1990s >> 1998 >> no-1123-march-1998

Goodbye to the Welfare State . . . as we know it

As members of the working class living on state benefits are well aware, it is quite impossible to put a little by for a rainy day, for every day is forecast as a downpour, and trying to keep your head out of the deluge is a constant problem. And for those who are wholly dependent on benefits as their only source of income, their whole lifestyle is dictated by their resourcefulness in eking out their pittance from one day to the next. Yet the Labour government is planning to make things worse.

One of the major problems for the Labour government is the ongoing increase in the benefits bill—which this year is approaching £100 billion—accounting for the largest slice of government expenditure. The changes in the NHS and education system, brought about by the Tory administration, were plainly underfunded and have resulted in Labour putting Tory Plan B into effect by instigating a deliberate purge in social security payments to enable them to fund the NHS and education changes set in motion by the previous government. In order to meet these financial targets Blair needs to make savings of around £8 billion on the social security budget.

Scraping the barrel

Alongside this Labour are also faced with the problem of attracting skilled workers back into the workforce should the economy show signs of improving. Why put workers through costly training programmes when there are ample skilled workers already available, albeit suffering ill-health or disability to varying degrees? Far better to meet the demands for a low paid, short-term casual and part-time workforce by scraping the barrel and getting the skilled disabled—specifically those who are suffering less than 65 percent disability—back into the labour market. With 2.8 million people of working age claiming benefits due to ill-health or disability, Harriet Harman, the Secretary of State for Social Security, intends to ensure their amount of benefits does not act a disincentive to them returning to employment.

This explains the emphasis Tony Blair places on “offering the opportunity” to those who are sick and disabled to provide for themselves with “appropriate support”. But such explanations also provide the means for the Blair government to distance itself from the present obligation of “provision of universal benefits for life” to a scenario of capping universal entitlement to incapacity and disability benefits to one, or two years, so that after that period means tested benefits come into operation.

The present Social Security Review is the third since the Beveridge proposals for a two-tier National insurance/national assistance social security system were implemented in 1948, with each review making major changes in “the application of universal entitlement” by a mixture of increased bureaucracy and deterrence through lack of appropriate information, or any help from qualified staff at point of access to enable benefit claimants to actually receive their full entitlement. This is a major reason why one million pensioners fail to apply for the full range of various benefits that are available.

The whole purpose of the two previous reviews was to make substantial cuts in the social security budget. So we should not expect this one to be any different. But another lesson of history, which Labour have failed to learn (and as the present cost of social security amply illustrates), is that the previous reviews proved to be damp squibs when confronted by workers more resolute in keeping their heads above water than meddling politicians or inept bureaucrats.

Blair is bowing to the need to impose austerity measures in response to the global crisis of capitalism and the Maastricht criteria in order to ensure British capitalists are well-placed if and when the upturn in the global economy occurs and for possible entry into the single European currency. Such measures also offer the opportunity of projecting the image of a “reforming government” when plainly they are no such thing, but merely a reorganising (and cutting-back) on past reforms.

It is also hoped to curtail fraud and abuse by developing an integrated computer system for the Employment Service, the DSS, local authorities and the Inland Revenue. Initially this reorganisation will put increased pressure on DSS staff and hinder them in achieving their cost and efficiency targets set at 25 percent savings, and also undoubtedly lead to inevitable delays in claimants’ payments whilst claims are being processed. As for claimants, with delayed payment notorious for the creation of a “crisis period” any further adverse moves will only exacerbate the problems of those caught up in the poverty trap.

Various leaks have suggested which benefits could come under the hammer. For instance, Child Benefit is likely to be limited to under 16-year-olds and also capped for those who earn over £20,000-£30,000 a year. Likewise Statutory Sick Pay and Statutory Maternity Pay face the possibility of being capped at the level of £20,000 yearly earnings—resulting in 8.8 percent of claimants of SMP who are currently over that bracket having their disposable income accordingly reduced. Incapacity Benefit could be limited to one or two years, after which those claimants found to be only 65 percent disabled will be encouraged back into the work force by linking them to the means-tested Disability Working Allowance, or something similar. Should this “opportunity” to return to wage slavery found to be wanting no doubt more compelling measures will be used in conjunction with the Job Seekers Allowance. For those in receipt of Severe Disablement Allowance and Industrial Injuries Benefit there is the possibility of both these benefits being amalgamated under a new disability heading and either taxed accordingly, or made an overlapping benefit against other disability benefits.

Since the introduction of policies such as Care in the Community, and with the creation of unitary authorities, many Social Services departments are being hard pressed to meet many of their statutory obligations within their present budgets. This state of affairs has resulted in them considering charging for some of the services they dispense to the mentally and physically disabled. This raises the possibility of claimants currently receiving either the care component for Disability Living Allowance, or if aged over 65, Attendance Allowance, finding they will have to forfeit these particular benefits for receiving local authority care or support. It is also highly likely that both these benefits will, be capped for those earning over £20,000 a year, or taxed as income—and therefore in a roundabout way means-tested—or even for that matter directly means-tested.

The introduction of disablement benefits undoubtedly enabled many recipients to partake in activities which previously had been denied them, especially those who experienced difficulties with mobility. The prospect of this continuing looks bleak for those claiming the mobility component of Disability Living Allowance for it is highly possible that on reaching the age of 65 they can look forward to a life sentence of being housebound with the mobility component being cut from that age.

If such measures are actually put into practice the limited autonomy the disabled presently enjoy will face even further erosion, leading no doubt to an explosion of discontent from the numerous charities and agencies involved with disablement issues, and also from those who were instrumental in obtaining reforms of this nature—in recognition that the needs of the disabled outweigh those of the able-bodied. But with Blair clearly stating that “the welfare state had been left behind by social and economic change”, it is pretty obvious their pleas are going to be met with cynical platitudes from the politicians.

Deterring take-up

Whatever austerity measures are actually imposed on those benefits which presently come under the criteria of “universal entitlement”, the general trend will be towards linking them with some form of means-testing in order to deter the recent high growth in the take-up rate for benefits—especially from the sick and disabled. The high take-up rate for disability benefits in particular proved to be a stumbling block for the Tories, who sought to curb it by installing a stricter medical criteria, and by introducing the Benefit Integrity project which randomly selects 12 percent of claimants for review (this alone is expected to cover 500,000 disability claims) and resulted in 10 percent of those reviewed having their payments cut. Yet despite these and other measures workers have managed to counter them by adopting the realistic attitude of “getting what they can from the system”, and responding in kind with 345,859 new claims for DLA and a further 55,605 new claims for Industrial Injuries Benefit since April.

With a full-blown means test unlikely to become the norm for claiming benefits—for the extra cost of administration would be self-defeating—and with Blair making a point of emphasising that the means-tested safety nets of Income Support, Housing Benefit and Council Tax Benefit also face scrutiny, it can be expected that cuts will be implemented on these already meagre handouts. For instance, Housing Benefit and Council Tax Benefit could be made applicable to only one person per household—irrespective of whether other members of the household claim Income Support. Alternatively, claimants could be made to pay 20 percent of their rent before Housing Benefit comes into operation. If such measures are adopted it will inevitably mean that means-tested claimants will feel the pinch by being expected to pay a portion of their benefit towards rent.

Socialists argue that all reformist activity is subject to the changing nature of capitalism. To fight the same old welfare reform battles over several decades is demoralising enough, but when previous reforms are put into reverse the case against the system which puts profits before needs is stronger than ever.

Even before Labour won the May election, the Child Poverty Action Group in their Rights Guide to non-means-tested benefits, made a point of forecasting that “Is it naïve of us to hope that our successors(s) as authors of this Guide will have a comprehensive range of non-means-tested benefits to describe here in six years time?” (March 1997.) Frankly with Blair and his ilk locked into the profit system, the Socialist Party can confidently assure the CPAG that their guide for 2003 will be a decidedly slimmer version.

G. Digger

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