Taking from the poor to give to the rich!

Taking from the Poor to give to the Rich

The safety net provided by government since the creation of the welfare state, ensures that people are given the support they need to live a decent quality of life at difficult times in their lives, and sometimes for all of their lives. The Labour Party believes in a progressive taxation system. This in its simplest form means that those with the most resources pay the highest percentage of their income in tax, in order to adequately fund services for everyone. We all have a responsibility to everyone else.

In a speech in November 2016, 13  Jeremy Corbyn said :

‘The Labour Party under my leadership will break from a failed austerity project and transform our Social Security system based on the principles of dignity, independence and support.

We will scrap punitive sanctions and develop policies to tackle issues affecting all disabled people and their carers across the UK.

It is part of Labour’s commitment to transform our Social Security system, ensuring that, like our NHS, it is there for us all in our time of need’.

In contrast, the Conservative view is that people should provide for themselves, and pay for the support they need from their own resources. Consequently, they support private businesses in supplying public services, rather than state owned services. The core ideology of conservatism is that government has no business in people’s lives and should have to do very little to support them.

Under the coalition government from 2010, and the Conservative one from 2015, there has been a systematic policy to cut all public services, and outsource many of them to profit making companies. Cuts to local authorities have resulted in a £4.6 billion reduction1 in social care budgets, for example. At the same time there have been significant tax cuts for the very high earners and corporations.

This is evident in the policies being introduced by the government and their draconian approach to disabled people.  The attack on the levels of Welfare Benefits and their qualification criteria for people who are unable to provide for themselves due to the impact of disability has literally taken away the means of survival from these most vulnerable people.

By 2015, there had been over 50 cuts to welfare provision and services.2 The banking crisis, which was caused by the greed of millionaire bankers, had resulted in an unacceptable level of ‘debt’ which needed to be paid off. This was the Government’s justification for the programme of austerity, that has decimated our public services, increased homelessness, child poverty, and left the NHS struggling for its very survival. However, despite all the pain, the deficit has massively increased3.

“Paying down the deficit” was a smokescreen to allow the government to implement severe cuts on public services, year on year, in pursuit of the Tory ideology of ‘small state’. Cameron’s Big Society idea, was actually no more than rolling back the state to force voluntary and charitable organisations to provide the support people need, often whilst coping with government cuts to their own grants and allowances.

The government contends that practically everyone is able to do some work. Some people who are very sick need support until they are able to look for a job. The logical conclusion to their position is that in 2010, there were large numbers of people deliberately choosing a life on unemployment, sickness and disability benefits, who were perfectly able to work if they only tried. The Benefits bill was to be cut by removing benefits from those who didn’t really deserve them. Who could disagree with that?

 

Tackling fraud ?

Clearly some people abuse the system. There are some fraudulent claims for benefits.  But the narrative around this in the media, would suggest that this is happening on a much larger scale. People abuse the tax system too, but much less work is done to tackle tax evasion and avoidance. 11

In a Parliamentary Report,4 the Work & Pensions Committee admitted that there were £5.1 billion in incorrect benefit payments made in The Financial Year to March 2013. Of these, £1.6 billion was underpaid and £3.5 billion overpaid.

Of the £3.5 billion of estimated overpayments, £700 million was caused by official error, £1.6 billion by claimant error, and the fraudulent element of overpayments, £1.2 billion, amounted to 0.7 percent of £175 billion total benefits expenditure.

The DWP response to these figures was to introduce a raft of measures that included a partnership with HMRC and private sector companies to track down fraudsters, and offering incentives to the general public to “rat on a rat” and inform on people they suspected of fraud. There is no data available on how many HMRC officers were detailed to this task. It is notable that no resources appears to have been put in to reducing the amount of official error, or indeed to reducing the amount of underpaid benefit!

 

An easy target

Refusing to accept that their mantra that work is the way out of welfare cannot apply to everyone, the government turned its attention to a group in society portrayed as including malingerers in great numbers by sections of the media and MPs; people with disabilities.

Here was a group that traditionally does not have much of a voice, and was heavily dependent on the benefits system, in which the government perceived a need to make huge savings.

In 2013, the government decided that every person claiming sickness or disability benefits would be subjected to a reassessment of their ability to work. And new claimants would be subject to a new test of their incapacity to work. Atos, a company previously appointed by the Blair government in 1998 as the sole provider of medical assessments to DWP, was given the contract to carry out the new work.

 

Disquiet and protest

In a very short space of time, the nature of the new assessments began to cause disquiet and protest among the sick and disabled and their advocates. Initially, the government estimated that up to 23% of the 1.5 million people undergoing assessment would be found fit for work. Over 1 in 5 then, believed to be claiming fraudulently. In fact their own figures above show the percentage of fraud to be just 0.7%.

However this erroneous estimate became a clear target to aim at, and Atos set to work. Thousands of disabled claimants suddenly found their allowances stopped, they were told to apply instead for Job Seekers Allowance and to look for work.

Chris Smith, a qualified plumber from Leicester, had been off work with a knee problem, and then he began to feel sick. He was called in for health tests. Atos assessors told him he was fit for work and his benefits were stopped. He was diagnosed with terminal lung cancer a few weeks later.

His partner, Maggie Black, told the job centre about the cancer. They agreed Chris was not fit for work, but his benefits were not reinstated. Chris was in hospital, having chemotherapy, as the cancer spread from his lungs to his skin and into his spine. He continued to receive texts from the job centre about finding work. The day after he died a letter from the job centre arrived, informing Chris he needed to report to the benefits office.

Controversy over assessments peaked as similar cases became public knowledge. Stories of people with terminal illnesses being told they were fit to work, and suicides of failed claimants were leapt on by the media. The Guardian estimated5 that around 80 people a week were dying after being found fit to work. In 2014, the level of adverse publicity led to Atos announcing that it was to pay compensation to the government in order to make an early exit from its contract.

 

Unpopular and controversial

The government subsequently appointed another US company to take over the Atos contract. In March, 2015, Maximus began to work on the reassessment program. The company will receive between £590 million and £650 million over its 3-year contract period. They immediately announced that they would be recruiting 1,000 more staff and begin work on clearing the then backlog of 600,000 claimants.

To date, in spite of the amount of money thrown at the project, WCA (Work Capability Assessment) has continued to be an unpopular and controversial aspect of the DWPs role. The government is nowhere near achieving its projected ‘saving’ of £700 million per year. In fact, there is evidence that pursuing its dubious policy is costing more in contract costs and appeals against DWP decisions than it could ever save; The Daily Record found the sanctions regime costs the government £285 million pounds a year but saves only £132m pounds a year. This leaves an overall deficit of £153 million each year.

The financial cost of this punitive system is accompanied by a toll of emotional distress, human misery and desperation that has brought many to take their own lives.

And whilst the deaths and extreme cases of deprivation rightly hit the headlines, they are actually the tip of the iceberg. Many disabled people are simply having to cope with the loss of some or all of their benefits. The eligibility rules for the new Personal Independence Payment (PIP)  which replaces Disability Living Allowance, have changed. So people losing these benefits were not committing fraud, many had lifetime awards for lifelong disabilities. These are being removed with the new PIP assessment as the lower level of benefit has been abolished completely, reserving benefit for only the most severely disabled.

 

Job Seekers Sanctions

At the same time as disability benefits have been cut, the process of claiming Job Seekers Allowance has been significantly tightened up to reduce expenditure. Always seen as a short term benefit, sanctions for failure to seek work intensively, failure to adhere to a Job Seekers Agreement, and even for being a few minutes late to sign on, have resulted in JSA claims being ‘sanctioned’. This means all benefits are stopped for a period of time. The safety net is removed.

Support to find work translates into enforced ‘work experience’ placements, which are unpaid, and for which sanctions for non-attendance apply. Companies use unpaid placements to subsidise their wages bill, making a mockery of the Living Wage.

The cumulative effect of the withdrawal of disability benefits and unemployment benefits has resulted in levels of hardship and suffering that have not been seen since the welfare state began.

Ironically, the letters from the DWP state that “the law states that you need £x to live on”. So surely by withdrawing that amount  for whatever reason, the DWP are breaking the law? No one seems to have been able to address this to date.

 

Causing Unnecessary Suffering

Activist and Journalist Charlotte Hughes sees the victims of this war on the poor every week as she campaigns outside the job centre in Ashton Under Lyne.

In her blog, The Poor Side of Life, she documents people who cannot afford heating or electricity because they have had benefits stopped. She has started organising food parcels for people, who are often waiting for them at the job centre when she arrives with fellow campaigners. Some of those in need of her help have been sanctioned for the most arbitrary reasons; one for being a minute late, another for being five minutes early.

These sanctions represent a benefits system which has been distorted to punish claimants and enable benefit payments to be minimised and removed at every opportunity. But the government is increasingly finding its policies being overturned by Benefit Tribunals and the courts.

For example, Ministers have recently been forced to scrap a drastic change to benefit rules meaning seriously ill claimants found unfairly “fit for work” were no longer allowed to take a period of sickness absence, even with a sick note from their GP.  The new rules meant someone who had their Employment Support Allowance stopped after being found fit for work could only submit a sick note if their GP stated that their health had worsened significantly or that they had a new condition.

DWP admitted on Thursday March 23 2017 that the memo had been revised earlier this month to show that JSA claimants previously found fit for work can claim an Extended Period of Sickness.

 

Bedroom Tax – or Spare Room Subsidy.

This cut to Housing Benefit meant that anyone living in social housing who has a spare bedroom had a 14% reduction in the eligible rent for the purpose of Housing Benefit. The conservatives suggest that tenants in social housing are receiving a ‘subsidy’ from tax payers for their extra room, which isn’t fair to people living in poorer quality private rented housing.

Its introduction forced people to move, as they were unable to pay the shortfall in rent. It meant that some people who had specially adapted homes due to a disability now found they had a shortfall in rent to pay. It affected access to accommodation for new tenants, as there was a general shortage of one bed properties, for either new tenants, or for people to move to from their larger properties.

So the policy caused insecurity for vulnerable social housing tenants. In some cases it caused extreme hardship as people were unable to move to a smaller property, and perhaps had more than one spare room under the definition. For example a family with two children under 10 who each had their own room, (which was previously seen as good practice in letting) would now be treated as having a ‘spare’ room for benefit purposes and lose 14% of their housing benefit. An elderly person living alone in a three bed house where family had left home, would lose 25% of their housing benefit.

DWP did not expect large numbers of people would choose to move as a result of the policy. They would instead make up the shortfall in rent through other means such as moving into work or increasing working hours. Again this plays to the belief that people have a choice to work part time when the reality is that many jobs today offer part time hours only, and zero hours jobs are common.

The Government’s own evaluation6,   found that only 1 in 5 of cases no longer affected by bedroom tax 9 months later had found work or increased their hours. Others had had changes of personal circumstance such as household composition or ages of children.

This change is part of the marketisation of social housing, begun in the 80s with the sale of council houses. The provision of social housing has been drastically reduced, and private renting is the only option for many. Thus the housing benefit paid to the vulnerable for their housing costs, finds its way into the bank accounts of private landlords. See our Housing article for more info on this.

Together the cuts to benefits have created a situation where people are forced to rely on foodbanks for basic essentials. Trussell Trust7 figures show that since 2010 the number of food parcels issued has grown exponentially. This is distribution of donated food by a charity. This is what David Cameron’s Big Society actually looks like.

Giving to the Rich

Researchers from Essex university,8  Paola De Agostini, John Hills and Holly Sutherland analysed the impact of benefit and direct tax changes since the UK general election in 2010 in detail.

‘The study found that:

  • the poorest income groups lost the biggest share of their incomes on average (and those in http://www.aol.co.uk/money/2016/11/11/corbyn-disabled-people-demonised-by-austerity-politicians/In contrast, those in the top half of incomes gained from direct tax cuts, with the exception of most of the top 5 per cent – although within this 5 percent group those at the very top gained, because of the cut in the top rate of income tax.
  • In total the changes have not contributed to cutting the deficit. Rather, the savings from reducing benefits and tax credits have been spent on raising the tax-free income tax allowance’.

And according to the Economic and Social Research Council9   £17billion has already been cut to welfare benefits since 2010 and a further £12 billion is expected to come by the end of the next financial year (2017-18)

At the same time £32Billion has been given away by the chancellor in tax breaks for the very wealthy, making a “black hole” in the government’s finances if it wishes to pay off the deficit as intended.

These stark figures clearly show the government taking from those most in need in order to give money to the most well off.

Labour is committed to a fairer tax and benefits system which targets the underpayment of tax by large corporations, and ensures that everyone pays their fair share. The cruel and inhumane treatment of disabled people and benefit claimants is a by-product of the conservative belief that everyone should fend for themselves.

1 https://www.theguardian.com/society/2016/jul/13/vulnerable-adult-social-care-risk-england-councils-face-1bn-shortfall

2  http://www.mirror.co.uk/news/uk-news/budget-2015-50-cuts-tory-led-5354805

3 http://www.taxresearch.org.uk/Blog/2016/03/13/the-conservatives-have-been-the-biggest-borrowers-over-the-last-70-years/

4 https://www.publications.parliament.uk/pa/cm201314/cmselect/cmworpen/1082/108205.htm

5  https://www.theguardian.com/commentisfree/2015/aug/27/death-britains-benefits-system-fit-for-work-safety-net

6  https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/506407/rsrs-evaluation.pdf

7 https://www.trusselltrust.org/news-and-blog/latest-stats/mid-year-stats/

https://www.iser.essex.ac.uk/2014/11/14/poor-lose-and-rich-gain-from-direct-tax-and-benefit-changes-since-2010-without-cutting-the-deficit-at-all

9 http://www.esrc.ac.uk/news-events-and-publications/evidence-briefings/welfare-budget-and-benefit-cuts/

10 https://www.theguardian.com/politics/2016/mar/17/osborne-tax-cuts-for-wealthy-create-32bn-headache-resolution-foundation

11http://www.independent.co.uk/voices/comment/its-time-to-bust-some-myths-about-benefit-fraud-and-tax-evasion-9520562.html

12 https://www.ifs.org.uk/publications/7541

13http://www.aol.co.uk/money/2016/11/11/corbyn-disabled-people-demonised-by-austerity-politicians/

 

 

 

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