Welfare cuts draw blood

It strikes me that April Fool’s Day is an oddly appropriate choice to usher in some of the biggest spending cuts to Britain’s welfare state since its inception. But for all the anti-austerity protests of recent years, these cuts seem surprisingly popular. 

Three quarters of Brits think the country spends too much on welfare (ie: looking after people who can’t look after themselves). Half of people think the government is not being tough enough on those receiving benefits and an amazing 37 per cent think that most (yes, most) people on benefits are “fiddling” the system. So over half of the 5.7m people on benefits are liars? Blimey.

Do you agree?

Benefit fraud convictions have shot up since investigators were given extra powers (to do stuff like look at Sky TV bills), but the cost of tracking down fraudsters is around £100m each year, compared to the £215m recouped from convictions. To put that in perspective, UK banks were fined a thousand times that amount last year for misbehavingYearly convictions for benefit fraud number around 10,000.

Sympathy for Britain’s needy is dwindling, being replaced by a “get off your arse and do something” attitude. The welfare cuts being implemented today are summarised really well by the Guardian, but the main two points for young people are to do with housing and out-of-work benefits.

Housing Benefits

You know that three-bed holiday home you wanted, courtesy of Her Majesty’s Treasury? Well…tough.

Housing cuts are twofold. First, the national government is passing control of council tax benefits to local governments and cutting the budget by 10 per cent. Second, those in social housing with a spare bedroom will lose 14 per cent of their benefit. Two spare bedrooms loses you 25 per cent. This is the infamous “bedroom tax” which has received a lot of media attention recently.

BREAKDOWN: Although 5.9m Brits claim housing benefits, only 380,000 people under 25 do. Half of them have kids, about a quarter are looking for a job and not far off half will find that job within three months. There are about 6.7m people in the UK aged between 16 and 25. 

VERDICT: About 6 per cent of 16 to 25-year-olds claim benefits. About half are not looking for a job, disabled or employed. Don’t expect to be standing on homeless bodies next time you’re waiting for the bus, but this one could hurt a minority.

Out-of-Work Benefits

Instead of receiving one (or more) myriad job-seekers’ and workers’ benefits, claimants will be offered one universal credit. This is only on trial in a part of Greater Manchester, but should be rolled out nationwide in September. The idea is that job-seekers are pushed more to find jobs and penalised if they don’t make the effort or turn a job down.

BREAKDOWN: One in five people between 16 and 24 are unemployed and claiming job-seekers’ benefits. That’s a million people who will need to be reassessed and, after inflation, they will also suffer a cut in the amount they receive each year. Here’s how they’re spread geographically.

VERDICT: Universal credit is a trial and not universal yet, so there’s no conclusive evidence that this will be more or less stingy. The limited rise below inflation is a pain, though, and youth unemployment is a big problem – young people are the ones with longer to work and instead of progressing down a chosen career path are at home watching Top Gear.

My question: young people are the taxpaying, economic engine of the future – why are heating allowances and bus passes for the elderly fiercely protected regardless of income but a young person’s career prospects are not?

Only 6 per cent of Brits would trust the Lib Dems with benefits reform, but in all fairness, Vince has a point about cutting benefits to pensioners. It’s also rather telling that more people (34 per cent) would trust no political party, than any of the main three.

Bottom line: you’ll feel these cuts, unless you’re retired.

8 thoughts on “Welfare cuts draw blood

  1. MichaelJ

    Hi JG,
    I’m curious to know what you and your readers believe in principle about “wealth-transfer”. Do you think it is moral and just for some people (the government), to take by force the wealth of other people (tax-payers) and redistribute it (while keeping a chunk for themselves!) to another group of people (the receivers of “benefits”). If the answer is yes, then deciding who gets what can only be a matter of rule by majority – the most votes get the biggest slice of pie, minorities and individuals be damned. That’s Democracy.
    Best, MPJ

    Reply
  2. jinxedgeneration Post author

    Hi MPJ

    I can’t speak for my readers, because I’m sure their views vary hugely. Personally, I’d say it is necessary to have some form of government redistribution of wealth, although how much of it they should keep for themselves is another matter. A young person who has just left school and is looking for their first career-entry job but can’t afford to look after themselves (and doesn’t have rich parents) should be supported by the state so that in later life they will be able to pay it all back through taxes (and then some).

    When it comes to “democracy”, this is where perhaps we differ. Voters elect politicians to represent them – ie make decisions on their behalf. We cannot have a referendum every week to decide each and every issue and it would be unfair to allow the voice of a majority to drown a minority simply because there are more of them. The majority isn’t always right.

    I’m no Marxist, but I think “from each according to his ability, to each according to his need” is a sound principle. Yet it is flawed. Limitless giving to the needy does not help them be more able. The other role of government is to help the needy become less so, where possible.

    I hope that answers your question.

    Best

    JG

    Reply
    1. jinxedgeneration Post author

      Good question. There are natural limits to what people are able to do. And there are physical needs which can be quantified/measured. Beyond that, the rest is subjective and I guess this is what we elect politicians for. Do you disagree?

      Reply
      1. MichaelJ

        Hi JG,

        Absolutely, I disagree. I’m not sure where to start though, it’s a big topic.

        I’m an advocate of Laissez-faire Capitalism, the system under which all property is private, including money, and the government’s only responsibilities are the protection of the rights of individuals through police force, judicial system, and defense force. This has unfortunately never existed. America in it’s first 150 years approached it, but has been on a downward spiral since the end of the 19th century. The crony-socialism we live under now, where government controls the money and is in cahoots with fraudulent bankers and corrupt businesses is abhorrent, and only exceeded in villainy by fully-blown communism.

        So, with that as context…

        Before you can have, you must create. Before you can have anything, you must create something. No one has a “right” to that which others have earned. Only babies, children, and the disabled who cannot help themselves or be taught to, are exempt, and under the care of others. The rest contribute to the best of their abilities. Marx’s famous dictum is only half right: from each according to his abilities. Each person creates value to the best of their ability. That is the meaning of life. Choose your purpose, hourly, daily, over years and decades, over your whole life. Work to create that which will help you achieve that purpose, those many purposes. This is what it means to be alive as a human.

        But the second phrase of Marx’s homily, accepted in even the smallest amount or with regard to the smallest minority group, is the wedge that cracks asunder society. It is the poisoner of culture, the straight jacket on men’s minds, and the destroyer of civilization.

        It is not to each according to his needs. Why would it be? How can one human’s “rights” entail the taking of something by force from other humans, which is what the blithely-named “redistribution of wealth” amounts to? Wealth does not grow on trees, it has to be created, earned.

        The entire thing should read: from each according to his abilities, to each according to his abilities, and each decides for themselves.

        Values, to be of value, must be freely given, or earned. The value of the stolen is destroyed in the act of theft, because the thief is no longer able to value himself, far less the receiver of a thief’s largesse.

        No group, large or small, may demand of a single human that he or she give up what they have earned, far less take it by force. That is inhuman.

        The enablers of this tragedy are the intellectuals and pundits who fervently claim that one group or other are not able to create enough value, that they are incapable to live without help. It is not true, and is only an indication of the claimers’ own lack of belief in their ability to create value and to live successfully. And therein lies the real tragedy. To live successfully is actually easy. Wake up everyday, go at life with enthusiasm, and stay as honest as the day you were born. You will be happy and you will be successful, which in the context of a life lived well, is the same thing.

        Yes, there are some that cannot fend for themselves, and they rightfully should be the object of charity. But charity must be freely given.

        There’s more to be said, much more, but I’ve probably taken more than my share of it on your blog, so enough.

        Best,

        MichaelJ

      2. jinxedgeneration Post author

        Hi MichaelJ

        I accept your premise in part. But people would not give generously enough on an individual voluntary basis to support a welfare state – even for just the disabled, babies and children. But the majority of people still want the benefits that the state provides. For all its troubles, the NHS is still thought of fondly in British culture. Why? Because it is comforting to know that if you fall ill, you will be made better. It is also comforting to know that if you are made redundant, the state will help you (to a degree) so that you don’t lose your house and family.

        Giving money to a person looking for a job is not a cost. It is an investment, which will hopefully bring a return. Unfortunately, Britain’s welfare state has a disproportionate number of what bankers call “non-performing loans” – ie people taking and never giving back.

        The *majority *of people in British democracy *do *want a welfare state, just less of one, and if the money for it was not raised through taxes, but instead voluntarily, they would lack the foresight to make the investment in their own futures and regret the decision later. That’s why the state makes the decisions for them. But, in a democracy, those who lead the state are voted for. The process of who gets what and how much is a negotiation between state and voters. Fundamentally, “from each according to his abilities, to each according to his abilities, and each decides for themselves” *is* the case. It’s just a decision made socially, not individually, because that’s the only way it can work.

        You seem disillusioned with government, believing that government is in the pockets of the rich and corporate. In the UK, this is not so true, although I admit it is an imperfect system. Winston Churchill is often quoted as saying: “*No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.”* * * In the US, corporations and lobbyists are a bigger problem, sadly. See this amazing TED video for that: http://www.ted.com/talks/lawrence_lessig_we_the_people_and_the_republic_we_must_reclaim.html

        And please do take up more of my blog. I like it when people disagree or have something to add.

        Best

        JG

  3. silvermud

    Great blog. I only recently discovered it.

    One possible answer to your last question might be that over three-quarters of those over 65 voted in the last general election compared to barely half 18 – 34 year olds. Low voter turnout is always a friend to rightist governments. In any case, the either/or arguement applied to pension benefit vs support for young people is a huge red herring. Financiers/tories do not see unemployed youth as wasted wealth creation, rather, as a cost on the national balance sheet, itself a somewhat vexatious notion. The genius of the tories lies in their ability to persuade people that countries run their finances in the same way as private households, despite all evidence to the contrary.Successful economies depend on public expenditure, however, the current policies are not really directed at a ‘successful economy’ in any societal sense, rather, the extraction of resources from the public sector to the private. Older people are certainly beneficiaries of a more enlightened attitude to economics, but this is not an age issue, but a political one.

    Reply
    1. jinxedgeneration Post author

      Hi silvermud

      Thanks. I agree the issue is political, although for the purposes of this blog I want to remain non-partisan. I would say, however, that young people do have a voice if they choose to use it. I don’t believe that politicians are blind to British youth, nor that they do not care, but their priorities are defined by those who vote for them and those who engage.

      Best
      JG

      Reply

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