Universal Credit - bleeding the poor

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universal credit

Universal Credit (UC), the government’s flagship welfare reform, is now being rolled out to over 105 local council areas, roughly a quarter of local authorities – hitting all new claimants with a minimum five-week waiting period for any pay out, reduced from six weeks by the Autumn Budget. This not only affects those leaving school or work who require a new payment of Jobseeker’s Allowance, but people who have been receiving benefits to subsidise their poor wages and extortionate housing costs, who have or will be transferred onto the new welfare regime. For these people, all of the benefits they were previously entitled to – including housing benefit – will be suspended until their new UC claim is validated. LUKE MEEHAN reports.

This gap in payments has already led to a marked increase in food poverty and mounting rent arrears – with research by the Trussell Trust reporting an unprecedented surge in the use of foodbanks in areas where UC has been implemented, and Freedom of Information requests in September 2017 revealing that roughly half of claimants were at least a month behind with their rent, and thus at risk of eviction. Further research by the Resolution Foundation has indicated that 57% of claimants have been forced to borrow money while waiting for their payments to come through, meaning that repaying interest on loans will join rent arrears in eating into the little money they eventually receive.

On top of the material hardship this causes claimants, reports by the New Statesman document the emotional and social impact on those who find themselves forced into precarious situations, facing homelessness or, in some cases, the indignity of begging for money from strangers. As one woman, whose payment was delayed and further benefits docked, put it: ‘[The situation] completely broke me, it sucked every ounce of life out of me’. With waiting times for a first payment regularly lasting 10 to 13 weeks, and with UC proposed to be rolled out to large metropolitan areas like Birmingham, Glasgow, Manchester and Bristol in the next five months, there is a very real crisis of hunger and homelessness looming for the huge number of people in Britain who rely on benefits to get by.

Given that waiting periods often exceed the six week benchmark, Chancellor Hammond’s budget pledge to cut waiting times by a week does little to alleviate this. The £1.5bn proposal to provide advances on benefits is unlikely to remedy the material hardship facing low-paid workers and unemployed people in the short term as it will have to pay for both the administrative costs of reducing waiting times and for emergency payments to claimants.

It also hides the continued freezing of benefit rates and scrapping of extra-cost components proposed in previous budgets. Amounting to £12bn, these have not been reversed in the Budget. As it stands, an ‘injection’ of funds into easing the roll-out of UC would still mean welfare cuts of a staggering £10.5bn for the duration of this parliament. As much of the money spent in emergency payments is likely to take the form of loans that will be later deducted from claimants’ benefits, this figure could well rise.

UC itself, which rolls six of the most commonly claimed benefits (Housing Benefit, Income Support, Working Tax Credits, Child Tax Credit, and income-assessed Jobseeker’s and Employment Support Allowance) into one single payment, is supposed to simplify the process of applying for welfare payments. In reality, UC does little to reduce the bureaucracy as extra-cost disability benefits and child benefits are administered separately and retain the same arbitrary and flawed criteria and processes as before. UC mainly limits itself to combining income-based benefits which are, by and large, applied for by simply sending information about one’s income, savings, and rent costs to the DWP or local authority.

UC does include the infamous Employment and Support Allowance (ESA) – the arbitrary eligibility and poor administration of which has been linked to suicides by people too ill to work – but the merging of ESA into the new regime does nothing to change how eligibility for payment of this benefit will be decided or administered.

The actual effects of UC are bleak for the working class. Firstly, the nature of the structural changes to payments involved in UC allows benefit cuts to be brought in through the back door. UC extends the draconian sanctions regime imposed on those out of work to those claiming in-work benefits. Where before, only jobseekers or those too ill to work could have their benefits reduced if they missed appointments at the Jobcentre, now any claimant who works less than 35 hours a week will be forced into a ‘work focused’ interview programme, during which the DWP will dock their payments if they fail to attend regular appointments with Job Coaches. This is expected to hit working parents and shift workers hardest, as they are less able to rearrange their working patterns and caring commitments around the DWP’s schedule.

Self-employed workers are similarly disadvantaged by a calculation of their working hours which means that their benefits will be reduced both in months where they have worked over the regulated hours per week, and in months where they have been unable to secure enough hours and are taken to be voluntarily not seeking work.

The government has been quite clear that it sees UC as a money saving exercise at the expense of the working class, openly admitting in September 2017 that it hopes to save £1.5bn through the new scheme – ironically, the same figure that Chancellor Philip Hammond has now claimed will be necessary to relieve pressure during its roll-out. Equally important, but rarely acknowledged, is the role that the threat of benefit sanctions has on workers and unemployed people whose lives are made so miserable and precarious that even the most brutal, underpaid, and meaningless work is preferable to dealing with the benefits system.

Such people can, and will, be forced into extra employment no matter how bad its conditions are, or how drastically it forces them to give up the time they have to follow their own interests, let alone commitments outside of work.

What opposition is there to UC roll-out? Labour leader Jeremy Corbyn has demanded a pause to its roll-out and cited the examples of councils like Croydon which have been ‘forced’ to pay their own tenants’ council rent. In a visit to a Citizens’ Advice Centre in County Durham, Corbyn demanded a ‘pause and fix’ for the implementation of UC, pointing out that its reliance on online application hindered many poor people in rural areas from applying for the benefits to which they are currently entitled. He condemned the outrageous 55p per minute the UC helpline charged, and that administrative failures will leave families without money before Christmas.

However, Corbyn’s rhetoric on UC has targeted the methods of implementation, rather than the benefit itself. The actual call to ‘pause’ the roll-out dodges the question of whether Labour supports a benefits system which penalises part-time and self-employed workers and the unemployed.

The history of Labour policy implies that it does. In 2014, the Shadow Work and Pensions Secretary Rachel Reeves insisted that she ‘supported’ the policy, but questioned the government’s competence in pulling it off. Speaking on The Sunday Politics in June 2014, Reeves was explicit that Labour ‘will get the benefits bill under control ... We support Universal Credit, but it’s going to cost £12.8bn, and we don’t know what kind of state [the pilots] are in’.

Labour’s 2017 election manifesto speaks of reforming and redesigning UC, but this is completely meaningless: its whole concept involves penalising an ever greater portion of the working class. As the rise in foodbank use, homelessness, and sanctions-related suicides prior to UC’s roll-out show, its regime is an appalling attack on the whole working class. The minimum requirement is that it is abolished. Nothing less will do.

Fight Racism! Fight Imperialism! 261 December 2017/January 2018