Let’s scrap Universal Credit and devise a truly radical welfare policy

On 7th October, John McDonnell finally appeared to acknowledged what has long been argued by benefits campaigners, claimants and many DWP workers: that no amount of tinkering will make Universal Credit fixable, and that it must be halted. Yet, even as evidence of UC-related destitution, homelessness and mental health distress pile up, the official Labour line remains as stated at conference by Shadow Work and Pensions Secretary Margaret Greenwood: that Universal Credit should be “paused” until certain elements have been “fixed”.

 

Thus, we can expect to see Labour MPs campaigning vigorously for a reduction of the waiting period for first payments, for easier access to direct rent payments to landlords, and for a reversal of the cuts wrapped up in the switch from the Tax Credits system to Universal Credit, (predicted by the Resolution Foundation to cost up to 3.2 million working single parents and couples with children an average of £2,400 a year). But as regards the fate of Universal Credit as a whole, we are offered only a consultation and review, suggesting that Labour policy-makers have yet to grasp the deeper implications of a system quite openly and even boastfully designed to inculcate “work discipline”. Nevertheless, a consultation is an opportunity not only for a resounding rejection the litany of murderous benefit cuts and barriers of which Universal Credit is the culmination, but also to propose more visionary ideas which genuinely support the values about which we heard so much at the Labour conference: those of equality, valuing of care, collectivism, and empowerment of workers.

 

Given the climate of media hostility and public mistrust of Corbyn prior to the 2017 election campaign, it is not surprising that the Labour manifesto showed little stomach for radically challenging the despicable and divisive “strivers and skivers” narrative which portrays benefits spending as an “unfair burden on the hard-working tax-payer”. The fact was that the mediabacked Tory campaign to demonise claimants had been spectacularly successful, aided by the inbuilt logic of the benefits system itself: if claimants are being sanctioned in droves, if claimants are being put through (and “failing”) harsh Work Capability Assessments, it must be that a tide of unscrupulous scroungers is threatening to bleed the taxpayer dry. Our experience of street campaigning also suggests that the arduous and unrewarding work schedules suffered by many of those in employment fuel their resentment of those depicted as “avoiding” this obligation.

 

Predictably, then, we have so far seen embarrassingly timid Labour campaigns around “making work pay” (ie reversing cuts in work allowances for claimants doing waged work). Such demands – vital as far as they go – remain entirely consistent with the Tory goal of enforcing compliance with the most exploitative end of the labour market. It is also worth noting that the hugely welcome and necessary manifesto pledges to end sanctions, the Work Capability Assessment (WCA), and the bedroom tax, have been largely forced by years of dogged campaigning by independent community-based groups and NGOs, and the resultant growing outcry at the monstrous inhumanity of these policies. But in protesting their cruelty, it is important not to portray these policies as in any way arbitrary or exceptional; rather they are intrinsic elements of a system whose ideology and practical goal is to unleash upon the poorest the basest and most naked logic of the job market, the reduction of the human to a mere unit of potential labour, and the portrayal of any adequate collective provision as an injustice against the righteous “self interested” individual. Impacts of Universal Credit and benefit cuts

 

The roll-out of Universal Credit alongside a series of vicious cuts to benefits is creating a deep humanitarian crisis, which is only set to get worse. The Institute for Fiscal Studies states that 75% of the cuts announced since 2015 are “yet to be felt by working-age households”. Their report projects a 50% increase in relative child poverty between the years 2015/16 and 2020/21, as well as a rise in absolute child poverty, mostly driven by benefit cuts. In areas where Full Service Universal Credit has been rolled out for all new claims the Trussell Trust has estimated a 50% increase in foodbank use; and in some areas 90% of UC claimants have been affected by rent arrears, with increasing numbers of landlords refusing to let to benefit claimants, and even preempting UC roll-out by using Section 21 (“no fault”) evictions to get rid of them.

 

There is far worse to come as “Managed Migration” (ie changeover to UC for people already on benefits or Tax Credits with no change in circumstances) is rolled out from 2019 onwards (most probably, it now seems, beginning with small-scale testing, with the start of the main roll-out planned for November 2020). The government is making much of the fact that people switched over to UC under Managed Migration will have “transitional protection” so will not see cuts to their benefits, but this is dishonest as their benefits will then remain static until their value has been reduced by inflation to the same level as applies to new claimants – and for many, a change in circumstances will result in loss of all transitional protection. In addition, there are fears about vulnerable people inadvertently falling off benefits because, once informed that they need to apply for UC, their benefits will be stopped if they fail to do so within a month.

 

The impacts of UC and benefit cuts severely deepen existing economic inequalities. A report early this year by the Equality and Human Rights Commission on the cumulative impact of tax and benefits policies from 2010 to 2021, found that women lose around twice as much as men, reflecting their greater dependency on benefits and tax credits due to the gendered division of labour. The poorest tenth of households bear the main brunt of the cuts, losing an average of 10% of their income; but for single parents this rises to 15%, with children in 62% of lone parent households expected to be in poverty in 2021, compared to 37% in 2010. Black and Asian families are projected to lose twice as much (as a percentage of their income) as the population average. Household containing one or more people with a disability lose several thousand of pounds a year compared with 2010, with those containing both a disabled child and a disabled adult faring worst of all. And as always, this analysis underestimates the impacts upon households affected by a number of intersecting and mutually reinforcing inequalities.

 

So why focus on Universal Credit specifically?

Many critics have suggested that the fault lies with the implementation of Universal Credit – hence the call to “pause and fix” – yet the central problem really lies with the underpinning principles that UC must resemble “work” (ie waged employment), inculcate “work discipline” and “incentivise” (ie enforce) “work” through the use of harsh conditionality backed up by sanctions. A further principle flowing from this is that it is seen as both “necessary” and “fair” that anyone unable to meet their material needs through the job market should suffer a significant degree of deprivation. The philosophy is not unique to UC, but UC is unique in applying it so systematically; by drawing the six main benefits and tax credits into one, the only “simplification” actually achieved is that of extending the embrace of this crude over-arching ideology across an ever wider section of the population.

 

In this scenario, human beings are merely interchangeable units of potential (flexible) labour, indistinguishable by autonomous interests, needs or obligations. Likewise, all “work” represents mere units of economic activity (ie potential profit), interchangeable without regard to its content or its specific impacts either on society or on the quality of life of the worker. Of course, such a stripped-down vision of the wage-relation cannot be applied universally in an economy partially dependent on specialist skills, maintaining a semblance of public services and securing consent through the perception of “choice” and the possibility of “advancement”. Rather, the discipline and hardship of the benefits system serves to hive off and mould a section of the workforce for whom the primary incentive for “work” is, perforce, simply to escape the penury of the benefit system – thereby meeting the demands of the most exploitative areas of the job market whose requirement is for a “flexible” and easily disposable workforce.

 

Thus the inbuilt tendency of UC is to exert downward pressure on wage levels and job quality, and heighten the barriers to workers’ solidarity and resistance – and it does so by tending to enforce work patterns which actually hinder “advancement”, instead locking people into cycles of insecure low quality work, zero hours contracts, fake self-employment and repeated bouts of unemployment (see, eg, Welfare Conditionality Project, University of York). Research has found that the threat of sanctions can indeed promote the take-up of employment, but the work is more often short-term, part-time and unhelpful to the claimant’s longer-term prospects than if they are supported to seek work which better meets their needs. The employer’s requirement for “flexibility”, on the other hand, is very well served!

 

Viewed in this light, it is no surprise that the rate of sanctioning (ie having benefits stopped for “failure to comply” with conditions) has soared under Universal Credit. DWP figures for May 2017 to April 2018 show that 2.8% of Universal Credit claimants have been subject a sanction compared to 0.3% of people on Jobseeker’s Allowance (JSA) and 0.1% cent of people on Employment and Support Allowance (ESA). In large part, this reflects the broader range of claimants potentially subject to sanctions: for example, unlike under the old system, disabled people and those with long-term health conditions are not treated as having limited capability for work until they undergo a Work Capability Assessment, but have conditions placed on them, at the discretion of their Work Coach, which they often struggle to comply with.

 

The sanctions regime is harsher under UC. The amount deducted is 100% of the standard allowance for a single adult or 50% of the couple allowance, except for the lowest level of sanctions, for single/lead parents of one year olds, where “only” 40% is deducted. The all-in-one system means that (unlike the old system) it is possible for the sanction to eat into the housing support and child elements of the benefit award. Unlike the old benefits, any additional sanctions are added on consecutively. Working claimants earning less than the minimum wage times their required hours of work (35 hours is the default) are required to prove they are seeking to increase their earnings, even though research such as the York University study has shown that this is rarely possible due to work patterns in these sections of the economy. Sanctions for working claimants are still being piloted at a large scale.

 

It is equally unsurprising that Universal Credit views unwaged work such as childcare as “worklessness”, whilst childcare responsibilities are described as “barriers to work”. Single parents of young children who would previously have claimed Income Support and faced a more limited conditionality regime, are now amongst the largest groups to account for the soaring rate of sanctions – mostly for missing work-related interviews or turning down or leaving jobs because of childcare issues. Although in theory working parents can claim back 85% of their childcare costs, the amount is capped at £646.35 per month for one child and £1108.04 per month for two or more children, and affordable childcare covering sufficient hours is rarely available. Under these conditions single and lead parents have severely limited options and are especially vulnerable to being pushed into the most exploitative sectors of the job market, whilst receiving no wage for the presumably vital work of raising and caring for tomorrow’s workers!

 

Single (and “lead”) parents of one year olds can be sanctioned for missing a work focused interview at the job centre. Single parents of two year olds can be sanctioned for failing to complete a work preparation requirement. Single parents of children aged three and upwards can be sanctioned for failing to seek or take up work for the mandated number of hours (usually 25 hours a week or more to fit in with school hours), with parents of over-12s being subject to “full work related requirements”.

 

Whilst technically gender neutral, in practice UC is modelled on and reproduces the “traditional” gendered division of labour and dependency of the main carer (most often a woman). For couples, the single monthly payment is made to one partner, in effect treating the couple as a “breadwinner” and a dependent despite the fact that each partner has their own work search conditions to meet. Clearly this increases the risk that the other partner and their children can be left destitute in the case of an abusive relationship, and with a high risk of violence should the victim/survivor request a split payment. Partners are also able to view each other’s online journals and conversations with Job Centre staff. Whilst joint claims were also the norm under the old system, Child Benefit at least was paid to the main carer, and direct payments of rent to social (and sometimes private) landlords meant that at least the home was secure.

 

The level of cuts wrapped up in Universal Credit for people with disabilities should also dispose of any notion that the benefit is about “supporting the most vulnerable”, or even providing a bare safety net. UC abolishes the Disability Premium (£33.55pw), the Enhanced Disability Premium (£16.40pw) and the Severe Disability Premium (£64.30pw). Claimants eligible for these supplements will now not have to claim UC until they become eligible for transitional protection under managed migration – but new claimants after that will still be affected, and “protected” payments will lose value due to inflation. Families who get DLA for a child at the lower or middle rate also lose more than £30 a week. The government seeks to justify even these cuts with the mechanical mantra that “work is the best way out of poverty” – hence its benevolence in forcing many sick people to seek work which they cannot do and then sanctioning them when they fail – often with severe and even fatal consequences.

 

People with disabilities and mental health issues are also most likely to fall foul of the hurdles involved in making an initial claim – for example, to have their claims closed or be sanctioned for failing to arrange or attend initial appointments. And those with certain mental health issues, or with drug or alcohol dependency, are likely to have particular difficulty in budgeting a large single monthly payment – thereby increasing the risk of rent arrears and eviction. Although it is possible for landlords to request direct payments of rent to avoid arrears, this is normally only possible where there are already significant or repeated arrears, and the household is already in serious debt. Most landlords seemingly prefer the simpler route of avoiding letting to tenants they suspect of being unable to manage their rent payments.

 

The many issues with the “implementation” of UC are widely documented. These generally flow from the government’s iron insistence that claiming benefits should be “like work”, although the pattern they have in mind appears to be that of a stable job with a monthly salary adequate to allow saving for emergencies – a far cry from the conditions many claimants have experienced or which the benefit system pushes them towards. Problems include:

• barriers faced by claimants without IT skills or computer access to making and managing claims online;

• monthly payment in arrears which leaves claimants with a five week wait before receiving a first payment;

• the difficulty managing a single monthly payment (including rent) when already on an inadequate budget;

• large fluctuations in income which result from awards being based on the previous
month’s earnings rather than the month in which the benefit is paid;

• the monthly assessment date which means claimants with 4-weekly or more regular wagedates can end up with two or more wages in one assessment period, thus reducing their UC award to zero in certain months and resulting in a significant arbitrary cut to their overall benefit income;

• self-employed claimants’ monthly assessments make an assumption that they have earned at least the equivalent of the minimum wage (after the first year of a business).

 

Campaigns and parliamentary interventions have resulted in some concessions – for example claimants on Housing Benefit now receive a two-week run-on of housing support when they claim UC, and new claimants can apply for a loan of up to a month’s benefit entitlement to tide them over the waiting period (leaving them with a significantly reduced benefit income for the coming year!). But essentially the barriers to making and maintaining claims and the indifference to the needs of those struggling most to cope are structural features of a system moving away from a “safety net” function and towards one of engineering “work” compliance.

 

So what should we do as Labour Party members and/or campaigners?

At the time of writing we are hearing that the government is likely to delay the start of large-scale managed managed migration until November 2020, though smaller-scale testing will begin next Summer. It is also likely that the effects will be mitigated by a two week run-on of Income Support, JSA and ESA after claiming UC, limitation of maximum deductions (eg loan repayments) to 30% of monthly entitlement, and reforming the treatment of self-employed earnings. These concessions do not appear to improve the prospects for new claimants, or affect the fundamental principles of the system. Nevertheless, they do point to the possibility of forcing the present government into further concessions.

 

At a minimum, campaigners and Labour MPs must push for the following: a moratorium on sanctions; permanent reinstatement of disability supplements; protection of Tax Credit income for new as well as migrated claims; non-repayable advance payments for new claimants; automatic split payments for couples; the right to choose shorter payment intervals and/or a direct payment to the landlord as standard; lifting of work related requirements from sick or disabled claimants pending assessment (the abolition of the current harsh assessment process is of course urgent in its own right!). We should also be calling for an urgent increase in front-line DWP staff and decision-makers, and better support for staff. Such reforms could result in a more viable interim system, making the introduction of a new system under Labour a realistic proposition.

 

Hopefully it is clear by now that in the longer run we need to demand the scrapping of Universal Credit and its replacement by a system which both provides genuine support and security, and which dovetails with other progressive social and economic goals. To do this needs a huge campaign involving an alliance of claimants, grass roots groups both inside and outside the Labour Party, trade unions, and tenants unions, and advocacy organisations. It also needs a shift in mindset and a raising of sights by Labour leadership, unions and many campaigning bodies.

 

At a Labour conference fringe meeting, John McDonnell repeated the conventional view that the main way of defeating poverty was through raising wages, but that there also needed to be an adequate safety net for those unable to “work”. There are serious problems with this dualistic view which defines the real subject of economic thinking as the waged worker, and relegates to an afterthought those with long-term disabilities, carers and all those whose unwaged labour in the home – especially childcare – underpins an economy based on wage labour. Speaking of those in the latter group as being in a “safety net” is not only offensive but has material consequences
in justifying their permanent relative impoverishment and perceived status as recipients of taxpayer funded charity. Yes, of course we must fight for higher wages – but on the basis of genuine principles of solidarity and equality, leaving none behind.

 

But McDonnell’s remarks also miss this point: if the Tories can weaponise the welfare system in the interests of a crude and hyper-exploitative market economy, it cannot be beyond us to devise a system which supports different goals. The details of such a system must be the subject of discussion and debate, but I would suggest a number of touchstones which should be applied:

 

• A welfare system must complement the revival of unions promised by McDonnell, by facilitating workplace solidarity and giving unemployed workers the genuine choice to refuse poor pay and conditions and fragmented work patterns. It can also support efforts to promote rights and protections through policies such as local authority insourcing.

 

• It must not view all work as equivalent, but must promote consideration of what kinds of work supports social and environmental goals and personal quality of life. Therefore, it must work alongside policies for education and training, and promote rather than block access to such opportunities. This would not only support the earning power and life satisfaction of the worker, but also facilitate policies such as shifting to a low-carbon economy, reviving economically depressed regions, and rebuilding the NHS and social care – all issues considered in Shadow Ministers’ conference speeches.

 

• It must promote parity of income and esteem for caring roles including childcare, whether carried out by parents in the home or collectively (eg in community nurseries), or via properly resourced conventional nurseries with well paid and trained staff. Corbyn has announced that 30 hours free childcare will be offered to all 2, 3 and 4 year olds (with further hours capped at £4), but this must not be seen as merely facilitating parents to enter the waged workplace and thereby entrenching the double-shift. The welfare system must recognise the value of free time and of quality time spent with children.

 

• It must genuinely support equalities of every kind. It must actively promote the economic equality, autonomy and safety of women, greater socialisation of domestic labour and care responsibilities and an end to the systematic gendered division of domestic labour. It should help to reverse entrenched inequalities based on a “racialised” division of labour which for example locks many BAME women in particular into low-waged caring roles. It should be genuinely enabling for people with disabilities who wish to access waged work, whilst ensuring that those who do not or cannot earn a wage receive a level of income which enables them to enjoy the same standard of living and quality of participation.

 

• It will be partly judged according to the extent to which it dovetails with and supports a shift towards shorter working hours without reductions in income

 

Finally… Please do respond to the Labour consultation on benefits when it appears, and if you are a Labour Party or union member please encourage your branch or CLP to pass motions calling on the Party to embrace and vigorously campaign for a Stop and Scrap policy. Get involved in the campaign against benefit cuts and UC and the discussion about what sort of welfare system we need.

 

Contact handsoffourhomes@gmail.com, the Community branch of Unite the Union, or the Facebook group Leeds Labour Housing and Benefits Campaigns (open to non-members). We will be publishing suggested motions on these forums shortly.

 

NB If you are personally affected by any of these issues you should check for the most up-to-date information with a professional advice worker or a website such as http://www.turn2us.co.uk, http://www.entitledto.com, or http://www.citizensadvice.org.uk/benefits/universal-credit/

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