It used to be called social security. Now it’s more often referred to as welfare, a subtle shift in language that gives a discretionary tinge to what should be a universal entitlement
It used to be called social security, or the social safety net. Now it’s more often referred to as welfare, a subtle shift in language that gives a discretionary tinge to what should be a universal entitlement. But after Tuesday’s vote in parliament, the British should get used to the idea of a social-insecurity system. Because what MPs agreed was a mean form of welfare very far removed from the social insurance envisaged by William Beveridge. That great Liberal described the security of income provided by welfare as “an attack on Want” – one of the five evil giants that had to be conquered in postwar Britain. Yet the benefits cap whipped through by the coalition parties marks a decisive break in the responsibility of government to provide a secure income to those who fall on hard times. The consequences, both for those who depend on welfare and for the rest of society, will be profound – and profoundly damaging.
It’s worth spelling out the impact on those who rely on benefits. Jobseeker’s allowance for a single adult is £71 a week. The cap agreed means that sum cannot rise by more than 1% a year between now and 2016. By the end of the three years, then, JSA will be worth a maximum of £73.15 a week. Since the cost of living is rising by 2.7% a year, claimants will be £3.76 a week (or £195.52 a year) worse off than had their benefits gone up in line with the consumer prices index. But because the poor spend more of their income on fast-rising basics such as food and heat, prices for them rise by well over 4% each year. Taking Institute for Fiscal Studies projections, JSA claimants will be at least £7.41 a week, or £385.32 a year, worse off under the new regime.
If we apply the same maths to child tax credit, working tax credit, maternity pay and other benefits, it is clear MPs have voted for the grinding immiseration of some of the most vulnerable members of our society, both in work and out. Under the guise of savings, the government is taking money out of the hands of the poorest. David Miliband was right, in his well-judged Commons performance: this is a “rancid” law. Nor was this the only recourse available to the coalition. Amid a slump, it is yet another recessionary measure, since the poor tend to spend their incomes. And, as Mr Miliband pointed out, if the government had limited tax relief on pension contributions to no more than the average salary of £26,000 a year, “we would have no need for this bill”.
Yet the government has not only falsely claimed it is out of options, it has aided and abetted a poisonous characterisation of those on benefits as “skivers” or “cheats”. The Lib Dem minister Vince Cable was right to complain about the language used by his Conservative coalition partners, but his public intervention came too late. And while it was good to see Sarah Teather and a few isolated Lib Dems protesting, it also raised the question of why they were not joined by more of their colleagues. The junior party fought nobly in 2011 to keep benefits at least tied to inflation: this bill undoes all their work. While Labour did the right thing in opposing this bill, Ed Miliband should have rejected the false distinction between “strivers” and “skivers”.
It is perfectly fair to say that welfare needs reform. It does, and there are all sorts of good proposals, from linking welfare more closely to an ever more insecure jobs market to reviving Beveridge’s contributory principle so that those who pay into the system feel more certain that they will get something back. But the coalition’s main priority is clearly to cut welfare, not reform it. By the time Mr Osborne has completed his austerity programme, many hard-pressed households will have lost something like a quarter of their income. But the change is more than financial: the welfare system is on its way to comprehensive toxification. The slashing of housing benefit paves the way to turning central London into a rich-only zone. Changes to council tax benefit will encourage local authorities to engage in social engineering. And an historic wedge will have been driven between rich and poor.