There’s something I’ve noticed whenever I hear or read Iain Duncan Smith talk about his plan to cap the increase in benefits at 1% – a measure which just won a key vote in the House of Commons this evening. IDS slips easily between discussing people claiming benefits fraudulently (‘criminals’), those claiming excessively (‘scroungers’), those claiming even if they could be working (‘idlers’) and any of the above who have the temerity to claim from overseas (‘foreigners’ – even though some could be UK citizens living abroad). He will tell you about his desire to move people from welfare to work, and about the cost of various aspects of the current system but, in doing so, he will carelessly elide all these different issues to make you think they’re all just subtly different aspects of a single problem. He might, for example, illustrate an argument about people earning more from benefits than others do from working with an estimate of the cost of benefit fraud. Or he might bandy about the total cost of the welfare system to emphasise his views on a culture of entitlement. Cost, impact, abuse, unfairness – it all gets blurred into one hazy issue where the distinctions between quite separate problems become hard to identify.
What you won’t hear him talk about is the importance of an effective benefits system to those that need it. The people who claim because they have no other way of keeping body and soul alive. The ones who would love a job, or a better paid job, if they could get one, but they don’t have the skills, or the experience, or there are too few jobs available near where they live because have you noticed we’re in the middle of this huge recession? IDS doesn’t talk much about how the system works for those for whom it was designed to work.
As far as I can tell, IDS talks like this for two reasons.
The first is that he doesn’t give a shit about poor people. I can’t think of any other explanation. He’s not interested in the effectiveness of benefits in helping those with no or very low incomes pay for luxuries like food and housing because he thinks poor people have only themselves to blame for their poverty. His is the classic conservative view which is that we’ve all had the same opportunities and if you just pull your socks up and work hard, you will get the rewards that come to you. Which is brilliant logic until you think about it for a millisecond or two and realise that we haven’t, in fact, all had the same opportunities. In fact, the main difference between someone who works hard and is poor and someone who works hard and is rich is usually the quality of opportunities they’ve had – most commonly starting with wealthy parents and good schooling.
The second reason IDS talks the way he does is, of course, because of the political value in portraying poor people – rather than poverty itself – as the problem. The natural compassion for the needy and vulnerable that we all have as, you know, human beings, needs to be smothered somehow if we are to swallow his act of political meanness. By blurring the distinction between the poor and the parasitical, IDS has been very effective in winning the support of the British public.
There are serious criticisms to be made of the welfare system that deserve attention. Plenty may argue that other issues deserve a higher priority but I don’t think you’ll find anyone actually defending benefit fraud. Any kind of ‘culture of dependency or entitlement,’ if it exists, would be cause for concern. And, yes, it is a bit bonkers that someone can earn more on benefits than in work – although, to my mind, that says more about the paucity of the wages than the generosity of the benefits.
But these are specific problems to which an indiscriminate solution – a real-terms, across-the-board cut in benefits – is being applied. How will cutting benefits tackle fraud? How will it help create jobs or curb cost-of-living inflation? How will it lift the wages of the most low-paid jobs? It won’t.
And, if the bill is indiscriminate in its purpose and design, it is highly discriminatory in its impact. The Department for Work and Pensions’ (DWP) own impact assessment on the bill voted on this evening notes that (according to The Guardian):
“The average change for those households in lower deciles is higher than those in higher deciles. This is because they currently receive a higher level of benefit payments and so they are impacted more from the same percentage change in benefit. Those in higher deciles who are affected may only receive Child Benefit.
Lone parents are the family type who are most likely to be affected and also have the highest average change (-£5 per week). This is because they have a lower employment rate than average and also often qualify for in-work support.
Women are more likely to be affected than men. Some 33% of women are affected, compared to 29% of men.
Households with a member who is disabled are more likely to be affected than non-disabled households. That’s because, although the 1% cap does not cover disability benefits, people with a disability are more likely to be receive the benefits that are covered by the bill.”
The poor will be made poorer; the poorest, poorer still.
Of course, this bill isn’t really anything to do with poverty, employment, fraud or discrimination. It’s purely a cost-cutting measure.
We have to do everything we can to reduce the deficit, the government argues (with validity). With the DWP accounting for some 23.3% of all government spending in 2010 – the biggest single chunk of public expenditure when this government came to power – something in benefits had to give. At least, it does if you can’t be bothered to find some way to avoid it. You know, by making high earner and corporate tax avoidance a higher priority than benefit fraud. Or ditching other big ticket spending items, like a nuclear weapons system we’ll never use and is designed to deter a largely hypothetical enemy. That sort of thing. No, obviously, if you can make the poorest pay then that’s clearly the best solution because they won’t do awkward things like threaten to leave the country because, ha ha, they can’t afford to go anywhere, the poor sods.
The absolute necessity to do absolutely everything humanly possible to cut the deficit somehow didn’t stop the government reducing the top rate of income tax (payable only by those earning £150,000 pa or more) from 50% to 45%. The 50% rate, brought in during the dying days of the Labour government, was reckoned by HMRC to be bringing in “only” about £1 billion in revenue (less than expected because it encouraged the super-rich to fiddle their taxes in ways that are only accessible to them and completely legal and so absolutely acceptable and untroubling). Today’s benefit rise cap will, according to DWP, save the government £1.1 billion. Basically, those on the lowest incomes and in greatest need are subsidising a tax cut for those on the highest incomes. Despite failing to bring the deficit or government debt under control, this government has managed the singular feat of redistributing wealth upwards.
Am I really bringing out the old saw about making the rich pay more? Yes I am. Even though I know that the biggest earners in the UK do, in fact, already account for a large proportion of tax revenues – in September 2012 Channel 4′s Fact Check found that, in 2009-10, the top 1% of earners in the UK earned 13.9% of declared pre-tax income and paid 26.5% of the nation’s income tax. So, what moral argument can be made for making the rich pay even more? I’ll make three.
First, because they can. A 1% difference in income means a lot more to someone on £150 a week than it does to someone on £1,500 a week.
Second, because I think that the co-existence of extreme wealth alongside poverty is morally obscene. Despite everything we’re going through, we are one of the most advanced, wealthy nations on the planet. It doesn’t seem unreasonable to expect that, as an absolute bare minimum, people should not go cold or hungry. The money exists to prevent that from happening – it just needs distributing right.
Finally, the rich should pay more because it is in their long-term interests to do so. Even the most talented, dedicated captain of industry did not get rich on his or her own. Lesser mortals worked for them, making their products for other lesser mortals, in even greater number, to buy them. The wealthy won’t get any wealthier in an impoverished economy in which productivity and consumer spending are down. Moreover, a society in which the poorest are even further marginalised, villified and maligned is one that can expect greater poverty, higher rates of crime and an increased likelihood of social disorder. Those things are not good for business.
If the welfare system is sick, then we should fix it – but modern medical practice is to favour a scalpel over a bludgeon. People in need are not a problem to solve – they are people. If it’s money you want, the best place to look is those that have it.