Tag: IFS

Why is the UK so unequal?

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The US and UK share an ideology of ‘free-market’ fundamentalism and competitive individualism. More widely called ‘neoliberalism’ these ideas were introduced, respectively, on both sides of the Atlantic by Ronald Reagan and Margaret Thatcher. 

Earlier this year, Angus Deaton, professor of economics at Princeton University and a Nobel laureate, launched a five-year review on the subject of inequality. Sir Angus, who is teaming up with the Institute for Fiscal Studies, with funding from the Nuffield Foundation, a charity, intends the review to be the “most comprehensive scientific analysis of inequalities yet attempted”, examining not just the gaps between the rich and poor, but also differences in health outcomes, political power and economic opportunities in British society and across the world.

It will attempt to answer which inequalities are beneficial, providing “incentives” for people to strive harder, and which should be stamped out because they are derived from luck or cronyism and, according to Sir Angus, “make a mockery of democracy”.

Personally, I have some major issues with the neoliberal language of “incentives.” In its crudest formulation this entails providing the conditions for the market sector to produce growth, and accepting that this will somehow result in inequality, and then relying on some vague mechanism of redistribution of some portion of this growth to help repair the inequality that has resulted from its production. Over the last decade, we have witnessed those ‘safety net’ mechanisms being dismantled, leaving a large proportion of society with dwindling resources, while a few people have become obscenely wealthy. The language of “incentives” implies that it is human behaviour and not market fundamentalism, that creates growing inequality.

But that isn’t true. Neoliberalism has failed the majority of citizens horribly, the evidence of which is stifling both the UK economy  and our potential as a society. There are a few beneficiaries, who, curiously enough, are working flat out to promote the failing system of economic and social organisation that was ushered in by the Thatcher administration, while viciously attacking any ideas that oppose their dogma and challenge their stack of vested interests.

The Deaton review starts from the premise that not all inequalities are bad. Deaton and the IFS also believe that inequalities based on luck or rigging the system are far worse than those based on the skills of individuals: “If working people are losing out because corporate governance is set up to favour shareholders over workers, or because the decline in unions has favoured capital over labour and is undermining the wages of workers at the expense of shareholders and corporate executives, then we need to change the rules,” Deaton said.

This assumption that cronyism and damaging activities of the rich have left others in poverty has raised hackles in some free-market circles. Ryan Bourne, economist at the Cato Institute, for example. He says the IFS should be careful not to assume wrongdoing just from data showing rising inequalities, and: “Income inequality, for example, can be increased through entrepreneurs making fortunes off hugely welfare-enhancing new products,” he said. Whether or not this is correct, many UK officials are concerned that the market economy is in danger of becoming rigged against ordinary people.”

Andrew Tyrie, chair of the Competition and Markets Authority, the competition watchdog, admitted earlier this year that the authorities had been “slow” to address shortcomings in competition and rip-offs and would in future “be doing and saying a lot more”.

I have a lot more to say on this topic, too.

I’m planning to produce a series of in depth articles on inequality and growing poverty in the UK. To introduce this series of works, I’ve invited a guest writer, Kenura Medagedara.

Here is Kenura’s article:

Despite having the fifth-largest economy in the world, the United Kingdom is a surprisingly unequal society. It has the fifth-highest income inequality in Europe. The top 20% highest earners earn six times more than the poorest 20%. The top 10% of wealthiest households own five times more wealth than the bottom 50%.

These statistics may not come as such a surprise to some of us. Unfortunately, Britain’s historic class divisions are showing signs of increasing. But why is Britain so unequal, especially compared to other wealthy nations? And what can we do about it? These are the questions I’ll be trying to answer in this article.

The problem of inequality

Before I discuss any of this, I should first explain why inequality is so dangerous. We all know that absolute poverty is bad, as it means that people can’t afford to survive. We also understand that undeserved wealth is problematic, as it gives some people an unfair advantage over others. Did you know, for instance, that the third-wealthiest landowner in Britain, Hugh Grosvenor, amassed his £9 billion fortune entirely through inheritance?

Like I said, most people can see the problems with these two issues. However, (as many of those on the right point out), these issues aren’t intrinsic to inequality. It is possible to conceive of an economy where inequality exists, but the poorest household still has its basic needs met, and measures like inheritance tax can somewhat prevent situations like the one described above. So what’s wrong with inequality?

One of the main problems is inequality of opportunity. In any society, there are a limited number of opportunities available. Big companies only have so many vacancies, top universities only have so many places. Even in a society where absolute poverty doesn’t exist, opportunities for social mobility will still be limited. And these opportunities tend to stay in the hands of the rich. There are a wide range of reasons for this, from subtle ones like poorer students facing more mental stress when applying to university than richer ones as the cost of them failing is significantly higher, to more obvious ones like wealthy people being able to afford additional courses and qualifications to make them more qualified for higher-paying jobs. Either way, economic inequality brings about very unfair circumstances.

Money in politics

Another problem is that of political power. In a democracy, everyone’s voice should be heard equally, through universal suffrage. However, money can significantly increase someone’s political power. For example, they can afford a party membership, giving their party more money to spend on advertising campaigns to win elections. They can also make donations to influence policy decisions. In these ways, the wealthy have an unfair say in politics over the economically disadvantaged. Technically, this could be remedied by certain policies, such as all political parties receiving the same amount of funding from the government, but this seems very implausible, so I’d argue that inequality remains the real issue here.

From a more pragmatic perspective, economic inequality actually hinders economic growth. A 2014 study by the OECD found that the UK’s failure to address inequality meant that its economic growth was six to nine percentage points lower than it could otherwise haven been. This is because, as previously mentioned, people from poorer backgrounds find it harder to get good education opportunities as the rich can use their wealth to give them an unfair advantage. As a result, the poor get low-skilled jobs contributing little to the economy, whilst the rich get high-skilled jobs with relatively little competition, and so are generally not as efficient as they should be. It turns out that reducing inequality actually benefits everyone.

Why is the UK so unequal?

Before we can combat inequality, we first need to understand what causes it. In the UK, one of the main causes is the housing market. Currently, only 64% of all households are owned, compared to 71% in 2003. And this is expected to get worse; the average wage in London is 16 times less than what would be needed for a deposit. A house is normally the most expensive asset someone will own. Britain’s situation has meant that the children of homeowners inherited vast sums of money, giving them a huge advantage over people who weren’t as lucky.

This has allowed them to afford their own property, and buy more assets to generate even more wealth. This makes the rich get exponentially richer, whilst the poor are forced to cope with higher rents due to increased housing demand, reducing their disposable income and effectively making them poorer. As a result, 10% of households own 44% of all wealth, while the poorest 50% of households own just 9%.

Education

But this isn’t the whole story; after all, the UK has a fairly average wealth distribution compared to other OECD nations. Another major source of inequality is the education system. Despite the fact that this is often touted as the ‘great equaliser’, only 21% of children eligible for free school meals go to university, compared to 85% of children from private schools. As a result, those from poorer backgrounds tend to get low-paying jobs, whilst the opposite is true for the wealthy. This ensures that the rich stay rich and the poor stay poor.

One major reason for this contrast is the price of nursery. The average price of full-time nursery in the UK is £242 per week, which is roughly 50% of the average household disposable income. Those on lower incomes will struggle to afford this compared to richer parents. This may explain why economically disadvantaged children even do much worse than their wealthier counterparts in primary school.

Solutions

To solve wealth inequality, the government must reform council tax. This is one of the main reasons why the housing market is in such bad shape. Firstly, this policy is regressive. According to a report by the Institute for Public Policy Research (IPPR), a household in band A property in London pays almost five times what a band H household would pay as a proportion of property value. Additionally, in 2013 the government simultaneously devolved council tax benefits and cut funding for it, forcing councils to start taxing those on the very lowest incomes. As a result, council tax has greatly contributed to economic inequality.

One possible solution is to exempt those on the lowest incomes from paying council tax. This will somewhat stop the tax from being regressive if poor households simply don’t have to pay it. Another, more long term, solution could be to scrap council tax entirely, and replace it with an annual flat rate tax. This would guarantee that the policy is progressive. According to City Metric, a 0.25% tax would raise the same revenue for London as the current system, but 80% of households will pay less.

To solve the gap in education, one possibility is to make nursery free. In a 2016 report on child well-being in rich countries, UNICEF called for high quality early education and care for children to reduce inequality in education. Making it free would certainly achieve this. In addition to this, British charity Teach First, who work to reduce educational inequality, claim that the government needs to increase the amount of teachers in schools in deprived areas. This will reduce class sizes, which plays a big role in the success of the pupils.

Conclusion

To conclude, economic equality is vital to achieve political equality and equality of opportunity, and also creates more economic growth. Two of the main causes of inequality in the UK are the housing market and the education system, both of which require serious reform if we’re to solve this issue.

Inequality is a very complex problem, and I’m not suggesting that this article has magically solved all of the issues that cause it. However, hopefully more discussion on this topic will eventually give us the answers.

If you enjoyed this article, you may want to check out Kenura’s blog for more analysis of British politics.


 

I don’t make any money from my work. But if you like, you can contribute by making a donation which helps me continue to research and write informative, insightful and independent articles, and to provide support to others going through disability  assessment and appeals. The smallest amount is much appreciated – thank you.

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About the government’s claims on ‘real wages’ being ‘the highest since 2011’…


(Update: Raab has removed the original Tweet. Good job I took a screenshot of it).

 

Firstly, the graph does not show what Raab is claiming. The graph does show that after 8 years of Conservative government, real wages are lower than when the coalition took office. In fact they are lower now than they were during the Great Global Recession in 2008. This shows an appalling and shameful record.

After the global recession in 2008, consumer prices rose faster than the average wage, so the real value of wages fell. They continued to fall until 2014.

The average real wage is now actually lower than it was ten years ago.

Following the recession in 2008, average wages fell almost consistently in real terms until mid-2014. From 2014 to 2016, inflation was low and wages increased, though they’re still not back to their pre-recession levels. Now, inflation has caught up again, and real wages are levelling off a little.

Analysis by the Office for National Statistics showed that in 2014, average earnings for full-time workers grew by only 0.1%. However, the average earnings of full-time workers who had been in their job for more than a year rose by 4.1%.

So although the drop in average earnings tells us something important about the economy overall, it’s not the same as what’s happened to everybody working in the UK.

For example, the level of wages is different depending on where you live in the UK. No region’s average full-time weekly earnings is above its 2009 level.

Wages are highest in London, and the population there has also seen the biggest falls in earned income. The average full-time employee in London earned £655 a week in 2017; down from £700 in real-terms in 2009.

The smallest fall was seen in Northern Ireland, where in 2017 the average full-time weekly wage was £504 a week, down from £522 in real terms in 2009. 

People working for the public sector, such as in the NHS, state schools or the civil service, have seen pay growth being restricted in recent years as a matter of policy.

Public sector pay has grown more slowly than private sector pay for the past four years – though recently it has started to catch up, as the caps have recently started to be lifted.

But the private sector suffered large falls in pay during the post-recession years. 

To understand changes to peoples’ incomes we need to also consider tax and benefit changes as well.

Working households’ average income after taxes and benefits has fallen in real terms, from £35,100 in 2008/09 to £34,500 in 2016/17. That has been calculated by adding income to cash social security and then subtracting direct tax (e.g. income and council tax) and indirect taxes (e.g. VAT) for households where at least one person earns income from employment or self-employment. But that doesn’t include some losses such as the bedroom tax. 

The poorest fifth of households paid the most, as a proportion of their disposable income, on indirect taxes – 29.7% compared with 14.6% paid by the richest fifth of households.

Furthermore, the effects of taxes and benefits (ETB) data from the Office for National Statistics’s (ONS’s) Living Costs and Food Survey (LCF), are from a small, voluntary sample survey on which these data are calculated which comprises of around just 5,000 private households in the UK.

The ONS say themselves that the sample tends not to include the very poorest and the very wealthiest citizens. That means there is under-reporting at the top and bottom of the income distribution as well as non-response error (see The effects of taxes and benefits upon household income Quality and Methodology Information report for further details of the sources of error.

That is likely to distort the view of the extent of income inequality.

It’s also worth looking at some comparison at an international level, too.

Oh dear.

When citizens use a public service, it’s viewed as a ‘payment in kind’

‘Benefits in kind’ – education and healthcare, for example – are also added to the final amount of income that citizens are estimated to have. However, this distorts the calculation of average income levels. Citizens pay taxes and so contribute towards paying for these services, and the poorest citizens are likeliest to rely on them rather more than the wealthiest citizens.

This means that in effect, poorer citizens using public services appear to be better off than they actually are, since using public services does not increase incomes. In fact the smaller the income that citizens have, the more likely it is that they will need to use public services. That does not make them any wealthier than they are.

Consequently, the ratio of income of the richest fifth to the poorest fifth appears to fall from twelve to one, to five to one. The inclusion of indirect taxes (for example, alcohol duties, Value Added Tax (VAT) and so on) and benefits in kind (for example, education, National Health Service) further reduces this ratio to less than four to one. 

That does not present an accurate picture regarding income distribution. The poorest fifth of households received relatively larger amounts of ‘benefits in kind’ in 2017. This however, is not income. Nor is it a ‘gift’, since most people have paid into the Treasury and contributed council tax towards the services that they may need to use.

It’s almost like charging people twice for public services, which is utterly disgraceful. It would be very interesting to see the calculation of UK income distribution without this political cheat, that makes it look as though the poorest citizens are rather better off than they actually are. 

Finally, its worth remembering that despite their claims, the Conservatives inherited an economy that had escaped the impact of the global crash, and was out of recession by the last quarter of 2009. By 2011, the Conservatives put us back in recession. It’s what Conservatives do. Thatcher and Major both created recession in the UK, as did Cameron’s government. Despite pledging to keep our triple A level international Fitch and Moody credit ratings – another thing the Tories inherited – Obsorne lost them. Then in 2016, the UK was stripped of its last AAA rating as credit agency – Standard & Poor’s –  who warned of the economic, fiscal and constitutional risks the country now faces as a result of the EU referendum result.

The two-notch downgrade came with a warning that S&P could slash its rating again. It described the result of the vote as “a seminal event” that would “lead to a less predictable stable and effective policy framework in the UK”.

Yet the Conservatives claim they are the party of ‘economic competence’. You just have to laugh at that. 

Image result for a big labour boy osborne kittysjones

I’ll leave you with this comment, which made me chuckle:

Update

Wages are still worth a third less in some parts of the country than a decade ago, according to a report. Research by the Trades Union Congress (TUC) found that the average worker has lost £11,800 in real earnings since 2008.

The organisation said that the UK has suffered the worst real wage slump among leading economies

The biggest losses have been in areas including the London borough of Redbridge, Epsom and Waverley in Surrey, Selby in North Yorkshire and Anglesey in north Wales, the studyfound.

Workers have suffered real wage losses ranging from just under £5,000 in the north-east to more than £20,000 in London, said the report.

The TUC general secretary, Frances O’Grady, said: “The government has failed to tackle Britain’s cost-of-living crisis. As a result, millions of families will be worse off this Christmas than a decade ago.

“While pay packets have recovered in most leading economies, wage growth in the UK is stuck in the slow lane.

“Ministers need to wake up and get wages rising faster. This means cranking up the pressure on businesses to pay staff more, especially at a time when many companies are sitting on large profits.”

A government spokesman said: “The UK’s jobs market has never been stronger, employment is at a record high with more people in work in every region of the UK since 2010 and wages are now rising at their fastest in a decade.

“We have cut income tax for 31 million people, and through the national living wage we have helped to deliver the fastest wage growth in 20 years for over two million of the lowest-paid workers.”

Stephen Clarke, senior economic analyst at the Resolution Foundation thinktank, said: “While wages are currently growing at their fastest rate in a decade and employment is at a record high, the sobering big picture is that inflation-adjusted pay is still almost £5,000 a year lower than when Lehman Brothers was still around.

“Stronger wage growth is needed to make 2019 a better year for living standards than this one.”

A change from the government that is utterly conservative with the truth would be a good starting point.


 

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Universal Discredit

Philip Alston, UN special rapporteur on extreme poverty and human rights, travelled across the country to examine the impact of austerity. He came to Newcastle, visiting a West End foodbank, among other places. He concluded that Universal Credit and other ‘reforms’ are “entrenching high levels of poverty and inflicting unnecessary misery.” According to his research, 14 million people – a fifth of the population – live in poverty. Four million of these are more than 50% below the poverty line, and 1.5 million are destitute, unable to afford basics essentials. Alston said: “In the fifth richest country in the world, this is not just a disgrace, but a social calamity and an economic disaster, all rolled into one.” 

Universal Credit has been designed to change the relationship between the state and citizens. It is about altering the public’s expectations of the role of government. It is about deepening targeted austerity. It is also about cutting social security and dismantling the welfare state. 

The one-off £10 payment, which was designed to be an extra boost to families over the festive period, has been axed under Universal Credit, which demonstrates very well what kind of “mean spirited” intentions went into the design of system. I rang the Department for Work and Pensions press office to confirm this and it was affirmed that the cut has happened. A spokesperson said: “Universal Credit claimants have never received a one-off December payment, but many disabled people on Universal Credit will be better off on average by £100 month than when they received Employment and Support Allowance (ESA).”

Yesterday, someone I know through social media sent me a copy of a notice they got when they logged onto the Universal Credit system. It said: Image may contain: text

So, if an employer pays his employees early in December due to the Christmas holiday period or pays a Christmas bonus, people may well receive a reduced Universal Credit payment in December or none at all. This is due the fact that the unadaptable system cannot cope with people being paid twice in one assessment period, even though it isn’t an additional payment, it is simply an early payment. 

Judicial reviews

The controversial Universal Credit programme is to undergo another legal challenge at the High Court in London, as evidence mounts further that the new social security system will leave thousands of people already on low incomes significantly worse off. Four women are taking the government to court because of this reason.

This is the second judicial review of Universal Credit. It follows the High Court’s finding in June that the Universal Credit system was unlawfully discriminating against severely disabled people. Those who had qualified for the support component of income-related Employment and Support Allowance (ESA) are also eligible for a disability premium.  However, as a result of the abolition of both the severe disability premium (SDP) and enhanced disability premium (EDP) under Universal Credit rules, according to the disability charity, Scope, the cut to the disability income guarantee will see disabled people lose as much as £395 a month

The high court judge ruled that the Department for Work and Pensions unlawfully discriminated against two severely disabled men who both saw their benefits dramatically reduced when they moved Local Authority – one of them because of the bedroom tax – and were required to claim Universal Credit. The court found that the implementation of Universal Credit and the absence of any ‘top up’ payments for this vulnerable group as compared to others constitutes discrimination contrary to the European Convention on Human Rights.

Since the court case, Esther McVey, then Secretary of State for Work and Pensions, announced that no severely disabled person in receipt of the SDP will be made to move onto Universal Credit until transitional protection is in place. She also committed to compensating those like the two claimants who have lost out on their disability premium because they had to claim Universal Credit.

Yet despite this, Secretary of State for Work and Pensions has sought permission to appeal, maintaining that there was “nothing unlawful” with the way the claimants were treated.

The second judicial review comes amid mounting concern over Universal Credit, which academics have described as a “complicated, dysfunctional and punitive” system pushing people into debt and rent arrears. 

Last week it emerged that more than half of people denied Universal Credit were found to be entitled to it when their cases were investigated, prompting fresh demands for the national rollout of the new system to be halted. It’s something of an irony, given that Universal Credit was introduced in 2013 with the stated intention of bringing “fairness and simplicity” to Britain’s social security system.

Now, four plaintiffs say the flaw, which relates to the way Universal Credit monthly payments are calculated, disproportionately affects working parents with children and leaves claimants with a “dramatically fluctuating income” and unable to budget from month to month.

In one case uncovered by the Child Poverty Action Group (CPAG) reported by The Guardian, a family’s monthly payment swung from £1,185 to zero, making budgeting impossible. One of the women has said that as well as being irrational, the payment system is also discriminatory as it disproportionately affects single parents, who are predominantly female. Last month, MP Frank Field said the system was driving some women in his constituency into sex work in a bid to avoid absolute poverty.

A single mother says she was forced to turn down a promotion and use a food bank after issues with the assessment period for the new benefit system made it “impossible to budget”.  

She said: “I invested £40,000 in higher education studies so that I could become an occupational therapist and it’s great that I’ve got my degree but I have had to put my career hopes on hold because of Universal Credit.  

“I had to go to a food bank and I took out an advance that I am still paying back. I took two jobs – as a PA and a waitress – which I could do without the education I invested in but which had paydays which don’t clash with my assessment period. I wanted to become free of welfare through my chosen profession but Universal Credit is holding me back from that.” 

Although she had originally wanted a healthcare job, which was relevant to her degree and would move her nearer earnings that would eventually take her out of the social security system altogether, she found that the NHS and other health organisations mostly paid salaries at the end of the working month so she would face the same assessment period trap. 

She left the council and initially took two part time jobs, and she now has one part time job.

Her solicitor, Carla Clarke of Child Poverty Action Group (CPAG), said: “Universal Credit is promoted as a benefit that ‘incentivises’ work but in practice its rigid assessment period system undercuts that claim. 

“Our clients have been left repeatedly without money for family essentials simply because of the date of their paydays.

“One of them, for example, did her utmost to find a workaround but ultimately had to decline a promotion in a job with good prospects when her then contract came to an end just to escape the trap.

“We say that the DWP’s refusal to alter our clients’ assessment period dates to avoid this problem discriminates against working parents – one of the two groups who are entitled to a work allowance – as well as being irrational and undermining one of the stated purposes of universal credit – to make sure that ‘work always pays’.”

CPAG argues that the DWP refusal to alter Woods’ assessment period dates to avoid the problem discriminated against working parents – one of the two groups who are entitled to a work allowance – as well as being “irrational and undermining.” 

Clarke added “This is a fundamental defect in Universal Credit and an injustice to hard-working parents and their children that must be put right for our clients and everyone else affected”.

Another of the women involved in the court case is paid by her employer on the last working day of each month. However, the Universal Credit assessment periods run from the last day of each month, meaning that if she is paid before the last day of the month she is assessed as having been paid twice that month.

Lawyers from the legal firm supporting  Johnson at LeighDay, say: “This has resulted in her receiving fluctuating Universal Credit payments throughout the year, making it very hard to budget from one month to the next.”

They add: “It has also caused her to be around £500 worse off annually due to the fact that she is entitled to ‘work allowance’ as a parent.

“The work allowance is a disregard of £198 per month of a parent’s monthly earnings so in months where she is treated as having no earned income, she loses the whole benefit of the work allowance. In months where she is treated as having double income, she does not receive any extra work allowance.”

Legal aid for social security appeals is almost entirely gone. People adversely affected by unfair decisions are effectively being denied support in accessing justice. It’s difficult to see this as anything other than a planned and coordinated attack on people’s most basic human and democratic rights. 

Universal Credit increases and extends the risk of domestic abuse

Couples who live together are required to make a single household claim for Universal Credit. Their individual entitlements are calculated—based on household income—and combined into a single payment, paid into one account only. In December 2017, 55,000 couple households, including 40,000 with dependent children, were claiming Universal Credit. Once it is fully rolled out, around 2.9 million couple households will claim it. MPs have warned that Universal Credit increases the risk of allowing domestic abusers to exert financial control over victims. 

A critical report by the Work and Pensions committee in August said the way Universal Credit is paid per household means that perpetrators could too easily take control of the entire budget, leaving vulnerable women and their children dependent on an abusive partner to survive. Frank Field, Labour chair of the committee, said: “This is not the 1950s. Men and women work independently, pay taxes as individuals, and should each have an independent income.

“Not only does Universal Credit’s single household payment bear no relation to the world of work, it is out of step with modern life and turns back the clock on decades of hard-won equality for women.”

He added “The government must acknowledge the increased risk of harm to claimants living with domestic abuse it creates by breaching that basic principle, and take the necessary steps to reduce it.”

Ministers were urged by the committee to consider overhauling the system so payments are automatically split between couples, as victims face “great danger” if they request their own payments under current rules.

The report said: “Universal Credit currently only allows claims to be split between partners in ‘exceptional circumstances’.

“The DWP itself recognises the risk that requesting such an arrangement poses to survivors. The perpetrator will realise the survivor has requested the split when their own payments fall, potentially putting them in great danger.

“In light of this risk, many survivors simply will not request a split.”

The committee also suggested the main carer of children should automatically receive the whole payment, while officials explore ways to develop a split payment scheme. JobCentres must set aside private rooms for vulnerable claimants and appoint a domestic violence specialist to deal with specific claims, the report also said.

Katie Ghose, chief executive of Women’s Aid, said: “We have long been warning that Universal Credit risks making the domestic abuse worse for survivors and putting an additional barrier in the way of them escaping the abuse.

“That’s why we welcome the committee’s report and urge the government to take action to make Universal Credit safe for survivors.

“We know from our work with survivors that abusers will exploit single household payments, yet applying for a split payment can also be dangerous. If the abuser finds out that a survivor has made an application, she may be at further risk.”

Domestic abuse is hugely complex, and the training Work Coaches currently receive leaves them ill-equipped to perform this vital function. Under Universal Credit, claimants living with domestic abuse can face seeing their entire monthly income—including money meant for their children—go into their abusive partner’s account. There is no guarantee that any of the money they need to live or care for their children will reach them. That risks them remaining dependent on their abusive partner and making it much harder for them to leave, should the opportunity present itself.

Yet the Scottish Parliament has passed legislation which requires the Scottish Government to introduce split payments by default.

Universal Credit is perpetuating gender inequality – an issue that the Equality and Human Rights Commission have also raised concerns about. If money is paid into an abuser’s account, that compromises a woman’s financial autonomy. Their recent report recommends:

  • offering Universal Credit as single payments to individuals rather than joint payments to avoid exacerbating financial abuse for women experiencing domestic violence
  • reconsidering the ‘spare room subsidy’ regulations which discriminate against survivors of domestic abuse who have safe rooms.

But the government justifies the policy by claiming that few couples manage their finances separately. They argue that paying one benefit into a single bank account means families can make decisions about their household finances without government interference. However, this assessment ignores the realities of women trapped in controlling relationships.

Two child policy – regarding children as a commodity, and some say, eugenics by stealth

This policy restricts support through means-tested family benefits to two children only and affects the child tax credit payable for all third or subsequent children born after April 2017 and all new claims for Universal Credit, whenever they were born. In doing so, the two-child policy breaks the fundamental link between need and the provision of minimum support and implies that some children, by virtue of their birth order, are less deserving of support. It is a very large direct cut to the living standards of the poorest families of up to £2780 per child, per year.

In 2015/16 — the latest year for which data is available — 27 per cent of households with children had more than two children, representing more than 1 in 3 children in poverty (after housing costs). The risk of poverty is already 39 per cent for households (after housing costs) with three or more children compared with 26 per cent for one- and 27 per cent for two-child families. The most recent statistics reveal that during the first year of operation, 59% of the 73,500 families who lost financial support for a third child were in work. Nine per cent of UK claimant households with three or more children were affected.

A number of groups in the population are particularly likely to be hard hit by the policy, including Orthodox Jews, Pakistani and Bangladeshi families, and Roman Catholics. It will also hit large families bereaved by the loss of  a parent, divorced families, and all large families falling upon hard times and needing to claim means-tested support.

Originally there were no intentions to make exceptions to the two-child policy, but the government was forced to make concessions for, among others, third and subsequent children under kinship care and those conceived as a result of rape — which in itself forces highly sensitive disclosure. A number of women’s rights and rape support organisations have raised serious concerns about the third-party evidence model for the rape/coercion exception and the risk that women claiming this exception will be exposed to further trauma and gross breaches of privacy.

The so-called rape clause has been condemned by campaigners, who say it is outrageous that a woman must account for the circumstances of her rape to qualify for support. The SNP MP Alison Thewliss called it “one of the most inhumane and barbaric policies ever to emanate from Whitehall”.

A government spokesperson said: “The policy to provide support in child tax credit and universal credit for a maximum of two children ensures people on benefits have to make the same financial choices as those supporting themselves solely through work.

The rationale for the two-child limit was to reduce the deficit by £1.36 billion per year by 2020/21. But the government also sought to justify it on the basis that they are hoping to ‘change behaviours’ — hoping to ‘encourage parents to reflect carefully on their readiness to support an additional child’. Yet, the savings to be made from the policy are quite modest in the context of the austerity cuts of £27 billion per year since 2010.

The rollout of Universal Credit will increase the number of families affected. All new claims for the benefit after February 2019 will have the child element restricted to two children in a family, even if they were born before the policy was introduced.

The government estimated 640,000 families will lose support as a direct result of the proposed changes. The Children’s Society estimate that the total loss of a child element plus the family element of child tax credit will mean that a family with three children will lose up to £3,325 per year. A family with four children will lose up to £6100. Troublingly, disabled children will also be affected by this measure on top of the major cuts in children’s disability support through Universal Credit.

Jamie Grier, the development director at the welfare advice charity Turn2us, has spoken out about mothers in low income families faced with the agonising choice of terminating wanted pregnancies already, because of their financial circumstances.

Alison Garnham, the chief executive of Child PovertyAction Group, said: “An estimated one in six UK children will be living in a family affected by the two-child limit once the policy has had its full impact. It’s a pernicious, poverty-producing policy.”

The Institute for Fiscal Studies has projected that 600,000 more children will live in absolute child poverty by 2020/21 compared with 2015/16 — all of them in families with three or more children. The absolute child poverty rate is to increase over that period from 15.1 per cent to 18.3 per cent. The two-child limit accounts for around a third of this impact. Absolute poverty is when people can’t meet one or more of their basic survival needs.

The policy is extremely likely to contravene human rights treaties to which the UK is a signatory, including those relating to women’s reproductive rights and protection from religious and gender-based discrimination contrary to Article 16 of the Convention on the Elimination of all Forms of Discrimination Against Women.

It would also discriminate against groups with a conscientious objection to contraception and abortion, or for whom large families are a central tenet of faith, in breach of Article 14 of the European Convention on Human Rights. Furthermore, it fails to give primary consideration to the best interest of the child in contravention of Article 3(1) of the UN Convention on the Rights of the Child. 

The UN Committee on Economic, Social and Cultural Rights raised a specific concern about the effect of cuts to social security on the standard of living enjoyed by families with two or more children in the Concluding Observations of its recent review of the UK’s compliance with the International Covenant on Economic, Social and Cultural Rights. The policy is going to be challenged in the courts on discrimination grounds and may well reach the Supreme Court and European Court of Justice. 

Context and policy intent

Universal credit is the controversal reform of the social security system, rolling together six so-called “legacy” benefits (including unemployment benefit, employment and tax credits and housing benefit) into one benefit paid monthly to claimants, to “make work pay.”

However, at a time of stagnant wages and ever-increasing living costs, the government slogan ‘making work pay’ is certainly not about a national wage increase. It’s rather more about neoliberal supply-side ideology.  Supply-side policies include the promotion of greater competition in labour markets, through the removal of what are deemed ‘restrictive practices’, and labour market rigidities, such as the protection of employment and workers’ rights. For example, as part of  neoliberal supply-side reforms in the 1980s, trade union powers were greatly reduced by a series of measures including limiting workers’ ability to call a strike, and by enforcing secret ballots of union members prior to strike action. More recently the Conservatives have again made substantial legislative changes that undermine the role of trade unions.

Deregulation and privatisation of state industry and services are also components of supply-side economics. Supply-side measures have a negative effect on the distribution of income. For example, lower taxes rates for the wealthiest, lower wages for workers, reduced union power, and privatisation have all contributed to a widening of the gap between rich and poor citizens. Universal Credit facilitates a supply-side labour market, it coerces people into accepting low paid, insecure work. Any work.

People claiming Universal Credit do not get a say in the kind of work they take on. If people don’t comply with Universal Credit conditionality they are generally sanctioned. This entails a loss of welfare support for between four weeks and up to a maximum of three years for refusing to take a job or prescribed community work. 

Some economists argue that a lack of bargaining power because union membership has been in long term decline – is leading to fewer widespread agreements on earnings increases, which has served to  keep wages stagnant. A lack of employee confidence and certainty following the recession and fears, then, over job losses has also led to fewer demands for rises.

Given that collective bargaining has been politically undermined, it is particularly outrageous that the government has introduced sanctions for those on low pay and in work, for a failure to single handedly negotiate better pay or an increase in working  hours with their employer. 

Perhaps we should ask “making work pay” for whom?

It’s interesting that the government have outlined what Universal Credit means for employers, indicating the intent behind the policy is not about mitigating poverty. It’s about employers “having access to a more flexible and responsive workforce, which can help your business with the challenges of filling vacancies.

“Universal Credit payments automatically adjust each month based on the real time PAYE information you report to HMRC, so it’s important that you report this information accurately and on time.”

The ‘business friendly’ government says “Universal Credit increases the financial incentive of work and provides employers like you with a more flexible workforce.”

So while employers are promised a workforce that will accept more, in terms of conditions, rates of pay and job security, the same workforce is being set up to fail when trying to negotiate more pay and longer hours by the government’s ‘business friendly’ deregulation. And failure can mean facing having their Universal Credit cut via sanctions.

It does go on to say on the site that “Jobcentre Plus work coaches will encourage claimants to discuss with their employers how they can increase their chances of earning more. This could be by improving their skills which may help them to take on more responsibilities. You may find your employees asking for more hours or for help with building their skills. You can play a role in this – helping your business become more productive.”

So, employers “can” but workers “must”, despite the substantial imbalance of power, made worse by the fact that workers are being coerced into “flexibility”. That invariably means lowering their expectations of employers and of the conditions of their employment.

The publicly stated aim of Universal Credit, for which there was orginally general support across the political divide, was to simplify the welfare system, making it more “efficient” and easy to access at a single claim point. Despite these claims, many have complained that Universal Credit is bafflingly complex, unreliable and difficult to manage, particularly if you are without internet access, and that Universal Credit staff are often poorly trained. The combination of these problems is leaving people in precarious and very vulnerable circumstances.

For families and lone parents in particular, there are barriers to taking short term low paid work, as continuity of income and availability of childcare are key priorities for parents.

The Conservatives have also claimed that the new benefit will provide incentives for people to work rather than stay on benefits. Perhaps it’s worth noting that only 34% of people claiming state welfare are of working age, the majority – 66% – are people of pension age.

The government say “It is intended that by introducing a single in-work and out-of-work benefit, previous barriers to employment such as taking up temporary employment or fewer hours are removed, therefore making it easier for claimants to take up any work and changing claimant perceptions of work and welfare, and their employment behaviours, at an individual and household level.”

The Conservatives go on to claim that employment levels are at a record high, because Universal Credit is “working”. Some 80% of men are in work, the joint highest employment rate since 1991. And over 70% of women are in work, the highest employment rate since records began in 1971. But that increase is down, partly, to state pension age changes which mean fewer women are retiring between the ages of 60 and 65. 

However, as I have indicated, the structure of the employment market also matters. Zero hours contracts and hyper-flexible employment might be welcomed by some for the options they offer, but they work against collective bargaining agreements on earnings, keeping wages low. And low wages, not lack of incentives, are the reason why people need welfare support. The trade union wage gap, the difference in earnings of union members compared with non-members, is 16.9% in the public sector and 7.1% in the private sector (which employs well over 80% of people). There cannot be any genuine economic ‘bounce back’ until the UK’s decade-long stagnation in wages ends.

Universal Credit was supposedly intended as a payment to help people with living costs. It’s for those on a low income or out of work. As of February this year, the number of people on Universal Credit was 770 thousand. Of these people 300 thousand were in employment. The intention embedded in the design of Universal Credit to force up to a million low-paid workers to seek more hours or move to higher-paid jobs, under threat of financial sanctions (in-work conditionality), is another ticking bomb.

It is being introduced in stages across the country.  People claiming Universal Credit receive a single monthly household payment, paid into a bank account in the same way as a monthly salary; support with housing costs will usually go direct to the person claiming as part of their monthly payment. 

People will usually make a claim for Universal Credit online, during which initial claim verification will take place. This entails people providing evidence of their identity. However, there have been some problems highighted with the government’s verification framework. 

MP for Liverpool Walton, Dan Carden, called on the Department of Work and Pensions (DWP) to postpone the roll-out of Universal Credit in his constituency until after Christmas and highlighted an issue with people having to pay out for a driving licence as one of many administrative problems with the new system.

In a letter to the secretary of state, Amber Rudd MP, Carden said: “We have families experiencing poverty on an unprecedented scale and now facing further avoidable hardship in the run up to Christmas. 

“I have now been informed that job centres across Liverpool are advancing payments to my constituents to obtain provisional driving licences for the purposes of identification and then deducting the cost from their benefits.

“Constituents are also having to pay for postal orders, passport photographs and postage, just to obtain provisional licences.”

He explained that the DVLA says there is a five-week wait for provisional licences, and highlighted the delays before the first payments are made when someone is transferred on to Universal Credit.

The controversial benefit is being rolled out in many parts of Liverpool this week. Carden added: “Continuing with this roll-out will leave many of the most vulnerable families in Liverpool Walton destitute by Christmas and I am therefore asking you to intervene as a matter of urgency.”

Rudd’s response was to say Carden was ‘scaremongering’, and she denied that ID was needed to claim Universal Credit. However, it seems she failed to bother checking her own government’s web site for advice and evidence. The site which outlines how to claim Universal Credit  completely contradicts Rudd’s claims, it says on the government’s site:

Amber rudd lies 1

Amber rudd lies 2

When people apply for Universal Credit they are asked to verify their identity online via the GOV.Verify service. 

To do so, you need either;

  • A valid UK driving license
  • A valid UK passport.

On the government document it says “Universal Credit cannot be paid to a claimant whose identity has not been verified. Failure to provide identity documentation means that there is no valid claim.”

Of course this creates significant problems for those without the required documents. Their Universal Credit claim cannot go ‘live’ without conforming to the ID verification framework. People generally can’t get an advance because their claim isn’t live. Once they’ve received their new ID document, (takes around 6-8 weeks usually), it’s then a further 5 weeks (at least) until their first Universal Credit payment. That’s a very long time to go without support that is intended to meet people’s most basic living needs: food, fuel and shelter. 

According to the government web site, you can only apply for an advance on your first payment if you have already verified your identity. It says:

You can apply for an advance payment in your online account or through your Jobcentre Plus work coach.

You’ll need to:

  • explain why you need an advance
  • verify your identity (you do this online when you submit your Universal Credit claim or at your first Jobcentre Plus interview)
  • provide bank account details for the advance (talk to your work coach if you cannot open an account.)

The claim date is the date that a claimant completes this process and submits their claim. After making a claim, an initial interview will take place with the claimant, where the eligibility for Universal Credit will be confirmed and the claimant will accept a Claimant Commitment. Failure to comply with the Commitment without ‘good reason’ will result in a sanction. What constitutes a ‘good reason’ unfortunately varies from area to area and even among advisors in the same building. One of the many criticisms of welfare sanctions is how arbitrary they are. Universal Credit is a far stricter regime than the previous ones, and indications are that people are being sanctioned more frequently.

The Universal Credit project was passed through legislation in 2011 under the patronage of its loudest champion, former secretary of state for work and pensions Iain Duncan Smith. The plan was to roll it out across the UK by 2017. However, a series of management failures, expensive IT blunders and design faults mean it has fallen at least five years behind schedule.

Under the current schedule it will be fully implemented to include about 7 million claimants by 2022-23, when it is estimated that it will account for around £63bn of spending. A substantial proportion of that is due to administration blunders. Earlier this year, the National Audit Office said “The benefits that it set out to achieve through Universal Credit, such as increased employment and lower administration costs, are unlikely to be achieved.”

The administrative cost of every Universal Credit claim is an eye-watering £699 per case against an ultimate target of just £173, others in the field are calling to stop this utter shambles now and reconsider all options. 

The Department is seriously criticised for “a lack of regard in failing to understand the hardship faced by some claimants”. Forget normal Whitehall tact, here are eight years of unrelenting failure, ploughing on despite alarms as costs rose to £2bn. One of the most urgent needs is to restore the £23bn that George Osborne cut from the budget, which is due to cause a record 37% of children in poverty by 2022, according to the Institute for Fiscal Studies. That’s likely to be a conservative estimate.

Despite a few minor changes, such as shortening the waiting period by a week, huge underlying problems remain with Universal Credit. Multibillion-pound cuts to work allowances imposed by the former chancellor have left it hollowed out. According to the Resolution Foundation thinktank, Universal Credit will leave about 2.5 million low-income working households more than £1,000 a year worse off. Reversing those cuts requires a political decision, not more tinkering around the edges and technical fixes.

Universal Credit is paid monthly, in arrears, so people have to wait one calendar month from the date they submitted their application before their first UC payment is made. This is called the assessment period. People then have to wait up to seven days for the payment to reach your bank account. That is of course providing everything goes right. 

So far, the ‘customer’ experience of Universal Credit for too many people (and other stakeholders, such as landlords) has been utterly dismal. Critics argue that Treasury cuts to the benefit mean it is now far less likely to incentivise people to move into work, or to work more hours – what the Conservatives call ‘in-work progression’. As a result of cuts, Universal Credit is significantly less generous than originally intended, leaving many claimants worse off when they move on to it than they were while claiming legacy benefits. Added to that are design flaws and administrative glitches that put poorer claimants especially at heightened risk of hunger, debt and rent arrears, ill-health and homelessness. 

Their report is intended to help the Council and partners to further develop the approach to supporting those affected by current and future welfare reforms. 

It builds on Sheffield Hallam University research published in March 2016 which suggested that welfare reforms have cost the city’s economy the equivalent of £157M per year, set to rise to £292M per year by 2020. Liverpool City Council has had a 58% cut in central government funding since 2010 and has to find another £90M in savings by 2020, is having to use around £7M of those reduced funds to help with rent top ups and crisis payments.

Liverpool Food People are part of a food insecurity sub group that reports into The Mayoral Action Group on Fairness and Tackling Poverty – food has been identified as one of the basic needs – and a recommendation within the report is that action to address food poverty and fuel poverty is coordinated across the city and that research is carried out on the level of food insecurity (both moderate and severe) across the city. 

New research conducted for Gateshead council concludes that Universal credit has become a serious threat to public health after the study revealed that the stress of coping with the new benefits system had so profoundly affected peoples’ mental health that some considered suicide.

The researchers found overwhelmingly negative experiences among vulnerable citizens claiming Universal Credit, including high levels of anxiety and depression, as well as physical problems and social isolation, all of which was exacerbated by hunger and destitution.

The Gateshead study comes as the United Nation’s special rapporteur on extreme poverty and human rights, Philip Alston, prepares to publish a report of the impact of Conservative austerity in the UK. Alston has been collecting evidence and testimonies on the effects of the welfare reforms, council funding cuts, and Universal Credit during a two-week visit of the UK. 

This research is highly likely to raise fresh calls for the system’s rollout to be halted, or at the very least, paused to attempt to fix the fundamental design flaws and ensure adequate protections are in place for the most vulnerable people claiming it.

Approximately 750,000 chronically ill and disabled claimants are expected to transfer on to Universal Credit from 2019. Yet earlier this year, the first legal challenge against Universal Credit found that the government unlawfully discriminated against two men with severe disabilities who were required to claim the new benefit after moving into new local authority areas. Both saw their benefits dramatically reduced when they moved to a different Local Authority and were required to claim Universal Credit instead of Employment and Support Allowance.

The study findings are yet another indication of how unfit for purpose Universal Credit is. Six of the participants in the study reported that claiming Universal Credit had made them so depressed that they considered taking their own lives. The lead researcher, Mandy Cheetham, said the participant interviews were so distressing she undertook a suicide prevention course midway through the study.

The report says: “Universal Credit is not only failing to achieve its stated aim of moving people into employment, it is punishing people to such an extent that the mental health and wellbeing of claimants, their families and of [support] staff is being undermined.”

One participant told the researchers: “When you feel like ‘I can’t feed myself, I can’t pay my electric bill, I can’t pay my rent,’ well, all you can feel is the world collapsing around you. It does a lot of damage, physically and mentally … there were points where I did think about ending my life.”

An armed forces veteran said that helplessness and despair over Universal Credit had triggered insomnia and depression, for which he was taking medication. “Universal Credit was the straw that broke the camel’s back. It really did sort of drag me to a low position where I don’t want to be sort of thrown into again.”

Unsurprisingly, the report concludes that Universal Credit is actively creating poverty and destitution, and says it is not fit for purpose for many people with disabilities, mental illness or chronic health conditions. It calls for a radical overhaul of the system before the next phase of its rollout next year.

Alice Wiseman, the director of public health at Gateshead council, which commissioned the study, said: “I consider Universal Credit, in the context of wider austerity, as a threat to the public’s health.” She said many of her public health colleagues around the country shared her concerns.

Wiseman said that Universal Credit is “seriously undermining” efforts to prevent ill-health in one of the UK’s most deprived areas.

She added “This is not political, this is about the lives of vulnerable people in Gateshead. They are a group that should be protected but they haven’t been.”

The qualitative study focused on those claimants with disabilities, mental illness and long-term health conditions, as well as homeless people, veterans and care leavers.

The respondents found that compared to the legacy benefits, Universal Credit is less accessible, remote, inflexible, demeaning and intrusive. It was less sensitive to claimants’ health and personal circumstances, the researchers said. This heightened peoples’ anxiety, sense of shame, guilt, and feelings of loss of dignity and control.

The Universal Credit system itself was described by those claiming it as dysfunctional and prone to administrative error. People experienced the system as “hostile, punitive and difficult to navigate,” and struggled to cope with payment delays that left them in debt, unable to eat regularly, and reliant on food banks.

The government claimed that people making a new claim are expected to wait five weeks for a first payment. That’s a long time to wait with no money for basic living requirements. However, the average wait for participants on the study was seven and a half weeks, with some waiting as long as three months. Researchers were told of respondents who were so desperate and broke they turned to begging or shoplifting.

Wiseman made a point that many campaigners have made, and said that alongside the human costs, Universal Credit was placing extra burdens on NHS and social care, as well as charities such as food banks. It also affected the wellbeing of advice staff, who reported high stress levels and burnout from dealing with the fallout on those claiming the benefit.

Guy Pilkington, a GP in Newcastle said that the benefits system had always been tough, but under Universal Credit, those claiming faced a higher risk of destitution.

“For me the biggest [change] is the ease with which claimants can fall into a Victorian-style system that allows you to starve. That’s really shocking, and that’s new,” he said.

A spokesperson for the Department for Work and Pensions (DWP) said: “This survey of 33 claimants doesn’t match the broader experience of more than 9,000 people receiving Universal Credit in Gateshead, who are taking advantage of its flexibility and personalised support to find work.”

“We have just announced a £4.5bn package of support so people can earn £1,000 more before their credit payment begins to be reduced, and we are providing an additional two weeks’ payments for people being moved from the old system.”

That will still leave people with nothing to live on or to cover their rent for at least three weeks. The study focused on those less likely to be able to work – people with disabilities, mental illness or chronic health conditions. The DWP failed to recognise that this group have different needs and experiences than the broader population, which leave them much more likely to become vulnerable when they cannot meet their needs.

Vulnerable people are suffering great harm and some are dying because of this government’s policies. It is not appropriate to attempt to compare those peoples’ experiences with some larger group who have not died or have not yet experienced those harms. Where is the empirical evidence of these claims, anyway? Where is the DWP’s study report?

Callousness and indifference to the suffering and needs of disadvantaged citizens – disadvantaged because of discriminatory policies – has become so normalised to this government that they no longer see or care how utterly repugnant and dangerous it is.

The DWP are not ‘providing’ anything. Social security is a publicly funded safety net, paid for by the public FOR the public. It’s a reasonable expectation that citizens, most of who have worked and contributed towards welfare provision, should be able to access a system of support when they experience difficulties – that is what social security was designed to provide, so that no one in the UK need to face absolute poverty. It’s supposed to be there so that everyone can meet their basic survival needs.

What people in their time of need find instead is a system that has been redesigned to administer punishments, shame and psychological abuse. What kind of government kicks people hard when they are already down?

Universal Credit was considered the antidote for the Conservative’s ‘welfare dependency’ myth, yet there has never been any empirical evidence to support their claims of the existence of a ‘culture of dependency’ and that’s despite the dogged research conducted by Keith Joseph some years ago, when he made similar claims. He never found any evidence despite trying very hard. Most people move in and out of work, because jobs have become increasingly precarious over the last few years. 

In fact over recent years, an international study of social safety nets from The Massachusetts Institute of Technology (MIT) and Harvard economists categorically refutes the Conservative ‘scrounger’ stereotype and dependency rhetoric.  Gabriel Kreindler, Benjamin Olken and colleagues re-analyzed data from seven randomized experiments evaluating cash programs in poor countries and found “no systematic evidence that cash transfer programmes discourage work.”

The phrase ‘welfare dependency’ diverts us from political class discrimination via policies, increasing inequality, and it serves to disperse public sympathies towards the poorest citizens, normalising the inequality and prejudice embedded in neoliberal ideology and resetting social norm defaults that then permit the state to target protected social groups for further punitive and cost-cutting interventions to ‘incentivise’ them towards ‘behavioural change.’ Outrageously, the behavioural change required by the state is that the public do not use publicly funded welfare services.

Stepping back from this, it becomes clear that the policy driver is ‘small state’, antiwelfarist neoliberal ideology. This is being propped up by pseudoscientific behavioural economic rationalisations. 

There is mounting evidence, according to local authority researchers in Liverpool, for example, that shows the actual effect is the reverse of what was claimed was intended; Universal Credit is harming the very people it was designed to support. It is forcing households into debt, causing severe poverty including to those in work, leaving too many people, including children, facing food insecurity, destitution and eviction. Liverpool council’s welfare reform cumulative impact analysis last year shows that the groups most adversely affected by the Government’s raft of ‘welfare reforms’ are the long-term sick and disabled, families with children, women, young adults and the 40-59 age group who live in social housing. 

Many working households are suffering a shortfall in Housing Benefit, Housing Allowance and a reduction and removal of many other benefits, all set against the backdrop of ever increasing living costs. Poverty disincentives people. 

In recent years welfare conditionality has become conflated with severe financial penalities (sanctions), and has mutated into an ever more stringent, complex, demanding set of often arbitrary requirements, involving frequent and rigid jobcentre appointments, meeting job application targets, providing evidence of job searches and mandatory participation in workfare schemes. The emphasis of welfare provision has shifted from providing support for people seeking employment to increasing conditionality of conduct, enforcing particular patterns of behaviour and monitoring citizen compliance.

Government Statistics tell us that more people get sanctioned under Universal Credit than under the existing legacy benefits system.

Sanctions are “penalties that reduce or terminate welfare payments in cases where claimants are deemed to be out of compliance with  requirements.” They are, in many respects, the neoliberal-paternalist tool of discipline par excellence – the threat that puts a big stick behind coercive welfare programme rules and “incentivises” citizen compliance with a heavily monitoring and supervisory administration. The Conservatives have broadened the scope of behaviours that are subject to sanction, and have widened the application to include previously protected social groups, such as sick and disabled people and lone parents.

There is plenty of evidence that sanctions don’t help people to find work, and that the punitive application of severe financial penalities is having a detrimental and sometimes catastrophic impact on people’s lives. We can see from a growing body of research how sanctions are not working in the way the government claim they intended.

Sanctions, under which people lose benefit payments for between four weeks and three years for “non-compliance”, have come under fire for being unfairpunitive, failing to increase job prospects, and causing hunger, debt and ill-health among jobseekers. And sometimes, even causing death.

However, if people are already needing to claim financial assistance which was designed to meet only very basic needs, such as provision for food, fuel and shelter, then imposing further financial penalities will simply reduce those people to a struggle for basic survival, which will inevitably demotivate them and stifle their potential.

The current government demand an empirical rigour from those presenting criticism of their policy, yet they curiously fail in meeting the same exacting standards that they demand of others. Often, the claim that “no causal link has been established” is used as a way of ensuring that established correlative relationships, (which often do imply causality,) are not investigated further.

Qualitative evidence – case studies, for example – is very often rather undemocratically dismissed as ‘anecdotal,’ or as ‘scaremongering’ which of course stifles further opportunities for research and inquiry.

The Conservative shift in emphasis from structural to psychological explanations of poverty has far-reaching consequences. The partisan reconceptualision of poverty makes it much harder to define and very difficult to measure. Such a conceptual change disconnects poverty from more than a century of detailed empirical and theoretical research, and we are witnessing an increasingly experimental approach to policy-making, aimed at changing the behaviour of individuals, without their consent.

This approach isolates citizens from the broader structural political, economic, sociocultural and reciprocal contexts that invariably influence and shape an individuals’s experiences, meanings, motivations, behaviours and attitudes, causing a problematic duality between context and cognition. It places unfair and unreasonable responsibility on citizens for circumstances which lie outside of their control, such as the socioeconomic consequences of political decision-making.

I want to discuss two further considerations to add to the growing criticism of the extended use of sanctioning, which are related to why sanctions don’t work. One is that imposing such severe financial penalities on people who need social security support to meet their basic needs cannot possibly bring about positive “behaviour change” or incentivise people to find employment, as claimed. This is because of the evidenced and documented broad-ranging negative impacts of financial insecurity and deprivation – particularly food poverty – on human physical health, motivation, behaviour and mental states.

The second related consideration is that “behavioural theories” on which the government rests the case for extending and increasing benefit sanctions are simply inadequate and flawed, having been imported from a limited behavioural economics model (otherwise known as nudge” and libertarian paternalism) which is itself ideologically premised.

Sanctions and workfare arose from and were justified by nudge theory, which is now institutionalised and deeply embedded in Conservative policy-making. Sanctions entail the manipulation of a specific theoretical cognitive bias called loss aversion.

At best, the new “behavioural theories” are merely theoretical  propositions, at a broadly experimental stage, and therefore profoundly limited in terms of scope and academic rigour, as a mechanism of explanation, and in terms of capacity for generating comprehensive, coherent accounts and understanding about human motivation and behaviour.

I reviewed research and explored existing empirical evidence regarding the negative impacts of food poverty on physical health, motivation and mental health. In particular, I focussed on the Minnesota Semistarvation Experiment and linked the study findings with Abraham Maslow’s central idea about cognitive priority, which is embedded in the iconic hierarchy of needs pyramid. Maslow’s central proposition is verified by empirical evidence from the Minnesota Experiment.

The Minnesota Experiment explored the physical impacts of hunger in depth, but also studied the effects on attitude, cognitive and social functioning and the behaviour patterns of those who have experienced semistarvation. The experiment highlighted a marked loss of ambition, self-discipline, motivation and willpower amongst the subjects once food deprivation commenced. There was a marked flattening of affect, and in the absence of other emotions, Doctor Ancel Keys observed the resignation and submission that continual hunger manifests.

The understanding that food deprivation dramatically alters emotions, motivation, personality and that nutrition directly and predictably affects the mind as well as the body is one of the legacies of the experiment.

The experiment highlighted very clearly that there’s a striking sense of immediacy and fixation that arises when there are barriers to fulfiling basic physical needs – human motivation is frozen to meet survival needs, which take precedence over all other needs. This is observed and reflected in both the researcher’s and the subject’s accounts throughout the study. If a person is starving, the desire to obtain food will trump all other goals and dominate the person’s thought processes.

In a nutshell, this means that if people can’t meet their basic survival needs, it is extremely unlikely that they will have either the capability or motivation to meet higher level psychosocial needs, including social obligations and responsibilities to seek work. Abraham Maslow’s humanist account of motivation also highlights the same connection between fundamental motives and immediate situational threats.

maslow's hierarchy of needs

Ancel Keys published a full report about the experiment in 1950. It was a substantial two-volume work titled The Biology of Human Starvation. To this day, it remains the most comprehensive scientific examination of the physical and psychological effects of hunger.

Keys emphasised the dramatic effect that semistarvation has on motivation, mental attitude and personality, and he concluded that democracy and nation building would not be possible in a population that did not have access to sufficient food.

I also explored the link between deprivation and an increased risk of mental illnesses, including schizophrenia, depression, anxiety and substance addiction. Poverty can act as both a causal factor (e.g. stress resulting from poverty triggering depression) and a consequence of mental illness (e.g. schizophrenic symptoms leading to decreased socioeconomic status and prospects).

Poverty is a significant risk factor in a wide range of psychological illnesses. Researchers recently reviewed evidence for the effects of socioeconomic status on three categories: schizophrenia, mood and anxiety disorders and substance abuse. Whilst not a comprehensive list of conditions associated with poverty, the issues raised in these three areas can be generalised, and have clear relevance for policy-makers.

The researchers concluded: “Fundamentally, poverty is an economic issue, not a psychological one. Understanding the psychological processes associated with poverty can improve the efficacy of economically focused reform, but is not a panacea. The proposals suggested here would supplement a focused economic strategy aimed at reducing poverty.” (Source: A review of psychological research into the causes and consequences of poverty – Ben Fell, Miles Hewstone, 2015.)

There is no evidence that keeping benefits at below subsistence level or imposing punitive sanctions ‘incentivises’ people to work and research indicates it is likely to have the opposite effect

Food banks have reported that demand for charity food goes up significantly when Universal Credit is introduced into the local area.

The Trussell Trust has expressed concern that, given the links between Universal Credit, financial hardship, and foodbank use, the next stage of the roll out could lead to further increased financial need and more demand for foodbanks. Their report uses referral data from Trussell Trust foodbank vouchers to examine the impact of Universal Credit on foodbank use. Their key findings were:

  1. On average, 12 months after rollout, foodbanks see at least a 52% increase in demand, compared to 13% in areas with Universal Credit for 3 months or less. This increase cannot be attributed to randomness and exists even after accounting for seasonal and other variations. 
  2. Benefit transitions, most likely due to people moving onto Universal Credit, are increasingly accounting for more referrals and are likely driving up need in areas of full Universal Credit rollout. Waiting for the first payment is a key cause, while for many, simply the act of moving over to a new system is causing serious hardship.

The Trussell Trust says that poor administration, the long wait for the first payment, and repayments for loans and debts are driving some people into severe financial need. This is particularly acute for families with dependent children and disabled people.

Ministers still claim that evidence from early official trials shows people claiming Universal Credit were more likely to get a job. However, the Office for Budgetary Responsibility (OBR) has said there remains insufficient evidence for this claim. Other researchers have found that the low benefit amounts coupled with rigid conditionality and sanctions profoundly disincentivise people to find work or progress in work. Evidence supports the latter proposition. 

But the government simply responds by labelling researchers and campaigners as ‘scaremongers’ and continues to deny the well-evidenced and documented experiences of citizens which demonstrate that Universal Credit is harmful, creating distress and entrenching inequality and absolute poverty.

 


 

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Authoritarian government warns headteachers against expressing ‘political views’

Last year, thousands of headteachers across England wrote a letter to parents to warn that there is “simply not enough money in the system” to fund schools properly, as their costs continue to rise and budgets come under severe pressure.

The letter from more than 4,000 heads told around a million families that the government’s then new national funding formula would still mean that their children face an unfair “postcode lottery”, with some schools able to afford class sizes of 20 but similar schools in other regions forced to have classes of 35 pupils.

The head teachers said that the proposed national funding formula will do little to solve the funding crisis affecting many state schools.

Now, campaigners are concerned that the government wants to ‘gag’ teachers in England over the issue of diminishing funding and resources in schools. 

A revision was made in September to the Department for Education’s (DfE)’s document entitled Staffing and employment advice for schools– billed as departmental advice for school leaders, governing bodies and local authorities – which contained a new paragraph with a blunt statement in a staff management section.

It states: “All staff have a responsibility to ensure that they act appropriately in terms of their behaviour, the views they express (in particular political views) and the use of school resources at all times, and should not use school resources for party political purposes.” 

The warning, which was first reported by Schools Week, comes after campaigns by school leaders over budget cuts that have irked the government, and high-profile union activity targeting parents during the previous general election campaign, which may have cost the Conservative party votes. 

However, headteachers and teaching unions have said they will defy any attempts by the DfE to block legitimate criticism, following the warning to teachers in England against expressing “political views”.

A DfE spokesperson said: “Headteachers have long had a legal responsibility to provide a balanced presentation of opposing views when teaching political or controversial subjects.

“This update simply brings this guidance in line with the law, which makes clear that headteachers and local authorities must not promote partisan political views in school.” 

However, Jules White, a headteacher behind the Worth Less? national group of school leaders that has organised critical letters on funding, said: “If expressing political views is about biased and ill-judged grandstanding by heads and teachers, then I fully support the DfE’s views.

“If, on the other hand, the DfE wishes headteachers to be gagged as they simply tell the truth about the financial and teacher supply crisis that our schools are facing then this is unacceptable.

“Worth Less? always uses independent evidence from sources such as the IFS and DfE data itself to support the legitimate concerns it raises with parents and the public. Our claims are never disputed, but frequently ignored.

“I will continue to lead our campaign and speak out in a reasonable and considered manner on behalf of colleagues and the children and families that we serve.”

Last year, Worth Less? organised 5,000 headteachers to lobby the government, while White and his colleagues oversaw a letter sent to an estimated 2.5 million households via pupils from thousands of state schools.

Geoff Barton, a former headteacher who is now general secretary of the Association of School and College Leaders, derided the DfE’s advice and suggested it would be unlikely to deter teachers from campaigning.

It is perfectly reasonable for school leaders and teachers to be able to articulate their concerns … and it is clearly in the public interest for them to have a voice. You cannot disenfranchise 450,000 teachers from talking about education,” he said.

Angela Rayner, the shadow education secretary, said: “The Tories are trying to ban teachers from whistleblowing when schools cuts bite into our children’s education. They may hope to silence teachers, but they can’t get away from the fact that they will have cut £3bn from school budgets by 2020.

“If the government wants to know why teachers are publicly criticising them, they need only look at their own record of broken promises. They even cancelled their ‘guarantee’ that every school would receive a cash increase.”

The non partisan Institute for Fiscal Studies (IFS) says that since 2009school spending per pupil in England has fallen by about 8% in real terms, with a smaller fall in Wales of about 5%.

While total school spending has risen in England by about 1% in real terms over this period, a 10% rise in pupil numbers means that the only slightly increased resources are now rather more thinly spread.

Damian Hinds had only been education secretary for a month when Labour shadow secretary, Angela Rayner, reported him to the UK Statistics Authority for making the incorrect claim that “real-terms funding per pupil is increasing across the system”. Themistake’ was corrected, and six months into the job, Hinds says he recognised not only that school budgets are being cut, but that such cuts are unsustainable and destructive.

Yet despite Hinds’ claim that he has grasped some of the problems facing schools, he has offered no solution.

In September, Hinds was forced to apologise to the families affected by the Whitehaven Academy scandal, and pledged to “do everything we can to stop it happening again”. Hinds said images of the Cumbria school’s squalid facilities shown in a recent BBC Panorama investigation were “very striking”, and said he was “sorry” for everyone affected.

The secondary school has been at the centre of a row over the way the private company Bright Tribe runs its schools in the north of England for years, but matters came to a head last autumn when flooding damaged already “dilapidated” buildings on the school site, and the chain announced it was walking away.

It has since emerged that the DfE was warned of problems as far back as 2015, but had taken no action.  The governmenthad approved the academy initiative. Bright Tribe had taken the money intended for repairs to the school, and then not carried out the work. 

Michael Dwan, who set up Bright Tribe and had previously made a fortune of over a hundred million pounds from similar arrangements in NHS provision, said “I am not in control of the trusts and never have been.”

Hinds told Schools Week: “I am sorry for the families involved with Whitehaven, of course I am, and as secretary of state for education, ultimately responsibility for the school system sits with me, and particularly the academy part of the school system, then especially so.” 

“I want to make sure that we learn from what happened, and make sure that we do everything we can to stop it happening again.”

The controversial Bright Tribe academy trust confirmed in September that the final six of the ten schools it ran will be ‘re-brokered’,

The wind-up of the trust follows a turbulent year which saw its founder, property tycoon Michael Dwan, resign last September. New trustees, installed by the government, are now investigating allegations of misuse of public money.

The Bright Tribe founder Michael Dwan withdrew his support from the ailing trust amid frustrations over government scrutiny and concerns that his ‘efforts had gone unrecognised’, copies of letters and emails obtained by Schools Week revealed in July.

The new bosses, who include two school leaders that specialise in the winding up of failing trusts, are investigating allegations that Bright Tribe made repeated false claims for building and maintenance grants at Whitehaven Academy in Cumbria, the first school to be given up by the private trust.

The school is now in limbo, it does not have the option to return to local authority control. It cannot make long-term planning decisions, hire new permanent members of staff or organise pay rises. The government has offered no solution, struggling to find a new chain willing and able to take on the school, which is in a precarious financial position.

By the end of 2017, 64 academy status schools were waiting to find a new sponsor after being abandoned by, or relinquished by their managing trust. Using average enrolments of 279 pupils for state primary schools and 946 for state secondary schools this would mean over 40,000 students are adversely affected.

Legitimate criticism of government policies that have negative consequences on children, public sector staff and the tax paying public isn’t ‘expressing political views’; it is an absolute necessity for a functioning democracy.

A government that labels valid concerns ‘political views’ is an oppressive, authoritarian, gaslighting one.

You can watch the Panorama documentary, Profits before Pupils? The Academies Scandal, here.

 

Related

Pupils with Special needs are being failed by system ‘on verge of crisis’

 


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PMQs showcases a government that is spiteful and Conservative with the truth


In a very wealthy so-called liberal democracy, from 2016 to last year, these are the reasons why people were referred to food banks. The highest number of referals are among the low earners, demonstrating the government’s slogan ‘making work pay’ is a myth. Work does not pay for many. However, the government chooses to gaslight the population about consequences of it’s policies.

Today in Prime Minister’s Questions: 

As my local Labour MP, Kevan Jones quipped: “the Conservatives will be celebrating re-opening workhouses next.”

The spite and malice on the Prime Minister’s face as she responds to the opposition, using blatant and snide playground gestures to intimidate never fails to anger me. It’s disgraceful that the government reduce serious political issues to immature ‘win or lose’ game playing and PR tactics.

The truth is that Universal Credit is not just failing our ‘relative’ contemporary standards of poverty but those of William Beveridge in the 1940s. Conservatives accuse Labour of ‘taking us back to the seventies’, but May’s government have taken us back to the 1940s, and to absolute poverty levels that existed before there was a welfare state. Absolute poverty is when people cannot meet their basic survival needs: food, fuel and shelter. The UK’s publicly funded social security system is no longer an adequate provision for people to meet the costs of their most fundamental and universal human needs. 

This is a government that has demanded the most from those citizens with the very least under the guise of austerity, while handing out public funds to the private banks accounts of the wealthiest.

Theresa May also selectively and maliciously quoted a section of a book – Economics For The Many  – which was edited by Shadow Chancellor John McDonnell, declaring Labour’s costed manifesto “doesn’t add up”. the Prime Minister went on it to claim the Labour party would “wreck the economy”, but as usual she was being Conservative with the facts.

She attempted to make it look like Professor Simon Wren-Lewis was criticising Labour’s economic strategy, but he wasn’t. The quote mining – a frequently used Conservative strategy to present lies and to mislead parliament and the public – referred to a book chapter May referred to by Wren Lewis , an economist and member of Labour’s Economic Advisory Committee.  Basically the chapter says that Labour will ensure: 

  • The Government is spending less than it takes in in tax within five years
  • Government debt is falling within five years
  • Labour will only borrow for investment and infrastructure, not for day-to-day spending.

Wren Lewis never said that Labour’s manifesto didn’t ‘add up’. He said that other people claimed it didn’t add up. And he said that it didn’t matter.

Wren Lewis notes in the chapter that the Institute for Fiscal Studies (IFS)claimed it ‘doesn’t add up’ – which is a very different thing. And actually, the IFS didn’t really say that either. It said that it was “hard to say” whether Labour’s pledge to reduce debt was compatible with their promises of a wave of nationalisations of water and energy.

The IFS said essentially that because the Labour party would transform the economy so radically, it would be impossible to say whether their manifesto costings would be accurate.

It’s a priceless cheek, as well as a malicious attack, especially considering that the Conservatives did not bother to cost their own manifesto at all.

The blatant lie also shows the prime minister’s utter contempt for democracy.

Finally, a word about the Conservative’s crowing regarding ‘their’ employment levels. 

The ‘high employment’ narrative does not benefit citizens, who face zero hour contracts, little employment security and more than half of those people needing to claim welfare support are in work. The Conservative’s definition of ‘employment’ includes people who work as little as one hour a week. It includes carers. It also includes people who have been sanctioned.

Now there is a perverse incentive to furnish a hostile environment of Department for Work and Pensions’ administrative practices in action.

When the Conservatives took office in 2010, on average citizens earned £467 a week. The latest figures from the Office for National Statistics (ONS) show that we now take home £460 a week. In other words, average wages have gone down in real terms during the eight years of Conservative-Lib Dem and Conservative governments, while the cost of living has risen substantially. It’s a misleading to make these claims at all when weekly earnings are actually 1.3 per cent lower now in real terms than they were when the Conservatives took office in 2010.

Furthermore, the ONS also produced household data suggesting that the true rate of unemployment is 4 times greater than the government’s preferred statistic.

The Conservative’s official definition of unemployment disguises the true rate, of course. In reality, about 21.5% of all working-age people (defined as ages 16 to 64) are without jobs, or 8.83 million people, according to the Office for National Statistics. I know whose statistics I believe, given the Conservative’s track record of abusing figures and telling lies.

Here is more data here on the effect of chronic underemployment of the unemployment rate, and the depressing Conservative reality of the ‘business friendly’ gig economy.

Conservatives being conservative with the truth as ever.

And spiteful.


 

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The DWP are being Conservative with the truth, yet again

Sarah's story: Turned out to be fiction rather than fact

Sarah’s story: Turned out to be fiction rather than fact


In 2015, Welfare Weekly exposed the Department for Work and Pensions for using fake testimonies from fake characters via a well-placed freedom of information (FoI) request, revealing that the lengths that the government is prepared to go to justify extremely punitive policies. Remarkably, even the 
Chartered Institute of Public Relations (CIPR)  were alarmed at the level of deception, and said it had written to all of its members who work at the Department to find out whether they had played any part in putting the leaflet together. 

Sarah Pinch, the CIPR’s president, said: “Falsely creating the impression of independent, popular support is a naive and opaque technique which blatantly disregards the CIPR’s standards of ethical conduct. It is deeply disappointing if public relations professionals allowed it to be published.” 

This happened during the same month that the it was only this month that the UK statistics watchdog censured the DWP for understating the scale” of its sanctions regime – essentially failing to release adequate data to give jobseekers or the public a genuine picture of the way it’s imposing sanctions, and of monitoring the real impact of this draconian policy. The revelation that the DWP has faked information to distort the reality that so many citizens face is reflective of how deep the rot is in the entire system. 

Then there are the fictional statistics. Iain Duncan Smith was rebuked by the Office for National Statistics (ONS) for the ‘misuse’ of benefit statistics  his claim that 8,000 people moved into work as a result of the benefit cap is “unsupported by the official statistics”, says the UK Statistics Authority. 

In letter to Duncan Smith, Andrew Dilnot writes: “In the manner and form published, the statistics do not comply fully with the principles of the Code of Practice, particularly in respect of accessibility to the sources of data, information about the methodology and quality of the statistics, and the suggestion that the statistics were shared with the media in advance of their publication.”

Another claim by Duncan Smith later in the same month also drew criticism and a reprimand. The (then) minister said around 1 million people have been stuck on benefits for at least three of the last four years “despite being judged capable of preparing or looking for work”.

However, the figures cited also included single mothers, people who were seriously ill, and people awaiting testing. Grant Shapps was also rebuked by UK Statistics Authority for misrepresenting benefit figures the Tory chairman claimed that “nearly a million people” (878,300) on incapacity benefit had dropped their claims, rather than face a new medical assessment for its successor, the employment and support allowance.

The figures, he claimed, “demonstrate how the welfare system was broken under Labour and why our reforms are so important”. The claim was faithfully reported by the Sunday Telegraph  but as the UK Statistics Authority confirmed in its response to Labour MP Sheila Gilmore, it was entirely fabricated.

In his letter to Shapps and Duncan Smith, UKSA chair Andrew Dilnot wrote that the figure conflated “official statistics relating to new claimants of the ESA with official statistics on recipients of the incapacity benefit (IB) who are being migrated across to the ESA”. Of the 603,600 incapacity benefit claimants referred for reassessment as part of the introduction of the ESA between March 2011 and May 2012, just 19,700 (somewhat short of Shapps’s “nearly a million) abandoned their claims prior to a work capability assessment in the period to May 2012. 

The figure of 878,300 refers to the total of new claims for the ESA closed before medical assessment from October 2008 to May 2012. Thus, Shapps’s suggestion that the 878,300 were pre-existing claimants, who would rather lose their benefits than be exposed as “scroungers”, was entirely wrong. Significantly, there is no evidence that those who abandoned their claims did so for the reasons ascribed by Shapps.

Now the DWP have been found out submitting fake claims to the Work and Pensions Committee. The DWP claimed the Institute for Fiscal Stdies (IFS) had reviewed its data which asserts that UC will help more than 250,000 people into employment, once the flagship welfare reform is fully implemented across the UK. However the IFS have contradicted the claim, leading to heavy criticism regarding the DWP’s statement and ‘evidence’ regarding Universal Credit’s ‘causal relatonship’ with employment. 

The Committee says:

“A central part of the Department for Work and Pension’s (DWP) case for the benefit of Universal Credit (UC) is their assertion of its effect on employment. In to a request for an estimate of the magnitude of that effect, DWP stated it has “determined” that UC will result in 250,000 more people in employment once it is fully implemented.

How the Department ‘arrived’ at these figures

In a follow up letter to Employment Minister Alok Sharma (PDF PDF 1.38 MB)Opens in a new window the Chair asked a set of specific questions about how the Department had arrived at each of the stated constituent parts of that figure:

  • 150,000 more due to “increased financial incentives to work” 
  • 50,000 more due to “increased conditionality”
  • 60,000 due to “simplification of the benefit system”

(That’s basically euphemisms for cuts, sanctions, and more cuts and sanctions)

The Department’s response (PDF PDF 800 KB)Opens in a new window did not answer any of the Chair’s specific questions, although it did supply an account of academic research papers that have informed the Department’s work on UC, and restated the principles underlying those three ostensible benefits of the reform.

DWP concluded by stating: “The approach to our analysis underpinning these estimates was reviewed by the Institute for Fiscal Studies.”

Accordingly, the Committee wrote to the Institute for Fiscal Studies (IFS) (PDF PDF 141 KB)Opens in a new window asking if, in that review, it had found those three estimates reasonable, and what the margin of statistical error might be on the numbers.

The IFS’ reply (PDF PDF 197 KB)Opens in a new window starts out “clarifying the role we had in reviewing DWP’s approach” in coming up with the numbers:

Note that at no stage did we review their approach to estimating the impact of increased conditionality or simplification, to which they attribute 50,000 and 60,000 respectively of the overall 250,000 forecast effect on employment”.

The employment impact of Universal Credit is highly uncertain

The IFS goes on to say: “Neil Couling’s letter to Baroness Hollis on 16 November states that the 250,000 figure is based on the same methodology we reviewed in 2012. For the reasons given above, that can only be true of the element (150,000) which is a result of changes to financial incentives. And we are not in a position to confirm whether and to what extent DWP took on board our comments and implemented our recommended improvements before applying the methodology….”

The employment impact of UC is highly uncertain. The move to UC involves a number of changes for which it is hard to find comparable precedents (especially UK precedents)” — casting doubt on DWP’s use of academic evidence to substantiate its estimates — “It is not even possible to produce statistical margins of error for estimates of the employment impact, as the nature of the uncertainty is not conducive to standard statistical analysis…”

Sadly, it will be difficult even after the event to produce convincing estimates of the overall employment impact of UC. The early impact estimates that DWP have published – cited in the Minister’s letter of 12 March – apply only to a small group of claimants who are not affected by UC in the same way as most other claimants […]” and;

“We emphasise that the overall employment impact of UC will conceal very different effects for different groups in the population, with employment rates likely to rise for some and fall for others.”

The last point contradicts what DWP have previously told the Committee when asked about the impact on other groups:

“We remain committed to producing robust comparative analysis of the employment impacts of Universal Credit. As we informed the Committee we are planning to expand the analysis for single cases in the Live Service to couples and families in both services.

This analysis will estimate a labout market impact for these broader claimant groups. In this instance it is misleading to draw a distinction between two services. The underlying policy for both is the same so any comparative analysis will hold true for both systems”.

Lack of evidence

Rt Hon Frank Field MP, Chair of the Committee, said:

“The ongoing lack of evidence to back up the much-vaunted employment impact of Universal Credit was already extremely disappointing. But to have our specific queries about basis of this claim answered with airy, irrelevant and, it appears, plainly inaccurate assertions adds insult to injury.

The IFS’ letter shows that Old Mother Hubbard hasn’t got much in the cupboard, despite the bragging of the Department. This clumsy and ill-judged attempt to piggyback on one of the most trusted, unimpugnable authorities on public policy and finance would be farcical if it was not so deeply worrying.”

Call it what it is, Frank. It’s just more glib, ideologically driven lies

Image result for Universal credit criticism


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A few thoughts on the implications of the United Nations report

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There is an important link between human needs and human rights that the Conservatives have dismally and persistently failed to recognise

The United Nations (UN) inquiry into the allegations many of us made regarding the systematic abuse of the human rights of disabled people in the UK has exposed the multiple injustices of targeted cuts and the disproportionate burden of austerity heaped on sick and disabled people, their carers and their families, evidencing and detailing the effects of a range of policy measures affecting them that have been introduced since 2010. These include the bedroom tax and cuts to disability benefits, funds to support independence and social care.

The report concludes that the overall effect of what is now an essentially punitive welfare regime, which has been based almost entirely on unevidenced political claims and assumptions, has had an extremely detrimental and regressive effect on the rights of disabled people, to live independently, to meet their basic needs, to seek and stay in work,  and to be able to live an ordinary life as citizens.

The UN report documented multiple violations of disabled people’s rights, including the way that they are politically portrayed as being lazy and a “burden on taxpayers”, the harm to health caused by unfair assessments, the cuts to legal aid and curtailed access to justice, the imposition of the bedroom tax and the ending of the Independent Living Fund.

I wrote a lengthy article about the unsurprising but nonetheless disquieting report findings and recommendations as I read it, here.

Predictably, the government responded to the damning contents of the report by denying a “causal link” between their policies and the evidenced accounts of the consequences being presented to them. Yet the government have never monitored the cumulative impact of their policies and successive cuts on disabled people, and they told the UN rapporteurs that it was “not possible or practical” to carry out an impact assessment on how reforms would affect disabled people. The UN disagreed, and stated that with the evidence and data already available, the government could have done this. 

The UN have called on the government to carry out a cumulative impact assessment. The government have refused to comply with any of the recommendations the UN has made. However, that means they cannot legitimately claim that there is “no causal link demonstrated” regarding the austerity measures and psychological distress, severe hardship, deteriorating health and death, as they have persistently refused to investigate the associations that academics, charities, disabled people’s organisations, individual campaigners and opposition MPs have consistently demonstrated. Denial isn’t empirical evidence or any kind of proof that your claims are valid. Nor does withholding evidence of correlation disprove causality.

It was also noted that the government failed to listen to the concerns of disabled people it had claimed to involve in policy making processes. Disabled people and their representative organisations “were not meaningfully taken into account in the decision-making and had little or no influence on policy decisions.”

The implication is that disabled people have not been democratically included. The government have persisted in treating us as objects of policies, rather than seeing us as democratic subjects and citizens. 

Also of note: “The [individual] impact assessments conducted by the State party prior to the implementation of several measures of its welfare reform expressly foresaw an adverse impact on persons with disabilities.”

The State party has not conducted a comprehensive human rights-based cumulative impact assessment even though reliable sources have indicated it is feasible.”

The UN stated that the Department for Work and Pensions (DWP) failed to properly investigate people’s deaths after their social security payments were stopped. t was noted that the government had made no “attempts at objective, thorough, open and impartial investigation(s)” to look at the alleged 90 deaths a month, despite being aware that there was widespread public concern about this.

Among other concerns, the committee said the UK government had used rhetoric to stigmatise disabled people, negatively influencing public perceptions. The report says that disabled people “have been… negatively portrayed as being dependent or making a living out of benefits; committing fraud as benefit claimants; being lazy and putting a burden on taxpayers, who are paying ‘money for nothing’. Persons with disabilities continue to experience increasing hostility, aggressive behaviour and sometimes attacks to their personal integrity.”

The committee said it found no evidence to support any of these ideas, especially the idea that disabled claimants were committing benefit fraud.

The committee were very critical of the legal aid cuts, which have created a significant barrier for people challenging benefits decisions and holding the government accountable:

“Evidence indicates that legal aid to challenge administrative decisions ending or curtailing their benefits before first-tier tribunals has been restricted. Legal aid for cases before those tribunals has also been curtailed. Similarly, access to review by an independent and impartial tribunal has been restricted by the introduction of mandatory reconsideration procedures before the same administrative entity that has ruled on benefits.”

I was pleased to see the United Nations report highlight a fundamental prejudice that informed the very basis of the “functional capacity approach” of the Work Capability Assessment (WCA), as well as commenting on the major flaws of the assessment process itself. The WCA is based on the assumption that a health condition or disability should not automatically be regarded as a “barrier” to work and that work itself can have health benefits. However these assumptions have been controversial from the outset.

The WCA places focus entirely on how we as individuals experience our illness and impairments. As such, this approach does not permit us to place our experiences of disadvantage in the context of how organisations, institutions, policy-makers and wider society interact with us. Despite the government claiming that they take a social model approach, eligibility for benefits and services is still being determined by assessment of how much our own bodies are affected by illness and impairment rather than the disabling social, cultural and political barriers that we experience.

The report said: Work Capability Assessments do not take into account the “support persons with disabilities need to perform a job or the complex nature of some impairments and conditions.” 

The inquiry also found that welfare assessors displayed a “lack of awareness and limited knowledge of disability rights and specific needs”, and disabled people experienced distress, “anxiety and psychological strain” as a result of this flawed process, and the financial insecurity that it generates.

“The committee observes that measures have caused financial hardship to persons with disabilities resulting in arrears, debts, evictions and cuts to essentials such as housing and food,” the report said.

The Government’s own research, published in June this year, revealed that one of the cornerstones of their austerity campaign – that cutting social security means recipients will be more likely to find work – is fundamentally flawed. 

Researchers found that cutting unemployed peoples’ benefits had the opposite effect to what is being claimed – something that many of us have also previously argued. The study, carried out by Oxford city council and the Department for Work and Pensions, found unemployed people become less likely to get a job when benefits are cut. Instead of looking for work, they are forced to devote their energies to surviving day-to-day. For every £1 in benefits cut per week, a person’s chance of getting a job drops by 2 per cent.

The government can no longer justify its narrative about benefit cuts, claiming that they are  “incentives” to “support” people into work.

Beyond the rhetoric – the hidden agenda

There is a wider agenda driving the welfare “reforms” and it is important to consider the hidden ideological dimension and the language references and signposts to that, as well as the superficial narratives and semantic shifts being deployed as a PR exercise, techniques of neutralisation and gaslighting to obscure political intentions and the consequences of policies.

The UN report effectively exposed the justification narratives presented by the government for their welfare “reforms” as unfounded and unsupported by empirical evidence. This report is just the beginning, it arms us with an invaluable weapon with which to continue our campaigning, and shape future challenges and debate to government policies and social injustice.  

The Conservatives have an ideological commitment to a “small state” and this is fueled by privatisation and an ever-expanding neoliberal competitive “market place.” The market place, private profit opportunities and neoliberal outcomes have been conflated with citizen’s interests and needs.

The welfare “reforms” have presented the opportunity to promote and deliver private income protection provision via profit making companies operating in free markets. Insurance companies and right-wing think tanks have been attempting to steer governments in this direction for many years. 

For example, Matthew Oakley, a senior researcher at the Social Market Foundation, and government advisor, recently published a report entitled Closing the gap: creating a framework for tackling the disability employment gap in the UK, in which he suggests considering a “role that a form of privately run social insurance could play in both increasing benefit generosity and improving the support that individuals get to manage their conditions and move back to work.

Oakley also proposes abolishing the ESA Support Group. To meet extra living costs because of disability, Oakley says that existing spending on PIP and the Support Group element of ESA should be brought together to finance a new extra costs benefit. Eligibility for this benefit should be determined on the basis of need, with an assessment replacing the WCA and PIP assessment. The Conservative definition of “the basis of need” seems to be an ever-shrinking category.

May’s new director of policy, John Godfrey, is a keen advocate of what in his last job, at financial services giant Legal and General, he called “Beveridge 2.0”: using technology to introduce new forms of “social insurance”.

Godfrey told a campaigning group, the Financial Inclusion Commission, last year that the systems used to deliver “auto-enrolment”, the scheme that ensures all low-income workers have a pension, could also be used to help the public insure themselves against “unexpected events”.

“There is a clear lesson from auto-enrolment that if you have a plumbing network or an infrastructure that works, that auto-enrolment infrastructure could be used for other things which would encourage financial inclusion: things like, for example, life cover, income protection and effective and very genuine personal contributory benefits for things like unemployment and sickness,” he said. “They can be delivered at good value if there is mass participation through either soft compulsion or good behavioural economics.”

Note the context shift in use of the term “inclusion”, which was originally deemed a democratic right, now it’s being discussed narrowly in terms of individual responsibility.

A report published by the Adam Smith Institute as far back as 1995 – The Fortune Account – also sets out proposals to replace “state welfare” with an insurance system “operated by financial institutions within the private sector”.

Mo Stewart has spent eight years researching the influence of the US insurance giant Unum over successive UK governments, and how it led to the introduction of the “totally bogus” work capability assessment (WCA), which she says was designed to make it harder for sick and disabled people to claim out-of-work disability benefits.Stewart’s book, Cash Not Care: The Planned Demolition Of The UK Welfare State, was published in September. She states that the assessment was modeled on methods used by the controversial company Unum to deny protection to sick and disabled people in the US who had taken out income protection policies.

She goes on to say that the WCA was “designed to remove as many as possible from access to [employment and support allowance]on route to the demolition of the welfare state”, with out-of-work disability benefits to be replaced by insurance policies provided by private companies like Unum.

Stewart warns us that the UK is now close to adopting a US-style model.  

The implications of the inquiry findings for Conservative welfare policies 

The government has announced further welfare measures which will affect disabled people including a four year freeze for most working-age benefits, reductions in the Benefit Cap, changes to tax credits and to Universal Credit, and abolishing the “Work-Related Activity Component” for new ESA claims from 2017.

As noted in the UN report: “The State party continues its policy of reducing social benefits of persons with disabilities as reflected in the Welfare Reform and Work Act 2016.” 

Article 28 of the Convention on the rights of persons with disabilities (CRPD) says: Adequate standard of living and social protection – This article affirms the rights of persons with disabilities to an adequate standard of living for themselves and their family, and to social protection without discrimination on the basis of disability. This right includes access to assistance from the state with disability-related expenses for persons with disabilities and their families.

The report reiterated something that many of us have noted and discussed in detail previously: that there is no evidence of a causal relationship between a reduction in social security and an increase in employment amongst disabled and sick people. Nor does welfare “dependency” “disincentivise” people seeking employment more generally. It was pointed out in UN report that these views are not evidenced. The two assumptions are embedded in justifications of Conservative welfare policies, and are prejudices that have been around since the Thatcher administration.

Bearing in mind these are key assumptions underpinning current policies and the proposals set out in the recent work, health and disability green paper –  for example, the recent decision to reduce the money paid to people who have been assessed as being unfit to work but able to undertake work related activity (those people in the Employment and Support Allowance work related activity group (WRAG)) is based on the same assumption- the Department for Work and Pensions have claimed  – that it will “remove the financial incentives that would otherwise discourage claimants from taking steps back to work”.

Particularly important in the current context and given the government’s recent work, health and disability green paper, the UN report says that: “Given the barriers that still prevent the full participation of persons with disabilities in the labour market and mean higher unemployment rates for them, income-maintenance social security schemes are particularly important for persons with disabilities. Such schemes allow them to maintain their autonomy and freedom of control and choice of their living arrangements and day-to-day activities. Without an adequate level of social protection, persons with disabilities run the risk of being isolated, segregated from the community and/or institutionalized. 

States parties should find an adequate balance between providing an adequate level of income security for persons with disabilities through social security schemes and supporting their labour inclusion. The two sets of measures should be seen as complementary rather than contradictory.

Measures aimed at facilitating the inclusion in the labour market of beneficiaries of social security should include transitional arrangements to ensure income protection while they reach a certain threshold and sustainability in their wages. They should become eligible again without delay if they lose their jobs.” 

Although many of us have been discussing these issues for a few years, the inquiry has consolidated a lot of valuable evidence and provided a concise rebuttal of government justification narratives for cuts in support for disabled people, which we really needed to be presented to the government formally, from an independent, official and international witness.

Though the government have tended to dismiss much evidence to date of the harm that their policies are causing, such as that which has been presented through case studies by shadow ministers, as “anecdotal”, it is rather more difficult to dismiss and ignore the substantial evidence presented as a result of rigorous international scrutiny.

The government response was founded on denials, more misdirectional rhetoric and techniques of neutralisation, defensive arrogance, authoritarian scorn and contrived outrage, rather than being about stepping up to democratic accountability, reasoned discussion and rationality. No sign of civilised conscience and decent concern regarding the impact of the prejudice and discrimination that is being intentionally and systematically embedded in Conservative policies, aimed at disabled people, at all. 

The government’s response to the UN report bears little resemblance to the lived experiences of disabled people, despite claims to the contrary. The government has justified systematic cuts to disabled people’s social security by claiming such cuts “incentivise” people to find work. The cuts are a form of punishment (apparently for our own “good”) designed to bring about “behaviour change” and this approach is founded on the wrongly perceived attitudes of disabled people, who this government consistently describes as being “parked on benefits” with the “misperception that they can’t work”. 

This does nothing at all to address the barriers disabled people face in finding and staying in work, nor does it address the acknowledged prejudiced attitudes of employers and Conservative ministers. It’s not long ago that Conservative welfare minister David Freud expressed the view that disabled people should work for less than the minimum wage. He wasn’t the only one, either. Philip Davies expressed the same view, claiming that disabled people “are the most disadvantaged by the national minimum wage,” so they should be “permitted” to work for less in order to “compete” in the labor market. Davies described criticism of his remarks that disabled people could work for less than minimum wage as “leftwing hysteria”.

It seems that Conservatives believe that the only way of “helping” disabled people in any way is by simply taking money from them. 

In their response to the UN report, the government say: “The United Kingdom is proud of its record in supporting disabled people to lead more independent lives and participate more fully in society. More than 20 years ago the UK legislated to protect disabled people’s rights. It now spends around £50 bn a year on benefits to support disabled people and people with health conditions, which is over £6 bn more than in 2010. That is around 5% of GDP, or over 6% of government spending. The UK spends more on disabled people and people with health conditions than the OECD average, and countries such as Germany, France and the USA.”

That’s definitely Conservatives being… conservative with the truth again.

The Institute of Fiscal Studies (IFS) report on spending on benefits for disabled people says the actual spend is £36,063 bn but this is partly in benefits that are not counted as working age disability benefits: War Pensions, Attendance Allowance for over 65s, Statutory Sick pay, Carer’s Allowance, Industrial Injuries Benefits and the ILF which the government has closed)

The total of those benefits not paid to working age disabled people is £7,908bn

That makes the actual spend on all working age benefits for disabled people £28,155 billion

The IFS report says: “The spending on DLA/PIP is only half what it was in 1995-96. Spending across Great Britain on disability benefits in 2014–15 was £13.5 billion. At 0.8% of national income this is half the level of disability benefit spending when it was at its peak in 1995–96.

The overall number of individuals receiving disability benefits has fallen slightly since the mid-1990s. But this is in the presence of underlying demographic change that would have tended to push UP the numbers receiving considerably – both overall population growth and the baby boomer generation reaching older working ages.”

It’s not clear if the spending figures include the massive costs of private companies that are contracted by the state, ironically, to cut welfare spending. 

The National Audit Office (NAO) report earlier this year scrutinised public spending for parliament, and is independent of government. The report indicates how public services are being appropriated for purely private benefit.

The audit report in January concluded that the Department for Work and Pension’s spending on contracts for disability benefit assessments is expected to double in 2016/17 compared with 2014/15. The government’s flagship welfare-cut scheme will be actually spending more money on the assessments conducted by private companies than it is saving in reductions to the benefits bill.

From the report:

£1.6 billion
Estimated cost of contracted-out health and disability assessments over three years, 2015 to 2018

£0.4 billion
Latest expected reduction in annual disability benefit spending.

This summary reflects staggering economic incompetence, a flagrant, politically motivated waste of tax payer’s money and even worse, the higher spending has not created a competent or ethical assessment framework, nor is it improving the lives of sick and disabled people. Private companies like Maximus are paid millions from our welfare budget, yet they are certainly not “helping the government” to serve even the most basic needs of sick and disabled people.

I will be challenging the government’s response to the UN report fully in due course. It would be good to see some collaborative effort from disabled campaigners and activists in addressing the government as comprehensively as possible. If anyone is interest in working together on this, just contact me here via the comment section.

The UN committee will meet to discuss the government’s comments and determine a response in Geneva, in March 2017. 

Meanwhile it’s crucial that we use the body of evidence collated by the UN and the conclusions drawn in the report effectively. For example, our responses to the consultation on the work, health and disability green paper must address the underpinning propositions and delve beneath the superficial rhetoric and glittering generalities, rather than permitting the DWP’s weighted and somewhat leading questions to shape the outcome of the consultation.

We must use the UN findings constructively to continue to challenge existing policies, and any which arise in the future to violate the human rights of disabled persons. 

We need to continue to coherently and collectively challenge the government’s assumptions on which their proposals for work, health and disability policy are based, none of which are not supported by a shred of solid empirical evidence.

 


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