What Welfare Benefits Reform Should Really Look Like

IF THE NHS HAS LONG BEEN SEEN as the jewel in the crown of the welfare state, loved by almost all, then the opposite has been true of the welfare benefits system, ever since its creation after the Second World War.

Right from the start it came under attack from the political right and its mass media for robbing the rich to reduce the number of poor. There was also, sadly, ready support for this from middle class voters who resented the higher taxes they now paid to put an end to other people’s social and economic insecurity. And so it goes on. If the present Tory government has a clear vision of transforming society in the interests of the rich, then welfare reform stands at the heart of the delivery mechanism for redistribution from the bottom and middle to the top.

Unfortunately, socialists are too often stuck in defensive mode fighting to defend what we have, but not articulating what a socialist alternative would look like and how we can achieve it. We aim to develop that process here.

Marx was right that class struggle is the essence of capitalism and Tory-led governments since 2010 have represented the interests of their class admirably.

Many would argue that this process has been going on for the last 50 years with Labour and Coalition governments collaborating in the redistribution of wealth back to Victorian levels of unequal distribution. Arthur Scargill argued, during the miners’ strike, that in Thatcher the ruling class had a leader that truly represented their interests and that we needed a leadership who would fight as tenaciously for our class as she did for hers. In Corbyn and McDonnell we hopefully have that leadership.

We need to analyse just how far the Tory project has got. To achieve their goals of creating a fearful, compliant, flexible workforce to create super-profits for their class, the Tories have embarked on a whole system change which we see through anti union legislation, privatisation of public utilities and services, benefit cuts and sanctions and slashing of public spending on essential services.

But it was Thatcher who set us on the extreme anti-welfare state road. Several key lessons have been drummed into us. Many of the people receiving benefits, particularly non-contributory benefits, are fraudulent scroungers and the system steals ‘our’ wealth and ‘enterprise’ to keep ‘them’ comfortable and in so doing creates a damaging anti-social ‘dependent’ or ‘under’ class that sponges on and threatens ‘our’ values and refuses to be in paid work like the rest of us.

From the 1980s on there has been a deluge of evidence pointing out the big lie here. But truth was an early victim and continues to be so. The fact is that people are much more likely not to claim benefits they are entitled to than try to grab ones that they don’t qualify for.

Moreover, there is a much more urgent and rapidly rising problem not receiving attention - tax avoidance and evasion, which cost the exchequer and nation serious and real billions.

Meanwhile unevidenced attacks on people on benefits have increased as we have moved into the 21st century. Given more and more people qualifying for benefits are in paid employment, rather than so-called ‘skiving’, this makes an even bigger mockery of right wing income maintenance theory. If the Victorians had a notion of the ‘deserving’ and ‘undeserving’ poor, current Conservative policymakers do not seem to treat anyone as deserving or without suspicion. Thus groups formerly seen as vulnerable and facing real barriers in the labour market and their lives, like those with terminal illnesses, disabled people and people with long term conditions, are being harassed by an arbitrary benefits and review system.

The flagship policy instrument for completing the next phase of the project is Universal Credit (UC). This is an assault on our rights like no other as it creates the 21st century version of the Poor Laws and the workhouse. Only in 2018 the workhouse is a neoliberal work camp where the poor are warehoused in the community, often homeless, sofa surfing or street homeless and sanctioned. The courts in rollout areas are clogged with eviction cases from private and so-called social landlords of people indebted and unable to pay rent because of the 6-10 week delay in benefit payments.

Universal Credit is being introduced on top of the Bedroom Tax, benefit caps, scrapping of DLA, WCA and PIP assessments, destruction of public housing and rent controls and 60% cuts to local authorities/services. UC takes the assault to the next level. It is designed to control and sanction millions of people. Its purpose is to facilitate low or no pay to an insecure workforce with few or no rights. It is designed to leave people indebted, compliant and fearful.

What is disturbing is the line being pedalled in parts of our movement that UC ‘is good in principle, it just needs to be tweaked a bit to make it right’. It is no accident that this comes from the wing of the Labour Party that abstained on welfare reform and has tried to destabilise the Corbyn leadership. Clearly the only principled position is to stop and scrap UC as a precursor for introducing a system-wide change based on our values and principles.

So what are the principles on which a socialist welfare system needs to be based? We need to start from basic principles. First we need to remember that most of us at some time are likely to need some financial or other help in the face of personal, social and economic crisis and uncertainty. As the proportions of very old and disabled people in our society rise, like in other western societies, those numbers will grow. They aren’t a reflection of fraud but of fundamentally changing demographics - and with them has also come the rise of automation and artificial intelligence, social, cultural and other economic change, which make clear we need a new kind of social security system for all.

Learning both from the positive lessons of the old welfare state and the more recent disasters made in the name of ‘reforming’ (or dismantling it), we now have a lot of knowledge and experience about what could make a welfare benefits system fit for a 21st century society committed to looking after its inhabitants and securing their rights and diverse needs.

What we need:

• A benefits system which takes account of these new demographics which mean that there are now many more older and disabled people in fortunate societies like ours. It means recognising that being in traditional paid employment may not be possible for everyone, even in a flexible sensitive employment system. It means that being in paid work is not the only way in which people can contribute, and that many may be supported to do so in other ways.

• A benefits system that reflects the reality that employment needs are changing, instead of just being tied to a moralistic argument that people should be forced into a labour market that doesn’t need them. This should not be confused with exclusion from meaningful paid work for those who want and are able to do it. We need a labour market geared to people’s diverse abilities, employment learning and training needs, not just the narrow imperatives of a traditional market economy. Instead of paid work being made an ideological totem, it must be geared to meeting human rights and needs. It must support sustainability and global wellbeing, not the market and consumerism.

• This demands that we reverse the trend we are witnessing to a residualising welfare system, which has increasingly relied on means tested benefits. The evidence has long shown that means testing benefits is a costly and wasteful approach that discourages people entitled to benefits to claim them. This undermines their wellbeing, negates prevention, exacerbates their difficulties and increases isolation.

• The benefits system must start with the implementation of a properly monitored and regulated living wage and social security policy properly linked with tax/fiscal policies committed to progressive redistribution. We must put an end to benefits policies based on tax credits propping up low pay, so that the state and taxpayers end up supporting an invidious employment system based on exploiting people financially.

• We have already touched on the failed policy of Universal Credit. It epitomises two key fallacies of modern welfare reform. First, that it is an easy matter to simplify benefits, when what this tends to do is fail to address people’s unique needs and circumstances. And second, that there are now easy new information technology solutions around which can readily ensure that benefits can address people’s complex individual needs. This has repeatedly been seen to be a fantasy of non-techie politicians.

• Instead we need a welfare benefits system which is integrated with health, social care and housing policies, based not, as now, on people having to prove how little they can do and their dependency. Instead it should rest on the philosophy of independent living, to support people to live on as equal terms as possible to non-disabled people and to be able to contribute to their fullest capacity in the ways they are able to.

Most of all though, while we need to start building new strategies for benefits, these are only likely to work if from the start they involve the people they are intended to help. Neo-liberal welfare reform has conspicuously ignored the collective voice of service users and welfare claimants. No socialist alternative can afford to make the same mistake.