Blame it on the benefits
Iain Duncan Smith, Secretary of State for Work and Pensions, made a speech today. The Telegraph had the scoop, and what they report suggests that Mr Smith has gone insane. The BBC article after the speech does little to change my mind. The Telegraph reports that he believes that, ‘[t]he economy will never fully recover unless families on benefits return to work’
What is disturbing about this is it assumes that everyone on benefits is unemployed. This is not the case. I’ve been trying to find recent figures but have failed to navigate the Department of Work and Pensions website, so I’m reliant on this graph produced by the Guardian in 2013. While the figures are out of date it is unlikely that the relationships have changed significantly. If I can find more up to date figures I will post them.
As you can see unemployment accounts for a very small proportion of the total benefits paid out. Ah ha! but those other benefits are also paid to unemployed people! Well, yes, they are but they’re also paid to employed people. In fact, there are more employed people getting housing benefit than unemployed.
The Telegraph also reports that ‘[Iain Duncan Smith] will also say that the number of immigrants entering the country was fuelled by British people refusing to take jobs because of the “way our benefits system was constructed”.’
The Guardian recently broke the story of a man who died due to benefit sanctions. David Clapson had diabetes and needed regular insulin injections. He was found dead in his flat after his benefits had been stopped. He had no money to pay for electricity so he was cut off, meaning his fridge was unable to preserve his insulin which resulted in him collapsing and dying from diabetic ketoacidosis. The story generated thousands of comments, culminating in another article detailing some of the stories of people being sanctioned for ridiculous reasons. While all of them are worth reading, this one really stuck in my mind for the Kafkaesque nature of the situation many people find themselves in,
‘My nephew got sanctioned for turning up seven minutes early for his appointment. He was, apparently, supposed to turn up 15 minutes early, but he hadn’t understood that.’
A report I did find on the DWP site showed the number of sanctions being applied.
[Source, p14]
That’s a massive increase. Are people getting less compliant or is it that the DWP is forcing staff to sanction claimants regardless of whether they deserve it? This tumblr gives a taste of the reasons why people have been sanctioned. Few, if any, are deserving of such action. So the idea that people are turning down jobs in meaningful numbers because life on benefits is so cushy is an idiotic fallacy.
Going back to his speech, Iain Duncan Smith says,
“This economy can never be where it should, holding its own in this tough world marketplace, unless British families play a full productive part in that plan”.
The implication that families aren’t ‘doing their part’ is as insulting as it is incorrect. As I said, many of the people on benefits are in work, generally working minimum or just above minimum wage jobs, trying to look after kids, possibly their parents, helping in their communities and generally trying to live their lives. Those who aren’t doing their part, it could be argued, are companies like Starbucks, Vodaphone and Google who are quite happy to make profit in the UK but are unwilling to pay their taxes which could total around £1 billion.
Plus, it’s rather hard to play an active role in the economic growth of the country when you’re struggling to pay the bills. The Equality Trust shows the income spread for the UK. 40% of the population earns less than £20,000 a year.
When you have removed a substantial proportion of the population from having any meaningful spending power you are harming the economy. If you aren’t willing to increase wages by increasing the minimum wage to something that means people can live on it then you need to increase their income through benefits. That’s what’s been done and it’s why so many people in work are receiving some form of benefit.
What’s even scarier than his implication that people on benefits are responsible for immigration (as if immigration is a new phenomena, rather than something that’s been happening for millennia), is his using this accusation as an excuse to cut benefits even further as, I’m guessing, some sort of ‘tough love’.
‘The Conservatives are reportedly considering making further cuts to welfare and Mr Duncan Smith suggests he believes there is more to be done.’
‘There have been reports that the party could consider lowering the £26,000 cap on benefits to bring it closer into line with the average take-home pay of about £18,000. Ministers are also understood to be considering plans to limit to two the number of children for whom benefits can be claimed.’
I don’t know enough about benefits to be able to speak to caps, other than I find it troubling that the reaction to the figures given in the quote above is to say, ‘let’s lower benefits’ rather than ‘lets try increase the average take-home pay’ and to try and do that by raising the wages of the lowest paid.
As for the cap on children, well, that’s all well and good if you want to stop people from having ‘too many’ children (and the idea of two being the norm is recent phenomena, only possible since the widespread use of contraceptives) but what about those children already born? What can be said to them? Sorry, but your parents should have played monopoly instead of having ‘an early night’ so, well, I guess it sucks to be you. The Guardian also shows that the majority of families only have one or two children anyway, so the act would be more of a symbolic ‘screw you’ to large families, rather than any meaningful way of saving money.
(The BBC reports that he's rejected the idea of limiting benefits to two-child families, but is considering capping benefits at four children and paying progressively less for each child following advice from the centre-right think-tank, Policy Exchange.)
All in all, Iain Duncan Smith is talking out of his arse. His claims aren’t backed up with data and the consequence of his fight against benefits is to keep the economy in the doldrums as more and more people struggle to pay for necessities and so have no money left over for those frivolous things like a night out, or new clothes, or even a much-needed holiday, that are so important to getting the economy back up and running.
Benefits are not a sign of a country in crisis. As the Guardian points out, Somalia spends less on benefits that Sweden, but I don’t think we’re all rushing to move to east Africa. Benefits are a sign of a country that has matured and realised that it is important to look after those who are less fortunate. The constant demonising and belittling of people on benefits, calling them scroungers rather than recognising that they’re working just as hard as anyone else with far fewer resources, does nothing to help the situation and everything to harm people and the institution. It only takes a business collapsing, or a serious injury to put anyone onto benefits.
People on benefits are not the cause of the economic downturn and penalising them further is not going to cause the economy to bounce back. The Conservative policies espoused by Iain Duncan Smith are not based on sound fiscal theory, they are based on the dogma that poor people deserve to be punished, bullied and demeaned. It’s the rhetoric that led to the Victorian workhouses and it seems to be leading right back to them.
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