Tag: #OBR

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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Universal Credit is set to cost billions more than legacy benefits, says government’s spending watchdog

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Despite the widespread concerns about the financial hardships that Universal Credit has created for many people , the government’s official spending watchdog says that the Conservative’s flagship policy will, nonetheless, cost the UK billions more than the legacy benefits system over the next five years. 

In its response to the Autumn Budget, the Office for Budget Responsibility (OBR) changed its previous prediction in March 2018 that the government’s controversial welfare overhaul will save public money. Instead, the OBR now forecasts that Universal Credit will cost ‘the taxpayer’ £7.1bn more than the current system between 2019/20 and 2023/24.

That amount also includes new funding for the programme announced by chancellor Philip Hammond on Monday in response to the serious concerns raised by MPs about the impact Universal Credit is having on people.

However, the OBR added that even without these measures, which include an extra £1bn for transition support and a £1.7bn-a-year plan to raise the work allowance threshold for some claimants, Universal Credit would have a net cost of £1.9bn over the next five years.

Perhaps an analysis of the costs of the administrative and delivery framework would be useful. 

The OBR say: “On a pre-measures basis UC is now projected to be more expensive than the legacy system would have been from 2019-20 to 2022-23, having been less expensive (i.e. generating a net saving to the Exchequer) in our March forecast. This reflects many changes, some down to revising key assumptions that can now be tested against outturn data relating to the 1 million or so cases now on UC.” 

In its Economic and Fiscal Outlook based on the Autumn Budget, the OBR said: “Our pre-measures forecast revisions were sufficiently large to push our estimate of the effect of [Universal Credit] on welfare spending from a net saving to a net cost in most years – the first time that it has been shown as a net cost on average since our March 2015 forecast.”

The watchdog added :“Once Budget measures are factored in, the marginal cost moves significantly higher.”

The high cost of Universal Credit indicates that the political motivation behind this radical reform is purely ideological, rather than being based on any economic necessity. ‘Making work pay’ is about punishment and discipline – ultimately it is about driving people into any work available, regardless of job security and conditions, regardless of whether the wages meet the costs of living.

Meanwhile in work poverty is growing significantly. Deregulated, supply side labour market policies drive wages down. Reducing welfare support creates a desperate reserve army of labour who have absolutely no collective bargaining powers to improve work conditions. 

Other comments of interest include: “The Department for Work and Pensions (DWP) is subject to ongoing legal challenges. We asked the Government whether there is a detailed central list of ongoing DWP legal challenges and the likelihood of losing them, and why it takes a different approach to recording these DWP contingent liabilities than it does to tax-related legal challenges recorded in HMRC’s departmental accounts.

“The Treasury stated that it is working to improve the reporting and managing of DWP’s legal cases in accordance with steps set out in its 2018 Managing Fiscal Risks report.”

The OBR report also confirms that disabled people in receipt of severe disability premia will not be moved onto Universal Credit until provision is made to ensure the premia are integrated to ensure people on legacy benefits such as Employment and Support Allowance are not left worse off through migration or through a change of circumstance that means a new claim has to be made. This follows a court ruling that the loss of disability premia is unlawfully discriminatory. 

The court defeat for the government indicates once again how unfit for purpose Universal Credit is. Rather than being the ‘simplified’ system as promised, the administration of the welfare provision has become subject to a series of post hoc amendments because of the original model’s incorporated and systemic abuse of people’s human rights and violation of equality legislation. These are being uncovered by ongoing legal challenges.

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Osborne finally admits he lied and that Labour did not cause the recession

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In the weeks after he took office, George Osborne justified his austerity programme by claiming that Britain was on “the brink of bankruptcy”. He told the Conservative conference in October 2010: “The good news is that we are in government after 13 years of a disastrous Labour administration that brought our country to the brink of bankrutcy.” 

The Conservatives have constantly tried to portray the Labour party as less than competent with the economy, and more recently the government made facetious jibes about “magic money trees” being required to fund Labour’s promising anti-austerity manifesto, which backfired. In fact the Conservatives have even claimed, rather ludicrously, that the opposition is “dangerous”. 

However, back in 2012, Robert Chote, head of the Office for Budget Responsibility (OBR) formally rebuked Osborne for his intentionally misleading “misinformation” and dismissed with scorn the “danger of insolvency” myth that has been endlessly perpetuated by the Conservatives.

It’s worth remembering that the Conservatives’ historic record with the economy isn’t a good one. Margaret Thatcher presided over a deep recession because of her authoritarian introduction of neoliberal policies, regardless of the social costs. Her only solution to an increasingly damaged economy was more neoliberalism. John Major also presided over a recession, and who could forget “Black Wednesday“. 

The global recession of 2007/8 would have happened regardless of which political party was in office in the UK. Osborne had also committed to matching Labour’s spending plans, but he later criticised them.

The financial crash process was started by the neoliberal Thatcher/Reagan administrations with the deregulation of the finance sector. We were out of recession in the UK by the last quarter of 2009. By 2011, the Conservatives fiscal policy of austerity put us back in recession. 

It’s good to see Osborne finally concede that there was no basis for his ridiculous claims in 2010, in a recent interview with Andrew Neil, for The Spectator‘s Coffee House Shots (12 October).

It follows that there was absolutely no justification for the Conservatives’ incredibly harsh and damaging neoliberal austerity programme.

You can listen to the full interview with George Osborne and Andrew Neil by clicking here.

 


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Department for Work and Pensions Recruits Staff To Reduce ESA And PIP Appeal Success Rates

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Legal Aid funding became unavailable for welfare cases at First Tier tribunal in April 2013, because of the Conservative-led Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO). This included Legal Aid for appealing all benefit decisions. Legal Aid at Second Tier tribunal may be available if the case is about a point of law. Political lip service was paid to the legal human rights implications regarding the violation to the right to a fair trial (Article 6 of the ECHR), equal access to justice , and the Act provided that funding may be granted on a case-by-case basis where the failure to provide legal aid would be a breach of the individual’s rights under the European Convention on Human Rights (ECHR) or the rights of the individual to the provision of legal services that are enforceable European Union rights.

The Lord Chancellor’s Exceptional Funding Guidance (Non-Inquests) clarified that in determining whether Article 6 ECHR would be breached, it has to be shown that the failure to grant funding would mean that bringing the case would be “practically impossible or lead to an obvious unfairness in proceedings” (para 63). But Ministry of Justice figures showed that from 1 April 2013 to 31 December 2013, of the 1,083 applications determined, funding was granted in only 35 cases (3% of cases). This indicates that the criteria are being applied in an intentionally “overly restrictive manner” and, in the case of welfare benefits, all 11 applications were refused: Exceptional Case Funding Statistics – April 2013 to March 2014

Considering this in a context that includes the introduction of the Mandatory Review, in 2013, and in light of more recent events, I think it’s fair to say that the Conservatives have shown they are determined to take away money that provides essential support from disabled people in particular, one way or another, no matter how much it costs to do so.

Many thanks to Benefits and Work for the following information:

The Department for Work and Pensions has been given £22 million to recruit presenting officers in an effort to reduce the number of claimants winning their personal independence payment (PIP) and employment and support allowance (ESA) appeals.

The Office for Budget Responsibility’s (OBR) “Economic and Fiscal Outlook” document lists the following amount:

“£22 million to DWP to recruit presenting officers across 2016-17 to 2017-18 to support the department in personal independent payments and employment and support allowance tribunals.”

Buzzfeed is reporting that the money will pay for 180 new presenting officers.

The number of PIP appeals is expected to skyrocket over the coming two years as the forced move from DLA to PIP takes place.

In addition, the proportion of successful PIP appeals has increased with every quarter since the benefit was introduced. PIP claimants won in 60% of cases from July to September 2015, up from 56% in the previous quarter.

58% of ESA cases are also won by the claimant.

The DWP is also concerned by the way that tribunal judges have been interpreting the very badly drafted PIP legislation in favour of claimants. In particular, the widening of what counts as aids and appliances for PIP activities by judges is what led to the disastrous attempt to change the point scores for PIP.

In theory, presenting officers should act a s a ‘friend of the court’, helping judges to reach a fair decision. In reality, they will be sent by the DWP to try to discredit claimants and argue as forcibly as possible for the DWP’s interpretation of the law to be accepted.

Attending an appeal tribunal is likely to be an even more gruelling process for claimants over the next few years.

Update

Recovery In The Bin is a mental health social justice group, who are fundraising to help train 16 volunteers to support people with mental health difficulties before and up to ESA/ PIP tribunals. They say:

“Here’s what we’re doing about it

We have asked Welfare trainer Tom Messere, author of the Big Book of Benefits, if he would train 20 volunteers in the basics that they will support people up to these tribunals to give them a bit more of a fighting chance. And whilst we have Tom at our disposal we are also we will be training the volunteers to help fill out the often complex and confusing forms, so that less have to go to tribunal in the first place. The training will be on ESA and PIP, form filling, getting any available medical and informal evidence correctly pitched (what the person needs to ask for), possible calls, key pointers for accompanying, and up to tribunals.

You can join us

We are hoping you can donate to help pay for the training, the venue, transport and accommodation for Tom, and as we are recruiting volunteers, many on low incomes themselves, and as we will need to have representatives in as many places as we can (sorry, we wish we could provide for everywhere) then we are trying to raise as much help for their travel as well.

As such we are looking to raise £2250.”

 

You can support Recovery In The Bin in their aim to provide support for people who need to fight at tribunal for their ESA and PIP award, and donate here

Conservatives plan stealth raid on in-work benefits and the long-term phasing out of child benefit

 

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Picture courtesy of Tina Millis

The respected Institute for Fiscal Studies (IFS) has warned in a recent Green budget report that George Osborne’s plan to achieve a budget surplus will result in 500,000 families losing child benefit and tens of thousands having to pay a higher tax rate. More than half a million families will be stripped of child benefit over the next five years under a series of “stealth” tax raids by the Chancellor to help “balance the books.” Fuel duty will also need to be be significantly raised over the next five years or Osborne will face a £3billion black hole in his surplus plans.

Currently those earning £50,000 will lose some benefit and those earning £60,000 or more lose it all. Eventually, the report concluded, even those earning modest wages and paying the basic rate of tax will start to lose their child benefit entitlement.

The authors of the report concluded that Mr Osborne’s tax plans “lack any coherent principle” and called for more transparency, adding: “If the desire is for these tax rates to apply to a greater fraction of individuals than is currently the case, it would be better for politicians to state this clearly, rather than achieving the outcome through stealth using fiscal drag.”

Osborne’s promise to deliver a budget surplus from 2019-20 is “risky” and could have a long-term impact on the UK because the Government refuse to borrow money to fund large-scale infrastructure projects, despite low inflation.

Total public spending, excluding health, will be at its lowest level since 1948 as a proportion of national income.

The authors said: “If continued indefinitely, child benefit would be received by fewer and fewer families over time.

“But if this is the government’s intention, it would again be better to state this clearly rather than achieving it by stealth.”

Tim Loughton, a former Conservative education minister, branded the IFS findings a “double whammy” for families who are already paying the 40p higher rate of income tax.

He said: “This was inevitable. It inevitably means more and more families suffer a double whammy of having to pay higher rate tax because of the freezing of the threshold and losing out on all or most of their child benefit at the same time.

“This is hardly helpful for hardworking families trying to do the right thing for their children – if you don’t index up the rates and if you have very complicated formula that doesn’t accurately reflect household income … it’s a double unfairness.”

The Treasury has declined to comment on the IFS criticism of the Office of Responsible Budget (OBR) charter, which Osborne has committed to. But a spokesperson has said: “There may be bumpy times ahead – so here in the UK we must stick to the plan that’s cutting the deficit.”

That will invariably mean further austerity cuts. Up until recently austerity targeted those claiming out of work benefits, particularly those who are unemployed because they are sick and disabled. But increasingly, austerity is being aimed at those in low paid or part-time work, and the middle classes are set to lose further income, under the Conservative plans, too.

Despite being a party that claims to support “hard-working families,” the Conservatives have nonetheless made several attempts to undermine the income security of a signifant proportion of that group of citizens recently. Their proposed tax credit cuts, designed to creep through parliament in the form of secondary legislation, which tends to exempt it from meaningful debate and amendment in the Commons, was halted only because the House of Lords have been paying attention to the game.

The use of secondary legislation has risen at an unprecedented rate, reaching an extraordinary level since 2010, and it’s increased use is to ensure that the Government meet with little scrutiny and challenge in the House of Commons when they attempt to push through controversial and unpopular, ideologically-driven legislation. The Shadow secretary for Work and Pensions, Owen Smith, has pointed out that cuts to benefit in-work entitlements being introduced through Universal Credit mean controversial tax credit reductions have been simply been “rebranded” by the government rather than reversed.

In the Spending Review last November, George Osborne announced that tax credit reforms, which were set to almost halve the income level at which support is withdrawn from £6,420 to £3,850, would not be enacted, an analysis of the changes published by the Office for Budget Responsibility (OBR) highlighted that cuts to work allowances in Universal Credit, which set the level at which benefits will begin to be withdrawn under the new system, have not been reversed. Furthermore, people claiming Universal Credit needing in-work benefit because of low pay and  part-time hours will be expected to increase their wages and working hours, or controversially, face losing their benefit.

The Chancellor has cut in half the amount people can earn before their working tax credit starts to “taper” (reduce) – down from £6,420 to £3,850 from April 2016. Restrictions to eligibility for child tax credit means that families with more than two children are set to lose a significant amount of weekly income from April 2017. whilst the flat £545 “family element” paid before the amount for each child will also be removed completely. This will affect people in work, the think-tank Resolution Foundation said that working mothers would be worst hit – accounting for 70% of money saved by the Treasury, but overall the cuts will hit those out of work the hardest.

Many of us recognised the Tory “making work pay” mantra for what it was in 2012, when the first welfare “reforms” were pushed through parliament against widespread resistance, on the back of “financial privilege.” It was and always has been a diversion to allow the Conservatives to dismantle our welfare state, and reduce the value of labour, in much the same way as the 1834 Poor Law principle of less eligibility, which fulfilled the same purpose. The Poor Law Committee also wanted to “make work pay.” Since 2012, steadily rising in-work poverty has shown that having a job no longer provides a route out of poverty.

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The IFS report conclusions simply confirm what many of us have suspected since 2012: that the government have a secret long-term aim to completely dismantle the social gains of our post-war settlement: the welfare state, affordable social housing provision, the National Health Service and access to justice through legal aid.

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Picture courtesy of Robert Livingstone

Cuts under Universal Credit are discriminatory and may be illegal

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The Labour Party released details of research last month, showing how new claimant families will get lower in-work benefit entitlements when tax credits are replaced by the Universal Credit benefit system.

Owen Smith, the shadow Work and Pensions secretary, said research commissioned from the House of Commons library shows that next year, thousands of working families will be at least £2,500 a year worse off as a result of the government’s cuts to Universal Credit.

Mr Smith MP, responding to Iain Duncan Smith’s recent claim on the Andrew Marr show that “nobody loses a penny” from cuts to Universal Credit, said:

Iain Duncan Smith is completely wrong to say nobody loses a penny from his cuts to in-work support.

 Cutting Universal Credit raises £100m for the government next year and that money has to come from somewhere.

What the Tories aren’t telling us is that the £100m – and a further £9.5 billion over the next five years – comes from the pockets of low- and middle-income families.

That means those currently on Universal Credit face losses of up to £2,400 come April.

Just like tax credit cuts, working families will be worse off next year and just like those cuts, Labour will fight them at every turn.

Earlier this month, analysis from the independent Office for Budget Responsibility, (OBR) suggested the changes to universal credit announced in the July budget would save the Chancellor close to £3bn by 2019-20.

The Labour Party is taking advice from lawyers about the legality of the benefit cuts under universal credit. Owen Smith, the shadow work and pensions secretary, said it is discriminatory that a single mother working full-time on the minimum wage could be almost £3,000 worse off under universal credit than a mother in precisely the same circumstances on tax credits.

The challenge raises the possibility that the new welfare system could be challenged in court.

Although the Chancellor abandoned plans to cut tax credits affecting millions of working families, in his Autumn Statement, it was due to  pressure from the opposition, because the cuts were rejected by the House of Lords and a number of uneasy Tory backbenchers also raised concerns about the negative impact the cuts would have on working families.

Labour MPs have highlighted that claimants will be substantially worse of claiming Universal Credit, the  in-work benefit payments are much lower.

In his autumn statement speech, the Chancellor said: “The simplest thing to do is not to phase these changes in but to avoid them altogether.” But he added: “Tax credits are being phased out anyway as we introduce universal credit.”

The OBR’s analysis show that by 2021 the changes to Universal Credit will save the Treasury almost as much each year as the controversial tax credits policy would have done.

Mr Smith said:

Those lucky enough to stay on tax credits will be massively better off than those on universal credit … That disparity cannot be fair, it cannot be right and it may not even be legal, and we are seeking advice as to the legality of that move.

Mr Smith also confirmed that a Labour government would reverse cuts to benefits happening under Universal Credit. He said:

We will press for the same reversal for the victims of the universal credit heist that will hit precisely the same Tory and Labour constituents just before the next election.

He made the comments in a debate about the welfare cap, after the government sought approval for a motion that said the breach of Osborne’s own fiscal rules were justified because of the reversal of tax credit cuts.

Junior Work and Pensions minister, Shailesh Vara, has confirmed that on current forecasts the cap will not be met for three years.

Universal Credit is to be rolled out gradually, with about 500,000 people on the new benefit by next April. The government has insisted they will be compensated for lower payments through a special scheme called the flexible support fund.

However, Owen Smith said the only money on offer was a £69m grant for job centre managers to help people who are close to getting into work with costs such as bus fares and new clothing.

He said:

Even if it were permissible to use that money, it is in no way going to make up for the £100m shortfall next year, the £1.2bn shortfall the year after, and certainly not the £3bn shortfall in 2020. It is completely impossible and I fear it is also misleading to the public.

Mr Smith also queried the Chancellor’s absence from the House of Commons during the debate, saying he had “carelessly, ignominiously fallen into his own welfare trap” and “slipped on his own smirk”.

He said:

But inexplicably, he’s not here to account for it. Last spring he was quite definite that he should be. He said: ‘The charter makes clear what will happen if the welfare cap is breached. The chancellor must come to parliament, account for the failure of public expenditure control’”.

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It’s time to end the lie that Labour and Tories are ‘the same’ on austerity – Sunny Hundal & Sue Jones

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It is a claim so ubiquitous that most people repeat it without even having to explain it:

‘there’s hardly any difference between the main political parties’.

It’s a claim the Greens, SNP and UKIP now repeat endlessly without being challenged. It is also a claim exposed as complete falsehood last week.

For all the Chancellor’s giveaways and triumphant rhetoric during the Budget, the most significant change was a capitulation to Labour’s charge that the Tories were cutting spending to 1930s levels. In fact the difference between Labour and Tories – especially on economic matters – is the biggest it has been in over a generation. To claim otherwise is to be ignorant of the facts.

Let’s go over the numbers first. In December last year, Osborne said he would slash government spending until it reached 35.2% of GDP, a level last reached during the 1930s.

Rather than accept the cuts, Labour attacked his plans as “extreme and ideological” and said they would not match Osborne’s race to the bottom.

The difference between Labour and Tory plans on spending is colossal. To cut spending to 35.2%, the IFS said Osborne would have to cut departmental spending by £55bn from 2015 to 2020, over £20bn more than what has been slashed over the last five years. Key government departments would have to cut spending by over 50%, after already being cut to the bone. It would render many of them useless.

Labour plans are significantly different but lost in technical detail, which has allowed many on the left to wrongly claim they are the same. Firstly, they have committed to raising taxes to cut the UK’s £90 billion yearly budget deficit (i.e. the 50p rate, Mansion tax, bankers’ bonus tax, a higher bank levy), while Osborne has pledged to focus on spending cuts rather than tax rises.

More importantly, the Tories plan an overall budget surplus by 2018-19, while Labour has only committed to a current budget surplus in the next parliament. This sounds like a boring technical detail – and in many ways it is – but the practical difference is vast.

It means that while Coalition had planned over £55 Billion in spending cuts, Labour had pledged only to plug potentially a £4 Billion gap – which could even come from tax rises. A difference of Labour and Tory plans of more than £50 Billion is not to be sniffed at (in comparison the entire Scottish Budget of 2014 was £35 Billion).

To claim that Labour and Tory ‘austerity’ is the same, as some on the left have done, isn’t just ludicrous but a bare-faced lie. It illustrates a huge distortion of the facts. Of course, the Greens and SNP have an interest in saying that Labour and Tories are the same, but that doesn’t make it true.

Last week was significant because Osborne was forced into a u-turn on the biggest issue of the past five years. Of course, the press played this down. He retreated, somewhat slightly, from extreme austerity: pledging to cut spending to 36% of GDP rather than 35.2%. This mostly came from the OBR’s projection that spending on debt interest in 2019-20 will be £9bn less than it expected earlier.

But Osborne’s sleight-of-hand had bigger meaning for Labour: now it means they don’t have to make any cuts over the next parliament, as the IFS pointed out. The difference between the two parties is now even more stark.

To the naysayers who still maintain that Labour and Tories are ‘the same’, a bit more explanation is required. Last year Osborne said he would publish a ‘Budget Responsibility Charter’ and test whether Labour would vote for it. It put Labour in a lose-lose position: they would be painted as ‘profligate’ if they didn’t sign up, and painted as signing up to Tory austerity by the left if they did. Neither was true, since signing up was consistent with Labour’s initial plans. Labour decided to avoid Osborne’s trap and he didn’t bother publishing the Charter. It changed nothing.

Furthermore, the claim that Labour has signed up to Tory austerity until 2016 is untrue. As a matter of technicality, Labour cannot reverse plans already put in place for that fiscal year after being elected.

This has always been a somewhat technical debate, obfuscated by many who have an axe to grind. For political and economic reasons, Labour could never be like Syriza, so it has always been ridiculous to hope it could. Plus, it’s easy for the Greens and SNP to make wild claims about rejecting austerity without spelling out how a massive increase in spending required would be funded.

I suspect that most people who have already decided that Labour and Tories are the same won’t ever be convinced. Labour’s plans won’t catch the world on fire, but to claim they are the same as Tory austerity plans is a lie that has finally been laid to rest.

With big thanks to Labourlist author Sunny Hundal.

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Recently, the SNP, Greens, TUSC and other parties on the so-called  left have made the claim that: “Labour voted for austerity.” This is such a blatant lie. The vote, clearly stated on the Hansard record (see 13 Jan 2015: Column 738, Charter for Budget Responsibility), was pertaining strictly to the motion: “That the Charter for Budget Responsibility: Autumn Statement 2014 update, which was laid before this House on 15 December 2014, be approved.”  That isn’t about austerity at all.

The charter sets out that the Office of Budget Responsibility (OBR) will continue to monitor our fiscal rules. As we know, the OBR has written extremely critical economic forecasts and analysis of austerity and the Tory spending cuts, clearly expressing the risks that the Chancellor is running and the scale of the damage his strategy will inflict on what remains of our public services.

Furthermore, austerity and fiscal figures are not mentioned at all in the Charter.

It’s worth noting that whilst Ed Balls challenged Osborne, there was a curious silence from the SNP and the Green Party. It was Ed Balls that challenged Osborne’s outrageous claims regarding “halving the deficit”- such a blatant lie, upon which even the exceedingly Conservative Spectator spluttered contempt. Or any of the other lies, some of which have already earned the Conservatives official rebukes from the Office for National Statistics (ONS). (See “bankruptcy lie” for example, on the hyperlinked article)

Furthermore, it’s about time that some MP’s, including Caroline Lucas, amongst others, recognised that there is a fundamental difference between the meaning of the word budget and the word austerity. Conflating the two for the purpose of politicking is unprincipled and dishonest.

It’s also worth noting from the same debate on the Hansard record:

13 Jan 2015 : Column 746

Caroline Lucas: Does the Chancellor agree with me that with the feeble and inconsistent opposition coming from the Labour Front Bench, there is a very good reason for seeing the SNP, the Greens and Plaid as the real opposition on this issue because we are clear and consistent about the fact that austerity is not working?

Mr Osborne: That shows why we want the hon. Lady’s party in the TV debates.

Yes, I just bet they do, to collaborate with the Tories in attacking and undermining the Labour Party, not the Coalition, who are, after all, the ones responsible for introducing austerity measures. I don’t imagine for a moment that Osborne values further challenges to his outrageous claims of efficacy regarding austerity measures.

What is very evident when you read through this debate, is that Ed Balls and a couple of other Labour MPs presented the ONLY challenges to Osborne on this matter, just to reiterate this important point.

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It’s also worth bearing in mind that Ed Miliband established the International ANTI-austerity Alliance. Back in 2012, Miliband said: “There is a grip of centre-right leadership on Europe which has said there’s only one way forward and that’s austerity, and you’ve got to have a decisive move away from that.(See also: Labour leader Ed Miliband’s anti-austerity alliance will fight for the European dream.)

And why would Miliband be attending ANTI-austerity protests if he supported austerity?

Labour leader Ed Miliband speaks on stage at Hyde Park, during the TUC organised protest against austerity measures in London

Labour leader Ed Miliband speaks on stage to over 150,000 at Hyde Park, during the TUC organised protest against austerity measures in London.

It’s interesting to see the Chicago Tribune’s article: Ed Balls, UK’s anti-austerity finance chief in waiting.  Balls dismissed Osborne as a “downgraded chancellor” after Britain lost its triple-A credit rating.

One of his main charges has been that the government is unfairly spreading the economic pain it deems necessary to fix the economy. Austerity cuts are the burden of the poorest citizens.

Balls says that a decision to cut the top tax rate amounts to an unjustified “tax cut for millionaires”, whilst his party has been scathing of the Conservative “reform” of the welfare system.

A point echoed many times by Ed Miliband, too. Accusing the government of making lower or no income groups pay for the recovery while shielding the rich is a claim which strikes a chord with some voters who view Cameron and his government – many of whom were educated at the same top fee-paying school – as out of touch.

Caroline Lucas was born in Malvern to Conservative parents and attended Malvern Girls’ College (which became Malvern St James in 2006), a fee-paying private school. Ed Miliband, on the other hand, went to a comprehensive school.

Polls also show that many voters approve of the government’s drive to rein in welfare costs and the government has demanded that Labour spell out what they would do to fix the economy. They have, but with understandable caution.

Labour’s careful, costed and evidence-based policies include: a Bankers’ Bonus Tax; a Mansion Tax; repeal of the Bedroom Tax; a reversal of the Pension Tax relief that the Tories gifted to millionaires; a reversal of the Tory Tax cut for Hedge Funds; freezing gas and electricity bills for every home a the UK for at least 20 months; the big energy firms will be split up and governed by a new tougher regulator to end overcharging; banning exploitative zero hour contracts; introduction of a living wage (already introduced by some Labour councils); a reversal of the £107,000 tax break that the Tories have given to the millionaires; reintroduction of the 50p tax; scrapping George Osborne’s “Shares for Rights” scheme that has opened up a tax loophole of £1 billion; ensuring Water Companies place the poorest households on a Social Tariff that makes it easier for them to pay their Water Bills; breaking up the banks and separating retail banking from investment banking; introduction of measures to prevent corporate tax avoidance, scrapping the Profit Tax Cut (Corporation Tax) that George Osborne has already announced for 2015 and many more.

These are not austerity measures. They are strongly redistributive policies.

It’s difficult enough opposing the manipulative, lying authoritarian Conservative-led government, without having to constantly counter lies and smears from fringe parties claiming to be on the Left, while propping up the Right simply to gain votes and undermine the only feasible opposition to the Tories, currently.

Shame on them.

Sue Jones

Related

Labour’s fiscal targets mean cuts could end next year – Labourlist

Labour’s fiscal responsibility and caution isn’t austerity, so stop doing Lynton Crosby’s job for him.

The ultimate aim of the “allthesame” lie is division and disempowerment of the Left.

Narxism

Electioneering and grandstanding: how to tell the difference between a moral political party and a moralistic one.

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Pictures courtesy of Robert Livingstone