Action needed on welfare cuts

Submitted by Matthew on 30 October, 2010 - 3:15 Author: Matthew Thompson

The announcement in last month’s Comprehensive Spending Review of cuts to social security benefits, together with planned job losses of fifteen thousand in the Department for Work and Pensions over the next two years, represents the clearest attack yet on the structure and principles of the modern welfare state created by the 1945 Labour government.

The cut that has attracted most media attention – withdrawing Child Benefit from children with a parent earning enough to pay the top rate of income tax (currently just under £44,000 a year) – had already been trailed at the Tory party conference.

As its name suggests, Child Benefit was introduced in 1946 as a low but universal payment to reflect some of the costs of bringing up children. Its withdrawal from the better off has caused problems for the Coalition government on its own backbenches with many Tory and Lib Dem MP’s seeing it as a move that will cost them votes.

It is clear that now the universal principle underlying Child Benefit has been removed, the way is open to make further cuts to it. Indeed, Secretary of State for Work and Pensions Iain Duncan Smith responded to criticism of the decision at the Tory conference by claiming that it was merely a transitional step and that by 2017 Child Benefit would be subsumed into his scheme for universal credits to replace Working Tax Credit and Income Support, both of which are means-tested and can only be claimed by those on low incomes.

Even in its own terms of cutting public spending, the new Child Benefit scheme has already run into trouble. Unlike the relatively straightforward task of paying benefit to all children, means testing payments will introduce another layer of bureaucracy as well as increasing state investigation of claimants’ personal circumstances. Where for example the father is the top rate tax payer and Child Benefit is claimed by the mother, HM Revenue and Customs will either have to write to the former asking whether their partner has claimed Child Benefit or the latter asking for details of what their partner earns, information neither of them may know. There is also the issue of self-employed people whose income fluctuates who do not know into which band their earnings will fall until the end of the tax year.

The confirmation that Housing Benefit will be also be restricted to £250, £280, £340 and £400 per week for one, two, three and four-bedroom properties and cut for those claiming Jobseekers Allowance for more than a year – first announced by Tory Chancellor George Osborne in his Budget speech – is also attracting media attention and criticism on the Coalition backbenches, especially in London where it will mean families having to uproot themselves and move into smaller accommodation in cheaper parts of the city. Even Tory mayor Boris Johnson has described the likely effects of this as “a kind of Kosovo-style social cleansing of London.”

The Government is also pressing ahead with plans to increase the state pension age from 65 to 66, albeit by 2020 rather than 2016 as previously announced. The last Labour government had already decided to increase it to 66 by 2024 and to 68 by 2046. The Coalition has said that the rise to 68 is now likely to be brought forward as well.

Like the parallel review of public sector pension schemes being conducted by ex-Labour minister John Hutton, the rationale behind these changes to retirement age is that “everyone is living longer now”. This argument clearly ignores the massive differences in age expectancy based on social class – men in Glasgow die on average at 78 compared to 87 for their counterparts in Kensington and Chelsea – and the fact that even those who live longer may not be physically capable of working till nearly seventy, especially in manual jobs.

Taken together with attacks on incapacity and disability benefits, the choice for many working-class people in the future if the Tories and Lib Dems get their way will either be working into their seventies in low-paid manual jobs and dying before they can claim their pensions or decades on lower, means-tested benefits paid to the unemployed and sick.

The wave of mass protests in France over similar plans to increase the retirement age has highlighted yet again the lack of action by our own official labour movement, with the TUC not planning to hold a demonstration against cuts to public spending until next spring. When even TV chat show host Paul O’Grady can show more anger at the cuts to welfare, using a live transmission to declare “Those Tories hooping and hollering when they heard about the cuts. Gonna scrap the pensions – yeah! – no more wheelchairs – yeah! Bastards.”, the need for leadership on these issues is more pressing than ever.

Add new comment

This website uses cookies, you can find out more and set your preferences here.
By continuing to use this website, you agree to our Privacy Policy and Terms & Conditions.