One of the first acts of the Conservative, Liberal‑Democratic coalition (Coalition) government, in 2010, was to attack welfare benefits which led to the introduction of the Welfare Reform Act 2012. This act was nothing other than an attack on the working class and to put into law billions of pounds of cuts to the social wage. During its time in office the Coalition government continued to reduce the income of working people. In 2015 unfettered by their Liberal‑Democrat colleagues the Conservatives increased their attacks against working people in their first Budget and their Trade Union Bill which sought to reduce the effectiveness of Trade Unions.
They claimed that the purpose of the Welfare Reform Act 2012 was “to simplify the benefits system in order to improve incentives to work” and advanced the proposition that the benefits system is too complex and has perverse incentives that make people decide not to work. It saw the roll‑out of Universal Credit which will replace housing benefits, tax credits, and income‑related Jobseekers Allowance.
The system of allocating the social wage is in need of simplification, so as to make it easier for people to claim the £10 billion of benefits that goes unclaimed every year. But the Conservative’s idea of simplification is to make it more difficult for people to claim, to make less money available and to make it easier for the authorities to stop paying.
The Welfare Reform Act 2012 introduced tougher penalties to reduce fraud and error, which seemingly costs the country £1.5 billion annually, the introduction of the Act has seen a huge increase in sanctions against claimants for the smallest of reasons, and with Universal Credit these sanctions will lead to the withdraw of all benefits. The supposed savings the act hoped for and the other cuts that have been imposed is dwarfed by the tax breaks given to business or the accounting methods used by the ruling class to avoid paying £120 billion of tax each year.
During the course of 2010‑2015 the Coalition government had -
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Introduced the “Bedroom Tax”, which affected 660,000 households in social housing, with average losses of £14 per week. Two thirds of those affected were disabled where a spare room was needed to support the disabled;
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Crisis Loans and Community Care grants were abolished. These grants and loans, 1.7 million awarded in 2011‑2012, provided a lifeline for people in financial crisis due to, for example, needing essentials when moving into a new home, possibly having downsized to avoid the “Bedroom Tax”;
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For many housing benefits were reduced by up to 25 per cent affecting more than 30 per cent of Housing Benefit claimants. The number of tenants being evicted by their landlords is at a record high. The Ministry of Justice revealed that in the three months to September 2014 more than 11,000 individuals and families lost their homes. According to housing charity Shelter that means more than 40,000 families have been evicted in a year — an 11.7% rise on the previous year. The impact of benefit cuts and caps has left tenants unable to pay their rent and many private landlords now evict or turn away poorer tenants or those on zero‑hours contracts;
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Housing benefit rates were reduced for many under 35s such that they can now normally only claim housing benefit at the rate for a single room in a shared house. Before January 2012, the shared accommodation rate applied only to people aged under 25;
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Council Tax Benefit was reduced by 10 per cent and impacted 3.7 million low income households. The benefit was devolved to local authorities, some of whom asked poor households to cover up to 30 per cent of council tax;
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The overall benefit cap was set at £500 per week, or £350 for single people was introduced resulting in an average weekly loss of £93 for 56,000 households.
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Non‑dependent deductions uprating saw 300,000 households in the social rented sector losing between £13.60 and £87.75 per week from housing benefit payments for any grown‑up children living at home. If their children decided to leave, parents were hit with bedroom tax;
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Uprating benefits by a below‑inflation one per cent over three years had a cumulative effect, impacting 9.6 million households. By 2015/16 the average‑out‑of work household will lose £215 per year and the average in work household affected £165 per year. Sixty per cent of households affected are in work;
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Disability Living Allowance (DLA) was replaced with the new Personal Independence Payment (PIP) in June 2015; in April 2013 3.2 million people received DLA, but by 2015, 500,000 fewer people will receive PIP. The DLA was paid by the Department of Work and Pensions to disabled people — both in work and out of work — in recognition of the higher costs of living that disability causes. There are serious concerns that the assessment process for the new benefit will exclude many disabled people who need support, much will be lost in the extra costs of administration and determining criteria of eligibility. Claiming will become more bureaucratic and difficult than it already is.
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Welfare advice was entirely taken out of the scope of Legal Aid funded advice along with most housing issues; 135,000 people seek legal aid funded welfare advice each year.
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There was a £3.5 billion cut to the social care budget resulting in 294,080 fewer people over 65 are getting state‑funded social care compared to when Cameron became Prime Minister. In 2010, a total of 1,147,695 had the care they needed to keep their independence, compared to just 853,615 in 2014. The elderly who have to pay for some or all of the cost of their social care faced soaring charges. The average annual cost for 10 hours’ home care and five meals‑on wheels a week increased to £7,900 in 2014, up almost £740 since 2010.
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The payment of the Employment and Support Allowance (ESA) has been limited to a 12 months.
The attack on workers continued through the spring of 2015 culminating in the summer budget of 2015 which -
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restricted public sector pay rises to one per cent a year for a further four years resulting in almost a decade of low pay rises for public sector workers;
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indirect taxation to be increased with Insurance premium tax raised to 9.5%;
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Education maintenance grants to end from 2016/17 and to be replaced with loans repaid once salary reaches more than £20,000. This will tip the balance against low and middle income young people going to university.
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No automatic housing benefit for 18 to 21‑year‑olds. This will drive more young people into homelessness and vulnerable situations.
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Working age benefits to be frozen for four years.
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The threshold for tax credits to be reduced and additionally that for every £1 earned above the threshold 48p of benefit would be lost, in 2015/2016 the loss would “only” have be 41p of benefit and child tax credits will be restricted to two children. This cut will see the average family £1,400 worse off and 300,000 more children living in poverty. This announcement came in the same week that a children's charity reported that 7.5 million children already lived in families dependant on tax credits for basics such as food and clothing.
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Those who live in social housing and earn what the Government considers to be a 'higher income' — this includes families earning over £40,000 in London or £30,000 elsewhere — will have to pay rent at the market rate. For many this will mean significant rises in rent and result in more profits for landlords
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the total amount of benefits a household with children can claim will fall from £26,000 a year to £23,000 a year for those living in London and to £20,000 for those elsewhere.
These changes are clearly part of the ruling class agenda to dismantle state welfare and return us to the Victorian days where paupers — the unemployed, elderly, sick, long‑term disabled and unsupported single parents — were forced to claim benefit from their local parish or borough. The criteria for eligibility varied from one locality to another but boroughs were anxious not to be seen as generous because this would attract paupers from outside the area and create an extra burden on the rates. Claimants were often refused benefits if they tried to claim outside the parish or borough where they were born as local authorities tried to shift responsibilities from one to another.
Strictly speaking housing benefit and tax credits paid to people in work, but on low incomes, are not welfare benefits. Housing Benefit is paid, via the hapless tenants, to landlords and enables rents to be sustained way above the level a truly free market would create. In 2014 the housing benefit bill had reached a new high of £25 billion a year, even though the number of claimants has not significantly changed since 1979, this money has gone directly to landlords.
Tax credits paid to those in work allow employers to pay wages well below what a truly free market would permit. They should be abolished by raising wages to enable workers to live a tolerable life without recourse to taxpayer‑funded top‑ups. These credits subsidise the profits of employers at taxpayers’ expense.
Furthermore housing benefit and tax credits undermine working class unity by creating a situation where low‑paid workers actually suffer a cut in total income when they win a pay rise through normal wage bargaining because these “benefits” are then withdrawn.
What the Conservative government never highlights is that Britain has one of the lowest levels of benefits in western Europe, with unemployment benefit of just £72.40 per week for those over 25 and £57.35 for those under 25.
The cuts to the social wage must be reversed and pay increased significantly. This can be done by Communists, socialists, trade unions, disability and pensioner organisations working together to confront the ruling‑class. Though the immediate demand must be to reverse the cuts and to extend the social wage there must be a political campaign led by the New Communist Party that demonstrates that the social wage can only become a permanent feature by workers taking state power.
