John Harris

Journalist & Author

Welfare: get ready for a war over benefits

Welfare cuts – particularly the government’s war on so-called ’skivers’ – will be the most bitterly fought political battleground in 2013

One issue will define British politics in 2013 like no other, but to think about it only in terms of Westminster politicians and the three main parties would be to miss the reason it is so massively important.

The benefits system was once routinely referred to by British people as “social security”, but that term began to disappear when it was dropped from the title of the relevant ministry in 2001. The political establishment now uses the ideologically loaded word “welfare”, which crash-lands in the news media on a daily basis, as both the government and opposition obsess over arguably the hottest domestic political issue of all. But as radical changes are rolled out, no one should lose sight of the thousands of people, all over the country, whose lives are about to drastically change.

In the autumn statement he presented in December, George Osborne ramped up the government’s “strivers v skivers” rhetoric, and announced the welfare uprating bill that looks set to go before the Commons in early 2013. What it proposes is simple enough: that increases to most working-age benefits will be capped at 1% – which, obviously, means a real-terms cut – for three years up until 2015. Osborne aims at savings of around £3.7bn a year by 2015-16, but is clearly motivated by political as well as financial motives, hence his quickly infamous claim that “fairness is also about being fair to the person who leaves home every morning to go out to work and sees their neighbour still asleep, living a life on benefits”. Note also the online Tory ads targeted at 60 marginal seats, offering voters a choice between spending public money on “hardworking families” or “people who won’t work”.

Watch the Labour party closely. Some of its MPs think that the public is now so judgmental about “welfare” that Labour should approach the Osborne plan with extreme caution, but Ed Miliband and Ed Balls have served notice that they will vote against it, emphasising the fact that 60% of the people who will be affected are actually in work. The big question is whether they will widen their attack to include the welfare uprating bill’s dire impact on people who are unemployed, and thereby question the whole “strivers” and “skivers” argument. That would go against a mindset that has run deep in Labour since the Tony Blair years, but rumblings from Miliband’s office suggest that is exactly what he intends to do. Watching him trying to take the debate somewhere new will be fascinating.

Thanks to the work and pensions secretary Iain Duncan Smith’s welfare reform bill, huge changes to the benefits system will come into force in 2013. One of the most controversial is the government’s benefits cap, which limits the most a single household can receive in a year at £26,000 – to quote the official blurb, a measure intended to mean “that workless households should no longer receive more in benefits than the average earnings of working households”. It was originally meant to arrive in April, though it has now been held back until the summer – a sign, say its detractors, of how tangled its consequences are going to be.

The government reckons that around 50,000 households will be affected, and that they will lose an average of £93 a week. But beneath this number lurk even more hair-raising consequences: analysis by the Children’s Society claims that 220,000 children will be affected by the cap, compared with 90,000 adults, and that more than 80,000 of them could end up homeless. The problem here is the crazily overheated rental property market in London (the policy will be trialled in four of the capital’s boroughs), and the fact that the benefits cap will push people out of the capital, often into the bed-and-breakfasts that represent the absolute bottom rung of the housing ladder. The fact that convulsive changes to thousands of families are afoot is clear: witness the London councils already preparing to move people to such places as Manchester, Slough, Hastings and Northampton.

There are other fiercely opposed measures. In April, council tax bills will rise for thousands of people thanks to the scrapping of council tax benefit, and there are also huge worries about the so-called Spare Bedroom Tax, whereby people will have their housing benefit cut if the government deem them to have a “spare” bedroom in either a council or housing association home.

At the same time, a new benefit for disabled people called the Personal Independence Payment (PIP) will be introduced, intended to replace Disability Living Allowance (DLA), which meets the costs of care and mobility. Eligibility for the new benefit will be decided via a test, and already the government’s information machine is grinding out the kind of lines that favourably tilt coverage: “Disability handouts to be cut or stopped for 330,000 claimants as government aims to end ‘welfare for life’” was a recent Daily Mail headline.

But the chief executive of disability charity Scope says that “disabled people are incredibly anxious and afraid that the switch from DLA to PIP is just an excuse to cut the support they need”. Just to deepen their fears, the contract for most of the testing work has gone to Atos, the company that has already acquired a less-than-glowing reputation for tests run on people who have claimed incapacity benefit, to gauge their supposed fitness for work. In this case, one particularly big fear hangs over the whole thing: how can the tests be evidence-based when the government has already served notice that it aims at cutting 20% from the relevant budget?

Perhaps the biggest change, though, will happen in October, when most working-age benefits begin to be replaced by what the government calls Universal Credit. In September 2012, the representatives of 70 organisations expressed serious concerns about what was planned. There are worries about the fact that once an “interim” period is over, Universal Credit will be paid monthly, as against most benefits currently going out fortnightly; that the drive to run the whole system online will cut out millions of people who are, to use a modern term, digitally excluded; and that suddenly paying all benefits to a single member of any given household will end a lot of women’s modest financial independence.

The government claims that 3 million people will be better off, and by “making work pay”, the changes will somehow push 300,000 people into jobs (how the parlous state of the economy fits into all this remains unclear). But its own impact assessment, quietly issued towards the end of 2012, says this: “In the longer-term, approximately 2.8m households will have notionally lower entitlement than they would have done as a result of Universal Credit. The average reduction in entitlement is estimated to be £137 per month.” Note the word “average”: of these households, 300,000 families will lose more than £300 a month – or £3,600 a year.

To state the obvious, whether the government succeeds or fails in its project to so drastically scythe down the benefits system is a question not just about policy, but what kind of country Britain now is. Labour has already talked about “compassionate Conservatism being replaced by contemptuous Conservatism”, and the disability changes in particular finally starting to turn the public mood.

Whether it will be the official opposition that leads the charge against what is planned, or a ragtag army of people using social media and tactics that will leave politicians behind, remains to be seen. Either way, make no mistake: 2013 will be a momentous year, not least for people who literally cannot afford for the anti-government side to lose.

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