Category Archives: Social Security

‘U-turn’, ‘Fiasco’, ‘Chaos’ – Personal Independence Payment (PIP) has been back in the news at the start of 2018 and the headlines don’t make good reading for the government. Back in March 2017, the government changed the eligibility criteria for the mobility component of PIP to exclude claimants experiencing ‘psychological distress’ from receiving the enhanced rate of the benefit. However, the High Court found that the government’s amendments ‘were blatantly discriminatory against those with mental health impairments and cannot be objectively justified, and concluded that ‘the wish to save nearly £1 billion a year at the expense of those with mental health impairments is not a reasonable foundation for passing this measure.’

The government decided not to challenge the High Court’s decision and now need to undertake a review of 1.6 million claims made for PIP over the last four years at an estimated cost of £3.7bn. It is understood that the review could take up to five years and result in 220,000 claimants receiving higher awards. What, then, does this recent development tell us about the adjudication of disability benefits for people with mental health problems? More broadly, what does it tell us about the ideology and administration that underpins PIP?

Personal Independence Payments and mental health

PIP was launched by the coalition government in April 2013 and was intended to assist claimants of working age with the costs associated with disability or long-term health conditions. The government argued that by replacing Disability Living Allowance, PIP would provide more targeted support for those in genuine need with decisions based on medical evidence. Initially, it was anticipated that the full roll-out of PIP would result in 600,000 fewer disability benefit claimants and annual savings of £2.5 billion. Analysis shows there are likely to be ‘winners’ and ‘losers’ from the new PIP regime, but this is difficult to accurately assess because the government has changed the timescales for its implementation and the standards for qualification.

The uncertainties created by the transition to PIP are a real issue for many people with mental health problems. It is not unreasonable for someone with mental health problems to ask, ‘Am I likely to get PIP?’ or ‘When will I have to go for a PIP assessment?’ At the moment, the system is so fraught with uncertainties and inconsistencies that these are very difficult questions to answer. And surely the whole point of a social security system is to provide some security for claimants.

I am in the early stages of a research project exploring the impact of the rollout of PIP and claimants with mental health problems have repeatedly told me that their mental health has been negatively impacted by the unpredictability of the system. Consider the following timeline of events over the last 12 months:

  • 23 February 2017: Department for Work and Pensions lays regulations before parliament that amend the eligibility criteria for the mobility component of PIP for those unable to undertake journeys due to psychological distress. It is estimated that this change would result in nearly 300,000 people no longer being entitled to the mobility part of PIP and will affect people with a range of conditions including schizophrenia and anxiety conditions. The government state that this amendment is necessary to restore the original aims of PIP.
  • 21 December 2017: The High Court found that the government’s amendments amount to direct discrimination against those with mental health impairments and the policy intention to save money was based on an untestable hypothesis about levels of need.
  • 19 January 2018: New Department for Work and Pensions Secretary Esther McVey states that the government will not challenge the High Court decision and a review of 1.6 million claims for PIP will be undertaken.

A charitable view of this timeline would be of the government and judiciary applying scrutiny to a new benefit in order to get things right. However, the impact on claimants, particularly those with mental health problems, is often damaging. Not surprisingly, the second independent review of PIP completed by Social Security Advisory Committee chairman Paul Gray and published in March 2017 described an ‘inherent distrust’ in the system by claimants. This means that a benefit system which should provide a safety net is, in fact, exacerbating anxiety for those living with mental health problems.

Criticism of the UK disability benefits system has also come from the UN Committee on the Rights of Persons with Disabilities, which found in 2016 that ‘there is reliable evidence that the threshold of grave or systematic violations of the rights of persons with disabilities has been met in the State party’. The committee recommended that the UK government should improve the administration of disability benefits and make it more accessible for disabled people.

Delayed implementation and chaotic administration

It should be acknowledged that designing and administering a disability benefit is not an easy task and this is underscored by the fact that few other countries have a comparable benefit to PIP. The eligibility criteria for PIP focuses on claimant’s ‘limited ability’ in relation to mobility and a range of daily living activities. This, in itself, seems reasonable, but as with all social security, the devil is in the details. Unfortunately, with PIP, the details seem to have focused on saving money and reducing the number of claimants.

The government appear to have overlooked the fact that the needs of disabled people don’t vanish because tighter benefit rules are introduced. This is important as the concessions that the government have been pressed into making are largely because claimants and disability campaigners have been able to clearly demonstrate (often through the tribunal and court system) that significant elements of PIP are not fit for purpose. An ill-conceived policy that seeks to save money invariably ends with compromise and additional cost that was not initially intended. It will be interesting to see to what extent the government’s initial forecast in terms of expected savings and number of claimants has changed once its review of PIP claims is complete.

The government’s intention was that PIP would create a more fair and objective assessment of need. However, from the early stages of the rollout of this benefit, there has been intense criticism of the assessment and adjudication process. Early concerns were voiced by the National Audit Office and the Work and Pensions Committee about unacceptable delays in the decision-making process. While there have been some improvements in this area, the second Gray review of PIP found that administrative processes need to be significantly improved. This should include improvements to the way evidence is obtained and the need ‘to broaden audit and quality assurance in assessment and decision-making.’ For many claimants, the experience of the PIP assessment process can be as damaging as the final decision that is made, with many reporting cancelled appointments, rushed assessments and a lack of understanding of individual conditions and resulting need. As with other areas of policy, the appropriateness of the involvement of private contractors (ATOS and Capita) has been questioned.

We should also recognise that public and judicial pressure are not the only reasons for the government U-turn on PIP. The challenges that the government face with the Brexit negotiations mean they must choose their domestic battles wisely and it seems that a fight over PIP was a step too far for Theresa May. (Remember, this is a Prime Minister who chose social justice as one of the central themes of her maiden speech.) While campaigners and social policy academics will rightly welcome the government climb-down on PIP, we must not forget that this creates yet more uncertainty for disability benefit claimants. Rather than a system underpinned by a fiscally-driven ideology, shaped by short-term political considerations and delivered in a chaotic manner, what we really need is a ‘real-world assessment’ of disability and a benefit which appropriately meets the needs of claimants.

First published by the Social Policy Association

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It’s lovely to be here and with my dear friend and former colleague, Dr Alex Scott-Samuel. Alex and I were co-Directors of a research unit at the University of Liverpool, and it’s really my tackle inequalities that drove me into politics.

As a public health consultant for over 20 years, I knew that if you’re serious about tackling health inequalities you have to get policy right as its being designed.

At the same time I was at Liverpool I was also chair of Rochdale Primary Care NHS Trust for nearly 5 years, resigning in 2006 over my concerns of the use of private healthcare companies in the NHS. As a lifelong Labour supporter, I decided to get stuck in to try and influence Labour’s health policy….and the rest, as they say, is history. I became an MP seven years ago, and it is truly an honour to do this job.

Although I was critical about the use of the private sector in the NHS by the former Labour Government, under Labour the gap in life expectancy between the rich and poor did reduce. But I’m sure it will come as no surprise that a couple of weeks ago the ONS published data showing that under Tory austerity this gap is widening. For women, the gap is the largest since the 1920s.

As you know, inequalities are NOT inevitable. They are socially reproduced. They can be changed. And that should give us all hope. But it needs political will to tackle them, not the soundbites of this Govt.

Unfortunately in spite of all of this evidence, we are seeing a concentration of power in tiny elites more than ever. In 2015, the International Monetary Fund stated that ‘widening income inequalities is the most defining challenge of our time’. Forty years ago, 5% of income in the UK went to the highest 1% of earners. Today it is 15%. This trend of increasing income inequalities has occurred in most high income countries, but some less so than others.

This work followed on from another IMF report which came out in support of Nobel economist, Joseph Stiglitz’s analysis that inequalities are a drag on growth and can also make growth more volatile. The Organisation of Economic Co-operation and Development has similarly rejected the ‘trickle down’ economics of the 1970s, so popular with Margaret Thatcher and other Thatcherites; this supposed that increasing wealth at the top would ‘trickle down’ to the rest of the food chain and that policies aimed at reducing inequality would remove incentives and slow growth.

Now the evidence is clear: inequalities have slowed not increased growth. Raising the income share of the poorest 20% of the population increases growth by as much as 0.38% over five years. In contrast, increasing the income share of the richest 20% by 1% decreases it by 0.08%.

In the UK, the Institute of Fiscal Studies has shown that working people on low incomes, particularly families with children, have lost proportionately more of their income than any other group since 2010 as a result of tax and benefit changes. If cuts to public services are added to this, the disproportionate negative impact on people on low income is even starker.

All of this seems to have escaped the notice of the Chancellor on Tuesday & in his Budget last Autumn.

Reducing the gap between rich and poor benefits everyone – in addition to increasing life expectancy, there’s increased educational attainment, social mobility, trust and so on as we know from evidence from Richard Wilkinson’s and Kate Pickett’s Spirit Level.

To tackle these inequalities in income and wealth, in addition to reforms to the labour market, a coherent and comprehensive industrial strategy, and a national education service that is not just about preparing you for work but is enabling you to get the most out of life, we need a social security system that is there for us all in our time of need, just like the NHS is there to care for us if we become ill.  And of course we need a properly publically-funded NHS and social care system.

But it’s the socio-economic determinants of health I want to focus on today.

Since 2010 the Tories have inflicted a programme of spending cuts to the tune of £83 billion pounds. Under the Coalition, our social security system has particularly borne the brunt with swingeing cuts of nearly £34bn, with another £12bn planned. At the time austerity was first being implemented, the then Home Secretary, Theresa May, warned in a letter that “there are real risks that women, ethnic minorities, disabled people and older people will be disproportionately affected.” She went on to state that “Women, for instance, make up a higher number of public workers, and all four groups use public services more.”

On this, she was right. The risks were realised and disabled people, ethnic minorities, women have been hit hardest. As most people here today will be aware, women have borne the brunt of Government cuts. House of Commons Library analysis revealed that a staggering 86% of the burden of austerity – largely changes to taxes and benefits – since 2010 has fallen on women. Yet it is under Theresa May as Prime Minister that we are seeing the very worst effects, with a huge proportion of the announced cuts yet to come.

After nearly eight years, this government continues to pursue an economic agenda based on discrimination and inequality, slashing our public sector and cutting our social security system and our welfare system as a whole to the bone, while at the same time giving tax breaks to those on the highest incomes. Action to tackle industrial scale tax avoidance and evasion by the super-rich elite and big business can only be described as piecemeal. Attacks on some of the most vulnerable in our society through cuts to the social security support available are shameful, and they are damaging not just for the people experiencing this hardship, but for society as a whole.

The inequalities that the people of our country are facing at the moment are reminiscent of a Victorian age. According to the latest Sunday Times Rich List, the richest 1000 people in our society saw their wealth increase by 16% in the last year alone.  In spite of promises to tackle these ‘burning injustices’, the income gap between the richest and poorest in society has almost doubled. According to the Equality Trust, Britain’s top bosses are paid, on average, 165 times more than a nurse, 140 times more than a teacher and 312 times more than a care worker. Indeed it would take a typical UK worker 160 years to rake in the average annual amount handed to a FTSE 100 boss.  The Equalities and Human Rights Committee has revealed that the poorest tenth of households will on average lose about 10% of their income by 2022 – equivalent to £1 in every £8 of net income.

The recent EHRC report published this week found that the impact of policy decisions taken by the two Conservative administrations since 2015 will be to reduce incomes for the poorest, while increasing incomes for the richest 20%. Women lose more than men at every income level. Lone parents – the vast majority of whom are women – are particularly badly hit, losing about 15% of their net income on average, equivalent to almost £1 in every £6.  On top of this, we have seen a period of growing job insecurity and low pay, stalling productivity, rising precarity and self-employment, and falling living standards. Now we have the latest ONS labour market statistics showing a rise in unemployment.

And then there’s inequalities in wealth with land and property being the largest real asset. In 2002 it was estimated that 69% of the land in the UK was owned by 0.6% of the population. In the six years to 2011 the number of landholdings reduced by 10% but the size of these holdings had increased by 12%. So even fewer people own even more land. Many in housing policy emphasise that if we’re to solve the housing crisis in addition to building more homes, we need to tackle the cost and availability of land and address the volatility in the market. With average house prices in the UK over £180,000 (over £460,000 in London), it has been estimated that it would take 22 years for people on low and middle incomes to save for a deposit. As a result many young people, but not exclusively, are living with their parents, or are renting, the so-called ‘Generation Rent’. Inequalities are now becoming intergenerational.

And finally there’s inequalities in power. In status. In who makes decisions and how. This is often the neglected inequality but is central to who we are as human beings. When wealth and power are concentrated in a tiny elite, there tends to be less investment in education, health and infrastructure, which particularly benefits people on low incomes and enhances productivity. In the last 5 years, for example, public spending as a percentage of GDP, fell in health from 6.6% in 2009/10 to 6.1% in 2015/16 and in education from 3.8% to 3.1%.

In addition to this lower investment, there has been a targeting of resources away from areas of high need. For example, many of you will recall how in 2011/12 the health inequalities weighting in NHS resource allocations was reduced from 15% to 10%. This was breathtaking. The recommendations from the Advisory Committee on Resource Allocation (ACRA) to maintain the health inequalities weighting at 15% were completely ignored by the Health Secretary at the time. The effect was to shift resources from deprived areas with high levels of unmet health need to affluent areas with better health; for example reducing Tower Hamlets’ budget allocation by 4.1% and increasing Surrey’s by 4.2%.  The Coalition followed this with a campaign to base NHS Resource Allocation Targets more on a population’s age profile. This would see the break with NHS resource allocation based on need which has been a fundamental component since 1970 and will see funding haemorrhage from deprived to affluent areas. If you couple this with the Government’s NHS privatisation agenda, the introduction of Personal Health Budgets, and the scandalous cuts to social care AND public health we can see the cumulative impact this will have on health inequalities.

And the inequality in resource allocation doesn’t stop with healthcare. Collectively public spending cuts have been significantly greater in deprived areas. And again there is strong evidence of the relationship between public spending and, for example, life expectancy at birth. The immediate effects of this is already showing. In 2011 there was a significant surge in suicide rates for both men and women, but particularly for working age men with a 4% rise in 2012.

On top of this shift in investment, the policies themselves have also been highly polarising, from reducing access to education by, for example, trebling tuition fees and scrapping education maintenance allowance, to patently not making work pay to removing workers’ rights and protections through the proliferation of zero hour contracts and low paid, poor quality jobs as well as restricting access to justice with legal aid and judicial review changes. All of these have further contributed to maintaining power with an elite.

I will be writing more on inequalities in power soon.

CHILD/IN-WORK POVERTY

Since 2010 working people on low incomes, particularly families with children, have lost proportionately more of their income than any other group as a result of tax and social security changes. Regressive economic policies where the total tax burden falls predominantly on the poorest combined with low levels of public spending, especially on social security, are key to establishing and perpetuating inequalities.

The Government’s cuts to social security are pushing more and more people into poverty. The Child Poverty Action Group estimate that cuts to Universal Credit alone will force 1 million children into poverty by 2020, while the ongoing freeze to the vast majority of social security payments means that 10.5 million households will see an average cut of £450 a year by 2020.

Again, as with other Government cuts, low paid workers will lose the most from cuts and changes to Universal Credit, with women and ethnic minorities hardest hit according analysis by the Women’s Budget Group. The cut to the work allowance, the two-child limit, the freeze in payment levels, removal of the family element and the change in the taper rate mean that by April 2021 employed individuals who live in households claiming universal credit will be £1200 a year worse off than they would have been under the original Universal Credit system, with women losing more than men.

As hopefully you already know, I have called on the Government to pause the chaotic roll out of their failing Universal Credit programme. Labour has committed to Universal Credit’s principles of reducing child poverty, simplifying the social security system and always making work pay in the past, but for me everything else is up for grabs.

I want a radical overhaul of not just Universal Credit but the whole system, changing the culture from one that is demonising and dehumanising to a system that is supportive and enabling. And as the sixth richest country in the world, I don’t believe we should be letting people live in squalor without heating or eating either.

PENSIONERS

We must address the adequacy of the social security system for our children, working age people and our pensioners too. You will know, as I do having travelled across the country as part of my pensions tour about women born in the 1950s who are sofa surfing because they can’t do the work they’ve done in the past in their 60s. We must do better for them.   We have been clear, there are several immediate actions the Government could and should take, but time and again they have refused. We would immediately offer women affected by Government changes to the state pension age the cost-neutral option to draw their state pension at age 64, allowing women who choose it to retire up to two years earlier. It is also right to extend pension credit to those who were due to retire before the increase in the pension age, which would benefit hundreds of thousands of women. This would provide approximately half a million women on the lowest incomes up to £159 per week. We have repeatedly called on the Government to implement this costed measure, but sadly they have so far refused to act.

These measures are a start. They are actions the Government should take now! They are to compliment additional action on transitional protections. It also doesn’t preclude compensation. We want to continue working with women to right the wrong that they have been dealt.

But in spite of the stalling of life expectancy, and decline for some groups, the Government has said that they are going to accelerate the increase in the State Pension Age to 68! It beggars belief.

 DISABLED PEOPLE

But after nearly eight years of Tory austerity, it is the impact on disabled people in the UK that is the cruelest. According to analysis by Demos/Scope, the 2012 Welfare Reform Act alone saw 3.7m sick and disabled people lose approx. £28bn of social security support. And this doesn’t include the cuts in support through social care. And the EHRC report on the cumulative impact of cuts, estimates a disabled adult has lost £2,500 pa since 2010.

Half of those who live in poverty are disabled or live with someone who is disabled, because of the extra costs they face as a result of their disability or illness. This is completely unacceptable. Disabled people face barriers in all aspects of life – including in education, transport, access to justice, access to voting, housing, health and employment. Shockingly, the ‘disability employment gap’ remains high, at 31.3%, yet the Government has scrapped their 2015 manifesto commitment to halve this DEG.

As our manifesto with and for disabled people, Nothing about you, Without you states, we support a social model of disability which recognises that people may have a condition or an impairment but they are disabled by barriers in society.

As a starting point, we will end the current punitive sanctions regime and scrap the current cruel and dehumanising Personal Independence Payment and Employment Support Allowance assessments. Instead of supporting people, the process is often inaccurate and worsens existing health conditions. With 68% of decisions overturned at tribunal it is clear the system simply not fit for purpose and the distress and anguish these assessments cause cannot be underestimated.

SYSTEM REFORM

A social security system that fails to alleviate poverty is failing at the most basic level. Instead of a safety net we have a trap door.

Like the NHS, our social security system should be there for all of us in our time of need, providing security and dignity in retirement, and the support needed should we become sick or disabled, or fall on hard times. It is a vital weapon in our fight against inequality.

Fundamentally, we will transform our social security system as part of wider radical reforms to drastically reduce inequality and poverty. I have advocated that the Party needs to go further than we have already. We need a new social contract with the British people – we need a Beveridge 2 defining a welfare state for the 21st century.  I hope that I will have the opportunity to work on this and contribute to the fairer society that this country so desperately needs and I believe wants as well.

 

 

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The roll-out of Universal Credit may be running five years later than planned, having wasted £40 million in botched IT, and been emasculated by austerity cuts since 2015, but its advocates in the DWP still argue that it is all going to be worthwhile in the end because its labour supply effects will get people into work and onto higher earnings. Sir Robert Devereux, the DWP Permanent Secretary, claimed this in a retirement interview: “the roll-out will see unemployment rates fall as disincentives are taken out of the system”. Esther McVey, the new Secretary of State for Work and Pensions, even seemed to claim that 3.1 million extra people were in work as a result of UC when at the time only 700,000 were on it.

The impact assessment for UC in 2012 estimated that between 100,000 and 300,000 people would enter work and between 1 million and 2.5 million more hours would be worked as a result of UC. A parliamentary question in 2017 reduced the entering work number to 150,000 and made no claim on extra hours. The DWP presented estimates of the impact of UC in reports published in 2015 (the initial report and an update) and a further update in 2017. The latter found that UC claimants were 3 percentage points more likely to be in work after six months than matched jobseeker’s allowance claimants (56 per cent versus 53 per cent).

The Office for Budget Responsibility concentrated on UC in its latest Welfare Trends report and was clearly not convinced enough by this evidence to take it into account. They concluded “we have not yet incorporated these (findings) into our forecasts, as it is not yet clear that the impact found for the simple cases migrated so far will be replicated for the more complex ones to come or if the resources devoted to the early cases will be sustained.”They point out that simple cases are unlikely to be representative of the overall caseload; that operational choices and resources available per case may not be representative of the policy when scaled up; and that the generosity of the UC system has been significantly reduced since the trials, with large cuts to work allowances taking effect in 2016-17. They reproduce with implicit hilarity the onerous job description for the 13,000 work coaches being recruited for UC at £24,000 to £26,000 per year, commenting these “stretching roles are modestly remunerated”. They conclude “that we will consider the updated estimates that are due to be published in the full UC business case later this year, but do not expect to make any new forecast judgements until UC is operating at greater scale across all types of claimant and for a sufficiently long period for robust evidence of any labour market effects to emerge.”

So the jury is still out on whether, what is effectively the sole remaining claim for Universal Credit, will be realised.

This was first publish on Prof Bradshaw’s own blog and is reproduced by his kind permission

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The roll out of Universal Credit started in 2013, but the Department of Health doesn’t seem to have noticed.

Form FP10

Form FP10

People entitled to Universal Credit who had net earning of less than £435 in a month should get free prescriptions and dental treatment on the same basis as  people in receipt of other means tested benefits. For those with a child and/or limited capability for work or limited capability for work related activity the figure is £935.

Now the roll out of Universal Credit  is well under way, but the prescription form does not mention it. Claimants are officially advised by NHS England to tick the box for income-based Jobseeker’s Allowance.   They then have to sign the declaration that the information they put on the form is correct and complete. The NHS Business Services Authority can and does issue fines for people who don’t tell the truth on the form, with threats to take them to court if the fine is not paid.

Stories are beginning to appear of patients who have stopped taking their medication  because of the stress of the process.  Others may have borrowed money for their prescriptions but the process for claiming refunds is far from easy. It is not designed for those who are unable to concentrate and feel overwhelmed.

Gingerbread points out that “The official advice is pay first and claim later – but for many this is a cost they simply can’t afford. The aim has been a simplified benefits system; the reality is that the NHS and DWP systems (like so many other government departments) don’t work together, creating confusion, complexity and often additional costs for single parents.”

There doesn’t appear to be any agreement between the Department of Work and Pensions about the documents which demonstrate entitlement to free prescriptions. The FP10 prescription form states that patients who are not sure what to do, should pay for prescriptions and at the same time, obtain a FP57 to claim a refund. They cannot obtain one after the event.

That statement assumes they are capable at the time of dealing with the convoluted process and have available funds to pay for prescriptions, mindful of the fact that many claiming Universal Credit, cannot afford to feed themselves and their families and so rely on food banks.

There are very obvious and very simple solutions, which any clear-thinking adult with no qualifications or administrative experience could recommend:-

(1) tick any box on the prescription form, strike out the adjacent words and write “Universal Credit”, as long as something that simple and truthful would not result in a legally invalid fine or legally invalid court action;

(2) ensure the DWP puts Universal Credit payments on one sheet of paper as now but add (a) figures, if any, for earnings or “take home pay” in the same period and (b) state on the one page, whether the combined figures prove entitlement to free prescriptions for the period in question;

(3) require the NHS to confirm with the DWP past entitlements to free prescriptions and make refunds, without requiring claimants to apply for those;

(4) ensure the NHS Business Services Authority knows how to write and explain things in ways which are easy to understand, rather than continually rejecting evidence of entitlement, because that evidence lacks “full” details, without saying what is missing and where that can be found;

(5) demonstrate a determination to respect the law, by ensuring NHS civil servants cannot use tangled administration, to persistently subvert full compliance with the law, e.g. the legal duty to protect and promote both physical and mental health and the legal duty which came into force on the 1st August 2016, to provide information which is accurate, balanced, trustworthy and easy to understand, regardless of intellectual and sensory needs.

Frank Field MP., who chairs the Work & Pensions Select Committee, has laid five written Parliamentary Questions, dated 10th & 29th November and 18th December.  Steve Brine, Parliamentary Under-Secretary at the Department of Health replied on 15th November to say:

“National Health Service prescription forms (FP10) and claims for NHS funded sight tests (GOS 1) and for vouchers for glasses or contact lenses (GOS 3) will be amended to include a Universal Credit box in due course. Some NHS Help with Health Costs claim forms, for example HC5 refund claim forms, have already been amended to include a specific tick box to enable Universal Credit recipients to claim entitlement. All versions of dentistry claim forms were updated on 1 April 2016, to include a tick box for Universal Credit.

A patient can currently make a claim for entitlement if in receipt of Universal Credit by ticking the “gets income based Jobseekers Allowance” on relevant forms. Guidance for both the public and healthcare practitioners (such as pharmacists, dentists and, opticians) has been included on NHS Choices with links from the Universal Credit webpages on Gov.uk.”

 

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In today’s Britain, the idea of a welfare state and social security system that provides effective anti-poverty provision and adequate support is increasingly under threat. Indeed, our safety net has been described as ‘in tatters’. Successive rounds of welfare reform and reductions in the generosity and eligibility conditions of benefits have taken a very clear toll.

Take just three statistics:

  • 1.25 million people, including 300,000 children, are destitute in the UK;
  • Over a million three-day emergency food parcels were handed out by the largest network of food banks, the Trussell Trust, in 2016/17;
  • The Institute for Fiscal Studies estimate that 37% of all children will be living in relative poverty by 2022, undoing all the progress made in reducing child poverty over the last twenty years.

There is a gaping mismatch between politicians’ endless promises to make work pay, and ensure that the vulnerable are properly protected, and the significant and enduring hardship pointed to by these figures. The contemporary status quo feels a long way from the ideal articulated by classical liberal citizenship theorist, T H Marshall. His model of citizenship placed emphasis on the importance of providing social rights to all citizens, as part of a tripartite structure of social, political, and civil citizenship rights. Social rights, Marshall argued, should enable individuals to enjoy at least a ‘modicum of economic welfare and security.’ Almost seventy years later, the social rights of citizenship have become increasingly conditional and fractured, leaving many to ask what if anything social citizenship today offers to individuals living in poverty and affected by welfare reform.

Over the past seven years, I have interviewed a small group of single parents, disabled people, and young jobseekers as they experienced changes to their benefits. By following people over time through repeat interviews, I have been able to track the impact of welfare reform on individual lives, and – in so doing – contrast the policy rhetoric with lived realities for those at the sharp end of the social security system.

What my research uncovers is a stark disconnect between social citizenship as it is narrated from above, and social citizenship as it is lived and experienced from below. Drawing a distinction between how dominant political narratives conceptualise ideas of citizenship and what has been described as the ‘everyday world’ of citizenship enables a better and richer understanding of the consequences of welfare reform. Within the dominant narrative – citizenship from above – there is an explicit suggestion that benefit changes and, in particular, a ratcheting up of welfare conditionality will enable greater citizenship inclusion by supporting and enabling transitions from ‘welfare’ to ‘work’. This argument, which we have heard from politicians on both the left and right, is underpinned by the assumption that paid employment (and paid employment alone) is the marker of the responsible and dutiful citizen. This neglects the various other forms of socially valuable contribution – care work, parenting, volunteering – that could form part of a more inclusive understanding of citizenship.

Further, the dominant narrative of citizenship from above places responsibility on benefit recipients to take steps to secure paid employment, and suggests that this is a reasonable requirement if they are to claim social rights. Over the past 35 years, we have seen a considerable extension and intensification of these responsibilities (operated via welfare conditionality) such that many single parents, disabled people, and even those in-work but reliant on forms of in-work state support, are expected to participate in work-related activities and efforts to secure (more) work, or risk benefit sanctions. Welfare conditionality is a cornerstone of contemporary welfare provision. It is underpinned by a political framing that implies that conditionality operates effectively to support and engineer welfare-to-work transitions, and so enables greater citizenship inclusion for targeted individuals.

In fact, as my own and other research demonstrates, welfare conditionality often operates to push people further away rather than closer to the paid labour market, and can have perverse consequences given the adverse effect it may have on relationships between advisers and claimants, and on the mental health and employment prospects of individuals directly affected by sanctions.

Indeed, what an examination of citizenship from below illustrates is the ways in which the undermining of the social security system has created a situation of chronic insecurity for affected individuals, who find everyday life incredibly difficult given the extent of their financial hardship, and the fear that so often accompanies current and anticipated future rounds of welfare reform. This fear is particularly prevalent among disabled people, who can be subject to repeat reassessments of their eligibility for support. As one participant put it when commenting on these assessments:

It puts a lot of stress on [me]…I think about it all the time.

As a result of the reduction in social security support, individuals regularly have to make very hard choices and are going without in their efforts to get by. Cath explained:

[earlier] this year, I needed underwear so I didn’t pay my gas and electric that fortnight.

While the citizenship narrative from above suggests that welfare reform and conditionality are mechanisms of inclusion, they often have exclusionary outcomes, where individuals are left feeling excluded from mainstream society as a result of their poverty. Cath felt unable to attend a mental health support group as it met in a local museum café:

I know I bang on about money but, with meeting in place where a cup of tea’s £1.75. I want a hundred tea bags and two pints of milk for that.

Where individuals are affected by benefit sanctions, they report immediate and severe hardship, and this often affects children, as in the case of Chloe, who had two young children, but was sanctioned shortly after she was placed on Jobseeker’s Allowance when her youngest child started school:

We’re paupers, we’re so poor. It’s like we’re living in – you know when you see all those adverts – please feed our children – feed my bloody children.

Engaging with the everyday worlds of citizenship for individuals affected by welfare reform underlines the extent to which social citizenship is no longer providing adequate security for those in receipt of out-of-work benefits. It highlights the disconnect between citizenship from above and below, and illustrates the very real need to reimagine social citizenship for contemporary times.

Social citizenship today seems to operate most often as a tool of social control and a mechanism of governance, employed rhetorically to call for greater responsibility on the part of ‘welfare dependants’. Despite this, there is still scope to regain its emancipatory potential. For this to be effective, we need to place sustained effort on seeking to better understand the everyday worlds of citizenship, particularly for those at the sharp end of the rapid escalation of welfare conditionality. My research suggests that what Loïc Wacquant observes in the USA as the ‘normalization of social insecurity’ is also evident on this side of the Atlantic. Contrasting the status quo with more egalitarian ideals of social citizenship illustrates just how much would need to change if the welfare state is to offer meaningful security to all of its citizens.

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Note: the above draws on the author’s published work in Social Policy and Society. Ruth’s latest book, For whose benefit, can be ordered from the Policy Press website at the special price of £15.00 until 31 December 2017 by using the code POFWB2 at the checkout.

This was first published on the British Politics and Policy blog

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My brother recently applied for Universal Credit, he started growing a beard to show how long it took to for his benefit to arrive. He now looks like Rasputin but without the trappings of the household of a Russian queen at his disposal. Bear in mind that my brother is single, has no dependants and is also not in receipt of housing benefit. He is not a complex case, he is essentially a jobseekers’ allowance claimant.

In order to distract my sister-in-law (different brother, I am resplendent with brothers) from the painful throes of her labour this week I wittered through small talk in the moments that her pain abated. I asked her when she would be going back to her job as a support worker for care leavers, and if she was going to be OK financially for the period she was on basic statutory maternity pay. She is the definition of a complex case, with variable hours at work, changing childcare costs, changing housing needs and changing family size. When I broached her possible move over to Universal Credit from working and child tax credit her eyes rolled further back in to her head than they had with any of the contractions. At time of writing she is three days into the induction of her labour, so spare a thought.

Universal Credit

On the face of it, Universal Credit is a good idea. The benefits system is ridiculously complex, simplifying it is common sense. Except people are not simple, they don’t fit into boxes. My sister-in-law and my brother could not have more different needs, experiences and circumstances. The idea that one (fairly inflexible) thing could simply suit them both is a system designed by someone who has not met a very broad range of people. If the variation in my immediate family is so wide, imagine how many iterations are possible.

Dame Louise Casey took to the airwaves this week to advise the government to halt on the rollout of Universal Credit. Louise is a woman we can safely say has met a huge variety of people. When talking about vulnerability and homelessness, she knows her onions. She warned that the fast-paced rollout about to commence would increase homelessness and destitution, the likes of which we have not seen for decades. After she was interviewed on the BBC Radio 4 PM programme Deven Ghelani, who worked with Iain Duncan Smith in creating Universal Credit and now works at a place called Policy in Practice, came on and said councils had a role to play in bridging the terrifying gap of destitution. I nearly swerved off the road at the shock of his naivety and ignorance. Local councils cannot in any way, shape or form cope with the levels of homelessness they already face. He went on to say that advice and guidance could be provided by councils, which is funny because I have watched all advice and guidance services in Birmingham close over the last seven years. Citizen’s advice offices boarded up, council homelessness centres reduced down to one. Where previously we had local neighbourhood offices where agencies worked with partners like Women’s Aid and drug services to intervene to stop homelessness occurring, all are now gone! Not for a laugh, not because Birmingham City Council wanted rid of them, but because the government have starved these centres to death.

I don’t work for a punchy-named think-tank but I have a few pieces of advice about how we can make this policy work in practice, because I am the practice, I am the frontline.

This policy will only cause destitution while private landlords are seemingly completely unregulated and registered. Under Universal Credit, tenants have to prove that they have a signed tenancy and have a bill in order to receive the housing benefit element of their Universal Credit, which sounds fine when you are in an office in Whitehall. In reality, thousands of people are living in situations where they have very difficult relationships with their landlord and cannot be relying on their good nature to provide them with the documentation that they need. I imagine the good landlords with record-keeping systems will largely stop offering homes to people on Universal Credit as the money is no longer guaranteed to make its way to them. So where will these people live?

There must be a definitive pathway for those who will inevitably go into arrears with their rent, because the local council’s homelessness duty is simply not going to cut it. The words “intentionally homeless” will be doled out like candy to those who have fallen in to arrears and cannot pay their rent. Not such a problem if you are in a council house and the agencies can talk to each other but that misses hundreds of thousands of people. What are we going to do with all of these intentionally homeless people? The government needs to invest pretty sharpish in decent quality temporary accommodation to deal with this churn, because I can bet you a whole year’s Universal Credit that the B&Bs and Travelodges on the motorways around Birmingham will be brimming with families. At a minimum, Universal Credit should not be rolled out until the Government funds – in every area – independent advice and guidance services so these people have somewhere to go for help.

The Government has absolutely got to get to the bottom of the issue of split payments. Instead of each person receiving individual benefits, Universal Credit is now all going to be paid into the pocket of one person in a household. All well and good if you are a happy unit, not so good if your old man has a penchant for the horses and a pint of the gold stuff. For victims of domestic violence, how on earth are they going to request in front of their husband to have a split payment in order that they might have a tiny piece of independence, a chance of escape? I can just see it now, loads of abused women disclosing their secret shame at the local Jobcentre. How on earth will they then explain to their controlling partner that he is only getting half the payment because she grassed him up to Julie at the Jobcentre? Remember one in three women suffer domestic abuse in their lives. These are not small insignificant numbers, these are hundreds of thousands of people.

I could go on and on, these are just a few of the very obvious pitfalls of the new system. They are not new observations, I and many others have been raising these things since Universal Credit was started seven years ago. In seven years the Government still don’t have any answers to these dilemmas.

So until I have answers, I am firmly with Louise Casey. The Government need to hit pause. The Government want people to fit into boxes. They want to think that taxpayers live in these houses and benefit claimants live in those. Life isn’t like that. We all pay tax, we all get benefits. Even just looking at my family there is no universal truth, we have different needs and different experiences. We are not a homogenous bunch of people who can be helped or incentivised with one thing.

Universal Credit is not a bad idea, it’s just incredibly naïve. The road to hell is paved with good intentions, which is a natty proverb if you are the person with the good intentions, less fun if you are the one who ends up in hell.

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Poverty in the UK is a serious problem, and it is a problem that is often ignored or wilfully misrepresented in political debate. Social injustice is wrong, but misrepresenting the nature of social justice is doubly wrong, because it encourages further injustice.

Of course there are natural and selfish reasons why we may all want to misunderstand the nature of justice, and usually such misunderstandings start by distorting a half-truth rather than deploying a lie. In the UK a common distortion starts with a twin pair of assumptions that are not exactly false, but are highly misleading:

  • Economic development requires freedom of exchange, or what is often called ‘the market,’ the freedom to buy and sell with flexible pricing. For most of us this means the freedom to buy things that others sell us and the freedom to sell our labour, by becoming an employee (or servant) of another person or organisation
  • When we freely enter into contracts with other people or organisations then we are bound by our promises. If we behave properly and follow the agreed rules, even if we end up poorer, it might still be said that we were treated fairly.

The first assumption is utilitarian. It is claimed the free market exists to serve the overall good; and there are good reasons to believe that markets can sometimes perform a useful social function. The second assumption is deontological. We are free to make our own decisions and promises, but we must accept the results of those decisions, even if other people seem to be doing better than us. In the UK people who believe strongly in these two assumptions, like the philosopher John Stuart Mill, are called liberals (although confusingly the term liberal means something very different in the USA).

Liberalism is a great philosophy, if you are wealthy, because it offers you a double comfort: Not only are you entitled to whatever you’ve got, but you can also persuade yourself that you are part of a system that is good for everyone (in the long-run).

However it does not take much imagination to realise that this cannot be the whole story. For injustice is a logical consequence of unrestrained economic freedom, and in every decent society there have always been systems, rules or institutions that are designed to reduce the injustices created by economic freedom.

Just think about what happens if we simply allowed people absolute economic freedom. First, those people who are more successful will, over time, may use their economic power to guarantee their own future success and so will make it harder for others to compete. This is why democratic governments tend to restrict monopolies or replace monopolies with nationalised industries, like the NHS, which work for everyone’s benefit. It is also why public education and free university education matter, because it reduces the advantage the better-off can buy for their children.

Second, people who lose out will become more desperate, unable to sell their labour for income or only able to sell it at a very low price. This is why democratic government’s have been forced to both set minimum wages and to create income security systems to redistribute money towards the poorer half of the population.

There is nothing in a free economic market that ensures that you will get a fair, reasonable or even adequate price for your labour. That’s not how markets work. If you are very poor then you must be prepared to sell your time for next to nothing. Economic freedom has never naturally protected the interests of the poorest, the weakest or those without power. Instead it often releases the very worst in our nature: greed, avarice, pride and the sadistic pleasure of exploitation.

These statements should not seem controversial or challenging. They represent some of the hard-won lessons of the twentieth-century, a century which proved that the price we can pay for ignoring social injustice is revolution, war, terror and Holocaust. So, it may seem surprising that, in the early years of the twenty-first century, we seem to be in danger of forgetting all these important lessons. Not only do the half-truths of liberalism seem to be back in fashion, but many are even tempted to go a little further and embrace some utterly false beliefs:

  • Poverty is just a matter of perspective, it’s all just relative, and the poorest even benefit from inequality, because inequality is a natural part of a free economic system. What really matters is economic growth, not the distribution of that wealth.
  • People who are not doing as well as you deserve to be poor, just as you deserve to be rich. In fact, economic success means you are a better person and economic failure means you are an inferior person. It is perhaps even dangerous to protect the poorest as this might encourage the wrong kind of people.

I think it is obvious that these beliefs are false; and I think it is also obvious why they are tempting. This kind of thinking is no longer liberal, it is much closer to fascism or eugenics. It pictures some humans as more valuable, more productive, more equal than other humans. Dog-eat-dog economic freedom is twisted into an engine for human improvement. I think it is this kind of extreme liberalism that is sometimes called neoliberalism.

It is also fascinating (in a rather horrible way) to see how the rather different idea of meritocracy has increasingly been promoted as if it offers a positive vision for society. This is peculiar in the extreme. Meritocracy means that ‘the best’ people should have the most power (and, it is typically assumed, the most money). In fact the term meritocracy is simply a modernised form of aristocracy – ‘aristos’ being the Greek word for the ‘the best’. The difference is that the best is now presumed to be some cocktail of ‘the clever,’ ‘the powerful’ and ‘the rich’ – rather than landed nobles.

Old-fashioned liberalism was often combined with a commitment to charitable action: We have other obligations beyond keeping our promises, and any financial success should bring extra social responsibilities, much in the same was that old-fashioned aristocrats used to believe that they had extra responsibilities to the commoners – “noblesse oblige”. It was for this reason that many of the early pioneers of capitalism (Rockefeller, Carnegie, Harkness etc.) actually did spend much of their money on works of public philanthropy.

However, today’s neoliberals and their meritocratic cousins seem much less interested in social or moral responsibility. Success is not an invitation to exercise social responsibility, it is merely the proclamation of the right of the powerful and rich to seek even higher rewards for themselves, and to look down their noses on those with less money or with different gifts. Liberalism and meritocracy merely justify growing injustice: encouraging the powerful to believe they are entitled to more money; encouraging the wealthy to believe they are entitled to more power. As shallow philosophies go we are scraping the bottom of a very deep barrel.

How did we get here?

How have we got here? How have we forgotten the lessons of the past? Why do we even begin to treat these crazy and wicked views as somehow reasonable points of view. Although I am a Christian I do not believe that declining faith or moral standards is the best explanation. In fact countries like the USA, which have a very high rate of Church attendance, also seem to be just as morally confused as the agnostic UK. We will find better explanations I think if we look at the economic, social and political characteristics of our society.

I also think that, despite the fact that things are currently getting worse, there are several reasons to be hopeful. Social and economic changes are themselves driving us towards a crisis point that might ultimately be very helpful, although how quickly this change will take place is unclear. Although the rise of liberal and meritocratic thinking is a growing threat, I think there remains a stubborn awareness of older truths that hard to dislodge from the human soul:

Justice lives in poverty.
She survives.
She measures
What is necessary.
She honours what ought to be honoured.
She seeks out clean hearts, clean hands.
She knows what wealth and power
Grind to dust between them.
She knows
Goodness and the laws of heaven.

Aeschylus: Agamemnon

In fact, even when our leaders try to exploit liberal and meritocratic prejudices they can only go so far, and often they try to manipulate language and statistics in order to cover their tracks. This tells us that not all hope is lost; there is no need for deception if all truth is gone.

What we find in practice is that modern politics is a little like street magic. The performer wants us to look in one place, while what is really important is happening somewhere else. In fact I think we can spot at least 10 myths that are commonly exploited to put our moral conscience to sleep:

  1. Inequality is good for the economy
  2. Growth is good for everyone
  3. The welfare state protects the poorest
  4. The rich pay the highest taxes
  5. Only the poor need benefits
  6. Benefits are often claimed fraudulently
  7. People are too dependent on benefits
  8. The benefit system is too expensive
  9. Government has tried to protect the most vulnerable
  10. There is no real poverty in the UK

I want to use this essay to not only challenge these myths, but more importantly to try and show how the use of these myths performs a useful social function for the political system. Ultimately I believe that, for all the worthy discussion about poverty reduction in the UK (from across the political spectrum) there has been no meaningful commitment to reduce poverty for over 40 years. This means that those of us who care about equality and social justice may need to think differently about our goals and our strategies.

1. Inequality is not good for the economy

Liberals will often argue that inequality is a natural part of the economic order and that if we want the benefits of a developing free-market economy then we must accept that inequality will naturally arise. Moreover they also argue that interfering with the labour market will have negative consequences. However, as Figure 1 show, if we look at the growth rate in the UK it has not increased as the UK has become a more unequal country, if anything it has declined.

Figure 1. UK Economic Growth Rate 1949-2012

In fact inequality has not benefited the economy and there are many ways of combining economic freedoms with social justice, primarily through redistribution and other social and economic policies.

2. Growth is not good for everyone

Another common proposition is that we should not care about equality, just about growth. If an economic policy raises the standard of living of everyone then the fact that some people benefit more is irrelevant. But, as we have seen, the opposite is true – inequality seem to reduce growth. So what we should really pay attention to is who does benefit from economic growth.

The following data is all taken from the Office for National Statistics, who publish detailed information on the family (household) incomes for every year from 1977 onwards. This allows us to compare how the incomes of different groups changed between 1977 and 2014. We can compare and contrast these incomes more effectively by bring them into line with the values for 2014. Figure 2 shows how incomes had changed – before any redistribution by tax or benefits – between 1977 and 2014. I have adjusted the data from 1977 to bring it in line with the data from 2014 by showing how income distribution for households would look if 1977 had the same average household income as households did in 2014.

We can see that relatively only the top 20% of families have really benefited from economic change during this period (although there is also a tiny uplift for those in the second decile). So, broadly, we can see:

  • the poor have got poorer
  • the rich have got richer
  • the middle has got a lot poorer

Figure 2. Comparing Distribution of Original Incomes 1977-2014

So, during the post-1977 period growth has declined (as per Figure 1) and economy has skewed the benefits of that reduced growth to the better off. This means the poorest are losing twice: lower growth and higher inequality.

3. The welfare state is not protecting the poorest

It is often assumed that the welfare state almost automatically benefits the poorest most. However, as we shall see, the reality of the welfare system is not quite what people believe. The welfare state’s primary direct impact comes in three forms:

  • benefits – increased income
  • taxes – reduced income
  • services – increased income for its employees, reduced costs for those with needs

Now if we compare the incomes after taxes and benefits between 1977 and 2014 as we do in Figure 3 we can see that, rather than increasing the incomes of the poorest, the system’s function has been to increase the incomes of middle-earners.

Figure 3. Comparing Post-Tax-Benefit Incomes 1977-2014

This means that we should be very careful to examine two very different kinds of impact on family income. Some of these changes seem to be economic. We can see a significant drop in the incomes of almost all groups, except the wealthiest 20%. However we can also see that tax-benefit policy during this period has been engineered to bring about changes that are just as significant as the economic changes. In fact it looks very much like, as the economy has depressed middle-incomes so the tax-benefit system has been used to reflate them.

Because the poor were already so poor and the rich were already so rich the changes are best understood using percentages and ratios. So here are some key facts:

  • Before tax and benefits the income of the richest 10% was 18 times higher in 1977 and 27 times higher in 2014.
  • After tax and benefits the income of the richest 10% was 7 times higher in 1977 and 13 times higher in 2014.
  • Economic changes reduced the income of the poorest 10% by 15% between 1997 and 2014
  • Policy changes reduced the income of the poorest 10% by 26%
  • Middle income groups all lost income because of economic changes, the most extreme group being the 4th decile, who saw their income reduce by 29%
  • However middle income groups saw their incomes increase because of policy changes that increased their benefits and reduced their taxes, with the 4th decile benefiting by a 26% increase in their income
  • The rich saw a huge growth in their income of 31%, but a modest reduction by policy of only 8%

It is these facts that explain the focus by politicians on the ‘squeezed middle.’ However it is not that the middle has been squeezed by the poor or by economic policies that support the welfare state. Instead most of the tax-benefit system is focused on increasing the incomes of those in the middle. In fact as we can see in Figure 4 and Figure 5, between 1977 and 2014 income has been taken off the poorest and redistributed towards the middle.

Figure 4. Changes in income for families 1977-2014

Figure 5. Percent changes in income for families 1977-2014

What is really going on is a fundamental change in the structure of the economy. Growth continues, but the beneficiaries of growth are getting fewer – basically only the top 20%. The welfare system is not primarily being used to benefit the poorest, it is primarily organised to support the middle.

4. The poor pay the highest taxes

One of the biggest deceptions of everyday political rhetoric is the use of the term ‘taxpayer.’ The term is often used to imply that there is some group, the better-off, who are somehow contributing the most, and that the poorest are in someway not taxpayers. This deception relies on pretending that the only significant tax is income tax – but this not true. Income tax is the biggest tax the richest pay, but for others indirect taxes, like VAT, are much more important.

For the following figures I have primarily used the latest ONS data (ONS, 2017). So, if we take all the taxes people pay, and then compare it to their total income then the group that pays the highest rate of tax is the poorest 10% of families – who pay more than 10% more in tax than any other group.

Figure 6. Overall rate of tax paid by household

The reason for this is that the UK tax system is regressive – which means it hurts the poorest most – because it relies to such a high degree on indirect taxes, taxes on spending, not on income. Figure 7 compares the detailed breakdown of taxes paid between the poorest 10% and the richest 10%.

Figure 7. Comparing the different taxes paid

5. We’re all on benefits

A similar deception is that only the poor are ‘on benefits.’ Nothing could be further from the truth. Every group benefits from benefits and the poorest do not even benefit the most. In fact it would truer to say that we’re all on benefits and that the primary beneficiary of benefits is the middle-income earner. However this deception is maintained by treating some benefits, like tax credits and pensions, as if they are not really ‘benefits.’ This serves to aid the natural desire of the better-off to see themselves as somehow distinct from those relying on Job Seekers Allowance or Employment and Support Allowance.

Figure 8. Distribution of benefits across different income groups

6. Benefit fraud is utterly insignificant

Another common lie is that benefit fraud is a significant problem. In fact, benefit fraud is very low indeed. It is dwarfed by tax fraud and even more by tax avoidance (the legal but immoral effort to avoid your social responsibilities). The fact that the public seem to believe benefit fraud is so much greater must have something to do with the way in which politicians and the media have exploited an image of some people in society as being somehow particularly unworthy. This problem certainly began before Austerity as it was the new Labour Government who launched the ‘Benefit Thieves’ campaign which pandered to this non-existent social problem.

Figure 9. Benefit fraud in context

One very striking statistic is that the poorest not only pay lots of tax, mostly indirect taxes like VAT, but they also pay a significant level of income tax. This is surprising because their incomes are so low they should not be paying any income tax. However, the poor have no accountants, and I suspect that the application of emergency tax rates for short-term work means that the government is actually defrauding the poorest by over-taxing them. In addition the £17 billion of unclaimed benefits could also be treated as a form of government fraud – creating a system so complex – no one knows what they’re entitled to.

What we must ask is who benefits from this kind of rhetoric. It certainly provides a useful distraction from the real issues, including growing inequality. Perhaps there is a sense in which this is a further price of a declining middle-class. As incomes drop, status is threatened. Perhaps, as well as propping their income through tax and benefit changes politicians are pandering to the need of middle-income earners to feel morally superior to those who are poorer. I suspect the negative skiver, scrounger, fraudster rhetoric is really the mirror image of the as ‘hard-working families’ ‘the squeezed middle’ or ‘alarm-clock Britain’. The rhetorical purpose is to divide us and delude us. Money is transferred from the poor to the middle, but stigma is added to the poor to make the middle feel less bad about this act of theft.

7. People are not too dependent on benefits

Another common fallacy is that the benefit system is primarily about supporting people who are out of work and that benefits need to be low in order to discourage people from becoming dependent upon them. But even a cursory glance at benefit spending destroys that myth.

Figure 10. Different benefits used

Job Seekers Allowance (the UK’s unemployment benefit) represents 0.7% of total spending. Whereas the four main benefits (nearly 80% of the benefit bill) are not even really directed to address poverty at all:

  • 48.3% on pensions – a basic income for all people of retirement age
  • 12.4% on housing and council tax benefits – compensation for the unequal distribution of property
  • 11.1% on tax credits – compensation for the collapse of middle-income wages
  • 6.2% on child benefit – a basic income for nearly all children

The poor are in no danger of becoming over-dependent on benefits. Instead the whole of economy is dependent on a significant level of income redistribution and social security simply to function. The shame is that the poorest are treated so poorly by that system – stigmatised and impoverished.

8. The benefit system is inexpensive

The UK’s spending on the welfare state is higher than some countries and lower than others. It has remained at a fairly constant level over a long period. There is no reason to think that welfare spending is unsustainable; it is only unsustainable if we refuse to pay for what we think is necessary, and this just requires us to adjust taxation levels. Politicians like to pretend that there is some crisis in order to justify policies they believe will bring them electoral advantage. We should ignore them.

Figure 11. Government spending over time

Often it is spending on benefits that is represented as the greatest and most unsustainable cost for the welfare state. What is more it is claimed that the poorest may have become dependent on these benefits and that cuts in services or income are necessary to get people ‘off benefits’ and into work. In fact the truth is much more interesting.

First of all, as we have already seen in Figure 6, the cost of benefits is hugely exaggerated by ignoring the fact that most benefits are paid straight back in taxes. If we calculate the net or real cost of benefits – after taxes we find that the cost of benefits is very low indeed: £27.8 billion or 1.4% of GDP.

Figure 12. The real cost of benefits

Benefits are not even strictly government spending, they are a transfer payment, reducing one person’s income through taxes and increasing another with a benefit. The fact that benefits are presented as government spending is really just a trick of accountancy. If instead we accepted that redistribution was an essential feature of a modern economy we would distinguish it much more clearly from public spending, such as the NHS and education. Currently we’ve got things the wrong way round; we treat redistribution as a somewhat dubious feature of the welfare state, rather than as its primary function.

9. Government often attacks the most vulnerable

A further rhetorical trope, that turns out to be a lie, is the idea that government will naturally and quite properly protect those in most need. This line has been particularly important during the Austerity period, although it is not an uncommon lie at the best of times. For instance, I have explored elsewhere, and at some length, how austerity policies targeted those on low incomes, and in particular disabled people with the greatest need. The UK Government’s policies have been so shameful in this regard that the United Nations has openly criticised the UK for failing to meet its human rights obligations:

“The Committee is seriously concerned about the disproportionate adverse impact that austerity measures, introduced since 2010, are having on the enjoyment of economic, social and cultural rights by disadvantaged and marginalised individuals and groups. The Committee is concerned that the State party has not undertaken a comprehensive assessment of the cumulative impact of such measures on the realisation of economic, social and cultural rights, in a way that is recognised by civil society and national independent monitoring mechanisms (art. 2, para. 1).”

UN Committee on Economic, Social and Cultural Rights: Concluding observations on the sixth periodic report of the United Kingdom of Great Britain and Northern Ireland. 24 June 2016

I won’t repeat all of my earlier analysis of the cumulative impact of the cuts here. However I will note, as shown in Figure 13, that one of the features of the welfare state that enables such deception is its complexity.

Figure 13. The different cuts impacting disabled people

Complexity allows for various changes to go unnoticed or to be misunderstood:

  • Changes that happen over time, such as the failure to update benefits, take place slowly, but have a very large impact over time
  • Changes in assessment and eligibility can move people out of entitlement, and for new people they will not know they have lost out
  • Technical changes or rationalisations can be presented as modernisations or improvements in targeting, even if they are primarily cuts

The general rule of thumb in understanding political changes to the welfare state is not to look for fairness or rationality, but to try and identify where short-term political advantage lies. If the primary strategy is to provide tax-cuts to groups who will provide political support then making cuts at any point and by any means can be expected.

10. Poverty is a significant and growing problem in the UK

Poverty is not just political, it is also economic. The real situation is something as follows:

  • public and private wage inequality has increased significantly
  • the tax-benefit system has increasingly been used to lift the income of middle-income earners
  • taxes target the poorest and benefits have not risen accordingly

Over time inequality has increased as:

  • salary differentials have got worse
  • taxes have got more unfair
  • benefits have got worse for the poorest
  • but the system has got more generous in the middle

On a technical level I think this is also why the Gini Coefficient is a rather inadequate measure of inequality, because it gives too much weight to middle incomes. It makes much more sense to examine the discrepancy between the richest and the poorest, as Figure 14 does.

Figure 14. How inequality doubled in the UK

It is also important to ensure that in presenting data about poverty we do not fall into the trap of ignoring taxes. It is the post-tax and post-benefit data that is most important. So today, as Figure 14 shows, the UK has a very high level of inequality and a very high level of poverty. 6.5 million people must live on £51 per week after tax, to pay for all costs. This amount is totally inadequate and it is clear that even a modest tax increase for those on higher incomes could be used to radically increase the lowest incomes.

Figure 15. Inequality in 2016

This is why there are now 2,000 food banks in the UK. It is why mortality rates are falling for the first time since the creation of the UK. Poverty in the UK is severe, harmful and unjust – and completely unnecessary.

Redistribution and public services

So far I have restricted myself to three main factors in shaping poverty and inequality: income, tax and benefits. But there are other important factors, which are also subject to political influence, that also impact on poverty in the UK.

Positively the existence of free public services, like health and education, is a great leveller, although in practice there often great distortions in the distribution and quality of those services. Nevertheless universality that takes public services out of the money economy is generally very positive. The fact that social care remains highly means-tested is significantly regressive. The rich look after themselves and make no commitment to the public system, the poor often have to impoverish themselves further to ensure they are entitled to vital services.

It should also be noted that public services also create jobs, often very well paid jobs, for those with middle-incomes. This is worth considering when we examine the overall redistribution created by the welfare state. The poorest certainly benefit from public services, but society becomes more unequal when pubic services also increase wage differentials. In other words many middle-income earners have their income lifted twice, both through the tax-benefit system and by taking up work in public services. It is the poorest who lose out on both accounts.

This is not a criticism of public sector workers – far from it – it is just drawing attention to the strange way we think about income and public spending. If the Government increases the salary of a doctor this will be good for the doctor, but it makes no obvious difference to the service I receive and, from the perspective of equality, it is has made a bad problem worse.

Cost, debt and other complexities

The data that I have focused on here – incomes, tax and benefits – doesn’t tell us about some other very important facts:

  • Personal debt, which is a cost that has to be served and which is pushed up as incomes drop, is expensive for the poor, but cheap for the rich.
  • Housing costs, which have risen as the social housing has been suppressed and mortgages cheapened, become a bigger burden for the poorest whilst for the homeowner or landlord the costs go down.
  • Growing energy bills, increased through privatisation, hit the poor harder than the rich, because we all need to heat our homes (although now some can’t).
  • Lack of savings, growing job insecurity, lack of community resources, services or support and many other factors worsen the living situation of the poorest disproportionately.

Real poverty

There is no excuse, as some in the Government plan, for reducing our focus on the economics of poverty. However we should take a holistic approach and ensure that we also look at the costs people have to pay. Moreover we should also examine the social conditions which make it even harder to bear the costs of poverty. real poverty might best be pictured as having several dimension, as set out in Figure 15.

Figure 16. Real poverty

Personally I think we should move towards a more objective understanding of poverty, one which would enable us to eradicate poverty. I would define poverty as follows:

Poverty is the lack of all the resources necessary to participate as an equality in the life of the community

There is absolutely no reason why, by this definition, we cannot eradicate poverty from the UK.

Why does the system not care?

If we assume that politicians are not naturally unjust, but are primarily motivated by the desire to get re-elected, then there are a number of factors that may help explain recent developments.

In a two-party system, focused primarily on economic well-being, lifting the income of median-income voters is going to be critical. In addition you must disguise fact that you are doing so is also important (a) because you are failing to address the needs of people in the greatest need (b) benefits are stigmatised and those groups don’t want to be confused with stigmatised groups. Hence systems like tax credits are used to provide a benefit with lower levels of stigma for middle earners.

Furthermore this explains the increasing use of stigma, sanction, conditionality and control for those in the lowest income groups. Increasing the negative stigma associated with those on the lowest income also increases both a sense of superiority and a sense of insecurity – I don’t want to become like ‘them’. Abusing the poor becomes part of the street magic as it distracts people from noticing that most government policy is about subsidising the middle.

It is also important to acknowledge the changing structure of our society. If the interests of those who are poorest are unlikely to be represented, if people themselves are unlikely to organise to protect their interests, then exploitation is inevitable. Some of the more obvious social changes include:

  • declining trade union membership
  • declining church attendance
  • increased social atomism
  • declining social fabric in many communities
  • reduced level of political engagement

Poverty has been privatised. Without the necessary level of social solidarity and connectedness this situation is unlikely to change.

What next?

Although the current trend looks very negative I think there are some opportunities for positive change. The decline for middle-income earners which has helped erode our focus on poverty and inequality will increase. Technology and other economic changes is going to see more people, younger people, people in white collar jobs feel that the current system is unsustainable. You can only rob the poor for so long – they’re too poor for the trick to last for ever.

I think many more people are going to be attracted to the concept of basic income as a solution which universalises income security. In a sense the interests of the middle and the poorest will – if this happens – start to coincide. This should be a good thing.

I also think that a growing number of us will realise that an economic model which assumes that the only valuable activities are measured by money will collapse. The attractions of family, love, citizenship and community do remain, even in a world impoverished by injustice and shallow thinking. As people begin to reconsider what is of real importance then we can also start to consider how best to build a world where everyone’s gifts matter.

Meritocracy and neoliberalism will remain a threat to moral sanity. Things will not get better on their own. But we can unite around different values and use the emerging economic crisis as the basis for building something better.

This was first published by the Centre for Welfare Reform.

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In his first budget as Chancellor of the Exchequer, Philip Hammond was notably silent on the topical issue of ‘welfare’.

Unlike his predecessor, Hammond announced no new tightening of the social security budget nor any extra mechanisms to address what is so often (however erroneously) described as the ‘lifestyle choice’ of ‘welfare dependency’.

However, the welfare reforms already timetabled by Osborne and Cameron are proceeding apace.

April 2017 sees several new measures implemented that will further reduce social security support and make it more conditional. These include extensions to the welfare conditionality faced by parents and carers of young children and reductions in the financial support available to disabled people. May’s government is also overseeing the removal of child-related financial support via tax credits and Universal Credits for third and subsequent children in the same family.

“Attitudes to ‘welfare’ are much more complex and nuanced than often presumed.”

These welfare reforms are typically presented as being in tune with a ‘hardening’ of public attitudes to ‘welfare’ over time. This picture is challenged in a recently published special issue of the Journal of Poverty and Social Justice which draws together research exploring attitudes and experiences of ‘welfare’.

What this research shows is that attitudes to ‘welfare’ are much more complex and nuanced than often presumed. Further, it illustrates the reach and extent of benefits stigma and the ways in which this stigma impacts upon how those in receipt of out-of-work benefits see themselves, see others and are seen by others.

Key findings from the special issue were debated at a policy roundtable in the House of Lords in December 2016, organised by the Social Policy Association, Child Poverty Action Group and the Journal of Poverty and Social Justice, and jointly chaired by Baroness Lister of Burtersett (representing the Journal of Poverty and Social Justice’s editorial board) and Alison Garnham (Chief Executive of CPAG).

Contributors to the special issue were joined by experts from Parliament, central and local government, the media, the third sector and think tanks. The roundtable debate unpacked some of the very real political challenges faced by those looking to make the case for a more expansive vision for social security in the UK today.

welfare

Much campaigning activity in recent years has focused on fact-checking based ‘mythbusting’ but participants made a number of suggestions for shifting attitudes which go beyond this approach,  including a greater focus on individual stories and using social media to engage specific groups in discussion and debate.

“…need to focus political debate more fully on the human costs of ‘welfare reform’…”

Indeed, the efficacy of ‘mythbusting’ was subject to much comment and Baumberg Geiger and Meuleman offer a critical evaluation of the approach in the special issue. Some argued there was a need to focus political debate more fully on the human costs of ‘welfare reform’; for example, in terms of poor mental health or people living in poverty and increasingly destitution. Several of the papers in the special issue explore lived experiences of ‘welfare reform’, including papers by Patrick, who reports findings from qualitative longitudinal research with out-of-work benefit claimants, and Garthwaite, who reports findings from ethnographic research undertaken in foodbanks.

Others suggested there was a need to move away from making the case for social security and to focus instead on the reasons why individuals may become reliant on it: for example, significant numbers of people engaged in low paid, precarious work or underlying stigma to groups typically excluded from the labour market. Many papers in the special issue explore such debates, for instance Wincup and Monaghan focus on dependent drug users and the ways in which stigma often acts as a barrier to recovery.

Finally, there was also much discussion about the extent to which contemporary attitudes really are ‘harder’ than those in the past, with significant continuities in discourse and attitudes being identified. Hudson, Lunt et al explore these themes in their contribution to the special issue, tracing the continuities in pejorative attitudes to ‘welfare’ from the ‘golden age’ of welfare through to today’s debates.

Authors: John Hudson, Ruth Patrick and Emma Wincup

First published on the Policy Press blog

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The momentum in favour of universal basic income is gathering. John McDonnell, the Shadow Chancellor of the Exchequer, recently announced the Labour Party was establishing a working group to investigate UBI. Round about the same time, at our SSM/MMU event on Universal Basic Income, featuring Karl Widerquist, we asked people who came three things:why they were interested in UBI, how their or others’ lives might change if UBI were introduced and what alternative policies might be introduced to achieve the same ends as UBI?

Interest in UBI

Interests in UBI were wide ranging. Several people wanted to know if and how it could work in practice and what the implications would be if there were still destitution? Some concerns were expressed about how ‘citizenship’ would be defined and whether there would always be people excluded. The potential advantages were:

It would bring people out of extreme poverty and those unable to work, or, unable to find work would not be at such a disadvantage

It would realise the dignity and unifying effect of no longer having the ‘strivers and the skivers’ as our current welfare system is perceived.

The challenge to the current state of affairs was recognised.

In the transition to even greater use of technology, jobs will become scarcer. With UBI people could top up their income with part-time work. The stigma attached to ‘benefit claiming’ would be removed. Making the payment universal would reduce bureaucracy.

Apart from getting a cheque each month, I am interested in what effect it would have on society. I see the social and economic system as a complex system and the UBI is a fundamental change to that system, so, when making fundamental change to a complex system, the emergent effects are unpredictable and potentially significant. So I am interested to see what effects UBI will have in the real world, positive and negative.

It has been in the mind of many people. But, its application requires a huge effort not just to social groups and social scientists, but also to convinced political parties and mostly to convince several strategic sectors that haven’t been involved in this issue yet.

How might lives change with UBI?

People identified lots of ways lives would be changed for the better with UBI.

It would mean for me a better society. More equal society in terms of income. Happier.

No need to work. Reduce vilification of people needing benefits. Push conditions of employment and service up

I think that the most positive aspect would be that people would be free to pursue their dreams. This could potentially create a much more value for society than currently. For example, I would be free to work on a start-up.

I can only see improvements for everyone. A UBI to give everyone a lift; means that those on benefits are no longer ‘slaves’ working for the JobCentre Plus ‘master’ and churning out CVs and job applications; means that only those who actually want the flexibility of the zero-hour contract are forced to take zero-hour contracts I think that it would allow people more freedom and time to pursue more meaningful work, or develop their interest/passion in order to find suitable work in the future. A shift toward this could contribute greater wellbeing, due to more economic security than is currently granted.

Have wellbeing? Healthier communities? Happier people? Decent living?

I would be better able to continue in my varied self employment, which I enjoy very much but is a low and patchy income that I couldn’t manage on for ever. This self employment gives me freedom to dedicate a lot of time to pursuits that I consider to be more worthwhile than any paid work I’ve ever done – currently running the organisation World basic Income

Remove anxiety leading to improved mental health of no or few choices. Opening up choices of how to live.

Alternatives to UBI

As to alternatives to UBI, several people were stumped and not able to think of alternatives.. However a range of possibilities were and these included:

Reform of tax law – and a proper system where people can contribute and then get back but not a something for nothing culture. And spending on weapons could stop.

In a sense NHS and free u16 education are a form of UBI. Need to do community testing broadly

Stronger Unions. Increased use of cooperatives.

Work guarantee with the right to refuse until an appropriate job comes up

The living wage. International wages for housework

Free homes for everyone. Free gas and electric

Presenting positive points of view from employers (the richer the better)

Have a UBI for a sector of the community e.g. 18-25 year-olds initially, as being proposed by the potential left in France.

We thought it might be useful to overview some of these alternatives.

Alternatives to UBI?

Many alternative proposals are based on the principle that paid employment offers the best route out of poverty. However, we know that there are high levels of in-work poverty (JRF, 2016a), that precarious work leads to poor psychological health (Banach et al., 2014), and that there are growing inequalities and increasing numbers of households failing to meet minimum income standards (Davis et al., 2016). There is also the very real danger that further automation will render full employment for all just a pipe dream (Srineck and Williams, 2015), although the contrary view is that a coming scarcity of energy will make that unlikely in the longer term (Davey, 2016). Assuming for a moment that full employment is a possibility, the case against UBI and for paid work should be revisited.

Why work?

Society places a high social value on paid employment. So, not only does work provide a source of income, it is also a source of self-respect, social status and identity. Unemployment (involuntary) on the other hand, is strongly associated with depression and feelings of a lack of self worth. Fryer and Fagan (2003) drew attention to the reasons why some people continue to work when in receipt of benefits that provide them with an income. They found that when people were out of paid employment and in receipt of benefits, some turned to work in the hidden or ‘black’ economy, which provided them with a sense of pride, status and respect. It enabled them to develop skills and to buy necessary items like children’s shoes. Those who remained reliant on out of work benefits, on the other hand, showed signs of depression, passivity, and feelings of humiliation and stigmatisation. Importantly, there was a lack of reciprocity, of an exchange relationship; whereas working in the hidden economy enabled a reciprocal relationship between work done, payment received and entitlement to spend as people pleased.

Trial experiments of UBI have shown that contrary to most people’s predictions, people continued to work, even in the face of a guaranteed basic income. (The exceptions were some young people who continued to study and women with small children, particularly single mothers.) However, the reciprocal relationship – of work done and payment received was missing. Do we need this kind of reciprocity or not?

It is important to note that studies on the psychological consequences of (involuntary) unemployment have been undertaken in the context of paid work being highly valued in society, leading to social status and the self-respect that comes with this (Mckenzie, 2014). One of the advantages predicted for UBI, is the weakening of the social value placed on paid employment, in favour of unpaid work, caring, creativity and community building. In other words, UBI would change the social norms around work and break the link between social status (being socially valued) and paid employment.

Variants on a UBI theme

Before we go on to consider alternatives to UBI it is worth mentioning variants on the Basic Income theme. Firstly, negative income tax, originally proposed by Milton Friedman, writing about the alleviation of poverty (Friedman, 1962) from the political right but re-visited later by Block and Manza (1997) from a progressive political position. A negative income tax is a progressive tax system whereby households below a certain income receive a cash transfer from the Government instead of paying taxes. Effectively a negative income tax would create a floor below which income could not fall. This would give a degree of income security, enabling choices to be made by those in work about how many hours to work, and giving some basic income to those without paid employment. In Block and Manza’s formulation it would also supplement low wages, as tax credits do under the present system. They argue that it avoids the “benefit trap” whereby people on certain benefits gain little or nothing by becoming employed at low wages.

Negative income tax would not address the universality aspect of UBI, being targeted instead on those with low incomes: instead it is a progressive measure, integrating money subsidies to the poor with the tax system, with those on higher incomes contributing progressively more.

Stakeholder grants, however, have been proposed as alternatives to UBI, and to be universal. Ackerman and Alstott (2004) argue that a 2% tax on the wealthiest, would enable a grant to be paid to all those coming of age as long as they complete secondary school and do not have a criminal record. (Ackerman and Alstott, 2004). The grant would enable all citizens of working age to make choices and plan their lives, spending (or saving) their money as they wish. Every citizen, then, claims her or his stake (or collect their Basic Income) simply by virtue of being a citizen capable of forming a life plan. The idea is similar to that introduced in the UK via the Child Trust funds – a small amount of money paid to every new born child, invested until the child reaches 18, and then to be spent on whatever the young person chooses. Critiques of the stakeholder income include the argument that this grant would be to the advantage of those with the human and knowledge capital to use the money wisely, and to the detriment of those who did not (Standing, 2006).

Perhaps income redistribution is not the only way to alleviate poverty.

Other proposed variants of UBI include proposals to (1) use a form of UBI as a way of sharing the profits from equities (i.e. the ownership of capital) (Varoufakis, 2016); (2) return unused UBI payments to Government or to charity in order to discourage the accumulation of further wealth by those on higher incomes (Cadarn Research, 2017) and (3) the FEASTA Cap and Share proposals in which carbon permits are bought by fossil fuel companies and the revenues from these shares distributed equally in the population, thereby reducing carbon emissions whilst at the same time providing an income in an equitable way (http://www.feasta.org/documents/energy/Cap-and-Share-May08-summary.htm).

Given that affordability is a recurrent issue, one alternative might be to combine UBI with a complementary local currency, one not linked to sterling but nevertheless backed by councils and other institutions (for example by accepting payment or part payment in these local units – this would be an essential requirement in order to ensure the currency had value). The Hullcoin pilot has these characteristics http://www.hulldailymail.co.uk/what-is-hull-coin-and-why-is-it-the-city-s-answer-to-groupon/story-29582248-detail/story.html. There is no limit on the amount of such currency that can be created (other than what the local economy can sustain) and it would have the virtue of keeping money local, rather than leaching out to profit centres elsewhere. Such a variant of UBI could be trialled in parallel with the existing benefit system.

In addition, there are alternatives in the form of a redesigned social welfare system; job guarantees; participation income; and civic economy developments.

A redesigned social welfare system

Two recent poverty-reduction strategies, with paid employment as the goal, include substantial changes to the social security and tax systems.

A complex and comprehensive anti-poverty package has been proposed by the Joseph Rowntree Foundation (JRF, 2016a,b). This strategy places responsibilities on government, employers and businesses, communities and citizens to develop economic opportunities alongside social reform. The emphasis of the strategy is to ensure that everyone has a decent and secure life. The outcomes of the strategy are declared to be: to boost incomes and reduce costs; deliver an effective benefits system; improve education standards and raise skills; strengthen families and communities; and promote long term economic growth benefiting everyone (p. 21). The package, then has jobs, education, employment and economic growth (albeit what JRF are calling, after the OECD (Organisation for Economic Co-operation and Development – http://www.oecd.org/inclusive-growth/), ‘inclusive growth’) as the key route out of poverty, taking little account of the changing nature of work and the possibilities of a reduction in jobs overall. Furthermore, it does little to explicitly challenge the negative psychological consequences of a welfare system founded on eligibility assessments, conditions and sanctions: a system that is humiliating and belittling, leading to stigma, loss of self esteem, demoralisation, apathy and even mental ill health. The strategy is to be welcomed for its comprehensiveness, but because it retains a focus on economic growth, we do not believe it is environmentally sustainable in the long term.

Another set of proposals that aims to reduce poverty and raise lower and middle incomes through the re-design of the social security system comes from Harrop (2016a) in a report for the Fabian Society.

The report discusses at length the merits and challenges of a universal basic income (Harrop, 2016b). It concludes that the idea of a basic income might be the eventual end point after policy reform, but that the focus should be on “practical, incremental policy changes which embody something of the spirit of the basic income idea, but make sense as reforms in themselves” (Harrop, 2016a:139). (This incremental approach also features in the recent Compass proposals for UBI (Reed and Lansley, 2016)).

Harrop proposes retaining, but increasing the generosity of, means tested out of work benefits but supplementing them with the gradual introduction of individual universal credits in place of tax allowances, and substantially increasing the amounts of child and disability allowances. He also argues that adult credits should be conditional on participation in society (on learning, parenting, caring, job search or work preparation). The proposals include ‘disaggregation’ – moving away from the assessment of household income to benefits and allowances being awarded to individual adults and children. This change alone could have the effect of enabling greater independence and autonomy and reducing financial dependency, especially for women or for those with caring responsibilities.

Harrop acknowledges the challenge that providing for housing costs presents, and also that his proposals depend on economic growth (although there is no reason why Government could not just fund them) and questions whether or not his proposals would be adequate if the assumed growth did not take place. Scant attention is paid to the changing nature of work, and extent of precarious and uncertain work. Embedded within these proposals is the idea of a guaranteed job for those out of work for 12 months, modelled on the Young People’s Guarantee which was in place 2009-2011.

Indeed, the major challenge to UBI as a policy comes from those who advocate guaranteed work as the means by which people gain purpose and meaning and positive mental health and well-being as well as income security.

The Job Guarantee

Job guarantees for young people are a part of the contemporary political landscape. As a response to the recent fiscal crisis, the UK Coalition Government introduced a voluntary job guarantee for young people via the Futures Job Fund, which proved successful in moving young people into unsubsidised work and off benefits (Alkker and Cavill, 2011; DWP, 2012). The 2015 Labour Party Manifesto included a Compulsory Job Guarantee for every young person, unemployed for over a year, guaranteeing a job which they would have to take or lose benefits. The then leader Ed Miliband explained :”.. it will be a tough contract – those who can work will be required to take up the jobs on offer or lose their benefits. A life on benefits will simply not be an option” (http://press.labour.org.uk/post/79110402681/next-labour-government-will-guarantee-starter-jobs). The crucial difference between job guarantees (and indeed of the current social protection policies) and UBI is focused on the ‘unconditionality’ principle. Should people be entitled to state income without the expectation of a contribution in return?

Not all job guarantee schemes are as hard-line as the workfare-like version proposed by Miliband. Tchervena has argued for the job guarantee, for all, not just for young people, because it would enable greater economic stability than would UBI, whilst at the same time delivering many of the same benefits as UBI (Tchervena, 2012). In support of her argument, she draws on the impact of the Plan Jefes programme in Argentina following the financial crisis of 2001. This was a job guarantee programme aimed at Heads of Households (mostly men), but in practice involving women too, offering four hours of work a day at the minimum wage. Extensive evaluations of the programme have shown the positive impact on the participants, especially on poor women who participated, beyond increased income.

The scheme enabled people to identify specific unmet needs in their families and communities and design jobs to meet those needs. A wide range of work was undertaken, including day care, public libraries, after school activities, tailoring, artistic pursuits, recreation, environmental clean up and recycling, subsistence production and other activities for the public good. After a year the program evolved into Plan Familias, enabling a naturalistic quasi-experiment, comparing experiences across the transition from job guarantee to basic income. Men were offered training and job placement assistance, but women the alternative of a basic income to stay at home: in the pilot area for this change, less than 50% of women made the switch. The impact on the women of paid employment included the learning of basic skills, completion of courses, boosted self-perceptions, feelings of being connected to neighbours and enhanced sense of dignity and pride: collective and individual empowerment was facilitated and women reported increased respect in their households and communities. Being engaged, doing something, helping the community, working in a good environment were all more important to the participants than their increased income. Women wanted to work rather than receive welfare payments of equivalent amounts. Tcherneva argues that income alone does not lead to empowerment: rather empowerment comes from earned income not charitable donations (the reciprocity-exchange relationship discussed by Fryer and Fagan, 2003).

Tcherneva, then, suggests that “a well structured guaranteed employment that offers opportunities for meaningful work at a living wage, counters the precariousness of the labour market by eliminating unemployment, drastically reducing poverty and enhancing the individual freedom to say ‘no’ to bad jobs” (Tcherneva, 2009:184). In the context of the austerity era, she suggests that such a scheme would reverse the decline in public services by focussing on socially useful outputs and public provisioning for all, thus leading to community building and increased social capital at the same time thorough the prioritising of people’s contributions to socially useful activities. By focusing on the needs of those at the ‘bottom’, she argues, job guarantee would also serve a redistributive function , improving the incomes of those at the ‘bottom’ faster than those at the top and transforming the meaning an d purpose of work.

Jobs that focus on mitigating the causes and impact of climate change could also be a part of a job guarantee scheme. Godin (2012) modelled a variation on the job guarantee, the Green Jobs Guarantee (GJ), in which the jobs available are in the improvement of energy efficiency for domestic and public buildings (e.g. via retrofitting insulation). In Godin’s simulation, the GJ is cost effective for the State (in comparison to a conventional Keynesian demand stimulation package) and unlike the conventional job guarantee it does not lead to a boost in energy demand as a consequence, instead decreasing it.

The key distinction between UBI, social security modifications or job guarantee, may well lie in the degree to which people choose work and jobs at their will or are forced to take jobs out of financial necessity. One of the arguments in favour of UBI is that it would enable people the freedom to choose what, how and when to work.

Tcherneva does not dismiss UBI entirely, but concludes that it would be possible to combine the goals of UBI and Job Guarantee. Income guarantees not tied to labour market participation (such as child allowances, old age pensions, disability allowances, healthcare) could be combined with a voluntary employment opportunity through a living wage-benefit-vacation package for those able, ready and willing to work. She calls this a ‘universal guaranteed participation income programme’ (Tcherneva, 2006). Participation is the foundation of participation income proposals.

Participation Income

In 1994, the commission on Social Justice (IPPR, 1994:261-265) explored the possibilities of a citizen’s income, arguing for a modified version based on active citizenship, a participation income. This idea has also been proposed by the economist, Tony Atkinson (Atkinson 1996; 2015). He was concerned with reducing inequalities and both preventing and reducing unemployment, and proposed a version of basic income that replaces the ‘citizen’ eligibility requirement of most UBI proposals, with a ‘participation’ requirement. The qualifying conditions would include:

people working as an employee or self-employed, absent from work on grounds of sickness or injury, unable to work on grounds of disability and unemployed but available for work, it would also include people engaging in approved forms of education or training, caring for young, elderly or disabled dependants or undertaking approved forms of voluntary work, etc. The condition involves neither payment nor work; it is a wider definition of social contribution.” (Atkinson (1996:, 68–69)

Atkinson’s scheme grants a secure income but requires recipients to satisfy a participation requirement as a condition of support. The kinds of participation envisaged are socially useful activities, such as caring for an elderly person, volunteering in a neighbourhood project, engaging in training or studying for a qualification. The qualifying conditions would need to be approved, which in turn would require a mechanism for administering and monitoring participation activities. How, and on what basis participation activities would be approved would need to be worked out, with the obvious danger that such approval could be politically, rather than socially motivated.

The introduction of such a conditional element to the BI is similar to the ‘contribution contract’ proposed by the RSA as part of their model of UBI. The idea here is that all recipients of the BI sign a contract with their local communities to “Contribute to the extent they are able, through earning, learning, caring or setting up a business” (Painter and Thoung, 2015:.20). The suggestion is that such a contract will be a positive affirmation to establish norms, provide social support and underpin the contribution ethos – thereby helping to shift social attitudes values from individual success to social solidarity.

It is unknown whether or not participation, or contribution, requirements for a BI would enhance community building, and whether the breach of one of the core principles of most UBI models, namely that of unconditionally, would weaken the transformative potential of the UBI or strengthen it.

Participatory Civic Economy

Participation is at the heart of the creation of participatory civic economies, currently in their infancy. Rather than thinking about national policies and processes to alleviate poverty, austerity and its negative psychological effects, civic economies are locally focussed and begin with the goal of increasing social solidarity. Drawing on the work of Murray (2009), the Compendium for the Civic Economy (“00/(London)”, 2011:9) describes the civic economy as one designed to “unlock and share the resources we have more effectively. ..It comprises people, ventures and behaviours that fuse innovative ways of doing from the traditional distinct spheres of civil society, the market and the state. Founded on social values and goals and using deeply collaborative approaches to development, production, knowledge sharing and financing, the civic economy generates goods and services and common infrastructures in ways that neither the state nor the market economy alone have been able to accomplish”.

Civic economy approaches, then, aim to alleviate the passivity and isolation of current employment and welfare practices. Furthermore, proponents argue for innovative and new methods of co-producing society, co creating value, cost savings and mechanisms for financing or collective investment. People come together to identify local needs, design and implement projects, producing socially useful products. The approach has been successfully trialled at a neighbourhood level in Lambeth (Open Works, 2016:21), but has yet to be scaled up. This approach is similar to that of the Organisation Workshop, developed in Brazil and implemented in Latin America and Africa (Carmen and Sobrado, 2000; https://en.wikipedia.org/wiki/Organization_workshop) and in Marsh Farm, Luton (Imagine, 2016).

Civic economy approaches are participatory and collaborative, local in scale and are a way to regenerate and enhance the resilience of local communities, cities and regions. Examples of civic economy practices highlight the empowering impact of participation, as well as the sense of agency participants feel. The ideas challenge conventional thinking about work, social protection and participation, and so offer an alternative way forward, with positive social benefits, to those of UBI or welfare-employment reform.

So… are there viable alternatives to UBI?

These alternatives to UBI rely on either new packages of policy interventions, guaranteed jobs, or new ways of thinking about relationships between individuals, communities, the market and the state. The proposals do not address the potential UBI has of moving towards greater gender equality, particularly in terms of sharing care. Lister (2017), however, points out that to achieve this would require enhanced parental leave and shorter working weeks (Coote, Franklin and Simms, 2010) – which could be incorporated into either basic income, job guarantee or participatory alternatives.

Further work would be needed to ensure that whatever alternatives are considered, that they deliver the optimal mix of liveable and predictable income; sensitivity to additional needs; equity; encouragement of social solidarity and community contributions; economic stabilisation; ecological beneficence; and political and public feasibility and acceptability. They need to address both the social recognition that paid employment gives with income redistribution.

Perhaps they are not either/ors. Maybe social-good job guarantee schemes, coupled with progressive benefit and tax reform would form a realisable step towards UBI – and may even exist once UBI is in place to moderate the ravages of the market and ensure that the economy is realigned, with a just future of prosperity for all within ecological boundaries.

First published by Steady State Manchester, where you will find references.

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A Citizen’s Basic Income is an unconditional, automatic and nonwithdrawable payment to each individual as a right of citizenship. (A Citizen’s Basic Income (CBI) is sometimes called a Basic Income (BI) or a Citizen’s Income (CI))

  • ‘Unconditional’: A CBI would vary with age, but there would be no other conditions: so everyone of the same age would receive the same CBI, whatever their gender, employment status, family structure, contribution to society, housing costs, or anything else.
  • ‘Automatic’: Someone’s CBI would be paid weekly or monthly, automatically.
  • ‘Nonwithdrawable’: CBIs would not be means-tested. If someone’s earnings or wealth increased, then their Citizen’s Basic Income would not change.
  • ‘Individual’: CBIs would be paid on an individual basis, and not on the basis of a couple or household.
  • ‘As a right’: Everybody legally resident in the UK would receive a CBI, subject to a minimum period of legal residency in the UK, and continuing residency for most of the year.

A Citizen’s Basic Income scheme would phase out as many allowances against personal income tax as possible, and would phase out or reduce many existing means-tested benefits, and would pay a Citizen’s Basic Income automatically to every man, woman and child.

The Citizen’s Basic Income would

  • create a financial platform on which all would be free to build
  • encourage individual freedom and responsibility
  • help to bring about social cohesion
  • end perverse incentives that discourage work and savings
  • be affordable within current revenue and expenditure constraints
  • be easy to understand
  • be cheap to administer and easy to automate

HOW WOULD IT WORK?

A Citizen’s Basic Income (CBI) scheme would co-ordinate the income tax and benefits systems. CBIs would be paid automatically, and the cost would be recouped via Income Tax levied on all income and by reducing means-tested benefits. At the moment claimants and taxpayers experience very different regulations. A CBI would treat everyone alike.

Automatic payments.

Each week or each month, every legal resident would automatically be given the CBI appropriate to his or her age. For most adults this could be done through the banking system, and for children it could be done through the bank accounts of their parents. For adults without bank accounts special provisions would be necessary. Larger CBIs might be paid to older people, and smaller CBIs to children and young people, but there would be no differences on account of gender or marital status, nor on account of work status, contribution record, or living arrangements.

Tax-free and without means test.

The CBIs would be tax-exempt and without a means test, but tax would be payable on all, or almost all, other income. This is necessary in order to finance the scheme. The rate of tax would depend on the CBI amounts. The higher the CBI, the higher the Income Tax rate.

Funded by Income Tax.

There are various ways of funding a CBI. The particular illustrative scheme discussed would be funded by removing some tax allowances and National Insurance Contribution earnings thresholds, and reducing or abolishing means-tested benefits. Later on a larger CBI could be part of a wider tax reform package including, for example, a land value tax, a financial transaction tax, and/or a carbon tax.

Implementation methods.

At the point of implementation, either meanstested benefits could be abolished, or some or all of them could be retained and everybody’s in-work and out-of-work means-tested benefits recalculated to take into account their CBIs. A CBI could either be implemented for everybody at the same time, or successively for different age groups.

From the Citizen’s Income Trust, where more details can be found

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300,000 people have had their benefits suddenly stopped by sanctions in the last 12 months, many of whom have been plunged into poverty, unable to heat their homes or even eat.

On today’s National Day of Action Against Sanctions, Ruth Patrick highlights the reality of welfare reform as laid out in her new book, For whose benefit? The truth is that our punitive welfare reform agenda leaves people further away rather than closer to the paid labour market.

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Ruth Patrick

“While Cameron and Osborne may no longer be in charge, their welfare reform agenda continues apace. This month sees the implementation of another wave of reforms, which will further weaken Britain’s social security system.

Over recent years, politicians have robustly defended successive rounds of welfare reform. They argue that reform is needed to end supposed cultures of ‘welfare dependency’ and prevent people from being able to ‘choose’ benefits as a ‘lifestyle choice’. In making their case, politicians draw upon simplistic but powerful demarcations between ‘hard working families’ and ‘welfare dependants’, and suggest that welfare reform will help those on out-of-work benefits join the ranks of the hard working majority.

As David Cameron put it back in 2014:

“Our long-term economic plan for Britain is not just about doing what we can afford, it is also about doing what is right. Nowhere is that more true than in welfare. For me the moral case for welfare reform is every bit as important as making the numbers add up: building a country where people aren’t trapped in a cycle of dependency but are able to get on, stand on their own two feet and build a better life for themselves and their family.”

But does Cameron’s moral case stand up? And has welfare reform actually helped people make transitions from ‘welfare’ and into work?

“The truth is that our punitive welfare reform agenda leaves people further away rather than closer to the paid labour market.”

Patrick_For whose benefit-webOver the past six years, I have been researching experiences of welfare reform: walking alongside a small group of individuals as they anticipated, experienced and reflected upon changes to their benefits. By returning to the same people several times, I was able to contrast their expectations with what subsequently happened, and to unpick individual journeys through the benefit system against a context of far-reaching welfare state retrenchment.

The single parents, disabled people and young job seekers I spoke to did not recognise the idea of benefits as a lifestyle choice. Their lived experiences contrasted markedly with the popular stereotypes so often peddled by politicians and replicated and reproduced in the media. What they instead showed was the hard ‘work’ that getting by on benefits demands, and the ways in which welfare reform simply added an additional burden to their already difficult lives.

One of the individuals I interviewed was Adrian, a young job seeker and care leaver who had a history of offending. Adrian had never worked, but expressed strong aspirations to find employment, aspirations that endured over time despite repeated setbacks. Challenging the popular narrative of ‘inactive’ claimants, Adrian volunteered at a local homeless hostel, enjoying the chance to ‘give something back’ and provide support that he himself had once benefited from.

“The single parents, disabled people and young job seekers I spoke to did not recognise the idea of benefits as a lifestyle choice.”

At the time of our first interview, back in 2011, Adrian was on a benefits sanction for failing to apply for a job after a misunderstanding between himself and his Job Centre Plus adviser. Over the following five years, he was subject to repeated sanctions, and these often seemed to be due to poor communication, confusing directions as well – on occasions – as Adrian’s failure to turn up for appointments on time or when unwell.

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Image copyright: Dole Animators

For Adrian, sanctions meant immediate and extreme hardship, and indirectly led to his becoming homeless when he was unable to pay back rental arrears. To survive, Adrian turned to foodbanks and was also caught shoplifting sandwiches for which he received a fine which he was unable to pay because of his sanctions.

While Adrian continued to seek work, he felt the sanctions made this more difficult:

“You’d ring them [employers] up and they’d say “oh, come down, we’ll go for an interview”. You’d go for an interview and if it’s a point where you’re being sanctioned, you’re all…skinny and everything, you look proper ill. They look at you and go “nah, you look like a crackhead or something.”

When I spoke to Adrian last year, he explained the impact sanctions had on his work-search and mental health:

“[I go to the work programme] more or less every week….Just talk about looking for work, and then they’d put me on some mock interview and [I’d] never get through. They did say why, they said [poor] eye contact, which were pretty good. Cos I don’t make eye contact after the sanctions and that, I became very unsociable, didn’t want to trust…now it’s just lasted, made me unsociable with people and that, made me feel down…”

Adrian has been ill-served by a punitive welfare reform agenda that is grounded in a baseless rhetoric that suggests that individuals require ‘tough’ measures if they are to be activated off benefits and into employment. Over five years, repeated sanctions left him destitute and – ironically – further away rather than closer to the paid labour market. What Adrian needed – but what was notably absent – was targeted and effective support.

Any further changes to the social security system should start with a complete rethinking of the assumptions that currently underpin ‘welfare reform’. Unpicking these assumptions requires a recognition of the lived experiences of poverty and out-of-work benefits receipt, experiences that expose the weakness of David Cameron’s moral case for welfare reform.

First published by the Policy Press

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On a cold January day, the room of about 60 people was buzzing towards the end of Karl Widerquist’s talk on Universal Basic Income: The Cornerstone of a Just Society at the SSM/MMU event on January 30th 2017. Later that same week World Basic Income http://www.worldbasicincome.org.uk/ held its first conference in Salford and the themes of social justice, freedom and poverty alleviation were all discussed again, taking up issues of distributive justice, a return to the commons and the need to have a world-wide system.

Karl Widerquist and SSM’s Judith Emanuel and Carolyn Kagan

Karl Widerquist and SSM’s Judith Emanuel and Carolyn Kagan

Karl answered, amongst other things, the challenge of why people should get ‘something for nothing’ by suggesting that a basic income could be seen as compensation for the ways in which land and resources had been taken into private hands: we can no longer provide for ourselves and our families, or even build our own homes as land, property and natural resources are now owned – usually by someone else! Whilst this now seems so natural to us, we don’t even think about how it is that (most of us) work for others, doing what we are told and taking what pay we are offered. UBI presents an opportunity to take back some control over how we spend time and on what. Those who own the resources, he suggested, have a duty to compensate the rest of us.

Of course his message was considerably more complex than this and you can read more of his work at https://georgetown.academia.edu/KarlWiderquist or see the Basic Income Earth Network site http://basicincome.org .

But what do those who attended our event in January think? One person said afterwards that it had made her think differently about her work as a community organiser and of the links between poverty and social justice. We asked people what interests them in the idea of UBI; how their or others’ lives might change if UBI were introduced; and whether they thought there were alternatives to UBI that might achieve the same outcomes in eliminating poverty and enabling people to have more choice over the work they do.

People came from lots of different walks of life. Yet there was wide agreement that the promise of UBI lay in the combination of liberty and social justice; in freeing people from the shame and sanctions associated with poverty; the potential to eliminate destitution; its ability to free people from the shackles of precarious work; and to take account of ways in which technology has altered the world of work and how people relate to each other.

If UBI were in place, people thought there would be less anxiety and worry; people would get on with each other better and be happier and overall, society would be better with the stigma of poverty being a thing of the past.

UBI was thought to be a relatively simple idea (but a complex one to actually introduce). Whilst a number of alternatives could be thought up, most agreed none would produce such wide ranging changes, not only on people’s lives but on reducing prejudice and increasing happiness.

Wouldn’t you and yours want a guaranteed income throughout your lifetime? The idea is gaining momentum in Scotland https://www.theguardian.com/politics/2017/jan/01/universal-basic-income-trials-being-considered-in-scotland and Glasgow’s Council has just committed funds to explore the idea https://www.thersa.org/about-us/media/2017/rsa-launches-study-on-universal-basic-income-trial-in-glasgow . Where will be the first place in Greater Manchester?

First published by Steady State Manchester

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