Thursday, 9 May 2013
Fourth largest economy can afford welfare state
The obsession of the Coalition Government with the need to cut the welfare budget never seems far from the headlines.
It is an area where the spinning of facts is rife in order to produce a narrative that says the welfare state cannot be afforded in its present form.
The fundamental building blocks of the welfare state though as it is known today were put in place by the post war Labour Government. It moved to enact the recommendations of the Beveridge report which was published in 1942. Sir William Beveridge identified what became known as the five giants, Want, Disease, Ignorance, Squalor and Idleness.
The reforms proposed marked an essential shift from the Victorian days, when discretionary charity was seen as the answer to poverty, to a system where citizens have a right to welfare support.
Despite the poverty of post war Britain the capacity to pay for this welfare revolution was never in doubt. The welfare state remained an unquestionable facet of the post war consensus for ruling Britain up to the 1980s.
The arrival of the Thatcher Government in 1979 started the chipping away of credibility of the welfare state, though its funding levels remained relatively unscathed.
The tide, though, started to turn in those days. The constant flow of misinformation over the years has now resulted in the Coalition Government launching its all out assault on the welfare state.
It is as though things have almost come full circle with Chancellor George Osborne’s crude stereotyping of skivers and strivers, mirroring the Victorian values of the deserving and undeserving poor.
The result is the introduction of the universal credit, which brings together the jobseekers allowance, income related employment and support allowance income support, child tax credits, working tax credits and housing benefit into one benefit. There is also to be a cap of £500 a week on all benefits received by a household.
The cuts to housing benefits, including the infamous bedroom tax, which penalises people living on benefit in houses where there are spare rooms, aims to slash this budget.
An assault on the disabled has seen 100,000s of people being reassessed in relation to Disablity Living Allowance. Some 560,000 are due to be reassessed by October 2015. Many are expected to lose the benefit altogether as a result of this often dubious process. DLA is to be replaced by the Personal Independence Payment.
All of these changes are premised on the back of much misinformation in the media.
The TUC discovered the extent of misundertstanding when it commissioned a Yougov poll. Researchers found the public believe that 27% of the welfare budget is claimed fraudulently. The actual amount for 2011/12 was 0.8% or £1.2 billion. Similarly, on average people think that 41 per cent of the entire welfare budget goes on benefits to unemployed people, while the true figure is 3 per cent.
There has been much made of those families receiving more in benefits than the median salary of £26,000 a year, so justifying the imposition of the cap. The reality is that it applies to just 58.000 households.
There is so much false information around in the debate on welfare that it makes for a sobering exercise to look at just how the budget does split up. By far the largest part of £166 billion work and pensions budget (2011/12) goes on pensions. Pensions account for £74 billion or 47% of the budget. Pension credit and minimum income guarantee benefit account for another £8 billion. Housing benefit costs £17 billion and disability living allowance £13 billion. Incapacity benefit and jobseekers allowance account for £5 billion a piece.
There is also a double standard about welfare. Take housing benefit where the focus is on the family receiving thousands in benefits. Never is the focus on the greedy landlords who keep pushing up rents. Rent controls rarely get a mention, yet the rack renting landlords are also welfare benefit cheats.
Tax credits are another area where the bad employer paying poverty wages does not seem to receive the same level of criticism regarding welfare as the single parent struggling by. In effect via tax credits, people are not only being helped into work but a subsidy is being provided to employers who want to pay poverty wages.
The result of the present stripping away of the welfare state is already being seen with a doubling in the number of people going to food banks over the past year. The food banks are a charitable response to poverty of the type seen in the 19th century when the poor laws and workhouses scarred the landscape.
There seems little doubt that the Britain can afford the welfare state. The approach of the present government as in so many things is using a crisis to achieve idealogically driven goals that impoverish growing numbers of people.
Welfare for low paying businesses or rack renting landlords is apparently fine. Would the argument about funding welfare even be on the table if the £42 billion in tax being avoided by companies and individuals were being paid?
The challenge now must be to defend the right of citizens to cradle to grave welfare. The lies and misrepresentations now being used need to be exposed in order to halt the charge backwards to the days of charitable provision and the workhouse.
9/5/2013 Morning Star