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Welfare Reform Bill Plan


Just a few observations in regards to proposed changes to the Welfare Reform Bill:

  • The unemployed were damned for being “workshy” today as Con-Dem ministers revealed the nastiest welfare squeeze in living memory on top of mass public and private-sector job losses.
  • As the coalition ruins livelihoods by imposing hundreds of thousands of job cuts under the slogan
  • “we are all in this together,” Prime Minister David Cameron announced a “reform” package that unions argue blames the unemployed for being jobless.
  • David Cameron describes his Welfare Reform Bill as “the most ambitious, fundamental and radical changes to the welfare system” since the welfare state was set up.
  • That it may be, but equally valid adjectives would include unfair, discriminatory and mean.
  • Despite rhetoric about helping the unemployed into work, the real aim behind this Bill is to reduce welfare spending over the next four years by £5.5 billion – slightly less than the £6bn that the banks have devoted to bonuses this year.
  • “Never again will work be the wrong financial choice,” the Prime Minister asserted as he launched the Bill.
  • The implication behind this statement is that a substantial proportion of those living on benefits do so as a lifestyle choice rather than there being a lack of jobs.
  • Cameron and his ministers know this reality, but they are determined to draw a line under what the banks did and to blame unemployed workers for the symptoms of a crisis that they had no part in creating.
  • Their stomach-churning “compassion” for the needy, the most vulnerable and those in old age is just words.
  • The government is set to train its sights on precisely those sectors of society that need help most and to drive down their living standards at the behest of the City and the rich.
  • What would this multimillionaire, who has never experienced any kind of deprivation, know of claiming benefits?
  • And yet he rewrites history to claim that, when the postwar Labour government set up the welfare state, individuals’ sense of “private shame” was sufficient to deter them from claiming handouts unless they really needed them.
  • Now, according to him, couples live apart, the unemployed refuse jobs and people go on the sick because they are better off cheating the system than working.
  • In fact, the take-up of benefits was low in the late 1940s, ’50s and ’60s because there was virtually full employment. Youngsters leaving school did not fear a life on the dole queue.
  • But the Upper class’s obsession with short-term profitability, its refusal to invest in Britain and its readiness to export investment – and jobs – overseas in search of higher returns have made mass unemployment a major feature across the country.
  • Instead of berating the unemployed for not having a job, politicians ought to have been directing investment into industry and employment.
  • According to Cameron, one in every £7 of government spending is devoted to welfare, amounting to £90bn a year, and this is not “simply not sustainable.”
  • If anything is not sustainable, it is the wars in Iraq, Afghanistan and elsewhere that have swallowed billions of pounds to no avail, to say nothing of the human cost.
  • Weapons of mass destruction, such as the Trident nuclear submarine fleet, are also unsustainable, costing tens of billions and contributing nothing to society.


The government is promising to “make work pay” as it sets out plans to ensure people in work are better off than the unemployed.

A “universal credit”, sanctions for those turning down jobs and a cap on benefits paid to a single family are among the changes outlined.

Planned housing benefit curbs for the jobless have been dropped but tenants ‘under-occupying’ homes face cuts.

Labour backs some changes but says help for people to find work is inadequate.

The changes, outlined in the Welfare Reform Bill, include:

  • A single universal credit to come into force in 2013
  • Tax changes to enable people to keep more income
  • Changes to the disability living allowance
  • More details of the back-to-work programme
  • Those refusing to work facing a maximum three-year loss of benefits
  • Annual benefit cap of about £26,000 per family
  • Review of sickness absence levels

The level of tax avoidance in Britain is also unsustainable, costing the exchequer around £80bn annually alongside a further £20bn uncollected because of staff shortages at HM Revenue & Customs that have been exacerbated by government-imposed redundancies.

The government does nothing about these unsustainable phenomena because they work to the benefit of the wealthy who still don’t pay their fair share of taxation.

The coalition assault on working-class living standards forms part of its ongoing campaign to absolve the rich of any responsibility to contribute to society.

Central to the plan is the creation of a universal credit, a process which will begin in 2013 and continue into the next parliament.

The government says, with five million people of working age on out-of-work benefits and 1.4 million of those for nearly a decade, that unemployment has become entrenched in many communities.

Prime Minister David Cameron said the bill would “bring about the most fundamental and radical changes to the welfare system since it began”.

Analysis


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Iain Duncan Smith has become something of an evangelist for welfare reform.

But the task he faces is probably even more daunting than that faced by any recent government – most of whom also pledged to “make work pay”.

The difficulty is that successful welfare reform in other parts of the world has always been carried out in boom times – when there are jobs and public money to help people find work.

There is also the sheer scale of the problem he faces, with more than five million people on out-of-work benefits.

The government is determined to move ahead at pace with more than half of all claimants moved on to the universal credit by the end of this parliament.

Lastly, the government has got an awful lot else on its reform agenda, with plans for sweeping change involving the NHS, schools, the police and the constitution.

He added: “Never again will work be the wrong financial choice… We are finally going to make work pay for some of the poorest people in our society.”

‘Wrong rewards’

Work and Pensions Secretary Iain Duncan Smith said: “Our reforms will end the absurdity of a system where people too often get rewarded for doing the wrong thing, and those who strive to do the best by their families get penalised.

“The publication of the Welfare Reform Bill will put work, rather than hand-outs, at the heart of the welfare system.”

Asked about dropping the plan to reduce housing benefit for the long-term unemployed, Mr Duncan Smith told BBC Radio 4’s Today programme it would “not be” in the bill.

He said: “Nobody will be worse off [under the changes]. They will be cash-protected.”

Mr Duncan Smith also said: “The universal credit will make sure that the poorest in society will be better off.”

The universal credit will see existing out-of-work and in-work entitlements, such as Jobseeker’s Allowance, Income Support and Housing Benefit, paid as a single lump sum although it is unclear how many benefits will be included in the new payment.

Ministers believe this will make it easier for them to demonstrate the value of being in work, reduce administrative costs and the risk of fraud.

“Start Quote

Long-term unemployment has doubled not because of a sudden increase in work-shy scroungers”

End Quote Brendan Barber TUC general secretary

They argue that the current system actively discourages claimants from looking for work, or those on low-paid jobs from increasing their hours, as rates of tax and benefit reductions leave them worse off.

In future, the government is guaranteeing that for every £1 extra people earn, they will be at least 35p better off as a result of being in work.

Up to 2.7 million households will be better off as a result of the changes, ministers say, with more than a million of these – including many of the poorest – seeing an increase of £25 a week.

But the Institute for Fiscal Studies has warned that while the changes could benefit 2.5 million households, a further 1.4 million – including many lone parents and families with savings of more than £16,000 – face being worse off.

Ministers say transitional arrangements will be put in place to make sure no-one is worse off while they are being migrated to the new system – which will cost £2.1bn up-front to introduce.

That short-term cost, they insist, will reap considerably higher savings in the long term.

The government has dropped controversial plans to cut housing benefit by 10% for people out-of-work for more than a year – but the bill includes plans to cut housing benefit for tenants deemed to be “under-occupying” their homes.

The National Housing Federation attacked the move, claiming about 680,000 people living in local authority and housing association properties will lose some of their housing benefit, “with many people struggling to pay their rent and ending up being forced to leave their home”.

Labour supports efforts to simplify the benefit system and back “conditionality” on benefits but says people should not be penalised for being unable to find work and the proposals do not provide a “panacea” for reducing unemployment.

“There is a big problem about a lack of jobs for people to move into,” Shadow employment spokesman Stephen Timms said. “There just aren’t the jobs there.”

‘Blaming the jobless’

Critics say the overhaul could leave vulnerable people worse off.

TUC general secretary Brendan Barber said: “Long-term unemployment has doubled not because of a sudden increase in work-shy scroungers, but as an inevitable result of economic policies based on cuts that destroy growth.

“Of course no welfare support is perfect and a small minority play the system, but just as conjurors divert your attention when doing a trick, today’s proposals are based on blaming the jobless for their own unemployment in the hope that voters won’t notice the real cause.”

But Katja Hall, chief policy director at the Confederation of British Industry, said: “Getting the UK working is crucial for securing economic growth. We welcome the government’s plans to get people off benefits and into long-term employment and to tackle long-term sickness.”

Sam Bowman of the Adam Smith Institute, a pro-free market think-tank, said: “The government’s welfare reforms are a good step towards reducing people’s dependency on benefits, but they are only part of the story.

“The minimum wage prices the most unskilled and inexperienced out of work and it should be abolished if the welfare reforms are to have the impact the government hopes.”

Kate Wareing, Oxfam’s UK poverty director, said it was a “step in the right direction” but lacked detail, adding that the government needed to make sure the “safety net welfare provides is not being pulled from under our feet”.

Gavin Poole of the Centre for Social Justice think-tank, which was founded by Mr Duncan Smith, said: “It [the bill] offers a once-in-a-generation opportunity to overhaul a dysfunctional and chaotic benefits system that locks people in poverty and stifles aspiration.”

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