Next week Philip Hammond will lay out his next budget. He has a chance to reverse the Tories’ welfare disaster, and it is one he will not take, writes Alison McGovern
Think you are angry with the Tories? Get ready for next week. Because when the budget comes, if Philip Hammond neglects the gaping hole in the welfare state, it is not just anger we will feel, but the sorest of regrets. Get ready for that sinking feeling that, yet again, our wonderful country is being dragged backwards. I find it shameful enough that I have foodbank vouchers in my constituency office, and unless the Chancellor steps in its about to get worse. And what must it feel like to be a child in a family knowing that your mum or dad has had to go to the local foodbank? Do you tell your friends? Do you confide in the teachers? I suspect you say nothing.
This is where the toxic debate on the British welfare state has got us. The national stories pedalled that the benefits system was to blame for poverty have ended up causing this pitiful situation. Everyone hates the idea of foodbanks, but no one was allowed to question whether the end of poverty could ever be brought about by a new IT system for applying for support, or whether in fact, ending poverty actually depended on significant redistribution through the tax system. Because drained of sufficient resources, that’s all universal credit turned out to be. A messing around with the welfare state, plus a new IT system. Iain Duncan Smith’s grand project has failed as a rescue plan for his reputation: almost every aspect of his reform was wrong. From the increased waiting times, to the overcomplicated bureaucracy, to the pointless sanctions. The sanctions, that as we now know, cause destitution.
They repeat the mantra that work is the best route out of poverty, whilst presiding over a labour market that has employed more people than ever before, on worse quality terms, and with lower in-work financial support, so that as the number of people working has risen, so have levels of in-work poverty
And what is even more breath-taking is that these same sanctions are soon to be rolled out with universal credit to people who are already in work. Not content with making those who lack a job suffer even greater indignity, the Tories are now planning to deal the same hand to British workers. Low paid job with insufficient hours? Claiming universal credit with all its bureaucratic headaches? Why not add to your stresses with an interview by Department of Work and Pensions staff to account for whether you are putting enough effort into getting more pay?
When some of the lowest paid people in our country – skilled care workers – are in large proportion paid for by the state itself, this is vicious. Imagine it now, a care worker being forced to an interview to explain to a government official why your pay isn’t rising, or you can’t get more shifts. ‘Let me refer you to the Chancellor of the Exchequer,’ I would say. In fact, this madness arises because of the Tories’ central failing: they repeat the mantra that work is the best route out of poverty, whilst presiding over a labour market that has employed more people than ever before, on worse quality terms, and with lower in-work financial support, so that as the number of people working has risen, so have levels of in-work poverty. It is perverse.
Philip Hammond has one week to wake up.
If I were him, the first thing I would do is say that whilst there will always be compliance rules for the welfare state, sanctions – financial punishment for up to 13 weeks – have got to go. The second task for the Budget is to look closely at the financial position of families, especially lone parents. For families in the broadest sense, the cuts to support for their incomes via the social security system are widespread and harsh. The switch from the retail price index measure of inflation to the consumer price index measure, uprating for benefits under the Conservative-Liberal coalition, has significantly reduced the value of benefits that support families with children. Then, in 2015, George Osborne announced a freeze on working-age benefits that would mean that the value of tax credits and universal credit to families would fall as prices rose. Price inflation was expected to be low, but actually rose, and in November 2017 broke the three per cent barrier. Working families are feeling a double squeeze – from low wages and degraded state support alike.
Too many people are no longer just about managing, they are just clinging on. I worry that my generation of politicians has failed to win the argument on the role of the welfare state in the British economy
Hammond – if he really thinks that work should pay – must restore the value of in-work support for families. He could increase the ‘work allowances’ or the ‘taper’ aspect of universal credit and allow families to keep more of what they earn. Or he could focus on lone parents who currently stand to lose most. Or ditch the two-child policy that punishes kids in larger families that are more at risk of poverty. But one way or another, he needs to undo the lie: if you have children, work is not a simple route out of poverty in Britain today. Fix that or we condemn the next generation.
I wish I could be more hopeful, and say that whatever the troubles of today, the future looks more promising. But the truth is, we are too close to the wire. Too many people are no longer just about managing, they are just clinging on. I worry that my generation of politicians has failed to win the argument on the role of the welfare state in the British economy.
But much worse than that, is the knowledge that foodbanks have become a savage reality across the country. This is unacceptable. My constituency is fairly average. We are not the poorest part of Merseyside, much less the poorest in Britain. But here we are. With foodbank vouchers in my office, and the constant stress that we might run out at the end of the month, as people run out of food because the social security system has had its heart ripped out.
Unfortunately, as we found out in 2010, 2015, and again in 2017, losing elections always has consequences. Come next Monday, the Chancellor of the Exchequer is the only person who can stop the destitution and get families back on track. I have no hope that, in seven days’ time, he will do so. But I write because I know that he could do it if he wanted to. I write because I see these things in my country and I know that they must change. And I write knowing that there are millions of us who think so.
Alison McGovern is the chair of Progress
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