working Class who make the sacrifices
Most economists and political commentators are saying that the UK’s budget deficit and indebtedness will usher in a period of significant austerity. This problem is a global one, as is the economic crisis. To take just one example, the problems of Greece have been well publicised. In order to receive loans from the Euro-zone countries and the International Monetary Fund, wage freezes, pension cuts and tax rises are being introduced.

David Cameron and other apologists for the status quo claim that the whole population will have to make “sacrifices”. What these defenders of capitalism utterly and deliberately fail to tell us is that the overwhelming burden of the sacrifice will have to be made by the working class. The rich will, for the most part, as usual keep their privileges and luxurious lifestyles. Perhaps, the average multi-millionaire or billionaire will only be able to “afford” two yachts in the Caribbean, instead of the more normal, three. Perhaps, some of the wealthy will have to delay refurbishment of their opulent gated homes, for a few months etc. The reality is that capitalism can never be made to work in any other way. It always works in the interests of the rich minority and against the interests of the majority of the population, no matter how many reforms are introduced.

The socialist answer to all this is firstly to point to the absurd contradictions which capitalism presents. We are being told that many reforms and much social expenditure cannot be afforded. Yet, huge sums of money are squandered on the destructiveness of the armed forces and on the wastefulness of financial services. The society in which we live, possesses immense wealth, on a global scale. Just think of the power of modern technology, compared with the technology of only 40 years ago. Just think of how greatly the processes of automation in industry have been developed in recent decades. Also, bear in mind the huge potential of the world’s labour force which could contribute towards expanding society’s wealth still further. However, under capitalism many of these productive resources are being and will be underused or abandoned since they cannot be “afforded” (in reality, it is not profitable to employ them). All the reforming of the capitalist monstrosity is not going to make any significant difference. The problem will still be there, unless…, unless people finally realise that there most certainly is an alternative to this austerity madness.

The Socialist Alternative
That alternative consists firstly of people becoming aware that conditions most certainly do not have to be as they are at present. The majority needs to come together and to realise that instead of a small, profiteering minority owning nearly all of the planet and its resources, we, as the overwhelming majority must take possession of those resources, manage and use them in the interests of the whole of humanity, with production of goods and services for human need and, not for profit making which benefits only a small minority.

In such a society where the resources of the world are owned and controlled by the people of the world, there will be absolutely no need for the money system and its inherent enormously wasteful financial apparatus. With the democratic introduction of common ownership, will come the abolition of money and all forms of exchange. In their place, each individual will be able to make their own voluntary contribution to the production of society’s wealth and in turn, will be able to draw from the common store, according to their own self-defined needs.

In such a world, notions of “indebtedness” and not “being able to afford” things in monetary terms, will be considered completely archaic and utterly out of place.

Through the pages of this journal and of other socialist literature, and by communicating with socialists, people can become aware of this alternative. So, the next time you hear a politician supporting policies of austerity and talking about there not being enough money to do something worthwhile, think of the socialist alternative where we will not need money in the first place. Instead, the world’s people will be empowered to contribute their knowledge and skills to the common good (that of society as a whole, including themselves, as individuals). In such a system, humanity will also have, at its disposal, technology designed and frequently refined to benefit all of the world’s people.

Vincent Otter