Ipswich Unemployed Action.

Campaigning for Unemployed Rights.

Universal Credit: Welfare that will not Work.

with 29 comments

The government White Paper, Universal Credit, Welfare that Work, has stirred up a lot of comment.

Little of it has come from the unemployed.

The present system is “unsustainable”. “Welfare dependency” has taken root. We lack a “culture of work” . We need a “new contract” and a “ladder of opportunity”.

The Liberal-Tory Government offers us a “leaner but fairer” welfare state. This will be a “system that provides people with the confidence and security to play a full part in society through a flexible labour market within a competitive modern economy.”
Is this so?

Will a system based on “increased conditionality” give any security?

***********
The signs are not good.

  • Much has been made of the details of the “universal credit” that will replace existing benefits. It will be “simpler” and enable people in low-paid work to keep more of their wages. Scepticism must be high about the ability fo a “single taper” and “earnings disregards” being any easier to administer than working tax credits – whose problems are well known.
  • There is a nasty little sting in this. Central financing of Council tax Benefit will (2013 – 14) will be reduced by 10%. It will be “administered by local authorities”. they will have a “greater say” in the “amount of support” given. This will be, we are told, be more “cost effective”. Local authorities will be able to represent the “priorities of their own local communities” (Chapter 2. 37). Some councils will decide to pay Council Tax benefit in full. Others will not.
  • Conditionality and sanctions. This has got a lot of publicity. Some people like treating the out-of-work as toy soldiers they can march up and down. That is the impression given by the “tool kit” of punishments available. The real problems will start when it becomes clear that it is DWP and Work Programme (yet to be given details of) ‘advisers’ who will decide on sanctions – such as the “mandatory work activity”. On what basis are these to be judge-jury and prison wardens of the unemployed?  Giving someone the power, effectively, to turf an individual out onto the street with no money is a recipe for disaster.  The scope for abuse is immense.There are no independent mechanisms to look over the system.

The White Paper appears to think that labour markets work well.

The problem is to fit loads of reluctant people into it.

Tinkering with the benefits system to give a small increase in money to those who move into work and sanction those who are reluctant to do so, will not solve a more basic difficulty.

Labour markets are “segmented”. That is they cannot absorb anyone into any job. We go into areas where we are employable.

The White Paper will not increase employability – it will stigmatise those sanctioned. For all but a few there will be no real training – a condition responsible for much present unemployment. Reducing housing benefit will, further make people unable to take jobs. They will be preoccupied with keeping their flats and homes. Raising social housing rents (underway) will make us less likely to move. Its method of ‘targeting’ benefits means the state will make choices about our private lives and make us dependent on their judgement. The Liberal-Tories will swell the numbers of the hard-to-employ. Or simply the ‘under class’ and destitute.

Nor are labour markets so healthy. It is not the case that people will suddenly flock into work. There is less and less of it. It is convenient for employers to take on mobile young people, and migrant labour, because they have little costs and are prepared to share houses and accept lower pay. Is the intention to reduce our living standards so that we can outbid them?

But as they get older, those who do not migrate again, will demand better money and accommodation. Then  they will join the rest of us, fed up with lousy pay and living conditions.

Making Britain into a paradise for the highly paid, lightly taxed, and a hell for the rest of us, drifting between bad jobs and the dole, will not boost the economy. Or get us out of mass unemployment. There is a lack of jobs, as the TUC says. Cuts in public spending will throw more people into the hands of the DWP. Planned reductions in their staff numbers will seize up the system.

************

The White Paper is built on the principle that the state should decide who is the “deserving” and who is the “undeserving” welfare claimant. 

Behind its simplicity the reality is that the system remains complex, full of a potential for more red-tape.

It will be costly as it will be introduced with more outsourcing to inefficient private companies. 

It is unfair, as people will suffer from arbitrary judgements. 

It will not work.

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Written by Andrew Coates

November 15, 2010 at 10:32 am

29 Responses

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  1. “Nor are labour markets so healthy. It is not the case that people will suddenly flock into work. There is less and less of it. It is convenient for employers to take on mobile young people, and migrant labour, because they have little costs and are prepared to share houses and accept lower pay. Is the intention to reduce our living standards so that we can outbid them?”

    That gets to the nub of the problem. Our politicians seem to think that work is the cure for all ills. That doesn’t address the problem of in work poverty, the very existence of the tax credit system is a condemnation of British employers. Work should pay enough that you can contribution, pay tax. You shouldn’t have to rely on the government propping up your wage.

    Benefit reform also ignores the quality of the work available. Polly Toynbee’s book hard work had something very interesting to say about this. She talked about shopping, how she liked to pop into a bookshop, browse the shelves, have a coffee. She realised that working minimum wage jobs made even this out of reach. If all you earn goes on paying the bills, the rent and you have nothing left over. Then basic little pleasures, that the well off take for granted, become out of reach. That is if you have the time to actually to do anything, but work. To have a chance of a reasonable standard of living on minimum wage, you would have to work ever hour that god sends.

    The government should be improving the quality of the jobs available, and actually created a few jobs in the first place. Raising the minimum wage would be a good start. Instead they want to kick the poor, and force them to take McJobs. Low quality work that will in no way improve their lives. Of course this country doesn’t care about the poor, unless they are inconvenient or cost the wealthy a few quid. If they are rotting in poverty, but working; the country won’t give a damn.

    john s

    November 15, 2010 at 11:20 am

    • Exactly John and Jupiter,

      It’s the one angle few people have concentrated on.

      What really annoys me is not poorly paid people ranting about lazy dole claimants, but the high-earners, specially, journalists who tell us what’s good for us.

      Andrew Coates

      November 15, 2010 at 12:14 pm

  2. Polly Toynbee’s book Hard Work also talked about that no matter how crappy the job with the crap pay that we are offered we are conditioned into thinking that we have won the lottery.

    Jupiter

    November 15, 2010 at 11:36 am

  3. Like the Job Centre adverts “I’ve got the Job”, “yeah, working my hours to the bone 14 to 16 hours a day for very little pay :-)”

    Jupiter

    November 15, 2010 at 11:38 am

  4. Don’t be so bloody stupid, Mr Coates! Minimum Wage is a lot more than you jolly well deserve, you bloody Commie!

    Sir Rupert Ramsbottom-Fortesque-Winterton-Smythe

    November 15, 2010 at 12:32 pm

  5. Well, I find the Universal Credit idea extremely funny. I shouldn’t.

    First, this idea to replace all benefits with one… actually isn’t going to replace all of them.

    This then destroys the entire idea.

    Secondly, it is deliberately pushed far back in the future where its likely Labour will be picking up the pieces (i.e. scrap it but taxpayer end up paying billions… sort of liek ID cards) and will cost £2 billion to start implementing.

    Although the £5 billion fraud figure is wrong, for arguments sake if it was £5 billion, they are spending 2/5th of the annual fraud amount on starting a new system. Inflation and further costs will rocket. If fraud actually is £1 billion, then they are paying DOUBLE the annual fraud bill to try to implement an idea no one knows is going to work (we know it isn’t). Actual prosecuted fraud is just under £150 million a year, so its approx 13 times this annual amount to implement.

    Thirdly, we here constantly how the existing benefit system is too complicated and how replacing the hundreds of benefits with just a maximum of 5 is seemingly impossible.

    To implement a Universal Credit system I estimate 100 statute Acts will need to be repealed and approx 1000 Statutory Instruments (Orders, Regulations) will also need to be repealed – and new legislation for Universal Credit will need to be drawn up.

    Of course, reality is, like the Work Programme, they have no idea of how to do this at current.

    The best solution would be a one step at a time benefits replacement system… that is through multiple phases rewrite the laws for each benefit – making a maximum of 5 benefit types. They would argue the existing system is adequate for its purpose… just the Universal Credit system is much “better”.

    I have read numerous articles on Universal Credit and official documents… although ideas have been sketched… no one really knows how to implement this and the variables of such are not set in stone.

    *** OF COURSE THIS SYSTEM IDEA WILL NOT WORK AND IF ATTEMPTED TO BE IMPLEMENTED WE WILL END UP LIKE GREECE. ***

    I do, however, respect the decision to delay implementation until way after the Olympics so the police forces are not overly stretched for any protests which will hinder such summer games. But the truth is, the intellectual resources are limited. Dave #2 doesn’t know his knee from his elbow and if a 5 year term is achieved… the most resources are going to focus on this Work Programme/Workfare/Work Activity/Big Society non-sense through this entire period.

    Work Programme

    November 15, 2010 at 12:47 pm

  6. The new Universal Credit system has been hailed by the millionaires who dominate the Conlib Cabinet as the biggest shakeup of benefits since Beveridge, but (when it comes into place in 2013) all it will do is consolidate 6 work and means-tested benefits (out of a possible 30).

    Whilst it may be true that there is some sense in linking out-of-work benefits with in-work tax credits, all that will happen is that the lowest paid will get a tax withdrawal rate of 65%, allowing them to save an extra 5p in the pound. So don’t spend it all at once. 😉

    Meanwhile city financiers are threatening to leave the country because of a marginal tax rate of 52%. As William Keegan says, we are all in this together, but some people are more ‘in it’ than others.

    Squiddly Diddly

    November 15, 2010 at 2:56 pm

  7. Incidentally, I still think the biggest shock is yet to come – Council Tax Rebate, the funding for which is also being reduced by 10%.

    Responsibility for CT Benefit is being passed from the DWP to individual local authorities, who will have the freedom to implement the savings as they see fit.

    I recently emailed my Mayor to ask her how it would affect my benefit. She has yet to reply….

    Squiddly Diddly

    November 15, 2010 at 3:08 pm

  8. […] Unemployed Action: The present system is “unsustainable”. “Welfare dependency” has taken root. We lack a “culture of work” . We need a “new contract” and a “ladder of […]

  9. Yet more propaganda from Auntie Beeb:

    http://www.bbc.co.uk/programmes/b00vxz5m

    Analysis

    The deserving and the undeserving poor

    Presenter Chris Bowlby asks whether a state welfare system can ever distinguish between those who deserve help and those who do not.
    As the recession bites and public spending cuts loom there have been calls, on both sides of the political debate, for a re-moralisation of welfare. Some say that the entitlement culture has gone too far, others that the hard-working poor should not be footing the bill for those who choose not to take a job. When did the language change and what does a change in vocabulary really mean?
    And even if desirable can distinctions between welfare recipients be made in practice? If there are time limits on the receipt of welfare will more people end up better-off in work or worse-off unable to work?
    Analysis will look at what history can teach us about making moral distinctions between the poor – both when the economy is booming & when it’s contracting. And what of those, such as the children of welfare recipients, caught up in the debate : can it ever right to reduce the money which may give them a better future?
    Contributors :
    Will Hutton
    Executive vice-chair The Work Foundation
    Author Them & Us

    Mark Harrison
    Professor of Economics, Warwick University

    Tim Montgomerie
    Co-founder Centre for Social Justice
    Editor, ConservativeHome

    Hazel Forsyth
    senior curator, Museum of London

    Jose Harris
    Emeritus Professor of Modern History, Oxford University

    Alison Park
    Co-editor British Social Attitudes Survey

    Philip Booth
    Editorial & Programme Director, Institute of Economic Affairs

    Gordon Lewis
    Community Project Manager, Salvation Army

    Rod Nutten
    Volunteer, Salvation Army

    Wolfie
    Client, Salvation Army

    Major Ivor Telfer
    Assistant Secretary for Programmes, Salvation Army UK & Republic of Ireland

    Presenter : Chris Bowlby
    Producer : Rosamund Jones.

    iPlayer:

    http://www.bbc.co.uk/iplayer/episode/b00vxz5m/Analysis_The_deserving_and_the_undeserving_poor/

    Podcast:

    [audio src="http://downloads.bbc.co.uk/podcasts/radio4/analysis/analysis_20101115-2032a.mp3" /]

    BBC Radio 4 - Analysis

    November 15, 2010 at 10:08 pm

  10. Yet more propaganda from Auntie Beeb:

    http://www.bbc.co.uk/programmes/b00vxz5m

    Analysis

    The deserving and the undeserving poor

    Presenter Chris Bowlby asks whether a state welfare system can ever distinguish between those who deserve help and those who do not.
    As the recession bites and public spending cuts loom there have been calls, on both sides of the political debate, for a re-moralisation of welfare. Some say that the entitlement culture has gone too far, others that the hard-working poor should not be footing the bill for those who choose not to take a job. When did the language change and what does a change in vocabulary really mean?
    And even if desirable can distinctions between welfare recipients be made in practice? If there are time limits on the receipt of welfare will more people end up better-off in work or worse-off unable to work?
    Analysis will look at what history can teach us about making moral distinctions between the poor – both when the economy is booming & when it’s contracting. And what of those, such as the children of welfare recipients, caught up in the debate : can it ever right to reduce the money which may give them a better future?
    Contributors :
    Will Hutton
    Executive vice-chair The Work Foundation
    Author Them & Us

    Mark Harrison
    Professor of Economics, Warwick University

    Tim Montgomerie
    Co-founder Centre for Social Justice
    Editor, ConservativeHome

    Hazel Forsyth
    senior curator, Museum of London

    Jose Harris
    Emeritus Professor of Modern History, Oxford University

    Alison Park
    Co-editor British Social Attitudes Survey

    Philip Booth
    Editorial & Programme Director, Institute of Economic Affairs

    Gordon Lewis
    Community Project Manager, Salvation Army

    Rod Nutten
    Volunteer, Salvation Army

    Wolfie
    Client, Salvation Army

    Major Ivor Telfer
    Assistant Secretary for Programmes, Salvation Army UK & Republic of Ireland

    Presenter : Chris Bowlby
    Producer : Rosamund Jones.

    BBC Radio 4 - Analysis

    November 15, 2010 at 10:10 pm

    • “Some say that the entitlement culture has gone too far, others that the hard-working poor should not be footing the bill for those who choose not to take a job.” – false dilemma if ever there was one 🙂 Propaganda at its finest 🙂

      Joseph Goebbels

      November 16, 2010 at 12:04 am

    • The thought of going cap-in-hand to the Salvation Army for a “handout” – the very same organisation who along with “charities” such as Barnardos sent the children of the poor abroad to work as forced labour on farms.

      Sally Ann

      November 16, 2010 at 12:34 am

  11. Podcast:

    [audio src="http://downloads.bbc.co.uk/podcasts/radio4/analysis/analysis_20101115-2032a.mp3" /]

    BBC Radio 4 - Analysis

    November 15, 2010 at 10:11 pm

  12. So basically it sounds like a new claimant contract will be introduced as soon as legislation is passed, and this will have the dreaded 3 sanctions for failing to take a job when offered (3 months stoppage of JSA for a 1st refusal, 6 months for a 2nd and 3 years for a third). (I imagine a lot of people will get pushed into working for call centres as cold-calling salesmen).

    In March 2011, I imagine the responsibility for assessing and implementing Council Tax Benefit will pass entirely to local authorites, who will be given the freedom to decide how much of the original 100% waiver they actually grant to unemployed claimants.

    In April the Housing Benefit cap will be introduced.

    In the summer of 2011 the Work Programme (Community Payback for the Unemployed) begins.

    In October 2011 an annual 10% cut in Housing Benefit will be introduced for those who have been claiming JSA for 12 months. Housing Benefit values will be downgraded from the median (half of the market rate) to a third of the market rate (or 30th percentile). It’s also quite possible that payments of Housing Benefit will be made directly to Landlords.

    And then in 2013 the system of Universal Credit will be introduced.

    The future looks pretty grim.

    Squiddly Diddly

    November 15, 2010 at 11:57 pm

  13. The idea that people should be labelled as being deserving or undeserving of poverty by the undeserving rich is quite sickening. I.D.S’s messianic tone when talking of the ‘sin’ of unemployment, and his clear need to impose his sense of puritanical moral rectitude upon the rest of society at all costs, does not bode well.

    Ross

    November 16, 2010 at 1:48 am

  14. It’s going to be grimmer than you’d imagine. Tucked away ie: ignored by the media yesterday, in the consultation paper containing the proposals for restricting Legal Aid is a section detailing how the government plan to bar access to Legal Aid for all matters concerning Welfare Benefits.

    Either scroll down to page 193 OR put “199” in the page selector at the bottom of the .pdf page (there’s a page number anomaly where the first few pages of the .doc aren’t numbered)

    http://www.justice.gov.uk/consultations/docs/legal-aid-reform-consultation.pdf

    “We propose to remove all Legal Help and Representation for welfare benefit matters”

    Sickeningly illustrating the government’s lack of experience in the real world, the first “factor” for removal listed is:-

    “Importance of issues: relatively low (financial entitilement”

    The miserly £65pw of JSA may be a trifling amount to those who put this spiteful piece of work together, but to those claiming it, it’s their sole income to live on. This is beyond shameful.

    Note how the government dump responsibility for providing advice onto a few large charities too.

    Those who have representation to take their cases to Tribunal have a significantly higher success rate than those who represent themselves.

    Those who apply for Disability Living Allowance stand a much greater chance of actually getting an award if they have help from say a CAB Benefits Worker than if they go it alone with their application. The support given to such applicants by CAB is funded by Legal Aid.

    I see large queues forming at every cliff edge in the UK

    Lucy

    Lucy

    November 16, 2010 at 9:08 am

    • Yes Lucy, I can confirm that amongst other actions (Medical Negligence, Divorce etc.) there will be no more Legal Aid availbale for Employment Tribunals and Welfare Appeals.

      Joshua Rosenberg

      November 16, 2010 at 9:31 am

      • This recent announcement by Ken Clarke applies to England and Wales only. Separate Legislation applies in Scotland and Northern Ireland.

        Joshua Rosenberg

        November 16, 2010 at 9:33 am

  15. Ve only vay to reduce ze velfare budget is a mass cull of ze pensioner population. Ze unemployed should ze forced to work zas gas chamber operatives.

    Reinhard Heydrich

    November 16, 2010 at 10:00 am

  16. removal of legal aid is a incredibly scary prospect as people will not legally be able to defend them selves

    antony little

    November 16, 2010 at 2:55 pm

  17. My God – it’s worse than I thought!

    I’ve used legal aid against Jobcentre Plus (successfully) on a number of occasions.

    I can’t believe that they’d do this!

    Squiddly Diddly

    November 16, 2010 at 6:14 pm

  18. This sounds like quite a rocky plan. Welfare is a difficult area to manage, as there is a lot to take into account with each individual case. Moving hte decisions to a local level could have benefits in terms of things being looked at with a closer eye. However, I have been on the receiving end myself during a period of temporary unemployment, and the local job centre managed to “lose” my personal details, and financial I might add, despite it being sent secured with Tamper Evident Tape, which leaves me with little trust for local authorities to deal with such responsibility. Sometimes seems there’s no answer.

    Purple Fox

    February 8, 2011 at 11:37 am


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